Intermap Announces Debt Restructuring and Equity Rights Offering

DENVER, Dec. 21, 2016 /PRNewswire/ - Intermap (TSX: IMP), (ITMSF:BB), a leading geospatial intelligence Corporation, today announced that it has entered into a series of related arrangements with Vertex One Asset Management Inc., on behalf of the Vertex Fund, ("Vertex"), its existing lender and principal shareholder, that are intended to restructure Intermap's outstanding indebtedness, reduce its interest and certain other payment obligations, and provide the necessary working capital to pursue Intermap's business objectives.

As part of these arrangements, Vertex has agreed to provide a Standby Purchase Commitment to backstop the issuance of US$6,000,000 of the Corporation's common shares through an exempt Equity Rights Offering to all existing shareholders (the "Rights Offering"). The proceeds from the Rights Offering will be used to repay the Bridge Loan described below.  It is anticipated that the Rights Offering will be completed during the first quarter of 2017.

In conjunction with its Standby Purchase Commitment, Vertex has provided a new US$6,000,000 Bridge Loan to fund general corporate purposes until the Rights Offering is completed. The Bridge Loan will be repaid from the gross proceeds of the Rights Offering (including proceeds received in connection with the Standby Purchase Commitment). Any unpaid amounts under the Bridge Loan, following the Rights Offering, if any, will convert into a term loan with a maturity of September 1, 2020. The Bridge Loan is non-interest bearing.

"We are extremely pleased that our primary lender and largest shareholder, one of the stakeholders that knows Intermap best, has provided equity financing and a strong vote of confidence", commented Patrick Blott, Executive Chairman and CEO of Intermap. "Vertex has agreed to make this investment available to all our existing shareholders. It sends a clear signal to our customers, partners, and employees that the Corporation enjoys strong financial support from a sophisticated and committed investor."

In conjunction with these new financings, Vertex has agreed to restructure its existing indebtedness and provide funds, as follows:

(1) Term Extension and Elimination of Interest on all Existing Notes: amending the maturity dates to September 1, 2020 and eliminating the obligation to pay interest in respect of two promissory notes (the "Amended Notes") issued by the Corporation to Vertex in the principal amounts of (i) US$2,000,000 due on the earlier of July 8, 2017 and the date on which the Corporation receives a down payment from a geospatial project (the "Amended July 2016 Note"), and (ii) US$25,800,000 due September 1, 2017 (the "Amended September 2016 Note");

(2) Termination of the Royalty and Cash Sweep: terminating a royalty interest equal to 17.5% of the net revenues of the Corporation (the "Royalty") and eliminating the Corporation's obligation to maintain a cash sweep account to restrict a certain portion of the Corporation's cash collections from net revenues (the "Cash Sweep") for repayment of the promissory notes owing to Vertex (the "Royalty and Cash Sweep Termination Agreement").  As consideration for terminating the Royalty and Cash Sweep, Intermap issued a non-interest bearing note (the "New Dec 2016 Note") maturing September 1, 2020, in the principal amount of US$3,000,000;

(3) Provision of US$6,000,000 Bridge Financing: advancing US$6,000,000 to the Corporation as a bridge loan, due on the earlier of March 31, 2017 and the completion of the Rights Offering and other transactions, that result in gross proceeds to the Corporation in an amount no less than US$6,000,000, (the "Bridge Loan"). The Bridge Loan will be available to meet the working capital requirements of the Corporation until the Rights Offering is completed. The Bridge Loan is non-interest bearing and any amounts which remain outstanding after the Rights Offering will be converted into a term loan due September 1, 2020 (the "Term Loan"); and

(4) Provision of a US$6,000,000 Standby Purchase Commitment to backstop the Rights Offering: providing a standby purchase guarantee of up to US$6,000,000 in respect of the Rights Offering ("Standby Guarantee").

The Amended July 2016 Note, the Amended September 2016 Note, the Royalty and Cash Sweep Termination Agreement, the New Dec 2016 Note, the Bridge Loan and, as applicable, the Term Loan are hereinafter referred to as the "Vertex Transactions".

The Vertex Transactions were unanimously approved by the Board of Directors of Intermap. Each of the directors was determined to be independent for the purposes of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions. After due consideration of the Vertex Transactions and the other alternatives available to the Corporation, the Board of Directors concluded that the Corporation was in serious financial difficulty and the Vertex Transactions, together with the Rights Offering and the Standby Purchase Commitment, were designed to improve the financial position of the Corporation and as such the Vertex Transactions were approved. Funding in respect of the Bridge Loan was completed on December 21, 2016.

Following the Vertex Transactions, Intermap will have the consolidated principal amount of Thirty-Six Million and Eight Hundred Thousand United States Dollars (USD$36,800,000) due under its Bridge Loan and Amended and New Notes held by Vertex.

About Intermap

Headquartered in Denver, Colorado - Intermap (www.intermap.com) is an industry leader in geospatial intelligence solutions. It is the only company capable of fusing volumes of accurate bare earth and other geospatial data into a single source to provide location-based solutions for customers in diverse markets around the world.

Intermap Reader Advisory

Certain information provided in this news release constitutes forward-looking statements, including the intention of the Corporation to complete the Rights Offering. The words "anticipate", "expect", "project", "estimate", "forecast" and similar expressions are intended to identify such forward-looking statements. Although Intermap believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of known and unknown risks and uncertainties. You can find a discussion of such risks and uncertainties in our Annual Information Form and other securities filings. While the Corporation makes these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Corporation will derive therefrom. All subsequent forward-looking statements, whether written or oral, attributable to Intermap or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements contained in this news release are made as at the date of this news release and the Corporation does not undertake any obligation to update publicly or to revise any of the forward-looking statements made herein, whether as a result of new information, future events or otherwise, except as may be required by applicable securities law. 

SOURCE Intermap Technologies Corporation