Intermap Technologies Corporation — Audit Report / Information 2022

Apr 1, 2023

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Consolidated Financial Statements of

INTERMAP TECHNOLOGIES CORPORATION

Years ended December 31, 2022 and 2021

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

INDEPENDENT AUDITOR’S 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 statements of financial position as at December 31, 2022 and December 31, 2021

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

• the consolidated statements of changes in shareholders’ (deficiency) 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, 2022 and December 31, 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

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 “ Auditor’s Responsibilities for the Audit of the Financial Statements ” section of our auditor’s report.

KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. KPMG Canada provides services to KPMG LLP.

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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.

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 from operating activities in the current and prior years, has negative working capital (current assets less current liabilities) and a shareholders’ deficit at December 31, 2022.

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, 2022. 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 auditor’s report, we have determined the matters described below to be the key audit matters to be communicated in our auditor’s report.

Evaluation of impairment of long-lived assets

Description of the matter

We draw attention to Notes 2(d)(vi), 3(j), 5, 6 and 7 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 $1,387 thousand, $1,016 thousand and $343 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

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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.

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

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 2022 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 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.

Evaluation of the fair value of the investment in a privately held company

Description of the matter

We draw attention to Notes 2(d)(iii), 3(f) and 8 of the financial statements. At December 31, 2022, the Entity had an investment in a privately held company (“investment”) which was valued at $1,011 thousand over which the Entity exercises no control or significant influence. The investment is carried at fair value, with the change recognized in profit or loss. The fair value of the investment at December 31, 2022 was estimated using a market-based approach with primarily unobservable inputs, including the comparable enterprise value to revenue multiples discounted for considerations such as the lack of marketability and other differences between the comparable peer group and the privately held company.

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Why the matter is a key audit matter

We identified the evaluation of the fair value of the investment in a privately held company as a key audit matter. This matter represented a significant risk of material misstatement given the magnitude of the investment. In addition, significant auditor judgment and specialized skills and knowledge were required in evaluating the results of our audit procedures regarding the Entity’s unobservable inputs identified above.

How the matter was addressed in the audit

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

We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the appropriateness of the comparable enterprise value to revenue multiples (“multiples”) discounted for considerations such as the lack of marketability and other differences between the comparable peer group and the privately held company. The multiples were evaluated by comparing them to independently developed multiples using publicly available market data, adjusted for the lack of marketability of the privately held company and other considerations.

With the assistance of our valuation professionals, we developed an independent range of estimates of the fair value and compared our estimates to management’s estimate.

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 auditor’s report thereon, included in a document likely to be entitled “2022 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.

We obtained the information included in Management’s Discussion and Analysis filed with the relevant Canadian Securities Commissions as at the date of this auditor’s report. If,

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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 auditor’s report.

We have nothing to report in this regard.

The information, other than the financial statements and the auditor’s report thereon, included in a document likely to be entitled “2022 Annual Report” is expected to be made available to us after the date of this auditor’s 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 as issued by the International Accounting Standards Board, 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.

Auditor’s 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 auditor’s 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 auditor’s 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 auditor’s 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 auditor’s 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 auditor’s 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 auditor’s report is Andrew Watson.

Ottawa, Canada March 31, 2023

INTERMAP TECHNOLOGIES CORPORATION

Consolidated Statements of Financial Position

(In thousands of United States dollars)

		December 31,		December 31,
		2022		2021
Assets
Current assets:
Cash	$	843	$	188
Amounts receivable (Note 19(a))		1,290		914
Unbilled revenue (Note 12)		8		679
Prepaid expenses		382		472
		2,523		2,253
Prepaid expenses		55		39
Property and equipment (Note 5)		1,387		2,480
Intangible assets (Note 6)		1,016		1,117
Right of use assets (Note 7)		343		497
Investment (Note 8)		1,011		1,062
Total assets	$	6,335	$	7,448
Liabilities and Shareholders' (Deficiency) Equity
Current liabilities:
Accounts payable and accrued liabilities (Note 9)	$	3,633	$	3,656
Bank loan (Note 10(a))		37		-
Current portion of government loans (Note 10(c))		108		9
Lease obligations (Note 11)		223		251
Unearned revenue (Note 12)		2,953		1,721
Income taxes payable		-		4
		6,954		5,641
Bank loan (Note 10(a))		71		-
Long-term project financing (Note 10)		177		188
Long-term government loans (Note 10(c))		375		477
Lease obligations (Note 11)		177		290
Total liabilities		7,754		6,596
Shareholders' (deficiency) equity:
Share capital (Note 15(b))		208,406		206,102
Warrants		493		232
Accumulated other comprehensive loss		(141)		(129)
Contributed surplus (Note 15(c))		26,603		26,144
Deficit		(236,780)		(231,497)
Total shareholders'(deficiency) equity		(1,419)		852
Going concern (Note 2(a))
Total liabilities and shareholders' equity	$	6,335	$	7,448

See accompanying notes to consolidated financial statements.

On behalf of the Board: (signed) Patrick A. Blott

On behalf of the Board: (signed) Phillippe Frappier

Patrick A. Blott Chairman and CEO

Phillippe Frappier Independent Director

INTERMAP TECHNOLOGIES CORPORATION

Consolidated Statements of Loss and Other Comprehensive Loss

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

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For the years ended December 31, 2022 2021
Revenue (Note 12) $ 6,795 $ 5,799
Expenses:
Operating costs (Note 13(a)) 10,225 9,280
Restructuring costs (Note 13(b)) - 238
Depreciation of property and equipment (Note 5) 1,125 1,375
Amortization of intangible assets (Note 6) 312 71
Depreciation of right of use assets (Note 7) 338 316
Gain on disposal of equipment (Note 5) - (6)
12,000 11,274
Operating loss (5,205) (5,475)
(Loss) gain on fair vale of investment (Note 8) (51) 1,062
Government grants (Note 13) - 1,135
Financing costs (Note 13(c)) (57) (61)
Financing income 6 3
Loss on foreign currency translation 20 (2)
Loss before income taxes (5,287) (3,338)
Income tax expense:
Current 4 (18)
4 (18)
Loss for the period $ (5,283) $ (3,356)
Other comprehensive (loss) income:
Items that are or may be reclassified
subsequently to profit or loss:
Foreign currency translation differences (12) (14)
Comprehensive loss for the period $ (5,295) $ (3,370)
Basic and diluted loss per share $ (0.16) $ (0.12)
Weighted average number of Class A common
shares - basic and diluted (Note 15(c)) 33,378,811 27,039,139
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See accompanying notes to consolidated financial statements.

