Intermap Technologies Corporation — Interim / Quarterly Report 2020

Nov 17, 2020

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Condensed Consolidated Interim Financial Statements of

INTERMAP TECHNOLOGIES CORPORATION

Three and nine months ended September 30, 2020

NOTICE: The condensed consolidated interim financial statements and notes thereto for the three and nine months ended September 30, 2020 have not been reviewed by the Company’s external auditors.

INTERMAP TECHNOLOGIES CORPORATION

Condensed Consolidated Interim Balance Sheets (In thousands of United States dollars) (Unaudited)

	September 30,	September 30,		December 31,
		2020		2019
Assets
Current assets:
Cash	$	735	$	1,230
Trade receivables		367		741
Unbilled revenue		13		410
Prepaid expenses		718		763
		1,833		3,144
Property and equipment (Note 4)		4,198		4,555
Right of use assets (Note 5)		684		406
Total assets	$	6,715	$	8,105
Liabilities and Shareholders' Equity (Deficiency)
Current liabilities:
Accounts payable and accrued liabilities (Note 6)	$	3,374	$	3,085
Current portion of project financing (Note 7(b))		30		300
Lease obligations (Note 8)		220		369
Unearned revenue		1,860		1,274
Income taxes payable		11		-
Current portion of notes payable (Note 7(a))		-		31,884
		5,495		36,912
Long-term project financing (Note 7(b))		330		184
Lease obligations (Note 8)		480		96
Total liabilities		6,305		37,192
Shareholders' deficiency:
Share capital (Note 11(a))		201,011		199,917
Accumulated other comprehensive loss		(155)		(154)
Contributed surplus (Note 11(b))		26,090		25,527
Deficit		(226,536)		(254,377)
Total shareholders'equity		410		(29,087)
Going concern (Note 2(a))
Subsequent event (Note 16)
Total liabilities and shareholders' equity	$	6,715	$	8,105

See accompanying notes to condensed consolidated interim financial statements.

INTERMAP TECHNOLOGIES CORPORATION

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

		For the three months	For the three months	For the three months		For the nine months	For the nine months	For the nine months
		ended September 30,				ended September 30,
		2020		2019		2020		2019
Revenue (Note 9)	$	1,002	$	4,265	$	3,795	$	7,021
Expenses:
Operating costs (Note 10(a))		1,982		3,250		6,393		8,631
Restructuring costs		-		-		-		272
Depreciation of property and equipment		278		249		832		810
Depreciation of right of use assets		77		124		333		374
		2,337		3,623		7,558		10,087
Operating (loss) income		(1,335)		642		(3,763)		(3,066)
Gain on modification of debt (Note 7(a))		-		-		32,138		-
Government grants		25		-		688		-
Gain on disposal of equipment		-		-		150		-
Financing costs (Note 10(b))		(11)		(726)		(1,310)		(2,141)
Loss on foreign currencytranslation Gain (loss) before income taxes		(36) (1,357)		13 (71)		(41) 27,862		(48) (5,255)
Income tax expense:
Current		-		3		(21)		(12)
		-		3		(21)		(12)
Net income (loss) for the period	$	(1,357)	$	(68)	$	27,841	$	(5,267)
Other comprehensive loss: Items that are or may be reclassified subsequently
to profit or loss:
Foreign currency translation differences		6		(18)		(1)		(14)
Comprehensive income (loss) for the period	$	(1,351)	$	(86)	$	27,840	$	(5,281)
Basic and diluted income(loss)earningsper share	$	(0.07)	$	-	$	1.52	$	(0.31)
Weighted average number of Class A common shares - basic and diluted (Note 11(c)) shares - diluted (Note 11(c))		19,722,973 19,722,973		17,268,472 17,268,472		18,092,611 18,344,996		17,268,472 17,268,472

See accompanying notes to condensed consolidated interim financial statements.

