Intermap Technologies Corporation — Audit Report / Information 2021

Apr 1, 2021

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Consolidated Financial Statements of

INTERMAP TECHNOLOGIES CORPORATION

Years ended December 31, 2020 and 2019

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KPMG LLP 150 Elgin Street, Suite 1800 Ottawa ON K2P 2P8 Canada Telephone 613-212-5764 Fax 613-212-2896

INDEPENDENT AUDITORS’ REPORT

To the Shareholders of Intermap Technologies Corporation

Opinion

We have audited the consolidated financial statements of Intermap Technologies Corporation (the Entity), which comprise:

• the consolidated balance sheets as at December 31, 2020 and December 31, 2019

• the consolidated statements of income (loss) and other comprehensive income (loss) for the years then ended

• the consolidated statements of changes in shareholders’ equity for the years then ended

• the consolidated statements of cash flows for the years then ended

• and notes to the consolidated financial statements, including a summary of significant accounting policies

(Hereinafter referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated financial position of the Entity as at December 31, 2020 and December 31, 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards (IFRS).

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the “ Auditors’ Responsibilities for the Audit of the Financial Statements ” section of our auditors’ report.

We are independent of the Entity in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

© 2020 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

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Material Uncertainty Related to Going Concern

We draw attention to Note 2(a) in the financial statements, which indicates that Intermap Technologies Corporation has incurred recurring operating losses in current and prior years, negative cash flows in the current year, and has negative working capital at December 31, 2020.

As stated in Note 2(a) in the financial statements, these events or conditions, along with other matters as set forth in Note 2(a) in the financial statements, indicate that a material uncertainty exists that may cast significant doubt on the Entity's ability to continue as a going concern.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matter described in the “Material Uncertainty related to Going Concern” section of the auditors’ report, we have determined the matters described below to be the key audit matters to be communicated in our auditors’ report.

Evaluation of Impairment of Long-Lived Assets

Description of the matter

We draw attention to Notes 2(d)(vi), 3(i), 4, 5 and 6 to the financial statements. The longlived assets of the Entity consist of property and equipment, intangible assets and right of use assets. The property and equipment, intangible assets and right of use assets balances are $2,731 thousand, $921 thousand and $778 thousand, respectively. The Entity reviews long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable and assesses impairment for intangible assets not yet available for use on an annual basis. In testing for impairment, the recoverable amount of cash generating units (CGUs) are estimated in order to determine the extent of the impairment loss, if any. The determination of the recoverable amount is based on each CGU’s value in use and requires the Entity to make significant estimates and assumptions which include projected revenues and discount rates.

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Why the matter is a key audit matter

We identified the evaluation of the impairment of long-lived assets as a key audit matter. This matter represented an area of significant risk of material misstatement given the magnitude of the long-lived assets. This matter required significant auditor judgment in evaluating the results of our audit procedures due to the high degree of estimation uncertainty involved in the Entity’s estimates and assumptions.

How the matter was addressed in the audit

The following are the primary procedures we performed to address this key audit matter:

We compared the Entity’s historical revenue projections to actual results to assess the Entity’s ability to accurately project revenues.

We evaluated the Entity’s projected revenue assumptions for each CGU by comparing those assumptions to 2020 actual results and the Entity’s expected growth plans. We took into account changes in conditions and events affecting each CGU to assess the adjustments or lack of adjustments made in arriving at projected revenues.

We performed sensitivity analyses on the Entity’s projected revenues and discount rates for each CGU to assess their impact on the Entity’s determination that the estimated recoverable amount of the CGU exceeded its carrying value.

We involved valuation professionals with specialized skills and knowledge to assist in assessing the discount rate assumptions used in the estimated recoverable amounts, by comparing them to discount rate ranges that were independently developed using publicly available market data and considering the risk profile of each CGU.

Other Information

Management is responsible for the other information. Other information comprises:

• the information included in Management’s Discussion and Analysis filed with the relevant Canadian Securities Commissions.

• the information, other than the financial statements and the auditors’ report thereon, included in a document likely to be entitled “2020 Annual Report”.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit and remain alert for indications that the other information appears to be materially misstated.

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We obtained the information included in Management’s Discussion and Analysis filed with the relevant Canadian Securities Commissions as at the date of this auditors’ report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in the auditors’ report.

We have nothing to report in this regard.

The information, other than the financial statements and the auditors’ report thereon, included in a document likely to be entitled “2020 Annual Report” is expected to be made available to us after the date of this auditors’ report. If, based on the work we will perform on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards (IFRS), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Entity’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Entity or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Entity’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

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As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Entity to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

• Provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group Entity to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

• Determine, from the other matters communicated with those charged with governance, those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our auditors’ report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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Chartered Professional Accountants, Licensed Public Accountants

The engagement partner on the audit resulting in this auditors’ report is Andrew Watson. Ottawa, Canada March 31, 2021

INTERMAP TECHNOLOGIES CORPORATION

Consolidated Balance Sheets

(In thousands of United States dollars)

		December 31,		December 31,
		2020		2019
			(Recast,Note 20)
Assets
Current assets:
Cash	$	1,778	$	1,230
Amounts receivable		579		741
Unbilled revenue (Note 10)		47		410
Prepaid expenses		769		763
		3,173		3,144
Prepaid expenses		41		-
Property and equipment (Note 4)		2,731		3,634
Intangible assets (Note 5)		921		625
Right of use assets(Note 6)		778		406
Total assets	$	7,644	$	7,809
Liabilities and Shareholders' Equity (Deficiency)
Current liabilities:
Accounts payable and accrued liabilities (Note 7)	$	3,102	$	3,085
Current portion of project financing (Note 8(b))		-		300
Current portion of government loans (Note 8(c))		4		-
Lease obligations (Note 9)		271		369
Unearned revenue (Note 10)		1,607		1,274
Income taxes payable		5		-
Currentportion of notespayable(Note 8(a))		- 4,989		31,884 36,912
Long-term project financing (Note 8(b))		188		184
Long-term government loans (Note 8(c))		460		-
Lease obligations(Note 9)		521		96
Total liabilities		6,158		37,192
Shareholders' equity (deficiency):
Share capital (Note 13(b))		203,642		199,532
Warrants		93		385
Accumulated other comprehensive loss		(115)		(154)
Contributed surplus (Note 13(c))		26,007		25,527
Deficit		(228,141)		(254,673)
Total shareholders' equity (deficiency)		1,486		(29,383)
Going concern (Note 2(a))
Correction of immaterial error (Note 20)
Subsequent event (Note 21)
Total liabilities and shareholders' equity (deficiency)	$	7,644	$	7,809

See accompanying notes to consolidated financial statements.

INTERMAP TECHNOLOGIES CORPORATION

Consolidated Statements of Income (Loss) and Other Comprehensive Income (Loss) (In thousands of United States dollars, except per share information)

				2019
For theyears ended December 31,		2020	(Recast,Note 20)
Revenue (Note 10)	$	4,720	$	10,052
Expenses:
Operating costs (Note 11(a))		8,432		11,221
Restructuring costs (Note 11(b))		-		272
Depreciation of property and equipment		1,094		1,056
Depreciation of right of use assets		399		495
Gain on disposal of equipment		(150)		-
		9,775		13,044
Operating loss		(5,055)		(2,992)
Gain on modification of debt (Note 8(a))		32,138		1,061
Government grants (Note 12)		904		-
Financing costs (Note 11(c))		(1,338)		(2,882)
Loss on foreign currencytranslation		(96)		(76)
Gain (loss) before income taxes		26,553		(4,889)
Income tax expense:
Current		(21)		(15)
		(21)		(15)
Net income (loss) for the period	$	26,532	$	(4,904)
Other comprehensive loss: Foreign currency translation differences Comprehensive income(loss)for theperiod Items that are or may be reclassified subsequently to profit or loss:	$	39 26,571	$	- (4,904)
Basic income (loss) earnings per share	$	1.35	$	(0.28)
Diluted income(loss)earningsper share	$	1.29	$	(0.28)
Weighted average number of Class A common shares - basic (Note 13(d)) shares - diluted (Note 13(d))		19,481,498 20,518,988		17,268,472 17,268,472

See accompanying notes to consolidated financial statements.