INTERMAP TECHNOLOGIES CORPORATION

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

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Accumulated
Other
Contributed Comprehensive
Share Capital Warrants Surplus (Loss) Income Deficit Total
Balance at December 31, 2020 $ 203,642 $ 93 $ 26,007 $ (115) $ (228,141) $ 1,486
Comprehensive loss for the period - - - (14) (3,356) (3,370)
Share-based compensation - - 146 - - 146
Private placement proceeds (Note 15(b)) 2,976 - - - - 2,976
Issuance costs (525) 139 - - - (386)
RSU conversion 9 - (9) - - -
Balance at December 31, 2021 $ 206,102 $ 232 $ 26,144 $ (129) $ (231,497) $ 852
Comprehensive loss for the period $ - $ - $ - $ (12) $ (5,283) (5,295)
Share-based compensation - - 366 - - 366
Private placement proceeds (Note 15(b)) 2,588 294 - - - 2,882
Issuance costs (284) 60 - - - (224)
Expiry of warrants - (93) 93 - - -
Balance at December 31, 2022 $ 208,406 $ 493 $ 26,603 $ (141) $ (236,780) $ (1,419)
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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)

For the years ended December 31,		2022		2021
Operating activities:
Net loss for the period	$	(5,283)	$	(3,356)
Interest paid		(23)		(25)
Income tax paid		-		(19)
Adjustments for:
Loss (gain) on fair value of investment		51		(1,062)
Depreciation of property and equipment		1,125		1,375
Amortization of intangible assets		312		71
Depreciation of right of use assets		338		316
Share-based compensation expense		412		146
Gain on disposal of equipment		-		(6)
Financing costs		57		61
Current income tax expense		(4)		18
Changes in working capital:
Amounts receivable		(391)		(337)
Unbilled revenue and prepaid expenses		756		(295)
Accounts payable and accrued liabilities		(109)		538
Unearned revenue		1,232		114
Loss (gain) on foreign currency translation		18		(32)
Cash flows used in operating activities		(1,509)		(2,493)
Investing activities:
Purchase of property and equipment		(32)		(1,124)
Additions to intangible assets		(211)		(267)
Proceeds from sale of property and equipment		-		6
Cash flows used in investing activities		(243)		(1,385)
Financing activities:
Proceeds from private placement		2,882		2,976
Issuance costs		(224)		(386)
Payment of lease obligations		(339)		(317)
Proceeds from bank loan		99		-
Repayment of government loans		(9)		(4)
Cash flows provided by financing activities		2,409		2,269
Effect of foreign exchange on cash		(2)		19
Increase (decrease) in cash		655		(1,590)
Cash, beginning of period		188		1,778
Cash,end ofperiod	$	843	$	188

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, 2022 and 2021

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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.

2. 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, 2022, the Company reported an operating loss of $5,205, net loss of $5,283, and negative cash flows from operating activities of $1,509. In addition, the Company has a shareholders’ deficit of $1,419 and negative working capital of $4,431(current assets less current liabilities) at December 31, 2022.

The above factors in the aggregate indicate there are material uncertainties which may cast significant doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on management’s ability to successfully secure sales with upfront payments, and / or obtain additional financing. There can be no assurance that such plans will be achieved. 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 exploring options for additional capital and securing subscription-based contracts which will increase revenue in future periods.

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 statement of financial position classifications used.

Notes to Consolidated Financial Statements

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

For the years ended December 31, 2022 and 2021

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INTERMAP TECHNOLOGIES CORPORATION

(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, 2023, 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.

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.

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 statements of financial position. At December 31, 2022, trade receivables represented 20% 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.

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

For the years ended December 31, 2022 and 2021

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INTERMAP TECHNOLOGIES CORPORATION

iii. Investments:

The valuation and accounting for the Company’s investment in a privately held company requires the application of management estimates and judgments with respect to the determination of appropriate valuation method applied at each reporting date. The assumptions for estimating fair value of the investment are disclosed in Note 8.

iv. 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.

v. Revenue:

Revenue from acquisition service contracts, which are fixed-price contracts, is recognized over time based on the ratio of costs incurred to estimated total contract costs. The determination of estimated total contract costs of acquisition services contracts requires the use of significant assumptions related to estimated purchased services, materials, and labor costs. Changes to the assumptions used to measure revenue could impact the amount of revenue recognized in the consolidated financial statements (see Note 3(k)).

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 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(j)).

(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.

For the years ended December 31, 2022 and 2021

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INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

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

(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.

3. Summary of material 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.

For the years ended December 31, 2022 and 2021

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INTERMAP TECHNOLOGIES CORPORATION

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

(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 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.

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

For the years ended December 31, 2022 and 2021

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INTERMAP TECHNOLOGIES CORPORATION

(f) Investments:

Investments include the common and preferred shares of a privately held company over which the Company exercises no control or significant influence. The investment is carried at fair value, with the change recognized in profit or loss.

(g) 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 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.

(h) 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

Notes to Consolidated Financial Statements

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

For the years ended December 31, 2022 and 2021

Page 7

INTERMAP TECHNOLOGIES CORPORATION

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.

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.