INTERMAP TECHNOLOGIES CORPORATION

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

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Accumulated
Other
Contributed Comprehensive
Share Capital Surplus (Loss) Income Deficit Total
Balance at December 31, 2018 $ 199,917 $ 25,379 $ (154) $ (249,564) $ (24,422)
- -
Comprehensive loss for the period (14) (5,267) (5,281)
Share-based compensation - 69 - - 69
Balance at September 30, 2019 $ 199,917 $ 25,448 $ (168) $ (254,831) $ (29,634)
Comprehensive income for the period - - 14 454 468
Share-based compensation - 79 - - 79
Balance at December 31, 2019 $ 199,917 $ 25,527 $ (154) $ (254,377) $ (29,087)
Comprehensive (loss) income for the period $ - $ - $ (1) $ 27,841 27,840
Share-based compensation - 85 - - 85
Expiration of warrants (385) 385 - - -
Private placement proceeds 1,779 - - - 1,779
Issuance costs (300) 93 - - (207)
Balance at September 30, 2020 $ 201,011 $ 26,090 $ (155) $ (226,536) $ 410
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See accompanying notes to condensed consolidated interim financial statements.

INTERMAP TECHNOLOGIES CORPORATION

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

For the nine months ended September 30,		2020		2019
Operating activities:
Net income (loss) for the period	$	27,841	$	(5,267)
Interest paid		(20)		(43)
Income tax paid		(10)		(13)
Adjusted for the following non-cash items:
Gain on modification of debt		(32,138)		-
Depreciation of property and equipment		832		810
Depreciation of right of use assets		333		374
Share-based compensation expense		85		69
Gain on disposal of equipment		(150)		-
Financing costs		1,310		2,141
Current income tax expense		21		12
Changes in working capital:
Trade receivables		343		1,537
Unbilled revenue and prepaid expenses		444		35
Accounts payable and accrued liabilities		267		905
Unearned revenue		586		542
Gain on foreign currencytranslation		37		(112)
Cash flows(used in) provided byoperatingactivities		(219)		990
Investing activities:
Purchase ofpropertyand equipment		(475)		(1,204)
Cash flows used in investingactivities		(475)		(1,204)
Financing activities:
Proceeds from private placement		1,779		-
Issuance costs		(207)		-
Payment of lease obligations		(402)		(450)
Proceeds from sale of property and equipment		150		-
Proceeds from SBA loan		150		-
Repayment of project financing		(270)		-
Repayment of notespayable		(1,000)		-
Cash flowsprovided by (used in)financingactivities		200		(450)
Effect of foreign exchange on cash		(1)		1
Decrease in cash		(495)		(663)
Cash, beginning of period		1,230		1,284
Cash, end ofperiod	$	735	$	621

See accompanying notes to condensed consolidated interim financial statements.

For the three and nine months ended September 30, 2020

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INTERMAP TECHNOLOGIES CORPORATION

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

1. Reporting entity:

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

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

1. Basis of preparation:

(a) Going concern:

These condensed consolidated interim 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 nine months ended September 30, 2020, the Company reported an operating loss of $3,763, net income of $27,841, and negative cash flows from operating activities of $219. In addition, the Company has a shareholders’ equity of $410 and negative working capital of $3,662 at September 30, 2020.

The above factors may be exacerbated by the ongoing COVID-19 pandemic and in the aggregate indicate there are material uncertainties which may cast significant doubt about the Company’s ability to continue as a going concern. In response to the COVID-19 pandemic the Company has taken actions to adapt to the current environment and manage liquidity by participating in various government support programs, where applicable, including wage subsidies, tax payment deferrals and favorable credit facilities. The Company’s ability to continue as a going concern is dependent on management’s ability to successfully secure sales with upfront payments, and / or obtain additional financing. Failure to achieve one or more of these requirements could have a materially adverse effect on the Company’s financial condition and / or results of operations. The Board of Directors and management continue to take actions to address these issues including the elimination of $32.9 million of debt, raising capital through a private placement and exploring options for additional capital.

The condensed consolidated interim financial statements do not reflect adjustments that would be necessary if the going concern assumption was not appropriate. If the going

For the three and nine months ended September 30, 2020

Page 2

INTERMAP TECHNOLOGIES CORPORATION

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

concern basis was not appropriate for these condensed consolidated interim financial statements, then adjustments would be necessary to the carrying value of assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used.