INTERMAP TECHNOLOGIES CORPORATION

Consolidated Statements of Changes in Shareholders’ Equity (In thousands of United States dollars)

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Accumulated
Other
Contributed Comprehensive Total
Share Capital Warrants Surplus (Loss) Income Deficit (Recast, Note 20)
Balance at December 31, 2018 $ 199,532 $ 385 $ 25,379 $ (154) $ (249,769) $ (24,627)
- - - -
Comprehensive loss for the period (4,904) (4,904)
Share-based compensation - - 148 - - 148
Balance at December 31, 2019 $ 199,532 $ 385 $ 25,527 $ (154) $ (254,673) $ (29,383)
Comprehensive income for the period $ - $ - $ - $ 39 $ 26,532 26,571
Share-based compensation - - 104 - - 104
RSU conversion (Note 13(b)) 9 - (9) - - -
Expiration of warrants - (385) 385 - - -
Private placement proceeds (Note 13(b)) 4,659 - - - - 4,659
Issuance costs (601) 93 - - - (508)
Shares issued as compensation (Note 13(b) 43 - - - - 43
Balance at December 31, 2020 $ 203,642 $ 93 $ 26,007 $ (115) $ (228,141) $ 1,486
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See accompanying notes to consolidated financial statements.

INTERMAP TECHNOLOGIES CORPORATION

Consolidated Statements of Cash Flows (In thousands of United States dollars)

				2019
For theyears ended December 31,		2020	(Recast,Note 20)
Operating activities:
Net income (loss) for the period	$	26,532	$	(4,904)
Interest paid		(30)		(53)
Income tax paid		(16)		(16)
Adjustments for:
Gain on modification of debt		(32,138)		(1,061)
Depreciation of property and equipment		1,094		1,056
Depreciation of right of use assets		399		495
Share-based compensation expense		104		148
Gain on disposal of equipment		(150)		-
Financing costs		1,338		2,882
Current income tax expense		21		15
Changes in working capital:
Amounts receivable		147		2,484
Unbilled revenue and prepaid expenses		314		(185)
Accounts payable and accrued liabilities		(21)		308
Unearned revenue		333		648
Gain on foreign currencytranslation		25		(62)
Cash flows(used in) provided byoperatingactivities		(2,048)		1,755
Investing activities:
Purchase of property and equipment		(192)		(990)
Investment in intangible assets		(296)		(219)
Proceeds from sale of equipment Cash flows used in investingactivities		150 (338)		- (1,209)
Financing activities:
Proceeds from private placement		4,659		-
Issuance costs		(508)		-
Payment of lease obligations		(478)		(552)
Proceeds from government loans Repayment of project financing Repayment of notespayable		535 (300) (1,000)		- (50) -
Cash flowsprovided by (used in)financingactivities		2,908		(602)
Effect of foreign exchange on cash		26		2
Increase (decrease) in cash Cash, beginning of period		548 1,230		(54) 1,284
Cash, end ofperiod	$	1,778	$	1,230

See accompanying notes to consolidated financial statements.

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

1. Reporting entity:

Intermap Technologies[ ®] Corporation (the Company) is incorporated under the laws of Alberta, Canada. The head office of Intermap is located at 8310 South Valley Highway, Suite 240, Englewood, Colorado, USA 80112. Its registered office is located at 400, 3[rd] Avenue SW, Suite 3700, Calgary, Alberta, Canada T2P 4H2.

Intermap is a global location-based geospatial intelligence company, creating a wide variety of geospatial solutions and analytics for its customers. Intermap’s geospatial solutions and analytics can be used in a wide range of applications including, but not limited to, locationbased information, geospatial risk assessment, geographic information systems, engineering, utilities, global positioning systems maps, oil and gas, renewable energy, hydrology, environmental planning, wireless communications, transportation, advertising, and 3D visualization.

1. Basis of preparation:

(a) Going concern:

These consolidated financial statements have been prepared assuming the Company will continue as a going concern. The going concern basis of presentation assumes the Company will continue in operation for the foreseeable future and can realize its assets and discharge its liabilities and commitments in the normal course of business. During the year ended December 31, 2020, the Company reported an operating loss of $5,055, net income of $26,532, and negative cash flows from operating activities of $2,048. In addition, the Company has a shareholders’ equity of $1,486 and negative working capital of $1,816 at December 31, 2020.

The above factors may be exacerbated by the ongoing COVID-19 pandemic and in the aggregate indicate there are material uncertainties which may cast significant doubt about the Company’s ability to continue as a going concern. In response to the COVID-19 pandemic the Company has taken actions to adapt to the current environment using teleconference platforms for trainings, customer meetings and conferences, and to manage liquidity by participating in various government support programs, where applicable, including wage subsidies, tax payment deferrals and favorable credit facilities. The Company’s ability to continue as a going concern is dependent on management’s ability to successfully secure sales with upfront payments, and / or obtain additional 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. The Board of Directors and management continue to take actions to address these issues including the extinguishment of $32.9 million of debt (see Note 8(a)), raising capital through a private placement and exploring options for additional capital (see Note 13(b)).

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

The consolidated financial statements do not reflect adjustments that would be necessary if the going concern assumption was not appropriate. If the going concern basis was not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying value of assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used.

(b) Statement of compliance:

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The significant accounting policies are summarized in Note 3.

The policies applied in these consolidated financial statements are based on IFRS issued and effective as of March 31, 2021, the date the Board of Directors approved the consolidated financial statements.

(c) Measurement basis:

The consolidated financial statements have been prepared mainly on the historical cost basis. Other measurement bases used are described in the applicable notes.

(d) Use of estimates:

Preparing consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period. Actual results could differ from these estimates.

The continuing uncertainty around the outbreak of the COVID-19 pandemic required the use of judgments and estimates in the preparation of the consolidated financial statements for the year ended December 31, 2020. The future impact of COVID-19 uncertainties could generate, in future reporting periods, a significant impact to the reported amounts of assets, liabilities, revenue and expenses in these and any future consolidated financial statements. Examples of accounting estimates and judgments that may be impacted by the pandemic include, but are not limited to revenue recognition, impairment of property and equipment and intangible assets, and allowance for expected credit losses.

Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimates are reviewed and in any future periods affected.

INTERMAP TECHNOLOGIES CORPORATION Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

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Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year include the following:

i. Depreciation and amortization rates:

In calculating the depreciation and amortization expense, management is required to make estimates of the expected useful lives of property and equipment.

ii. Trade receivables:

The Company uses historical trends and performs specific account assessments when determining the expected credit losses. These accounting estimates are in respect to the trade receivables line item in the Company’s consolidated balance sheet. At December 31, 2020, trade receivables represented 7% of total assets.

The estimate of the Company’s expected credit losses could change from period to period due to the allowance being a function of the balance and composition of trade receivables.

iii. Share-based compensation:

The Company uses the Black-Scholes option-pricing model to determine the grant date fair value of share-based compensation. The following assumptions are used in the model: dividend yield; expected volatility; risk-free interest rate; expected option life; and fair value.

Changes to assumptions used to determine the grant date fair value of share-based compensation awards can affect the amounts recognized in the consolidated financial statements.

iv. Government loans:

The Company has received a loan with no stated interest obligation. The valuation and accounting for the zero-interest loan requires the application of management estimates and judgments with respect to the determination of appropriate valuation method applied on initial recognition. The assumptions for estimating fair value of the loan is disclosed in Note 8(b).

v. Revenue:

Changes to the assumptions used to measure revenue could impact the amount of revenue recognized in the consolidated financial statements (see Note 3(i)).

vi. Impairment:

The carrying value of long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable and assesses the impairment for intangible assets not yet available for use on an annual basis. The Company has determined that its long-lived assets belong to two distinct cashgenerating units (“CGUs”). The Company determines the value in use based on estimated discounted future cash flows and an impairment is recognized if the carrying value exceeds that estimate. The significant assumptions used in determining estimated

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

discounted future cash flows include projected revenues and discount rates. Judgment is required in determining the level at which to test impairment, including the grouping of CGUs that generate cash inflows (see Note 3(i)).

(e) Functional and presentation currency:

These consolidated financial statements are presented in United States dollars, which is the Company’s functional currency. All financial information presented in United States dollars has been rounded to the nearest thousand.

(f) Foreign currency translation:

Items included in the financial statements of each of the Company's subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the functional currency). Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities not denominated in the functional currency of an entity are recognized in net loss for the period.