(i) 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

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

For the years ended December 31, 2022 and 2021

Page 8

INTERMAP TECHNOLOGIES CORPORATION

reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(j) 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 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.

(k) 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

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

For the years ended December 31, 2022 and 2021

Page 9

INTERMAP TECHNOLOGIES CORPORATION

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 at least one year, with invoices issued and paid at the beginning of the license term. Revenue is recognized over time, and payments for future months of service are recognized in unearned revenue. While the license agreements are 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 over time based on the ratio of costs incurred to estimated total contract costs. 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.

(l) 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.

Notes to Consolidated Financial Statements

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

For the years ended December 31, 2022 and 2021

Page 10

INTERMAP TECHNOLOGIES CORPORATION

(m) 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.

(n) 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 assets at fair value through profit and loss: Equity investments that are held for trading are classified at FVTPL

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.

Notes to Consolidated Financial Statements

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

For the years ended December 31, 2022 and 2021

Page 11

INTERMAP TECHNOLOGIES CORPORATION

Financial assets and liabilities are offset, and the net amount presented in the consolidated statements of financial position 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 assets at fair value through profit and loss: Equity investments are measured at fair value. Net changes in the fair value are recognized in profit and loss.

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

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:

iii. Fair value measurement:

Financial instruments recorded at fair value on the consolidated statements of financial position 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.

INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

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

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

For the years ended December 31, 2022 and 2021 Page 12
Financial instrument: Classification:
Cash Assets at amortized cost
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Financial instrument: Cash	Classification: Assets at amortized cost
Amounts receivable	Assets at amortized cost
Investments	Financial assets at fair vaule
	through profit and loss
Accounts payable and accrued liabilities	Financial liabilities at amortized cost
Long-term project financing	Financial liabilities at amortized cost
Bank loans	Financial liabilities at amortized cost
Long-term government loans	Financial liabilities at amortized cost
Lease obligations under finance leases	Financial liabilities at amortized cost

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.

(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) Warrants:

Warrants are classified as equity. Proceeds from the sale of combined financial instruments that include warrants are allocated to their components based on their relative fair values. The fair value of warrants is estimated using the Black-Scholes option pricing model at the time of their issuance. If warrants are exercised, a pro-rata portion of the amount recognized at their original issuance is transferred to common shares. If warrants expire unexercised, the amount recognized at their original issuance is transferred to contributed surplus.

(q) 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.

Notes to Consolidated Financial Statements

For the years ended December 31, 2022 and 2021

Page 13

INTERMAP TECHNOLOGIES CORPORATION

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

4. New and revised IFRS accounting pronouncements:

• (a) Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of accounting policies

During the fourth quarter of 2022, the Company early adopted Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of accounting policies issued on February 12, 2021. The amendments to IAS 1 require that an entity disclose its material accounting policies, instead of its significant accounting policies. The amendments to IFRS Practice Statement 2 provide guidance on how to apply the concept of materiality to accounting policy disclosures. The Company has applied these changes in the current period in Note 3.

The IASB and International Financial Reporting Interpretations Committee (IFRIC) issued the following standards that have not been applied in preparing these consolidated financial statements, as their effective dates fall within annual periods beginning after the current reporting period.

(a) Amendments to IAS 1 – Classification of Liabilities as current or non-current

On January 23, 2020, the IASB issued amendments to IAS 1 – Presentation of financial statements, providing a more general approach to the classifications of liabilities based on the contractual agreements in place at the reporting date. The amendments apply to annual reporting periods beginning on or after January 1, 2023. Early adoption is permitted. The Company assessed the potential impact of the amendment and determined there will be no material impact on the consolidated financial statements.

(b) Amendments to IAS 8 – Definition of accounting estimates

On February 12, 2021, the IASB issued amendments to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors, to assist entities to distinguish between accounting policies and accounting estimates. The amendments apply to annual periods beginning on or after January 1, 2023. The amendments to IAS 8 replace the definition of a “change in accounting estimates” with a definition of “accounting estimates”. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty”. Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involved measurement uncertainty. The amendments confirm that a change in an accounting estimate that results from new information or new developments is not a correction of an error. The Company assessed the potential impact of the amendment and determined there will be no material impact on the consolidated financial statements.

INTERMAP TECHNOLOGIES CORPORATION

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

For the years ended December 31, 2022 and 2021

Page 14

5. Property and equipment:

==> picture [462 x 344] intentionally omitted <==

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

Aircraft Radar and Furniture
and mapping and Leasehold Under
engines equipment fixtures improvements construction Total
Balance at December 31, 2020 $ 187 $ 2,094 $ 11 $ 9 $ 430 $ 2,731
Additions 257 503 1 - 363 1,124
Transfer from under construction 185 455 - - (640) -
Depreciation (99) (1,263) (4) (9) - (1,375)
Balance at December 31, 2021 $ 530 $ 1,789 $ 8 $ - $ 153 $ 2,480
Additions - 14 - - 18 32
Depreciation (100) (1,021) (4) - - (1,125)
Balance at December 31, 2022 $ 430 $ 782 $ 4 $ - $ 171 $ 1,387
Aircraft Radar and Furniture
and mapping and Leasehold Under
engines equipment fixtures improvements construction Total
Cost $ 10,618 $ 33,225 $ 345 $ 1,074 $ 153 $ 45,415
Accumulated depreciation (10,088) (31,436) (337) (1,074) - (42,935)
Balance at December 31, 2021 $ 530 $ 1,789 $ 8 $ - $ 153 $ 2,480
Cost $ 10,618 $ 33,239 $ 345 $ 1,074 $ 171 $ 45,447
Accumulated depreciation (10,188) (32,457) (341) (1,074) - (44,060)
Balance at December 31, 2022 $ 430 $ 782 $ 4 $ - $ 171 $ 1,387
----- End of picture text -----

During the twelve months ended December 31, 2022, the Company disposed of assets with an original cost of $Nil (December 31, 2021 - $54), a net book value of $Nil (December 31, 2021 - $Nil), recognized a gain of $Nil (December 31, 2021 - $6) on those assets and received cash proceeds of $Nil (December 31, 2021 - $6).