(b) Statement of compliance:

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 (IAS 34) as issued by the International Accounting Standards Board (IASB).

The notes presented in these unaudited condensed consolidated interim financial statements include in general only significant changes and transactions occurring since the Company’s last year-end and are not fully inclusive of all disclosures required by IFRS for annual financial statements. These unaudited condensed consolidated interim financial statements should be read in conjunction with the annual audited consolidated financial statements, including the notes thereto, for the year ended December 31, 2019 (the “2019 Annual Consolidated Financial Statements”).

The policies applied in these condensed consolidated interim financial statements are based on IFRS issued and effective as of November 16, 2020, the date the Board of Directors approved the condensed consolidated interim financial statements.

(c) Measurement basis:

The condensed consolidated interim 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 condensed consolidated interim 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 condensed consolidated interim financial statements, and the reported amounts of revenue and expenses during the period. Actual results could differ from these estimates.

The significant judgements made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual financial statements.

The continuing uncertainty around the outbreak of the COVID-19 pandemic required the use of judgments and estimates in the preparation of the unaudited condensed consolidated interim financial statements for the period ended September 30, 2020. The future impact of COVID-19 uncertainties could generate, in future reporting periods, a

For the three and nine months ended September 30, 2020

Page 3

INTERMAP TECHNOLOGIES CORPORATION

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

significant impact to the reported amounts of assets, liabilities, revenue and expenses in these and any future consolidated financial statements. Examples of accounting estimates and judgments that may be impacted by the pandemic include, but are not limited to revenue recognition, impairment of property and equipment, allowance for expected credit losses, and provisions.

3. Summary of significant accounting policies:

These condensed consolidated interim financial statements have been prepared using the same accounting policies and methods that were used to prepare the Company’s 2019 Annual Consolidated Financial Statements, except as described below.

(a) Government grants

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

4. Property and equipment:

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Aircraft Radar and Furniture
and mapping and Leasehold Under
Property and equipment engines equipment fixtures improvements construction Total
Balance at December 31, 2019 $ 290 $ 2,198 $ 7 $ 54 $ 2,006 $ 4,555
Additions - 3 7 - 465 475
Transfer from under construction - 334 - - (334) -
-
Depreciation (79) (716) (2) (35) (832)
Balance at September 30, 2020 $ 211 $ 1,819 $ 12 $ 19 $ 2,137 $ 4,198
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	Aircraft	Aircraft	Radar and	Radar and	Furniture	Furniture
		and	mapping			and		Leasehold		Under
Property and equipment	engines		equipment		fixtures		improvements		construction			Total
Cost	$	11,276	$	31,460	$	389	$	1,074	$	2,006	$	46,205
Accumulated depreciation		(10,986)		(29,262)		(382)		(1,020)		-		(41,650)
Balance at December 31, 2019	$	290	$	2,198	$	7	$	54	$	2,006	$	4,555
Cost	$	10,176	$	31,795	$	396	$	1,074	$	2,137	$	45,578
Accumulated depreciation		(9,965)		(29,976)		(384)		(1,055)		-		(41,380)
Balance at September 30, 2020	$	211	$	1,819	$	12	$	19	$	2,137	$	4,198

For the three and nine months ended September 30, 2020

Page 4

INTERMAP TECHNOLOGIES CORPORATION

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

During the nine months ended September 30, 2020, the Company disposed of assets with an original cost of $1,102 (nine months ended September 30, 2019 - $Nil) and a net book value of $Nil and recognized a gain of $150 on those assets and received cash proceeds of $150.

1. Right of use assets:

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September 30, December 31,
2020 2019
Beginning Balance $ 406 $ 781
Depreciation (333) (495)
New leases 640 120
Adjustment (29) -
Ending Balance $ 684 $ 406
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During the nine months ended September 30, 2020, the Company executed new lease agreements for two office facilities and the equipment colocation facility. The Company successfully negotiated a decrease in the lease payments due under the existing facility lease in Calgary, resulting in a reduction to the value of the right of use asset.