Assets and liabilities of entities with functional currencies other than United States dollars are translated at the period end rates of exchange, and the results of their operations are translated at exchange rates prevailing at the dates of transactions. The resulting translation adjustments are included in accumulated other comprehensive income in shareholders' deficiency.

1. Summary of significant accounting policies:

(a) Consolidation:

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Intermap Technologies Inc. (a U.S. corporation); Intermap Insurance Solutions Inc. (a U.S. corporation), Intermap Technologies PTY Ltd (an Australian corporation); Intermap Technologies s.r.o. (a Czech Republic corporation); and PT ExsaMap Asia (an Indonesian corporation).

Inter-company balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. The accounting policies of all subsidiaries are consistent with the Company’s policies.

(b) Cash:

Cash includes unrestricted cash balances.

(c) Property and equipment:

Property and equipment are measured at cost less accumulated depreciation. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of aircraft overhauls is capitalized and depreciated over the period until the next

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements (In thousands of United States dollars, except per share information)

overhaul. When parts of an item of property and equipment have different useful lives, they are accounted for as separate items. Depreciation is calculated over the depreciable amount, which is the cost of an asset, less its residual value. Depreciation is provided on the straight-line basis over the following useful lives of the assets:

Assets	Years
Aircraft	10
Aircraft engines	7
Mapping equipment - hardware and software	3
Radar equipment	5
Furniture and fixtures	5
Leasehold improvements	Shorter of useful life or term of lease

Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted, if appropriate.

Assets under construction are not depreciated until available for use by the Company. Expenditures for maintenance and repairs are expensed when incurred.

The cost of replacing an item of property and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property and equipment are recognized in profit or loss as incurred.

Gains and losses on disposal of property and equipment are determined by comparing the proceeds from disposal with the carrying amount and are recognized net of costs associated with the disposal within other income in net loss for the period.

(d) Intangible assets:

Intangible assets include data library products the Company builds with the use of proprietary software and intellectual property for use in software subscription sales and data license sales. Intangible assets are measured at cost less accumulated amortization and they are amortized over a straight-line basis of five years. The amortization method, estimate of the useful life, and residual values of intangible assets are reviewed annually.

(e) Research and development:

Research costs are expensed as incurred. Development costs are expensed in the year incurred unless management believes a development project meets the specified criteria for deferral and amortization.

(f) Leases:

At inception of a contract, the Company assesses the right to control the use of an identified asset for a period of time in exchange for consideration to determine if the contract is a lease. The Company recognizes a right of use asset and a lease liability at the

Notes to Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

(In thousands of United States dollars, except per share information)

lease commencement date. The right of use asset is initially measured based on the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The asset is depreciated to the earlier of the end of the useful life or the lease term using the straight-line method. The lease term includes periods covered by an option to extend if the Company is reasonably certain to use that option. Lease terms range from two to five years for offices and data facilities. The right of use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be determined, the Company’s incremental borrowing rate. Variable lease payments that do not depend on an index or rate are not included in the measurement of the lease liability. The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in the future lease payments, if there is a change in the Company’s estimated amount expected to be paid, or if the Company changes its assessment of if it will exercise a purchase, extension, or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Company has elected to apply the practical expedient not to recognize right of use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The lease payments associated with these leases is recognized as an expense on a straight-line basis over the lease term.

(g) Provisions:

A provision is recognized, if as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

i. Restructuring:

A provision for restructuring is recognized when the Company has approved a detailed and formal restructuring plan, and the restructuring either has commenced or has been announced publicly. Future operating losses are not provided for.

INTERMAP TECHNOLOGIES CORPORATION Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 7

ii. Onerous contracts:

A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any impairment loss on the assets associated with the contract.

(h) Income taxes:

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(i) Impairment:

The carrying values of all long-lived assets, including property and equipment, intangible assets, and right of use assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Intangible

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 8

INTERMAP TECHNOLOGIES CORPORATION

assets that are not yet available for use are assessed annually regardless of whether there is an indication that the related assets may be impaired. In testing for impairment, the recoverable amount of the CGU is estimated in order to determine the extent of the impairment loss, if any.

The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the cashgenerating unit, or CGU).

An impairment loss is recorded when the recoverable amount of an asset or its CGU is less than its carrying amounts. Impairment losses are evaluated for potential reversals when events or changes in circumstances warrant such consideration.

(j) Revenue recognition:

Revenue is recognized upon transfer of control of goods or services to the buyer in an amount that reflects the consideration the Company expects to receive in exchange for those good or services. The Company’s goods and services are generally distinct and accounted for as separate performance obligations. Billings in excess of revenue are recorded as unearned revenue. Revenue recognized in excess of billings is recorded as unbilled revenue.

The company recognizes an asset related to the incremental costs of obtaining a contract with a customer. The Company has elected to make use of the practical expedient and will expense sales commission costs when incurred if the amortization period is less than 12 months.

i. Data licenses:

Revenue from the sale of data licenses in the ordinary course of business is measured at the fair value of the consideration received or receivable. Customers obtain control of data products upon receipt of a physical hard drive or download of the data from a web link provided. Invoices are generated, and revenue is recognized when control is transferred. Invoices are generally paid within 30 days.

ii. Software subscriptions:

Software subscriptions are generally one year or less, with invoices issued and paid at the beginning of the license term. Revenue is recognized overtime, and payments for future months of service are recognized in unearned revenue. While the license agreements are

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 9

INTERMAP TECHNOLOGIES CORPORATION

for a fixed term, some agreements also contain a limited number of clicks or uses. If the limit is reached prior to the end of the term, the license ends early.

iii. Fixed-price contracts:

Revenue from acquisition service contracts is recognized overtime based on the ratio of costs incurred to estimated final contract costs. The use of this method of measuring progress towards complete satisfaction of the performance obligations requires estimates to determine the cost to complete each contract. These estimates are reviewed monthly and adjusted as necessary. Provisions for estimated losses, if any, are recognized in the period in which the loss is determined. Contract losses are measured in the amount by which the estimated costs of the related project exceed the estimated total revenue for the project. Invoices are issued according to contractual terms and are usually payable within 30 days. Revenue recognized in excess of billings is recorded as unbilled revenue.

iv. Multiple performance obligations:

When a single sales transaction requires more than one performance obligation, the total amount of consideration to be received is allocated to distinct products or services deliverables based on the stand-alone selling price of each.

(k) Share-based compensation:

The grant date fair value of equity-settled share-based payment awards granted to employees is recognized as an employee expense, with a corresponding increase in equity, over the period the employees unconditionally become entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Share-based payment arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled sharebased payment transactions, regardless of how the equity instruments are obtained by the Company.

(l) Earnings per share:

The basic earnings per share is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share is computed similar to basic earnings per share, except the weighted average number of common shares outstanding are increased to include additional shares from the assumed exercise of share options and warrants, if dilutive.

Notes to Consolidated Financial Statements (In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 10

INTERMAP TECHNOLOGIES CORPORATION

(m) Financial instruments:

i. Initial measurement and classification:

Non-derivative financial assets: The Company initially recognizes trade receivables on the date that they are originated. All other financial assets are recognized initially on the date at which the Company becomes a party to the contractual provisions of the instrument. The Company determines the classification of its financial assets on the basis of both the business model for managing financial assets and the contractual cash flow characteristics of the financial assets. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets.

Assets at amortized cost: Trade receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. A financial asset is measured at amortized cost if it is held within a business model whose objective is to hold assets to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial liabilities at amortized cost: The Company initially recognizes debt liabilities on the date that they are originated. All other financial liabilities are recognized initially on the date at which the Company becomes a party to the contractual provisions of the instrument.

ii. Subsequent measurement:

Non-derivative financial assets: The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognized as a separate asset or liability.

Financial assets and liabilities are offset, and the net amount presented in the consolidated balance sheet when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

Assets at amortized cost: Subsequent to initial recognition, trade receivables are measured at amortized cost using the effective interest method, less any impairment losses.

Financial liabilities at amortized cost: The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.

INTERMAP TECHNOLOGIES CORPORATION Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 11

Such financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.

The following is a summary of the classification the Company has applied to each of its significant categories of financial instruments outstanding:

Financial instrument: Classification: Cash Assets at amortized cost Amounts receivable Assets at amortized cost Unbilled revenue Assets at amortized cost Accounts payable and accrued liabilities Financial liabilities at amortized cost Obligations under finance leases Financial liabilities at amortized cost Notes payable Financial liabilities at amortized cost Other long-term liabilities Financial liabilities at amortized cost

iii. Fair value measurement:

Financial instruments recorded at fair value on the Consolidated Balance Sheet are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1 – valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices;

Level 3 – valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs).

