Intermap Technologies Reports 2016 Second Quarter Financial Results

DENVER, Aug. 12, 2016 /CNW/ - (TSX: IMP) – Intermap Technologies Corporation ("Intermap" or the "Company") today reported financial results for the second quarter ended June 30, 2016. A conference call will be held today, August 12th, at 11:00 a.m. Eastern Time to discuss the results.

All amounts in this news release are in United States dollars unless otherwise noted.

Intermap reported total revenue of $0.9 million for the second quarter of 2016, a 20% increase from $0.7 million in the second quarter of 2015. The majority of the year-over-year increase in revenue was from increased data licensing and InsitePro software sales. Net operating loss for the second quarter of 2016 was $3.5 million, compared to a net operating loss of $4.4 million for the second quarter of 2015. Second quarter adjusted EBITDA, a non IFRS financial measure, was a loss of $3.3 million, an improvement from an adjusted EBITDA loss of $3.7 million for the same period in 2015. Adjusted EBITDA excludes share-based compensation, change in value of derivative instruments, and gain or loss on foreign currency translation.

"During the quarter we supported efforts to obtain the project financing associated with a $175 million spatial data infrastructure (SDI) contract that we announced in February of this year. Although Intermap is not responsible for the project financing on this contract, we provide support to our client in connection with their negotiation of final financing terms," said Todd Oseth, President & CEO of Intermap. "If and when project financing is completed, we will issue a detailed press release. We believe this award can be a catalyst to close other large Orion Platform government implementations in the future, as well as promote Intermap's location based Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) product offerings for the enterprise sector."

Mr. Oseth added, "During the second quarter we continued to see expanded interest in our InsitePro user base in the US. Our risk based customers have expressed significant interest in InsitePro's capabilities and the fact that we can customize the application for proprietary risk scoring to suit their individual needs. In addition to the expansion of our software business, we also received repeat business for further data acquisition in North America. The expanded contract was for $2.6 million and further task orders to expand this project are expected. The flying portion of this contract is now complete, ahead of schedule and under budget. Our data acquisition results surpass our published specifications. We continue to create a high quality dataset for this customer."

Financial Review

Consolidated revenue for the second quarter of 2016 totaled $0.9 million and included (i) $0.1 million in mapping services, (ii) $0.1 million in professional services, (iii) $0.4 million in data licensing, and (iv) $0.3 million in software licensing. For the same period in 2015, consolidated revenue totaled $0.7 million and included (i) $0.1 million in mapping services, (ii) $0.1 million in professional services, (iii) $0.3 million in data licensing, and (iv) $0.2 million in 3DBI software licensing. Contract backlog at the end of the quarter totaled $3.5 million

For the second quarter of 2016, personnel expense was $2.6 million, compared to $3.0 million in the same period last year. The decrease was primarily due to reduced personnel in all of the Company's locations.

For the second quarter of 2016, purchased services and materials expense was flat at $1.2 million when compared to the same period last year. Purchased services and materials includes (i) aircraft related costs, including jet fuel, (ii) professional and consulting costs, (iii) third-party support services related to airborne data collection efforts, processing and editing of the Company's data collection efforts, and (iv) software expenses (including maintenance and support).

The cash position of the Company at June 30, 2016 (cash, restricted cash, and cash equivalents) was $0.3 million, compared to $0.8 million at December 31, 2015. Subsequent to the close of the second quarter, Intermap completed a $2.0 million promissory note with Vertex One Asset Management ("Vertex") bearing interest at 15% per annum and maturing on the earlier of (i) July 8, 2017, or (ii) the date on which a down payment from a material geospatial project is received by the Company. Amounts receivable and unbilled revenue at June 30, 2016 was $0.7 million, compared to $2.3 million at December 31, 2015. Working capital was negative $29.1 million at June 30, 2016, compared to negative $16.6 million at December 31, 2015.