1. Accounts payable and accrued liabilities:

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September 30, December 31,
2020 2019
Accounts payable $ 1,637 $ 1,383
Accrued liablities 1,734 1,702
Other taxes payable 3 -
$ 3,374 $ 3,085
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7. Financial liabilities:

• (a) Notes payable:

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September 30, December 31,
2020 2019
Beginning balance $ 31,884 $ 29,065
Effective interest on note discount, 9.21% 1,254 2,819
Gain on modification of debt (32,138) -
Repayment (1,000) -
-
$ $ 31,884
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On June 3, 2020, the Company announced a settlement agreement with PenderFund Capital Management Ltd. (Pender), the manager of the Vertex fund. Under the terms of the agreement, Vertex and Pender extinguished the notes payable, and the parties provided for a general release from all claims associated with the Vertex financings, following receipt of a

For the three and nine months ended September 30, 2020

Page 5

INTERMAP TECHNOLOGIES CORPORATION

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

$1,000 cash payment. On August 12, 2020, the Company paid $1,000 and all claims associated with the Vertex financings were released.

(b) Project financing:

The following table details the components of the project financing balance at September 30, 2020:

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September 30 December 31,
2020 2019
Promissory note payable $ 30 $ 300
Reimbursable project funding 180 184
SBA loan 150 -
360 484
Less current portion (30) (300)
Long-term portion of project financing $ 330 $ 184
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i. Promissory note:

A promissory note with a service provider. The Company repaid $270 during the first nine months of 2020.

ii. Project funding:

Reimbursable project development funds provided by a corporation designed to enable the development and commercialization of geomatics solutions in Canada. The funding is repayable upon the completion of a specific development project and the first sale of any of the resulting product(s). Repayment is to be made in quarterly installments equal to the lesser of 20% of the funding amount or 25% of the prior quarter’s sales.

iii. SBA loan:

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

8. Lease obligations:

The following table presents the contractual undiscounted cash flows for right of use asset lease obligations which require the following payments for each year ending September 30:

2021	$	190
2022		179
2023		155
2024		58
2025-2026		75
	$	657

For the three and nine months ended September 30, 2020

Page 6

INTERMAP TECHNOLOGIES CORPORATION

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

Interest expense on lease obligations for the nine months ended September 30, 2020 was $21. Total cash outflow for leases was $681, including $279 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 office space that are not on the balance sheet which require the payments of $201 for the twelve months ending September 30, 2021.

9. Revenue:

Details of revenue are as follows:

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For the three months For the nine months
ended September 30, ended September 30,
2020 2019 2020 2019
Acquisition services $ 269 $ 3,473 $ 1,382 $ 4,655
Value-added data 199 234 621 707
Software and solutions 534 558 1,792 1,659
$ 1,002 $ 4,265 $ 3,795 $ 7,021
Primary geographical market
United States $ 262 $ 3,199 $ 1,133 $ 5,006
Asia/Pacific 346 672 1,349 871
Europe 394 394 1,313 1,144
$ 1,002 $ 4,265 $ 3,795 $ 7,021
Timing of revenue recognition
Upon delivery $ 271 $ 335 $ 975 $ 932
Services overtime 731 3,930 2,820 6,089
$ 1,002 $ 4,265 $ 3,795 $ 7,021
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10. Operating and non-operating costs:

(a) Operating costs:

		For the three months	For the three months	For the three months		For the nine months	For the nine months	For the nine months
		ended September 30,				ended September 30,
		2020		2019		2020		2019
Personnel	$	1,359	$	1,629	$	4,139	$	4,582
Purchased services & materials(1)		514		1,251		1,759		3,151
Travel		6		87		81		221
Facilities and other expenses		103		283		414		677
	$	1,982	$	3,250	$	6,393	$	8,631

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

INTERMAP TECHNOLOGIES CORPORATION

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

For the three and nine months ended September 30, 2020

Page 7

(b) Financing costs:

		For the three months	For the three months	For the three months			For the nine months	For the nine months	For the nine months
		ended September 30					ended September 30
		2020		2019			2020		2019
Accretion of discounts recognized on
notes payable	$	-	$	712		$	1,254	$	2,089
Interest on SBA Loan		1		-			1		-
Interest on lease obligations		8			12		21		44
Interest on accounts payable		2			2		7		8
Interest on accounts receivable		-		-			27		-
	$	11	$	726		$	1,310	$	2,141