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

For the years ended December 31, 2022 and 2021

Page 15

INTERMAP TECHNOLOGIES CORPORATION

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

6. Intangible assets:
Data library
not yet
Data available for
library use Total
Balance at December 31, 2020 $ 220 $ 701 $ 921
Additions - 267 267
Transfer 797 (797) -
Amortization (71) - (71)
Balance at December 31, 2021 $ 946 $ 171 $ 1,117
Additions - 211 211
Transfer 18 (18) -
Amortization (312) - (312)
Balance at December 31, 2022 $ 652 $ 364 $ 1,016
Data library
not yet
Data available for
library use Total
Cost $ 1,017 $ 171 $ 1,188
Accumulated amortization (71) - (71)
Balance at December 31, 2021 $ 946 $ 171 $ 1,117
Cost 1,035 364 1,399
Accumulated amortization (383) - (383)
Balance at December 31, 2022 $ 652 $ 364 $ 1,016
7. Right of use assets:
----- End of picture text -----

	December 31,	December 31,	December 31,	December 31,
		2022		2021
Beginning Balance	$	497	$	778
Depreciation		(338)		(316)
New leases		174		33
Adjustment		10		-
Foreign Exchange		-		2
EndingBalance	$	343	$	497

During the twelve months ended December 31, 2022, the Company executed a 2-year equipment lease, extended the office facility leases in Colorado and Jakarta by one year, and adjusted a lease with an increased payment. During the twelve months ended December 31, 2021, the Company extended the office facility lease in the Czech Republic by one year.

Notes to Consolidated Financial Statements

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

For the years ended December 31, 2022 and 2021

Page 16

INTERMAP TECHNOLOGIES CORPORATION

8. Investment:

The Company has an investment in a privately held company over which the Company exercises no control or significant influence. The fair value of the investment at December 31, 2022 was estimated using a market-based approach with primarily unobservable inputs, including the comparable enterprise value to revenue multiples discounted for considerations such as the lack of marketability and other differences between the comparable peer group and the privately held company. Revenue multiples were selected from comparable public companies based on, industry, size, target markets, and other factors that the Company considers to be reasonable. The comparable enterprise value to revenue multiple was applied to the trailing twelve months actual revenues of the privately held company to determine the enterprise value of the privately held company. Once the enterprise value of the privately held company was determined the net debt was removed (total debt less cash) and the remaining equity value was allocated to the capital of the privately held company in order of ranking (e.g., preferred shares, common shares). At December 21, 2021, the Company valued this investment using a market-based approach with primarily unobservable inputs, including but not limited to non-binding offers entertained by the privately held company. The Company changed its method of estimating the fair value of this investment because of a greater availability of market comparable data. At December 31, 2022, the fair value was estimated to be $1,011 (December 31, 2021 - $1,062) and is a level 3 fair value measurement. A 20% change in the estimated value of the investment would impact net income by approximately $202.

9. Accounts payable and accrued liabilities:

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

December 31, December 31,
2022 2021
Accounts payable $ 1,934 $ 1,969
Accrued liablities 1,592 1,686
VAT payable 107 1
$ 3,633 $ 3,656
----- End of picture text -----

During the twelve months ended December 31, 2022, the Company reversed excess vendor payables of $6 (December 31, 2021 - $53) 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, 2022 and 2021

Page 17

INTERMAP TECHNOLOGIES CORPORATION

10. Financial liabilities:

The following table provides a reconciliation of movements of liabilities to cash flows arising from financing activities and balances at December 31, 2022 and 2021:

==> picture [433 x 348] intentionally omitted <==

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

Bank Project Government Lease
Loan Financing Loans Obligations Total
(Note 11)
Balance at December 31, 2020 $ - $ 188 $ 464 $ 792 $ 1,444
Changes from financing activities:
- - -
Payment of lease obligations (317) (317)
Repayment of government loans - - (4) - (4)
Total changes from financing activities - - (4) (317) (321)
Foreign exchange - - 3 21 24
Other changes:
Financing costs - - 26 32 58
- -
Interest paid (3) (20) (23)
New leases (Note 7) - - - 33 33
Balance at December 31, 2021 $ - $ 188 $ 486 $ 541 $ 1,215
Changes from financing activities:
Proceeds from bank loan 99 - - - 99
- - -
Payment of lease obligations (339) (339)
Repayment of government loans - - (9) - (9)
Total changes from financing activities 99 - (9) (339) (249)
Foreign exchange 9 (11) (14) - (16)
Other changes:
Financing costs 4 - 26 27 57
-
Interest paid (4) (6) (13) (23)
New leases (Note 7) - - - 174 174
Adjustment (Note 7) - - - 10 10
Balance at December 31, 2022 $ 108 $ 177 $ 483 $ 400 $ 1,168
----- End of picture text -----

(a) Bank loan:

		December 31,		December	31,
		2022		2021
Bank loan	$	108	$	-
		108		-
Less current portion		(37)		-
Long-termportion ofproject financing	$	71	$		-

On August 8, 2022, the Company executed a bank loan in the Czech Republic to finance the purchase of foundation data for 2,500,000 Czech Republic koruna (equivalent $110 thousand). Interest will accrue at 10.71% and minimum monthly installment payments of $4 thousand began in December 2022.

Notes to Consolidated Financial Statements

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

For the years ended December 31, 2022 and 2021

Page 18

INTERMAP TECHNOLOGIES CORPORATION

(b) Project financing:

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, 2022 and 2021.

(c) Government loans:

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

December 31, December 31,
2022 2021
SBA loan $ 150 $ 154
Western Development Canada loan 333 332
483 486
Less current portion (108) (9)
Long-term portion of project financing $ 375 $ 477
----- 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 began 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.