Vertex has been the primary funding partner for Intermap beginning in February 2015. Since that time they have provided $21.3 million of debt financing and have restructured the terms of such outstanding debt on three separate occasions. The maturities of the outstanding debt occur (i) $9.1 million, plus accrued interest, on August 24, 2016 (ii) $13.1 million, plus accrued interest, on October 11, 2016, and (iii) $2.0 million, plus accrued interest, on either July 8, 2017, or the date on which a down payment from a material geospatial project is received by the Company. Intermap has historically relied on Vertex to provide debt financing and also to restructure debt maturities and other terms of the debt until such time that cash proceeds from operations are sufficient to repay the outstanding debt. There is no guarantee that additional financing, from Vertex or otherwise, will continue to be available. (see "Intermap Reader Advisory" below).

Detailed financial results and management's discussion and analysis can be found on SEDAR at: www.sedar.com.

Second Quarter Business Highlights

  • On, June 13, 2016, Intermap announced that the Channel Syndicate (Channel) had subscribed to InsitePro for underwriting of United States flood insurance. Channel underwrites in the Lloyd's insurance marketplace and will be using InsitePro to provide reliable location-based risk assessments in the US. In the United States, Channel conducts business through multiple Managing General Agents (MGAs), requiring a disciplined approach to underwriting and pricing. By using an InsitePro risk score as a common understanding of risk between the underwriters in London and the MGAs, Channel can better maintain that discipline.

  • On May 13, 2016, Intermap announced that the Company was awarded a US $2.6 million contract for an airborne radar mapping services solution. Intermap is using its proprietary Interferometric Synthetic Aperture Radar (IFSAR) technology to collect orthorectified radar imagery and high resolution elevation data to enhance the customer's existing geospatial map database. This new dataset will be used for improved disaster planning, resource management, security interests, and infrastructure planning. The project commenced in June 2016 and the final deliveries of the dataset are expected to be substantially complete by the end of the year 2016.

  • On April 15, 2016 Intermap announced that it had entered into an agreement with its senior lender, pursuant to which three of its outstanding promissory notes, which were to become due and payable in April 2016, were restructured and consolidated, together with an additional advance of $5,000,000, into a new promissory note that bears interest at 15% per annum, with a maturity date of October 11, 2016.

    The material terms of the debt restructuring are as follows (all $ amounts shown are in USD):

    • Promissory note dated April 1, 2015 (the "First Note"), in the principal amount of $1,500,000, bearing interest at 20% per annum ($309,041 in accrued interest), was cancelled.
    • Promissory note dated April 27, 2015 (the "Second Note"), in the principal amount of $2,500,000, bearing interest at 20% per annum ($479,452 in accrued interest), was cancelled.
    • Promissory note dated July 9, 2015 (the "Third Note"), in the principal amount of $3,000,000, bearing interest at 15% per annum ($341,506 in accrued interest), was cancelled.
    • The principal amounts and accrued interest due under the First Note, the Second Note and the Third Note were restructured and consolidated, together with an additional $5,000,000 debt financing, into a new note dated April 12, 2016 (the "Restructured Note"), in the principal amount of $13,130,000, bearing interest at 15% per annum, with a maturity date of October 11, 2016, subject to a prepayment right by the Company at 107.5% of the principal amount at any time upon delivery of a 30 day prior written notice.
    • The Restructured Note is secured by way of a first priority lien over all of the assets of the Company.

With this financial restructuring, the total principal amount of the Company's debt obligations to its senior lender at June 30, 2016 amounts to $22,255,000. $9,125,000 of such debt has a maturity date of August 24, 2016 and the remainder, as detailed above, has a maturity date of October 11, 2016.

The Company announced that it intended to use the proceeds of the debt financing for general corporate purposes and preparatory work, including logistical set up, in support of its previously announced Spatial Data Infrastructure (SDI) project related activities.

As of August 12, 2016, there were 101,344,582 common shares outstanding.

As of August 12, 2016, potential dilutive securities include (i) 7,915,720 outstanding share options in the Company's share option plan with a weighted average exercise price of C$0.38, and (ii) 24,713,130 warrants outstanding with a weighted average exercise price of C$0.08. Each option and warrant entitles the holder to purchase one Class A common share.