11. Share capital:

(a) Issued:

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September 30, 2020 December 31, 2019
Number of Number of
Class A common shares Shares Amount Shares Amount
Balance, beginning of period: 17,268,472 $ 199,917 17,268,472 $ 199,917
- -
Private placement 4,158,113 1,779
Issuance costs - (300) - -
Expiration of warrants - (385) - -
Balance, end of period: 21,426,585 $ 201,011 17,268,472 $ 199,917
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On August 5, 2020, the Company issued 3,571,428 Class A common shares at C$0.56 per share in connection with the first tranche of a private placement. On August 17, 2020, the Company issued 586,685 Class A common shares at C$0.56 per share as a second tranche of the private placement. The Company received $1,779 in proceeds and recorded $300 in issuance costs, of which $93 settled through warrants (see Note 12) and $207 was paid in cash, related to both tranches. The Company used $1,000 of the proceeds to pay the outstanding notes payable (see Note 7(iv)).

On September 1, 2020, 546,456 warrants expired that had a value of $385 in share capital, which was reclassified to contributed surplus (see Note 11(b).

(b) Contributed surplus:

	September 30,	September 30,		December 31,
		2020		2019
Balance, beginning of period	$	25,527	$	25,379
Share-based compensation		85		148
Issuance costs		93		-
Expiration of warrants		385		-
Balance, end ofperiod	$	26,090	$	25,527

For the three and nine months ended September 30, 2020

Page 8

INTERMAP TECHNOLOGIES CORPORATION

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

(c) Earnings (loss) per share:

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

For the three months ended September 30, 2020, there were 927,325 outstanding share options (September 30, 2019 – 1,200,784) and 159,002 warrants (September 30, 2019 – 546,456) that were excluded from the diluted weighted average number of shares calculation as their effect would have been anti-dilutive.

For the nine months ended September 30, 2020, there were 780,459 outstanding share options (September 30, 2019 – Nil) and 97,242 outstanding warrants (September 30, 2019 – Nil) that were included in the diluted weighted average number of shares calculation as their effect was dilutive. There were 190,807 outstanding share options (September 30, 2019 – 1,208,076) and 61,578 outstanding warrants (September 30, 2019 – 546,456) that were excluded from the diluted weighted average number of shares calculation as their effect would have been anti-dilutive.

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

(d) 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 11(e)), and all options issued and outstanding at that time will remain until such time they are exercised, expired or forfeited. As of September 30, 2020, 927,325 share options are issued and outstanding. No additional options will be issued under this plan.

The following tables summarize information regarding share options outstanding:

September 30, 2020	December31,2019
Weighted Number of average shares exercise under option price (CDN)	Weighted Number of average shares exercise underoption price (CDN)
Options outstanding, beginning of period 1,180,575 0.89 $ Expired (253,250) 1.20 Forfeitures - - Options outstanding, end of period 927,325 0.81 $ Options exercisable, end of period 927,325 0.81 $	1,284,077 1.04 $ (81,376) 3.25 (22,126) 0.89
	1,180,575 0.89 $
	1,018,989 0.91 $

INTERMAP TECHNOLOGIES CORPORATION

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

For the three and nine months ended September 30, 2020

Page 9

Exercise		Weighted average
Price	Options	remaining	Options
(CDN$)	outstanding	contractual life	exercisable
0.70	711,012	6.53 years	711,012
0.80	170,932	6.13 years	170,932
2.30	12,381	0.87 years	12,381
2.70	33,000	1.63 years	33,000
	927,325	6.21 years	927,325

During the nine months ended September 30, 2020, the estimated forfeiture rate was 10.36%. During the nine months ended September 30, 2020, the Company recognized $8 (nine months ended September 30, 2019 – $32) of non-cash compensation expense related to the share option plan.