11. Lease obligations:

The following table presents the contractual undiscounted cash flows for lease obligations which require the following payments for each period ending December 31:

2023	$	269
2024		93
2025		58
	$	420

Interest expense on lease obligations for the year ended December 31, 2022 was $27 (December 31, 2021 – $32). Total cash outflow for leases was $339 (December 31, 2021 –

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

For the years ended December 31, 2022 and 2021

Page 19

INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

$321), and $292 (December 31, 2021 – $316) 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 statements of financial position which require the payments of $259 for the twelve months ending December 31, 2023.

12. Revenue:

Details of revenue are as follows:

For the twelve months ended December 31,		2022		2021
Acquisition services	$	1,099	$	1,403
Value-added data		2,339		1,688
Software and solutions		3,357		2,708
	$	6,795	$	5,799
Primary geographical market
United States	$	2,121	$	1,594
Asia/Pacific		2,401		1,996
Europe		2,273		2,209
	$	6,795	$	5,799
Timing of revenue recognition
Upon delivery	$	2,745	$	2,100
Services overtime		4,050		3,699
	$	6,795	$	5,799

Changes in the unbilled revenue balance are as follows:

For the twelve months ended December	31,		2022		2021
Unbilled revenue, beginning of period		$	679	$	47
Increase in unbilled revenue recognized			1,210		1,775
Amounts invoiced included in the
beginning balance			(679)		(38)
Amounts invoiced in the current period			(1,202)		(1,096)
Foreign exchange			-		(9)
Unbilled revenue, end ofperiod		$	8	$	679

Changes in the unearned revenue balance are as follows:

For the twelve months ended December 31,		2022		2021
Unearned revenue, beginning of period	$	1,721	$	1,607
Recognition of unearned revenue included in the
beginning balance		(1,135)		(1,025)
Recognition of unearned revenue in the current period		(1,533)		(956)
Amounts invoiced and revenue unearned		3,914		2,089
Foreign exchange		(14)		6
Unearned revenue, end ofperiod	$	2,953	$	1,721

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

For the years ended December 31, 2022 and 2021

Page 20

INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

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, 2022 was $60 (2021 – $82).

13. Operating and non-operating costs:

(a) Operating costs:

Forthe twelvemonths endedDecember31,		2022		2021
Personnel	$	6,596	$	5,603
Purchased services & materials(1)		2,818		2,932
Travel		151		86
Facilities and otherexpenses		660		659
	$	10,225	$	9,280

(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, 2022, the Company incurred $Nil in restructuring costs (December 31, 2021 - $238).

(c) Financing costs:

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

For the twelve months ended December 31, 2022 2021
Interest on bank loan $ 4 -
Interest on government loans 26 26
Interest on lease obligations 27 32
Interest on accounts payable - 3
$ 57 $ 61
----- End of picture text -----

14. Government grants:

The Company participated the following government assistance programs that were made available by various government agencies during 2021 to support COVID-19 relief, without any corresponding programs during 2022:

Twelvemonths endedDecember31,		2022		2021
Paycheck Protection Program	$	-	$	562
Canada Emergency Wage Subsidy		-		123
EmployeeRetentionCredit		-		450
	$	-	$	1,135

Notes to Consolidated Financial Statements

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

For the years ended December 31, 2022 and 2021

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INTERMAP TECHNOLOGIES CORPORATION

(a) Paycheck Protection Program (PPP):

The Company received $562 under the second round of the Paycheck Protection Program (PPP) in the United States in 2021. 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 $562 from the second round in 2021 has been forgiven.

(b) Canada Emergency Wage Subsidy (CEWS):

During 2021, the Company was eligible for $149, reduced by $26 for the portion of wages that were capitalized, under the CEWS program to cover a portion of employee wages and to help prevent future job losses and to ease the business back into normal operations. The Company has received all the funds.

(c) Employee Retention Credit:

The Company was eligible for $494 (reduced by $44 for the portion of wages that were capitalized) under the Employee Retention Credit (ERC) in the United States during 2021. The ERC is a refundable tax credit against certain employment taxes equal 70% of the qualified wages an eligible employer pays to employees. For each employee, wages up to ten thousand can be counted to determine the amount of the credit each quarter the Company meets the qualification criteria.

15. 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,	2022	December	31,	2021
	Number of			Number of
Class A common shares	Shares		Amount	Shares		Amount
Balance, beginning of period:	29,415,422	$	206,102	25,198,529	$	203,642
Private placement	8,278,288		2,588	4,166,893		2,976
Issuance costs	-		(284)	-		(525)
RSU conversion	-		-	50,000		9
Balance,end ofperiod:	37,693,710	$	208,406	29,415,422	$	206,102

On December 7, 2022, the Company completed a private placement resulting in the issuance of 250,000 Units for aggregate consideration of $74. Each Unit had a purchase price of C$0.40

Notes to Consolidated Financial Statements

For the years ended December 31, 2022 and 2021

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INTERMAP TECHNOLOGIES CORPORATION

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

and consisted of one Class A common share of the Corporation and one Class A common share purchase warrant. Each warrant entitles the holder to purchase one Class A common share at a purchase price of US$0.44 per share for a period of two years from the issue date. The total consideration received was allocated to Share Capital and Warrants on a relative fair value basis. The fair value of the warrants was determined using the Black Scholes pricing model based on the risk-free rate of 3.86%, average expected warrant life of 2 years, share price estimated volatility of 83% and expected dividend payments of Nil. In addition, the Corporation paid finder’s fees of $7 and issued 15,000 warrants to a third party for services rendered in connection with the transaction. The finder’s fee warrants were issued on the same terms as the private placement warrants with an exercise price of US$0.44. The Company recorded non-cash issuance costs related to this award based on the fair value of the award at the date of the closing of $2, bringing the total costs of the issuance to $9.