Important factors, including those discussed in the Company's regulatory filings (www.sedar.com) could cause actual results to differ from the company's expectations and those differences may be material. Detailed financial results and management's discussion and analysis can be found on SEDAR at: www.sedar.com.

Conference Call

Intermap will host a conference call today, August 12, 2016, at 11:00 am ET (9:00 am MT). To participate in the call, please dial +1-647-427-7450 approximately 10 minutes prior to the conference call and provide conference ID 61308127. A recording of the conference call will be available through August 26, 2016. Please dial +1-416-849-0833 and provide pass code 61308127 to listen to the rebroadcast. The call will also be available on Intermap's website at http://www.intermap.com/investors for replay.

About Intermap Technologies

Headquartered in Denver, Colorado - Intermap (www.intermap.com) is an industry leader in geospatial solutions on demand. Through its powerful suite of 3DBI applications and proprietary development of contiguous databases that fuse volumes of GIS data into a single source, Intermap is able to provide location based solutions for customers in diverse markets around the world that solve today's complex geospatial challenges.

Adjusted EBITDA is not a recognized performance measure under GAAP and does not have a standardized meaning prescribed by IFRS. The term EBITDA consists of net income (loss) and excludes interest, taxes, depreciation, and amortization. Adjusted EBITDA is included as a supplemental disclosure because management believes that such measurement provides a better assessment of the Company's operations on a continuing basis by eliminating certain non-cash charges and charges that are nonrecurring. The most directly comparable measure to adjusted EBITDA calculated in accordance with IFRS is net income (loss).

Intermap Reader Advisory

In the interest of providing the shareholders and potential investors of Intermap Technologies® Corporation ("Intermap" or the "Company") with information about the Company and its subsidiaries, including management's assessment of Intermap's® and its subsidiaries' future plans and operations, certain information provided herein constitutes forward-looking statements or information (collectively, "forward-looking statements"). Forward-looking statements are typically identified by words such as "may", "will", "should", "could", "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe", and similar expressions suggesting future outcomes, and include statements that actions, events, or conditions "may," "would," "could," or "will" be taken or occur in the future. These forward-looking statements may be based on assumptions and expectations regarding the nature and success of negotiations to finalize the terms of project financing on an existing spatial data infrastructure ("SDI") contract; the Company's ability to carry out SDI programs; geopolitical and country-based risks of SDI contract jurisdictions; and the expectation that the risks outlined in the Company's most recent Annual Information Form will not materialize in a manner materially detrimental to the Company. Intermap considers these assumptions and expectations to be reasonable based on the information available on the date such statements are made, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties, and other factors which may cause actual results, levels of activity, and achievements to differ materially from those expressed or implied by such statements. The forward-looking information contained in this press release is based on certain assumptions and analysis by management of the Company in light of its experience and perception of historical trends, current conditions and expected future development and other factors that it believes are appropriate.

The material factors and assumptions used to develop the forward-looking statements herein include, but are not limited to, the following: (i) project financing for an existing SDI project will be completed and the Company will receive a significate upfront fee in connection with that project; (ii) the Company will be able to restructure the terms of its outstanding debt maturities with its major lending partner until such time the Company's cash flows are sufficient to repay its outstanding debt obligations (iii) there will be adequate liquidity available to the Company to carry out its operations; (iv) down payments, ongoing payments and post-completion payments on material contracts will occur within a reasonable period of time; (v) the continued sales success of Intermap's products and services; (vi) the continued success of business development activities; (vii) there will be no significant delays in the development and commercialization of the Company's products; (viii) the Company will continue to maintain sufficient and effective production and software development capabilities to compete on the attributes and cost of its products; (ix) there will be no significant reduction in the availability of qualified and cost-effective human resources; * the continued existence and productivity of subsidiary operations; (xi) new products and services will continue to be added to the Company's portfolio; (xii) demand for geospatial related products and services will continue to grow in the foreseeable future; (xiii) there will be no significant barriers to the integration of the Company's products and services into customers' applications; (xiv) the Company will be able to maintain compliance with applicable contractual and regulatory obligations and requirements, and (xv) superior technologies/products do not develop that would render the Company's current product offerings obsolete.