(e) Omnibus plan:

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

The maximum number of common shares reserved under the omnibus plan is 3,363,631. Any common shares reserved under the predecessor share option plan related to awards that expire or forfeit will be rolled into the omnibus plan. As of September 30, 2020, 927,325 share options and 1,199,461 RSUs are issued and outstanding. In addition, 872,183 Class A common shares were issued during 2018 under the plan, leaving 364,662 awards remain available for future issuance.

The following tables summarize information regarding RSUs outstanding:

	September 30,	December 31,
	2020	2019
	Number of	Number of
	RSUs	RSUs
RSUs outstanding, beginning of period	1,050,400	430,200
Issued	214,061	655,000
Forfeitures	(65,000)	(34,800)
RSUs outstanding,end ofperiod	1,199,461	1,050,400

During the nine months ended September 30, 2020, 214,061 RSUs were issued at a weighted average grant date fair value of C$0.76 per share. During the nine months ended September 30, 2020, the Company recognized $77 (nine months ended September 30, 2019 - $37) of non-cash compensation expense related to the RSUs.

For the three and nine months ended September 30, 2020

Page 10

INTERMAP TECHNOLOGIES CORPORATION

Notes to Condensed Consolidated Interim Financial Statements

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

(f) Share-based compensation expense:

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

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For the three months For the nine months
ended September 30, ended September 30,
2020 2019 2020 2019
Employees $ 7 $ 13 $ 45 $ 69
Directors and advisors 20 - 40 -
Non-cash compensation $ 27 $ 13 $ 85 $ 69
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12. Class A common share purchase warrants:

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

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Number of Number of
Warrants Warrants
Outstanding Outstanding
Exercise Anti-dilution December September
Grant Date Expiry Date Price Granted Adjustment 31, 2019 Expired 30, 2020
4/1/2015 9/1/2020 US$ 0.70 458,907 87,549 546,456 (546,456) -
8/5/2020 7/31/2022 US$ 0.42 139,284 - - - 139,284
8/17/2020 8/14/2022 US$ 0.42 19,718 - - - 19,718
- -
617,908 546,456 159,002
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Each warrant entitles its holder to purchase one Class A common share. The 159,002 outstanding warrants are recognized as part of share capital. At September 30, 2020 $93 is included in share capital related to these warrants.

On September 1, 2020, 546,456 warrants expired that had a value of $385 in share capital, which was reclassified to contributed surplus (see Notes 11(a) and (b)).

13. 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 9.

Property and equipment of the Company are located as follows:

		September 30, 2020	December	31,2019
United States	$	4,103	$	4,399
Canada		41		75
Europe		28		38
Asia/Pacific		26		43
	$	4,198	$	4,555

For the three and nine months ended September 30, 2020

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INTERMAP TECHNOLOGIES CORPORATION

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

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

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Three Three Nine Nine
months ended months ended months ended months ended
September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019
Customer A $ 268 $ 628 $ 1,089 $ 628
Customer B 85 119 385 292
Customer C - 2,845 293 4,026
$ 353 $ 3,592 $ 1,767 $ 4,946
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14. 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. There have been no significant changes to the Company’s risk management strategies since December 31, 2019.

Trade receivables as of September 30, 2020 and December 31, 2019, consist of:

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September 30, December 31,
2020 2019
Trade receivables $ 288 $ 703
Other miscellaneous receivables 79 38
$ 367 $ 741
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Trade receivables by geography consist of:

	September 30, 2020	September 30, 2020	December 31, 2019	December 31, 2019
United States	$	107	$	524
Europe		163		152
Canada		-		18
Asia/Pacific		18		9
	$	288	$	703

An aging of the Company’s trade receivables are as follows:

	September 30,	September 30,	December 31,	December 31,
		2020		2019
Current	$	172	$	682
31-60 days		17		20
61-90 days		92		1
Over 91 days		7		-
	$	288	$	703

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

For the three and nine months ended September 30, 2020

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INTERMAP TECHNOLOGIES CORPORATION

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

15. Fair values:

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

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

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

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

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

(a) Fair value hierarchy:

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

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

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

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

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

16. Subsequent event:

In November 2020, the Company issued 3,646,874 Class A common shares (Shares) under an issuer private placement at a price of CAD$1.03 per Share, raising aggregate gross proceeds of CAD$3,756.