During the reporting periods, there were no transfers between Level 1 and Level 2 fair value measurements.

iv. Impairment of financial assets:

Loss allowances are measured based on the lifetime expected credit losses (ECLs). When determining whether the credit risk of a financial asset has increased significantly since initial recognition and then estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on historical experience and forward-looking information. The Company considers a financial asset to be in default when the customer is highly unlikely to pay its obligation in full and then impairs the asset.

Notes to Consolidated Financial Statements (In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

(n) Segments:

The operations of the Company are in one industry segment: digital mapping and related services.

(o) Share capital:

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effects.

(p) Government grants:

Government grants are recognized at fair value once there is reasonable assurance that the Company will comply with the conditions attached to the grants and that the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes the costs for which the grants are intended to compensate. A forgivable loan from the government is treated as a government grant when there is reasonable assurance that the entity will meet the terms for forgiveness of the loan.

4. Property and equipment:

==> picture [481 x 181] intentionally omitted <==

----- Start of picture text -----

Aircraft Radar and Furniture
and mapping and Leasehold Under Total
Property and equipment engines equipment fixtures improvements construction (Recast, Note 20)
Balance at December 31, 2018 $ 237 $ 2,764 $ 11 $ 101 $ 587 $ 3,700
Additions 2 4 1 - 983 990
Transfer from under construction 191 228 - - (419) -
-
Depreciation (140) (864) (5) (47) (1,056)
Balance at December 31, 2019 $ 290 $ 2,132 $ 7 $ 54 $ 1,151 $ 3,634
Additions - 4 7 - 181 192
Transfer from under construction - 901 - - (901) -
-
Depreciation (103) (943) (3) (45) (1,094)
Balance at December 31, 2020 $ 187 $ 2,094 $ 11 $ 9 $ 431 $ 2,732
----- End of picture text -----

INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements (In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 13

==> picture [452 x 162] intentionally omitted <==

----- Start of picture text -----

Aircraft Radar and Furniture
and mapping and Leasehold Under Total
Property and equipment engines equipment fixtures improvements construction (Recast, Note 20)
Cost $ 11,276 $ 31,362 $ 389 $ 1,074 $ 1,151 $ 45,252
-
Accumulated depreciation (10,986) (29,230) (382) (1,020) (41,618)
Balance at December 31, 2019 $ 290 $ 2,132 $ 7 $ 54 $ 1,151 $ 3,634
Cost $ 10,176 $ 32,267 $ 396 $ 1,074 $ 431 $ 44,344
-
Accumulated depreciation (9,989) (30,173) (385) (1,065) (41,612)
Balance at December 31, 2020 $ 187 $ 2,094 $ 11 $ 9 $ 431 $ 2,732
----- End of picture text -----

During the twelve months ended December 31, 2020, the Company disposed of assets with an original cost of $1,116 (December 31, 2019 - $Nil) and a net book value of $Nil (December 31, 2019 - $Nil) and recognized a gain of $150 (December 31, 2019 - $Nil) on those assets and received cash proceeds of $150 (December 31, 2019 - $Nil).

5. Intangible assets:

==> picture [387 x 146] intentionally omitted <==

----- Start of picture text -----

Data library not
Data yet available Total
library for use (Recast, Note 20)
Balance at December 31, 2018 $ - $ 406 $ 406
Additions - 219 219
Balance at December 31, 2019 $ - $ 625 $ 625
Additions - 296 296
Transfer 220 (220) -
Balance at December 31, 2020 $ 220 $ 701 $ 921
----- End of picture text -----

1. Right of use assets:

	December 31,	December 31,		December 31,
		2020		2019
Beginning Balance	$	406	$	781
Depreciation		(399)		(495)
New leases		800		120
Adjustment EndingBalance	$	(29) 778	$	- 406

During the twelve months ended December 31, 2020, the Company executed new lease agreements for all four office facilities, the equipment colocation facility, and two small equipment leases.

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INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

==> picture [392 x 89] intentionally omitted <==

----- Start of picture text -----

||||
|---|---|---|
|7.|Accounts payable and accrued liabilities:|
|December 31,|December 31,|
|2020|2019|
|Accounts payable|$ 1,556|$ 1,383|
|Accrued liablities|1,546|1,702|
|$ 3,102|$ 3,085|

----- End of picture text -----

During the twelve months ended December 31, 2020, the Company reversed excess vendor payables of $1 (December 31, 2019 - $37) and accrued liabilities of $Nil (December 31, 2019 - $35) recorded in prior years based on IFRS 9 derecognition of financial liabilities as the liabilities have expired.

Notes to Consolidated Financial Statements (In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 15

INTERMAP TECHNOLOGIES CORPORATION

8. Financial liabilities:

The following table provides a reconciliation of movements of liabilities to cash flows arising from financing activities and balances at December 31, 2020 and 2019:

	Notes Payable Project Financing Government Loans Lease Obligations Total
Balance at December 31, 2018 Adoption of new accounting policy Changes from financing activities: Payment of lease obligations Repayment of project financing	29,065 $ 1,588 $ - $ 14 $ 30,667 $ - - - 877 877 - - - (552) (552) - (50) - - (50)
Total changes from financing activities	- (50) - (552) (602)
Foreign exchange Other changes: Financing costs Interest paid Gain on modification of debt New leases	- 7 - 5 12 2,819 - - 54 2,873 - - - (53) (53) - (1,061) - - (1,061) - - - 120 120
Balance atDecember31,2019	31,884 $ 484 $ - $ 465 $ 32,833 $
Changes from financing activities: Proceeds from government loans Payment of lease obligations Repayment of notes payable Repayment of project financing	- - 535 - 535 - - - (478) (478) (1,000) - - - (1,000) - (300) - - (300)
Total changes from financing activities	(1,000) (300) 535 (478) (1,243)
Foreign exchange Other changes: Financing costs	- 4 - 6 10 1,254 - 2 29 1,285
Interest paid	- - - (30) (30)
Gain on modification of debt Discount on project financing (Note 12) New leases (Note 6)	(32,138) - - - (32,138) - - (73) - (73) - - - 800 800
Balance atDecember31,2020	- $ 188 $ 464 $ 792 $ 1,444 $

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 16

INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

(a) Notes payable:

The following table details the liability and equity components of each note payable balance at December 31, 2019:

==> picture [439 x 119] intentionally omitted <==

----- Start of picture text -----

December 14, December 14,
Closing Date of Note March 30, 2017 2016 2016 Total
Proceeds from issuance of notes $ - $ 6,000 $ - $ 6,000
- -
Repayment (2,890) (2,890)
Note modification - 2016 - - 27,800 27,800
- -
Conversion to long-term note payable 3,110 (3,110)
Issuance of December 2016 note - - 3,000 3,000
Transaction costs - - (168) (168)
Discount on the note (746) (158) (8,880) (9,784)
Effective interest on note discount 584 158 7,184 7,926
Current portion of notes payable $ 2,948 $ - $ 28,936 $ 31,884
----- End of picture text -----

i. December 14, 2016 note payable:

On December 14, 2016, the Company received $6,000 as a bridge loan from Vertex. The loan is payable on the earlier of March 31, 2017 or the completion of the Rights Offering, which closed on March 30, 2017. All the proceeds of the Rights Offering were to be used to pay down this note payable, and any amounts which remain outstanding after the Rights Offering will be converted into a term loan due September 1, 2020. The note is non-interest bearing, and therefore the fair value at inception must be estimated to account for an imputed interest factor. The value at inception was determined to be $5,842. The estimated discount rate was 9.21% and is subject to estimation uncertainty. The discount of $158 was recognized in contributed surplus and was amortized over the term of the note using the effective interest method. The note was subject to prepayment provisions, if the Company’s aggregate cash balance exceeds $10.0 million at the end of any calendar quarter, 50% of the balance greater than $10.0 million must be pre-paid against the outstanding notes payable.

ii. December 14, 2016 note modification:

On December 14, 2016, the Company and Vertex restructured its September 15, 2016 note payable of $25,800 and July 8, 2016 note payable of $2,000. The original notes, bearing interest at 15% per annum each, were extended to mature on September 1, 2020 and the interest was eliminated. In addition, a promissory note payable for $3,000 was issued in exchange for the termination of the royalty agreement, executed on February 23, 2015, and the amending agreement, which established the cash sweep requirement, executed on April 28, 2015. The restructured notes were treated as an extinguishment for accounting purposes, and given they require zero interest payments, the fair value at inception must be estimated to account for an imputed interest factor. The value of the remaining promissory notes ($25,800, $2,000 and $3,000) at inception was determined to be $21,752, net of transaction costs of $168. The estimated discount rate was 9.21% and is subject to estimation uncertainty. The discount to the note payable will be amortized over the term of the note using the effective interest method. For the twelve months ending December 31, 2020, $1,092 (twelve months ending December 31, 2019 – $2,592) was recognized in financing costs. The

INTERMAP TECHNOLOGIES CORPORATION Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 17

note is secured by a first priority lien on all the assets of the Company and is subject to prepayment provisions, if the Company’s aggregate cash balance exceeds $10.0 million at the end of any calendar quarter, 50% of the balance greater than $10.0 million must be pre-paid against the outstanding notes payable.

iii. March 30, 2017 note payable:

On March 30, 2017, the Company executed an amended and restated promissory note with Vertex One Asset Management (Vertex), for $3,110 due September 1, 2020. The note represents the balance remaining from the December 14, 2016 bridge loan, following the completion of the Rights Offering and repayment of $2,890. The note is non-interest bearing, and therefore the fair value at inception must be estimated to account for an imputed interest factor. The value at inception was determined to be $2,364, based on the estimated discount rate of 8.05%, and is subject to estimation uncertainty. The resulting discount of $746 was recognized in contributed surplus as a gain on the modification of debt at March 30, 2017 and will be amortized over the term of the note using the effective interest method. For the twelve months ending December 31, 2020, $162 (twelve months ending December 31, 2019 – $227) was recognized in financing costs. The note is secured by a first priority lien on all the assets of the Company and is subject to prepayment provisions, if the Company’s aggregate cash balance exceeds $10.0 million at the end of any calendar quarter, 50% of the balance greater than $10.0 million must be pre-paid against the outstanding notes payable.

iv. June 3, 2020 settlement: On June 3, 2020, the Company announced a settlement agreement with PenderFund Capital Management Ltd. (Pender), the manager of the Vertex fund. Under the terms of the agreement, Vertex and Pender extinguished the notes payable, and the parties provided for a general release from all claims associated with the Vertex financings, following receipt of a $1,000 cash payment. On August 12, 2020, the Company paid $1,000 and all claims associated with the Vertex financings were released, resulting in the gain on modification of $32,138.

(b) Project financing:

The following table details the components of the project financing balance at December 31, 2020 and 2019:

		December 31		December 31,
		2020		2019
Promissory note payable	$	-	$	300
Reimbursable project funding		188		184
		188		484
Less current portion		-		(300)
Long-termportion ofproject financing	$	188	$	184

i. Promissory note:

A promissory note with a service provider. The Company repaid $300 during 2020.

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 18

INTERMAP TECHNOLOGIES CORPORATION

ii. Project funding:

Reimbursable project development funds provided by a corporation designed to enable the development and commercialization of geomatics solutions in Canada. The funding is repayable upon the completion of a specific development project and the first sale of any of the resulting product(s). Repayment is to be made in quarterly installments equal to the lesser of 20% of the funding amount or 25% of the prior quarter’s sales. There were no sales of the related products during the years ended December 31, 2020 and 2019.

(c) Government loans:

==> picture [377 x 98] intentionally omitted <==

----- Start of picture text -----

December 31 December 31,
2020 2019
SBA loan $ 152 $ -
Western Development Canada loan 312 -
464 -
-
Less current portion (4)
Long-term portion of project financing $ 460 $ -
----- End of picture text -----

i. SBA loan:

On July 17, 2020, the Company received a $150 long-term loan from the Small Business Administration (SBA). Interest will accrue at the rate of 3.75% per annum and payments of $0.7 monthly will begin twelve months from the date the funds were received. The balance of principal and interest will be payable thirty years from the date of the note.

ii. Western Development Canada loan:

On December 29, 2020, the Company received a $385 (C$494) long-term loan from Western Economic Diversification in Canada. The loan will be repaid in 36 monthly installments starting in January 2023. The loan is non-interest bearing, and therefore the fair value at inception must be estimated to account for an imputed interest factor. The value at inception was determined to be $312, based on the estimated discount rate of 6.07%, and is subject to estimation uncertainty. The resulting discount of $73 was recognized in government grants at December 31, 2020 and will be accreted through interest expense over the term of the loan using the effective interest method.

9. Lease obligations:

The following table presents the contractual undiscounted cash flows for right of use asset lease obligations which require the following payments for each year ending December 31:

2021	$	316
2022		283
2023		131
2024		64
2025		61
	$	855

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 19

INTERMAP TECHNOLOGIES CORPORATION

Interest expense on lease obligations for the year ended December 31, 2020 was $29 (December 31, 2019 - $54). Total cash outflow for leases was $847 (December 31, 2019 - $915), including $369 (December 31, 2019 - $363) for short-term and low-value operating leases for equipment and office spaces.

The Company also has contractual undiscounted cash flows for short-term and low-value operating leases for equipment and maintenance that are not on the balance sheet which require the payments of $79 for the year ending December 31, 2021.

10. Revenue:

Details of revenue are as follows:

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----- Start of picture text -----

For the twelve months ended December 31, 2020 2019
Acquisition services $ 1,390 $ 6,925
Value-added data 908 797
Software and solutions 2,422 2,330
$ 4,720 $ 10,052
Primary geographical market
United States $ 1,385 $ 5,987
Asia/Pacific 1,474 2,390
Europe 1,861 1,675
$ 4,720 $ 10,052
Timing of revenue recognition
Upon delivery $ 1,364 $ 1,100
Services overtime 3,356 8,952
$ 4,720 $ 10,052
----- End of picture text -----

Changes in the unbilled revenue balance are as follows:

For the twelve months ended December	31,		2020		2019
Unbilled revenue, beginning of period		$	410	$	421
Increase in unbilled revenue recognized			1,446		6,943
Amounts invoiced included in the
beginning balance			(410)		(421)
Amounts invoiced in the current period			(1,411)		(6,533)
Foreign exchange			12		-
Unbilled revenue, end ofperiod		$	47	$	410

Changes in the unearned revenue balance are as follows:

For the twelve months ended December	31,		2020		2019
Unearned revenue, beginning of period		$	1,274	$	626
Recognition of unearned revenue included in the
beginning balance			(966)		(607)
Recognition of unearned revenue in the current period			(781)		(958)
Amounts invoiced and revenue unearned			2,079		2,214
Foreign exchange			1		(1)
Unearned revenue, end ofperiod		$	1,607	$	1,274

Notes to Consolidated Financial Statements (In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 20

INTERMAP TECHNOLOGIES CORPORATION

The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the expected benefit of those costs is longer than one year. The Company determined that certain commissions paid to sales employees meet the requirement to be capitalized. Total capitalized cost included in prepaid expenses and other assets to obtain contracts at December 31, 2020 was $85 (2019 – $61).

1. Operating and non-operating costs:

(a) Operating costs:

==> picture [418 x 96] intentionally omitted <==

----- Start of picture text -----

2019
(Recast, Note
For the twelve months ended December 31, 2020 20)
Personnel $ 5,497 $ 5,915
Purchased services & materials(1) 2,268 4,169
Travel 91 355
Facilities and other expenses 576 782
----- End of picture text -----

(1) Purchased services and materials include aircraft costs, project costs, professional and consulting fees, and selling and marketing costs.

(b) Restructuring costs:

During the twelve months ended December 31, 2020, the Company did not incur restructuring costs (December 31, 2019 - $272).