During November 2022, the Company completed a private placement resulting in the issuance of 3,020,000 Units for aggregate consideration of $906. Each Unit had a purchase price of C$0.40 and consisted of one Class A common share of the Corporation and one Class A common share purchase warrant. Each warrant entitles the holder to purchase one Class A common share at a purchase price of US$0.45 per share for a period of two years from the issue date. The total consideration received was allocated to Share Capital and Warrants on a relative fair value basis. The fair value of the warrants was determined using the Black Scholes pricing model based on the risk-free rate of 3.87%, average expected warrant life of 2 years, share price estimated volatility of 84% and expected dividend payments of Nil. In addition, the Corporation paid finder’s fees of $81 and issued 168,900 warrants to a third party for services rendered in connection with the transaction. The finders fee warrants were issued on the same terms as the private placement warrants with an exercise price of US$0.45. The Company recorded non-cash issuance costs related to this award based on the fair value of the award at the date of the closing of $29, bringing the total costs of the issuance to $110.

On October 14, 2022, the Company issued 1,000,00 Class A common shares at C$0.40 per share in connection with a private placement. The Company received $291 in proceeds and issuance costs of $26 was paid in cash.

On March 18, 2022, the Company issued 1,470,588 Class A common shares at C$0.51 per share in connection with a private placement. The Company received $596 in proceeds and recorded $111 in issuance costs, of which $19 settled through warrants (see Note 16) and $92 was paid in cash.

During February 2022, the Company issued 2,537,700 Class A common shares at C$0.51 per share in connection with two private placements. The Company received $1,015 in proceeds and recorded $28 in issuance costs, of which $11 settled through warrants (see Note 16) and $17 was paid in cash.

Notes to Consolidated Financial Statements

For the years ended December 31, 2022 and 2021

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INTERMAP TECHNOLOGIES CORPORATION

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

On April 27, 2021, the Company issued 613,005 Class A common shares at C$0.87 per share in connection with a private placement. The Company received $434 in proceeds and recorded $73 in issuance costs, of which $28 settled through warrants (see Note 16) and $45 was paid in cash.

On July 30, 2021, the Company issued 2,241,667 Class A common shares at C$0.90 per share in connection with the first tranche of a private placement. The company received $1,605 in proceeds and recorded $79 of issuance costs settled through warrants (see Note 16).

During August 2021, the Company issued 750,000 Class A common shares and 200,000 Class A common shares at C$0.90 per share in connection with the second tranche of a private placement. The Company received $680 in proceeds and recorded $29 in issuance costs settled through warrants (see Note 16).

On August 11, 2021, 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 15(c) and (f).

On September 20, 2021, the Company issued 362,221 Class A common shares at C$0.90 per share in connection with the third tranche of a private placement. The Company received $257 in proceeds and recorded $3 in issuance costs settled through warrants (see Note 16). The Company also paid $341 in cash relating to all three tranches during the third quarter of 2021.

(c) Contributed surplus:

	December 31,	December 31,		December 31,
		2022		2021
Balance, beginning of period	$	26,144	$	26,007
Share-based compensation		366		146
Expiration of warrants		93		-
Converted RSUs		-		(9)
Balance,end ofperiod	$	26,603	$	26,144

(d) Loss per share:

The calculation of 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. The Company has incurred a net loss for each period presented and the inclusion of the outstanding options and warrants in the loss per share calculation are anti-dilutive and therefore not included in the calculation.

The underlying Class A common shares pertaining to 801,943 outstanding share options, 2,453,744 restricted share units (RSUs), and 3,840,467 outstanding warrants could potentially dilute earnings.

Notes to Consolidated Financial Statements

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

For the years ended December 31, 2022 and 2021

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INTERMAP TECHNOLOGIES CORPORATION

(e) Share option plan:

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 15(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, 2022, 801,943 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, 2022 December 31, 2021
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 822,943 $ 0.77 895,325 $ 0.81
Expired (21,000) 2.70 (72,382) 1.25
Options outstanding, end of period 801,943 $ 0.72 822,943 $ 0.77
Options exercisable, end of period 801,943 $ 0.72 822,943 $ 0.77
Exercise Weighted average
Price Options remaining Options
(CDN$) outstanding contractual life exercisable
0.70 631,011 4.28 years 631,011
0.80 170,932 3.88 years 170,932
801,943 4.20 years 801,943
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During the twelve months ended December 31, 2022, the Company recognized $Nil (twelve months ended December 31, 2021 – $Nil) 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 was 3,363,631. Any common shares reserved under the predecessor share option plan related to awards that expire or forfeit will be rolled into the omnibus plan. At the Annual General Meeting on June 29, 2021, shareholders approved replenishment of 997,253 Common Shares reserved for

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

For the years ended December 31, 2022 and 2021

Page 25

INTERMAP TECHNOLOGIES CORPORATION

issuance under the Omnibus Incentive Plan, for a total reserve of 4,360,884. As of December 31, 2022, 801,943 share options (2021 – 822,943) and 2,453,744 RSUs (2021 – 1,330,884) are issued and outstanding. In addition, 872,183 Class A common shares were issued during 2018, 125,070 Class A common shares were issued during 2020, and 50,000 shares were issued during 2021 (see Note 15(b)) under the plan, leaving 57,944 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,
2022 2021
Number of Number of
RSUs RSUs
RSUs outstanding, beginning of period 1,330,884 1,224,126
Issued 1,132,860 188,159
Converted to common shares - (50,000)
Forfeitures (10,000) (31,401)
RSUs outstanding, end of period 2,453,744 1,330,884
----- End of picture text -----

During the twelve months ended December 31, 2022, 1,132,860 RSUs (twelve months ended December 31, 2021 – 188,159) were issued at a weighted average grant date fair value of C$0.58 per share (twelve months ended December 31, 2021 – C$0.91 per share). During the twelve months ended December 31, 2022, the Company recognized $412 (twelve months ended December 31, 2021 – $146) 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:

For the twelve months ended December	31,		2022		2021
Employees		$	215	$	73
Directors and advisors			197		73
Non-cash compensation		$	412	$	146

For the years ended December 31, 2022 and 2021

Page 26

INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

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

16. Class A common share purchase warrants:

The following table details the number of Class A common share purchase warrants outstanding at each statement of financial position date:

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

Number of Number of
Warrants Warrants
Outstanding Outstanding
Exercise December December
Grant Date Expiry Date Price Granted 31, 2021 Issued Expired 31, 2022
8/5/2020 7/31/2022 US$ 0.42 139,284 139,284 - (139,284) -
8/17/2020 8/14/2022 US$ 0.42 19,718 19,718 - (19,718) -
4/27/2021 4/27/2023 US$ 0.73 60,000 60,000 - - 60,000
7/30/2021 7/29/2023 US$ 0.80 131,166 131,166 - - 131,166
8/9/2021 8/8/2023 US$ 0.80 45,000 45,000 - - 45,000
8/18/2021 8/17/2023 US$ 0.88 12,000 12,000 - - 12,000
9/20/2021 9/19/2023 US$ 0.87 6,666 6,666 - - 6,666
2/11/2022 2/10/2024 US$ 0.54 - - 43,500 - 43,500
3/19/2022 3/18/2024 US$ 0.54 - - 88,235 - 88,235
11/16/2022 11/15/2024 US$ 0.45 - - 2,929,900 - 2,929,900
11/18/2022 11/17/2024 US$ 0.45 - - 259,000 - 259,000
12/7/2022 12/6/2024 US$ 0.44 - - 265,000 - 265,000
413,834 413,834 3,585,635 (159,002) 3,840,467
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The following table details the value of the broker and non-broker Class A common share purchase warrants outstanding at each statement of financial position date.

	Number of Warrants Value Non-Broker	Number of Number of Warrants Value Warrants Value Broker Total
Balance at January 1, 2020 Issued	- - $ - -	159,002 93 $ 159,002 93 $ 254,832 139 254,832 139
Balance at December 31,2021	- - $	413,834 232 $ 413,834 232 $
Issued Expired	3,270,000 294 - -	315,635 60 3,585,635 354 (159,002) (93) (159,002) (93)
Balance at December 31,2022	3,270,000 294 $	570,467 199 $ 3,840,467 493 $

Each warrant entitles its holder to purchase one Class A common share.

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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, 2022 and 2021

17. Income Taxes:

(a) Current tax (expense) recovery:

December 31,		2022		2021
Current period	$	4	$	(18)
	$	4	$	(18)

(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:

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December 31, 2022 2021
Net Income (Losses), excluding income tax $ (5,287) $ (3,338)
Tax rate 24.0% 25.0%
Expected Canadian income tax recovery (expense) $ 1,271 $ 833
Decrease resulting from:
Change in unrecognized temporary differences (1,273) 229
Difference between Canadian statutory rate and those
applicable to U.S. and other foreign subsidiaries (22) (7)
Non-deductible expenses and non-taxable income 88 207
Adjustment for prior years income tax matters (36) (1,230)
Expiry of tax losses - -
Other (24) (50)
$ 4 $ (18)
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(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, 2022 and 2021, are as follows:

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Assets Liabilities Net
December 31, 2022 2021 2022 2021 2022 2021
.
Property and equipment $ - $ - $ 553 $ 487 $ 553 $ 487
Intangible assets - - 116 113 116 113
Note payable - - 9 8 9 8
- -
Tax loss carryforwards (678) (608) (678) (608)
Tax (assets) liabilities $ (678) $ (608) $ 678 $ 608 $ - $ -
Set off of tax 678 608 (678) (608) - -
- - - - - -
Net tax (assets) liabilities $ $ $ $ $ $
----- End of picture text -----

For the years ended December 31, 2022 and 2021

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INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

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

(d) Unrecognized deferred tax assets:

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

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

December 31, 2022 2021
Deductible temporary differences $ 21,818 $ 21,247
Tax loss carryforwards 198,306 192,299
$ 220,124 $ 213,546
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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, 2022, approximately $198,348 of loss carry forwards and $2,405 of tax credits were available in various jurisdictions. At December 31, 2022, $3,381 of loss carry forwards were recognized as a deferred tax asset. A summary of losses by year of expiry are as follows:

2023	$	770
2024-2040		182,972
Indefinite	$	14,606 198,348

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

	Balance at	Recognized in			Recognized		Balance at
	December 31,2021 Profit and Loss				in Equity		December 31, 2022
Property and equipment	$	487 $		66	$	-	$	553
Intangible assets		113		3		-		116
Note payable		8		1		-		9
Tax loss carryforwards		(608)	(70)			-		(678)
Net tax(assets)liabilities	$	- $	-		$	-	$	-

18. 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 12.

Property and equipment of the Company are located as follows:

		December 31, 2022	December	31,2021
United States	$	1,362	$	2,425
Europe		19		37
Asia/Pacific		6		18
	$	1,387	$	2,480

Notes to Consolidated Financial Statements

For the years ended December 31, 2022 and 2021

Page 29

INTERMAP TECHNOLOGIES CORPORATION

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

A summary of sales to major customers that exceeded 10% of total sales during each period are as follows:

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

Year ended December 31, 2022 2021
Customer A $ 1,099 $ 1,365
$ 1,099 $ 1,365
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19. 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.

(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 16 percent of the Company’s revenue is attributable to transactions with one key customer (year ended December 31, 2021 – 32 percent of the revenue was attributable to two key customers), approximately 1 percent of the Company’s trade receivables at year end are attributable to customers located in Asia/Pacific (December 31, 2021 – approximately 21 percent), and approximately 97 percent of the Company’s trade receivables at year end are attributable to customers located in Europe (December 31, 2021 – approximately 50 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.