Intermap's forward-looking statements are subject to risks and uncertainties pertaining to, among other things, cash available to fund operations, availability of capital, timely receipt of down payments on contracts, revenue fluctuations, nature of government contracts, economic conditions, loss of key customers, retention and availability of executive talent, competing technologies, common share price volatility, loss of proprietary information, software functionality, internet and system infrastructure functionality, information technology security, breakdown of strategic alliances, and international and political considerations, including but not limited to those risks and uncertainties discussed under the heading "Risk Factors" in the Company's filings with securities regulators. The impact of any one risk, uncertainty, or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent, and the Company's future course of action depends on Management's assessment of all information available at the relevant time. Except to the extent required by law, the Company assumes no obligation to publicly update or revise any forward-looking statements made in this MD&A, whether as a result of new information, future events, or otherwise. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on the Company's behalf, are expressly qualified in their entirety by these cautionary statements.

Reference is made to the Company's audited Consolidated Financial Statements for the year ended December 31, 2015, together with the accompanying notes, which includes a going concern disclosure and such disclosure remains applicable as of the date of the financial statements included herein. In part, the going concern disclosure states that there remains significant doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent on management's ability to successfully secure sales with upfront payments, renegotiate terms of debt that matures in 2016, and/or obtain further financing. Failure to achieve one or more of these requirements could have a materially adverse effect on the Company's financial condition and/or results of operations.

INTERMAP TECHNOLOGIES CORPORATION
Condensed Consolidated Interim Balance Sheets
(In thousands of United States dollars)



June 30,

December 31,



2016

2015





Assets








Current assets:





Restricted cash


$

288

$

801


Amounts receivable


617

2,283


Unbilled revenue


33

11


Prepaid expenses


308

295



1,246

3,390





Property and equipment


1,594

1,922



$

2,840

$

5,312





Liabilities and Shareholders' Equity








Current liabilities:





Accounts payable and accrued liabilities


$

4,744

$

6,872


Current portion of notes payable


22,255

9,087


Current portion of project financing


1,166

1,121


Current portion of deferred lease inducements


44

101


Unearned revenue


618

467


Warrant liability


1,254

2,085


Income taxes payable


4

5


Obligations under finance leases


9

75


Current portion of other long-term liabilities


270

158



30,364

19,971





Long-term notes payable 


7,300

7,300

Long-term project financing


175

174

Deferred lease inducements


157

162

Obligations under finance leases


29

34

Other long-term liabilities


-

92



38,025

27,733





Shareholders' deficiency:





Share capital


196,622

196,409


Accumulated other comprehensive income


(98)

(102)


Contributed surplus


11,693

11,578


Deficit


(243,402)

(230,306)



(35,185)

(22,421)







$

2,840

$

5,312

 

INTERMAP TECHNOLOGIES CORPORATION
Condensed Consolidated Interim Statements of Profit and Loss and Other Comprehensive Income
(In thousands of United States dollars, except per share information)




For the three months
ended June 30,


 For the six months
 ended June 30,




2016


2015


2016


2015











Revenue 

$

864


$

719


$

2,302


$

1,675











Expenses:









Operating costs

4,114


4,839


8,047


9,497


Depreciation of property and equipment

205


244


419


486


Amortization of intangible assets

-


-


-


13




4,319


5,083


8,466


9,996











Operating loss

(3,455)


(4,364)


(6,164)


(8,321)











Gain on disposal of equipment

-


-


-


47

Change in fair value of derivative instruments

703


(3,672)


831


(3,643)

Financing costs 

(1,006)


(866)


(7,630)


(1,986)

Financing income

-


-


5


4

(Loss) gain on foreign currency translation

(19)


(114)


(130)


24

Loss before income taxes

(3,777)


(9,016)


(13,088)


(13,875)











Income tax expense:









Current  

(4)


-


(8)


(20)


Deferred

-


-


-


-




(4)


-


(8)


(20)











Net loss for the period

$

(3,781)


$

(9,016)


$

(13,096)


$

(13,895)











Other comprehensive loss:


