(c) Financing costs:

==> picture [431 x 104] intentionally omitted <==

----- Start of picture text -----

For the twelve months ended December 31, 2020 2019
Accretion of discounts recognized on
notes payable $ 1,254 $ 2,819
Interest on project financing 2 -
Interest on lease obligations 29 54
Interest on accounts payable 26 9
Discount on accounts receivable 27 -
$ 1,338 $ 2,882
----- End of picture text -----

12. Government grants:

The Company participated the following government assistance programs that were made available by various government agencies during 2020 to support COVID-19 relief:

Forthe twelvemonths endedDecember	31,		2020
Paycheck Protection Program		$	562
Canada Emergency Wage Subsidy			167
NRC IRAP Innovation Assistance Program			102
Western Development Canada discount			73
		$	904

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 21

INTERMAP TECHNOLOGIES CORPORATION

(a) Paycheck Protection Program (PPP):

The Company received $562 under the first round of the Paycheck Protection Program (PPP) in the United States. The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act, provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after twenty-four weeks if the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities. The unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments for the first six months. The Company used the proceeds for purposes consistent with the PPP and $454 of the first round has been forgiven.

(b) Canada Emergency Wage Subsidy (CEWS):

The Company was eligible for $216 (reduced by $49 for the portion of wages that were capitalized) under the CEWS program, to cover a portion of employee wages, retroactive to July 1, 2020, and is intended to help prevent future job losses and to ease the business back into normal operations. The Company received the funds during the first part of 2021.

(c) National Research Council (NRC) Industrial Research Assistance Program (IRAP) Innovation Assistance Program (IAP):

The Industrial Research Assistance Program provided a wage subsidy to eligible employers for up to 12 weeks. The Company was eligible for $127 (reduced by $25 for the portion of wages that were capitalized) for wages between April 1 and June 30, 2020.

(d) Western Development Canada discount (See Note 8(b)(iv))

13. Share capital:

(a) Authorized:

The authorized share capital of the Company consists of an unlimited number of Class A common shares and an unlimited number of Class A participating preferred shares. There are no Class A participating preferred shares outstanding.

(b) Issued:

	December	31,	2020	December	31,	2019
	Number of			Number of
Class A common shares	Shares		Amount	Shares		Amount
Balance, beginning of period:	17,268,472	$	199,532	17,268,472	$	199,532
Private placement	7,804,987		4,659	-		-
Issuance costs	-		(601)	-		-
Exercise of RSUs	50,000		9	-		-
Share-based compensation	75,070		43	-		-
Balance,end ofperiod:	25,198,529	$	203,642	17,268,472	$	199,532

On August 5, 2020, the Company issued 3,571,428 Class A common shares at C$0.56 per share in connection with the first tranche of a private placement. On August 17, 2020, the Company

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

issued 586,685 Class A common shares at C$0.56 per share as a second tranche of the private placement. The Company received $1,779 in proceeds and recorded $300 in issuance costs, of which $93 settled through warrants (see Note 13) and $207 was paid in cash, related to both tranches.

On October 6, 2020 50,000 restricted share units (RSUs) were converted to common shares that had a value of $9 in contributed surplus that was reclassified to share capital (see Note 13(c) and (f)).

During November 2020, the Company issued 1,648,874 Class A common shares, 728,000 Class A common shares, and 1,270,000 Class A common shares at C$1.03 per share in connection with the third tranche of a private placement. The Company received $2,880 in proceeds and recorded $301 in issuance costs.

On December 17, 2020, 75,070 Class A common shares were issued to a director of the Company as compensation for services. Compensation expense of $43 for these Class A common shares was included in operating costs.

(c) Contributed surplus:

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----- Start of picture text -----

December 31, December 31,
2020 2019
Balance, beginning of period $ 25,527 $ 25,379
Share-based compensation 104 148
Expiration of warrants 385 -
Converted RSUs (9) -
Balance, end of period $ 26,007 $ 25,527
----- End of picture text -----

(d) Earnings (loss) per share:

The calculation of earnings (loss) per share is based on the weighted average number of Class A common shares outstanding. Where the impact of the exercise of options or warrants is anti-dilutive, they are not included in the calculation of diluted loss per share.

For the twelve months ended December 31, 2020, there were 881,944 outstanding share options (December 31, 2019 – Nil) and 159,002 outstanding warrants (December 31, 2019 – Nil) that were included in the diluted weighted average number of shares calculation as their effect was dilutive. There were 45,381 outstanding share options (December 31, 2019 – 1,180,575) and no outstanding warrants (December 31, 2019 – 546,456) that were excluded from the diluted weighted average number of shares calculation as their effect would have been anti-dilutive.

The average market value of the Company’s shares for purposes of calculating the dilutive effect of the share options and warrants was based on quoted market prices for the period during which the share options and warrants were outstanding.

(e) Share option plan:

Notes to Consolidated Financial Statements (In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

The Company established a share option plan to provide long-term incentives to attract, motivate, and retain certain key employees, officers, directors, and consultants providing services to the Company. The plan permitted granting options to purchase up to 10% of the outstanding Class A common shares of the Company. The share option plan was replaced at the Annual General Meeting on March 15, 2018 (see Note 13(f)), and all options issued and outstanding at that time will remain until such time they are exercised, expired or forfeited. As of December 31, 2020, 895,325 share options are issued and outstanding. No additional options will be issued under this plan.

The following tables summarize information regarding share options outstanding:

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December 31, 2020 December 31, 2019
Weighted Weighted
Number of average Number of average
shares exercise shares exercise
under option price (CDN) under option price (CDN)
Options outstanding,
beginning of period 1,180,575 $ 0.89 1,284,077 $ 1.04
Expired (285,250) 1.16 (81,376) 3.25
Forfeitures - - (22,126) 0.89
Options outstanding, end of period 895,325 $ 0.81 1,180,575 $ 0.89
Options exercisable, end of period 895,325 $ 0.81 1,018,989 $ 0.91
----- End of picture text -----

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Exercise Weighted average
Price Options remaining Options
(CDN$) outstanding contractual life exercisable
0.70 681,012 6.21 years 681,012
0.80 170,932 5.80 years 170,932
2.30 12,381 0.55 years 12,381
2.70 31,000 1.30 years 31,000
895,325 5.96 years 895,325
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During the twelve months ended December 31, 2020 and 2019, the estimated forfeiture rate was 10.36%. During the twelve months ended December 31, 2020, the Company recognized $8 (twelve months ended December 31, 2019 – $40) of non-cash compensation expense related to the share option plan.

(f) Omnibus plan:

The omnibus plan was approved by the shareholders at the Annual General Meeting on March 15, 2018 and replaces the share option plan, the employee share compensation plan and the director’s share compensation plan, which provided for shares to be issued to employees and directors as compensation for services. . The omnibus plan permits the issuance of options, stock appreciation rights, restricted share units and other share-based awards under one single plan.

The maximum number of common shares reserved under the omnibus plan is 3,363,631. Any common shares reserved under the predecessor share option plan related to awards that

Notes to Consolidated Financial Statements (In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

expire or forfeit will be rolled into the omnibus plan. As of December 31, 2020, 895,325 share options (2019 – 1,180,575) and 1,224,126 RSUs (2019 – 1,050,400) are issued and outstanding. In addition, 872,183 Class A common shares were issued during 2018 and 75,070 Class A common shares were issued during 2020 (see Note 13(b)) under the plan, leaving 296,927 awards remain available for future issuance.

The following tables summarize information regarding RSUs outstanding:

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----- Start of picture text -----

December 31, December 31,
2020 2019
Number of Number of
RSUs RSUs
RSUs outstanding, beginning of period 1,050,400 430,200
Issued 325,061 655,000
Converted to common shares (50,000) -
Forfeitures (101,335) (34,800)
RSUs outstanding, end of period 1,224,126 1,050,400
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During the twelve months ended December 31, 2020, 325,061 RSUs (twelve months ended December 31, 2019 – 655,000) were issued at a weighted average grant date fair value of C$0.73 (December 31, 2019 – C$0.24) per share. During the twelve months ended December 31, 2020, the Company recognized $96 (twelve months ended December 30, 2019 - $108) of non-cash compensation expense related to the RSUs.

(g) Share-based compensation expense:

Non-cash compensation expense has been included in operating costs with respect to the share options, RSUs and shares granted to employees and non-employees as follows:

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For the twelve months ended December 31, 2020 2019
Employees $ 65 $ 88
Directors and advisors 39 60
Non-cash compensation $ 104 $ 148
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For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

14. Class A common share purchase warrants:

The following table details the number of Class A common share purchase warrants outstanding at each balance sheet date:

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----- Start of picture text -----

Number of Number of
Warrants Warrants
Outstanding Outstanding
Exercise Anti-dilution December December
Grant Date Expiry Date Price Granted Adjustment 31, 2019 Expired 31, 2020
4/1/2015 9/1/2020 US$ 0.70 458,907 87,549 546,456 (546,456) -
8/5/2020 7/31/2022 US$ 0.42 139,284 - - - 139,284
8/17/2020 8/14/2022 US$ 0.42 19,718 - - - 19,718
617,908 - 546,456 - 159,002
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Each warrant entitles its holder to purchase one Class A common share. At December 31, 2020, the 159,002 warrants are valued at $93.