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

For the years ended December 31, 2022 and 2021

Page 30

INTERMAP TECHNOLOGIES CORPORATION

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, 2022 and 2021, consist of:

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December 31, December 31,
2022 2021
Trade receivables $ 1,268 $ 398
Other miscellaneous receivables 22 516
$ 1,290 $ 914
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Trade receivables by geography consist of:

	December 31, 2022	December 31, 2022	December 31, 2021	December 31, 2021
United States	$	34	$	117
Europe		1,226		198
Asia/Pacific		8		83
	$	1,268	$	398
An aging of the Company’s trade receivables are as follows:
	December 31, December 31, 2022 2021
Current	$	1,232	$	362
31-60 days		30		36
61-90 days		-		-
Over 91 days		6		-
	$	1,268	$	398

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, 2022, is held in unrestricted cash at banks within the United States, Canada, Europe, and Asia to facilitate the payment of operations in those jurisdictions.

Notes to Consolidated Financial Statements

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

For the years ended December 31, 2022 and 2021

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INTERMAP TECHNOLOGIES CORPORATION

(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 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, 2022, 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 $ - $ 230 $ 8 $ - $ 9 $ 495
Trade receivables 9 7 23 58 18 97
Accounts payable and
accrued liabilities (5) (592) (28) (15) (162) (364)
Project financing - (177) - - - -
Government loans - (333) - - - -
Bank loan - - - - - (108)
$ 4 $ (865) $ 3 $ 43 $ (135) $ 120
----- End of picture text -----

The balances in foreign currencies at December 31, 2021, are as follows:

														Czech
		Australian		Canadian					British		Indonesian			Republic
(inUSD)		Dollar		Dollar		Euro			Pound			Rupiah		Koruna
Cash	$	-	$	2	$		19	$	-		$	10	$	6
Trade receivables		38		8			10			93		-		41
Accounts payable and
accrued liabilities		(2)		(595)		(29)			(16)			(161)		(151)
Project financing		-		(188)		-			-			-		-
Government loans		-		(332)		-			-			-		-
	$	36	$	(1,105)	$	-		$		77	$	(151)	$	(104)

Based on the net exposures at December 31, 2022 and 2021, 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:

For the years ended December 31, 2022 and 2021

INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

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

Page 32

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

December 31, 2022
Czech
Australian Canadian British Indonesian Republic
Dollar Dollar Euro Pound Rupiah Koruna
United States dollar:
Depreciates 10% $ - $ 86 $ - $ (4) $ 13 $ (12)
Appreciates 10% - (86) - 4 (13) 12
December 31, 2021
Czech
Australian Canadian British Indonesian Republic
Dollar Dollar Euro Pound Rupiah Koruna
United States dollar:
Depreciates 10% $ (4) $ 111 $ - $ (8) $ 15 $ 10
Appreciates 10% 4 (111) - 8 (15) (10)
----- End of picture text -----

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, 2022, or December 31, 2021.

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, 2022, the Company has a cash balance of $843 (December 31, 2021 – $188) and working capital (current assets less current liabilities) of negative $4,431 (December 31, 2021 – negative $3,388). The Company’s liquidity is dependent on management’s ability to successfully secure sales with upfront payments, and / or obtain additional financing.

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

For the years ended December 31, 2022 and 2021

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INTERMAP TECHNOLOGIES CORPORATION

The following are the contractual maturities of the undiscounted cash flows of financial liabilities as of December 31, 2022:

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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 28
months months year years years
Accounts payable
and accrued liabilities $ 3,474 $ - $ 159 $ - $ -
Project financing - - - 177 -
Government loans 33 33 66 131 345
Bank loan 12 12 24 48 48
Lease obligations 78 85 106 93 58
$ 3,597 $ 130 $ 355 $ 449 $ 451
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The following are the contractual maturities of the undiscounted cash flows of financial liabilities as of December 31, 2021:

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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 28
months months year years years
Accounts payable
and accrued liabilities $ 3,498 $ - $ 158 $ - $ -
Project financing - - - 188 -
Government loans 2 2 4 138 490
Lease obligations 75 80 126 170 125
$ 3,575 $ 82 $ 288 $ 496 $ 615
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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 bank loan, long-term portion of project financing, long-term government loans, and long-term portion of lease obligations in the definition of capital. Total capital at December 31, 2022, was negative $619 (December 31, 2021 – positive $1,807). 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 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, 2022 and 2021

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INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

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

20. 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 statement of financial position:

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December 31, 2022 December 31, 2021
Carrying Fair Carrying Fair
Amount Value Amount Value
Financial assets
Cash $ 843 $ 843 $ 188 $ 188
Amounts receivable 1,290 1,290 914 914
Investments 1,062 1,062 1,062 1,062
$ 3,195 $ 3,195 $ 2,164 $ 2,164
Financial liabilities
Accounts payable and accrued liabilities 3,633 3,633 3,656 3,656
Project financing 177 177 188 188
Bank loan 108 108 - -
Government loans 483 483 486 486
$ 4,401 $ 4,401 $ 4,330 $ 4,330
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The fair values of the financial assets and liabilities are determined 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.

• Carrying amount of project financing, bank loan and government loans approximates fair value due to prevailing 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.

21. 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 15(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 15(f)).

INTERMAP TECHNOLOGIES CORPORATION

Notes to Consolidated Financial Statements

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

For the years ended December 31, 2022 and 2021

Page 35

The following summarizes key management personnel and directors’ compensation for the years ended December 31, 2022 and 2021:

Year ended December 31,		2022		2021
Compensation and benefits	$	1,368	$	1,307
Share-based compensation		337		131
	$	1,705	$	1,438

The following summarizes key management personnel and directors share ownership of the Company as of December 31, 2022, and 2021:

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December 31, 2022 2021
Number of Class A Common shares held 6,496,696 6,496,696
Percentage of total Class A Common shares issued 17.24% 22.09%
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