Items that are or may be reclassified subsequently to profit or loss:







Foreign currency translation differences

(17)


25


4


(32)











Comprehensive loss for the period

$

(3,798)


$

(8,991)


$

(13,092)


$

(13,927)











Basic and diluted loss per share

$

(0.04)


$

(0.10)


$

(0.13)


$

(0.15)











Weighted average number of Class A common








shares - basic & fully diluted

100,335,233


92,952,350


100,429,225


92,370,739

 

INTERMAP TECHNOLOGIES CORPORATION
Condensed Consolidated Interim Statements of Changes in Shareholders' Deficiency
(In thousands of United States dollars)


Share
Capital

Contributed
Surplus

Cumulative
Translation
Adjustments

Deficit

Total







Balance at December 31, 2014

$

194,377

$

11,395

$

(57)

$

(212,152)

$

(6,437)







Comprehensive loss for the period

-

-

(32)

(13,895)

(13,927)

Share-based compensation

-

164

-

-

164

Exercise of warrants

506

-

-

-

506

Note conversion 

556

(16)

-

-

540

New warrant issuance

360

-

-

-

360







Balance at June 30, 2015

$

195,799

$

11,543

$

(89)

$

(226,047)

$

(18,794)







Comprehensive loss for the period

-

-

(13)

(4,259)

(4,272)

Share-based compensation

30

130

-

-

160

Exercise of warrants

498

-

-

-

498

Exercise of options

57

(22)

-

-

35

New warrant issuance

25

-

-

-

25

Deferred tax effect of convertible note

-

(73)

-

-

(73)







Balance at December 31, 2015

$

196,409

$

11,578

$

(102)

$

(230,306)

$

(22,421)







Comprehensive gain (loss) for the period

-

-

4

(13,096)

(13,092)

Share-based compensation

174

132

-

-

306

Exercise of options

39

(17)

-

-

22







Balance at June 30, 2016

$

196,622

$

11,693

$

(98)

$

(243,402)

$

(35,185)

 

INTERMAP TECHNOLOGIES CORPORATION
Condensed Consolidated Interim Statements of Cash Flows
(In thousands of United States dollars)

For the six months ended June 30,

2016


2015







Cash flows provided by:










Operating activities:





Net loss for the period

$

(13,096)


$

(13,895)


Adjusted for the following non-cash items:






Depreciation of property and equipment

419


486



Amortization of intangible assets

-


13



Share-based compensation expense

192


539



Gain on disposal of equipment

-


(47)



Amortization of deferred lease inducements

(76)


(70)



Change in fair value of derivative instruments

(831)


3,643



Financing costs

7,630


1,986



Current income tax expense

8


20



Interest paid

(6)


(11)



Income tax paid

(9)


(14)


Changes in working capital:






Amounts receivable

1,672


733



Work in process and other assets

(35)


(61)



Accounts payable and accrued liabilities

(701)


123



Unearned revenue and deposits

151


297



Loss (gain) on foreign currency translation

(45)


783




(4,727)


(5,475)







Investing activities:





Purchase of property and equipment

(91)


(34)




(91)


(34)







Financing activities:





Proceeds from notes payable

5,000


11,800


Issuance costs of convertible notes and notes payable

-


(94)


Proceeds from reimbursable project funding

-


93


Proceeds from exercise of warrants

-


97


Movement from (to) restricted cash

512


(69)


Repayment of obligations under finance lease

(77)


(64)


Repayment of long-term debt and notes payable

(617)


(6,300)




4,818


5,463







Effect of foreign exchange on cash

-


(2)







Decrease in cash and cash equivalents

-


(48)







Cash and cash equivalents, beginning of period

-


537







Cash and cash equivalents, end of period

$

-


$

489

 

SOURCE Intermap Technologies Corporation

For further information: please contact: Intermap Technologies: Rich Mohr, Senior Vice President & Chief Financial Officer, rmohr@intermap.com, +1 (303) 708-0955; Canada - Financial: Cory Pala, Investor Relations, e.vestor Communications Inc., cpala@evestor.com, +1 (416) 657-2400


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