On September 1, 2020, 546,456 warrants expired that had a value of $385, which was reclassified to contributed surplus (see Note 13(c)).

15. Income Taxes:

(a) Current tax (expense) recovery:

December 31,		2020		2019
Current period	$	(21)	$	(15)
	$	(21)	$	(15)

(b) Reconciliation of effective tax rate:

Income tax expense varies from the amount that would be computed by applying the basic federal and provincial income tax rates to the net income (losses) before taxes as follows:

December 31,		2020		2019
Net Income (Losses), excluding income tax	$	26,553	$	(4,889)
Tax rate		24.0%		27.0%
Expected Canadian income tax recovery (expense)	$	(6,373)	$	1,320
Decrease resulting from:
Change in unrecognized temporary differences		6,916		(553)
Difference between Canadian statutory rate and those
applicable to U.S. and other foreign subsidiaries		41		(41)
Non-deductible expenses and non-taxable income		156		(28)
Adjustment for prior years income tax matters		(96)		(729)
Expiry of tax losses		(693)
Other		28		16
	$	(21)	$	(15)

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

(c) Recognized deferred tax assets and liabilities:

Deferred income taxes reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws. Deferred tax assets and liabilities recognized at December 31, 2020 and 2019, are as follows:

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----- Start of picture text -----

Assets Liabilities Net
December 31, 2020 2019 2020 2019 2020 2019
.
Property and equipment $ - $ - $ 136 $ 288 $ 136 $ 288
Intangible assets - - 227 154 227 154
Note payable - - 11 548 11 548
- -
Tax loss carryforwards (374) (990) (374) (990)
Tax (assets) liabilities $ (374) $ (990) $ 374 $ 990 $ - $ -
Set off of tax 374 990 (374) (990) - -
- - - - - -
Net tax (assets) liabilities $ $ $ $ $ $
----- End of picture text -----

(d) Unrecognized deferred tax assets:

Deferred tax assets have not been recognized in respect of the following items:

December31,		2020		2019
Deductible temporary differences	$	21,184	$	20,340
Tax loss carryforwards		191,080		218,953
	$	212,264	$	239,293

The deferred tax asset is recognized when it is probable that future taxable profit will be available to utilize the benefits. The Company has not recognized deferred tax assets with respect to these items due to the uncertainty of future Company earnings.

Loss carry forwards:

At December 31, 2020, approximately $191,876 of loss carry forwards and $2,405 of tax credits were available in various jurisdictions. At December 31, 2020, $1,569 of loss carry forwards were recognized as a deferred tax asset. A summary of losses by year of expiry are as follows:

2022	$	1,190
2023-2040		182,705
Indefinite		7,981
	$	191,876

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

(e) Movement in deferred tax balances during the year:

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Balance at Recognized in Recognized Balance at
December 31, 2019 Profit and Loss in Equity December 31, 2020
Property and equipment $ 288 $ (152) $ - $ 136
Intangible assets 154 73 $ 227
Note payable 548 (537) - 11
Tax loss carryforwards (990) 616 - (374)
Net tax (assets) liabilities $ - $ - $ - $ -
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16. Segmented information:

The operations of the Company are in one industry segment: digital mapping and related services. Revenue by geographic segment is included in Note 10.

Property and equipment of the Company are located as follows:

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December 31, 2020 December 31, 2019
United States $ 2,654 $ 3,478
Canada 30 75
Europe 24 38
Asia/Pacific 23 43
$ 2,731 $ 3,634
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A summary of sales to major customers that exceeded 10% of total sales during each period are as follows:

Year ended December 31,		2020		2019
Customer A	$	1,097	$	2,092
Customer B		510		389
Customer C		293		4,833
	$	1,900	$	7,314

17. Financial risk management:

The Company has exposure to the following risks from its use of financial instruments: credit risk, market risk, liquidity risk, and capital risk. Management, the Board of Directors, and the Audit Committee monitor risk management activities and review the adequacy of such activities. This note presents information about the Company’s exposure to each of the risks as well as the objectives, policies and processes for measuring and managing those risks.

The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

(a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Such risks arise principally from certain financial assets held by the Company consisting of outstanding trade receivables and investment securities.

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Company’s customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk.

Approximately 40 percent of the Company’s revenue is attributable to transactions with three key customers (year ended December 31, 2019 – 73 percent of the revenue was attributable to three key customers), approximately 22 percent of the Company’s trade receivables at year end are attributable to customers located in Asia/Pacific (December 31, 2019 –

approximately 1 percent), and approximately 69 percent of the Company’s trade receivables at year end are attributable to customers located in Europe (December 31, 2019 – approximately 22 percent).

The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered.

A significant portion of the Company’s customers have transacted with the Company in the past or are reputable large Companies and losses have occurred infrequently.

The maximum exposure to credit risk of the Company at period end is the carrying value of these financial assets.

i. Trade receivables

Expected credit losses are made on a customer-by-customer basis. All write downs against receivables are recorded within sales, general and administrative expense in the statement of operations. The Company is exposed to credit-related losses on sales to customers outside North America due to potentially higher risks of collectability.

Amounts receivable as of December 31, 2020 and 2019, consist of:

	December 31,	December 31,	December 31,	December 31,
		2020		2019
Trade receivables	$	351	$	703
Other miscellaneous	receivables	228		38
	$	579	$	741

INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For	the years ended December 31, 2020 and 2019 Page 29
	Trade receivables by geography consist of: December 31, December 31, 2020 2019 United States 33 $ 524 $ Europe 242 152 Canada - 18 Asia/Pacific 76 9 351 $ 703 $ An aging of the Company’s trade receivables are as follows: December 31, December 31, 2020 2019 Current 270 $ 682 $ 31-60 days 22 20 61-90 days 21 1 Over 91 days 38 - 351 $ 703 $

The balance of the past due amounts relates to reoccurring customers and are considered collectible.

ii. Cash

The Company manages its credit risk surrounding cash by dealing solely with what management believes to be reputable banks and financial institutions and limiting the allocation of excess funds into financial instruments that management believes to be highly liquid, low risk investments. The balance at December 31, 2020, is held in unrestricted cash at banks within the United States, Canada, Europe, Asia, and Australia to facilitate the payment of operations in those jurisdictions.

(b) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Company’s income or the value of its holding of financial instruments.

i. Foreign exchange risk

The Company operates internationally and is exposed to foreign exchange risk from various currencies, primarily the Canadian dollar, Euro, British pound, Indonesian rupiah, Czech Republic koruna, Malaysian ringgit and Australian dollar. Foreign exchange risk arises from sales and purchase transactions as well as recognized financial assets and liabilities that are denominated in a currency other than the United States dollar, which is the functional currency of the Company and most its subsidiaries.

The Company’s primary objective in managing its foreign exchange risk is to preserve sales values and cash flows and reduce variations in performance. Although management

Notes to Consolidated Financial Statements (In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 30

INTERMAP TECHNOLOGIES CORPORATION

monitors exposure to such fluctuations, it does not employ any external hedging strategies to counteract the foreign currency fluctuations.

The balances in foreign currencies at December 31, 2020, are as follows:

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----- Start of picture text -----

Czech
Australian Canadian British Indonesian Republic
(in USD) Dollar Dollar Euro Pound Rupiah Koruna
Cash $ - $ 1,035 $ 23 $ - $ 12 $ 37
Trade receivables - 11 47 77 - 30
Accounts payable and
accrued liabilities (5) (407) (29) - (162) (121)
- - - - -
Project financing (188)
Government loans - (312) - - - -
$ (5) $ 139 $ 41 $ 77 $ (150) $ (54)
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The balances in foreign currencies at December 31, 2019, are as follows:

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----- Start of picture text -----

Czech
Australian Canadian British Indonesian Republic
(in USD) Dollar Dollar Euro Pound Rupiah Koruna
Cash $ - $ 22 $ - $ - $ 16 $ 27
Trade receivables - 18 43 46 3 43
Accounts payable and
accrued liabilities (2) (325) (27) - (129) (117)
- - - - -
Project financing (184)
$ (2) $ (469) $ 16 $ 46 $ (110) $ (47)
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Based on the net exposures at December 31, 2020 and 2019, and if all other variables remain constant, a 10% depreciation or appreciation of the United States dollar against the following currencies would result in an increase / (decrease) in net earnings by the amounts shown below:

December 31, 2020
											Czech
		Australian		Canadian			British		Indonesian		Republic
		Dollar		Dollar	Euro		Pound		Rupiah		Koruna
United States dollar: Depreciates 10% Appreciates 10%		$	- -	(14) $ 14	$	(4) 4	$	(8) 8	$	15 (15)	5 $ (5)
December 31, 2019
											Czech
		Australian		Canadian			British	Indonesian		Republic
		Dollar		Dollar	Euro		Pound		Rupiah		Koruna
United States dollar:
Depreciates 10%	$	-	$	29 $	(2)	$	(5)	$	11	$	5
Appreciates 10%		-		(29)	2		5		(11)		(5)

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

ii. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Financial assets and financial liabilities with variable interest rates expose the Company to cash flow interest rate risk. The Company does not have any debt instruments outstanding with variable interest rates at December 31, 2020, or December 31, 2019.

Financial liabilities that bear interest at fixed rates are subject to fair value interest rate risk. No currency hedging relationships have been established for the related monthly interest and principal payments.

The Company manages its interest rate risk by minimizing financing costs on its borrowings and maximizing interest income earned on excess funds while maintaining the liquidity necessary to conduct operations on a day-to-day basis.

(c) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. The Company’s approach to managing capital is to ensure, as far as possible, that it will have sufficient liquidity to meets its obligations.

The Company manages its liquidity risk by evaluating working capital availability and forecasting cash flows from operations and anticipated investing and financing activities. At December 31, 2020, the Company has a cash balance of $1,778 (December 31, 2019 – $1,230) and working capital of negative $1,816 (December 31, 2019 – negative $33,768).

The following are the contractual maturities of the undiscounted cash flows of financial liabilities as of December 31, 2020:

					Payment due:	Payment due:
				Between		Between		Between		Between
		In less than 3	3	months and 6	6	months and 1		1 year and 2		2 years and 5
		months		months		year		years		years
Accounts payable
and accrued liabilities	$	2,910	$	33	$	159	$	-	$	-
Project financing		-		-		-		188		-
Government loans		-		-		4		9		628
Lease obligations		76		80		160		283		256
	$	2,986	$	113	$	323	$	480	$	884

For the years ended December 31, 2020 and 2019

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INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

The following are the contractual maturities of the undiscounted cash flows of financial liabilities as of December 31, 2019:

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Payment due:
Between Between Between Between
In less than 3 3 months and 6 6 months and 1 1 year and 2 2 years and 5
months months year years years
Accounts payable
and accrued liabilities $ 2,857 $ 98 $ 130 $ - $ -
- - - -
Notes Payable 33,914
Project financing 90 90 120 184 -
Lease obligations 161 151 90 44 40
$ 3,108 $ 339 $ 34,254 $ 228 $ 40
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(d) Capital risk

The Company’s objectives when managing its capital risk is to safeguard its assets, while at the same time maintaining investor, creditor, and market confidence, and to sustain future development of the business and ultimately protect shareholder value. The Company manages its risks and exposures by implementing the strategies below.

The Company includes shareholders’ deficiency, long-term portion of project financing, longterm government loans, and long-term portion of lease obligations in the definition of capital. Total capital at December 31, 2020, was positive $2,655 (December 31, 2019 – negative $29,103). To maintain or adjust the capital structure, the Company may issue new shares, issue new debt with different characteristics, acquire or dispose of assets, or adjust the amount of cash and short-term investment balances held.

The Company has established a budgeting and planning process with a focus on cash, working capital, and operational expenditures and continuously assesses its capital structure considering current economic conditions and changes in the Company’s short-term and longterm plans. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

For the years ended December 31, 2020 and 2019

Page 33

INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

18. Fair values:

Set out below is a comparison by class of the carrying amounts and fair value of the Company's financial instruments that are carried in the Consolidated Balance Sheet:

	December 31, 2019 December 31, 2020
	Carrying Fair Carrying Fair Amount Value Amount Value
Financial assets Loans and receivables: Cash Amounts receivable	1,778 $ 1,778 $ 1,230 $ 1,230 $ 579 579 741 741
	2,357 $ 2,357 $ 1,971 $ 1,971 $
Financial liabilities Other financial liabilities: Notes payable Accounts payable and accrued liabilities Project financing Governmentloans	- - 21,884 31,798 3,102 3,102 3,085 3,085 188 188 184 184 464 464 - -
	3,754 $ 3,754 $ 25,153 $ 35,067 $

The fair values of the financial assets and liabilities are shown at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

• Cash, amounts receivable, accounts payable and accrued liabilities and provisions approximate their carrying amounts largely due to the short-term maturities of these instruments.

• Notes payable, project financing and government loans are evaluated by the Company based on parameters such as interest rates and the risk characteristics of the instrument.

• The fair value of the warrants is estimated using the Black-Scholes option pricing model incorporating various inputs including the underlying price volatility and discount rate.

• Key management personnel and director compensation:

The Company’s compensation program specifically provides for total compensation for executive officers, which is a combination of base salary, performance-based incentives and benefit programs that reflect aggregated competitive pay considering business achievement, fulfillment of individual objectives and overall job performance. Executive officers participate in the Company’s omnibus plan (Note 13(f)).

The compensation of non-employee directors consists of a cash component and a share component. Directors participate in the Company’s omnibus plan (Note 13(f)).

The following summarizes key management personnel and directors’ compensation for the years ended December 31, 2020 and 2019:

INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

For the years ended December 31, 2020 and 2019

Page 34

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Year ended December 31, 2020 2019
Compensation and benefits $ 1,062 $ 1,239
Share-based compensation 79 88
$ 1,141 $ 1,327
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The following summarizes key management personnel and directors share ownership of the Company as of December 31, 2020, and 2019:

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December 31, 2020 2019
Number of Class A Common shares held 6,496,696 6,308,492
Percentage of total Class A Common shares issued 25.78% 36.53%
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20. Correction of immaterial error:

During the fourth quarter of 2020, the Company determined the rates used to calculate capitalized labor costs were not properly converted from the local to functional currency. The Company has revised beginning deficit and corrected the immaterial error in the

accompanying prior period financial information in these consolidated financial statements. In addition, the company reclassified intangible assets under construction that were previously included in property and equipment.

The following table sets forth the effect these adjustments had on the Company's consolidated balance sheet as of December 31, 2019:

	December 31, 2019
	Previously Reported Reclass Adjustment Revised
Property and equipment Intangible assets Total assets Deficit at December 31, 2018 Deficit at December 31, 2019 Total shareholders deficit
	4,555 $ (676) $ (245) $ 3,634 $
	- 676 (51) 625
	8,105 - (296) 7,809
	(249,564) - (70) (249,634)
	(254,377) - (296) (254,673)
	(29,087) - (296) (29,383)

The following table sets forth the effect these adjustments had on the Company’s consolidated statements of profit and loss and other comprehensive income for the year ended December 31, 2019:

	December 31, 2019
	Previously Reported Adjustment Revised
Operating costs Depreciation of property and equipment Operating loss Net loss	11,101 $ 120 $ 11,221 $
	1,085 (29) 1,056
	(2,901) (91) (2,992)
	(4,813) (91) (4,904)

For the years ended December 31, 2020 and 2019

Page 35

INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share information)

The following table sets forth the effect these adjustments had on the Company's consolidated statements of cash flows for the year ended December 31, 2019:

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December 31, 2019
Previously
Reported Adjustment Revised
Net loss $ (4,813) $ (91) $ (4,904)
Depreciation of property and equipment 1,085 (29) 1,056
Cash flows provided by operating activities 1,875 (120) 1,755
Purchase of property and equipment (1,329) 339 (990)
-
Investment in intangible assets (219) (219)
Cash flows used in investing activities (1,329) 120 (1,209)
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21. Subsequent event:

During February 2021, the Company received loan proceeds of approximately $561 under the second round of the Paycheck Protection Program (PPP) in the United States.