Denver, February 5, 2016 – Intermap Technologies Corporation (“Intermap” or the “Company”), (TSX: IMP), (ITMSF: BB), a leading provider of geospatial solutions, today announced that it has entered into definitive agreements (collectively, the “Contract”), pertaining to the previously announced letter of award (see June 22, 2015, September 29, 2015, and December 31, 2015, press releases) for the creation, operation and maintenance of a national spatial data infrastructure (“SDI”) program (the “Project”).
Under the terms of the Contract, the statement of work for the Project’s initial three-year implementation phase is valued at US$143 million, earned on a monthly milestone payment basis, with a US$12 million down payment due upon financial close. The Company will also provide an operation and maintenance module valued at US$32 million for an additional nine-year period. In addition to the Contract, the Company expects to be retained to perform consulting services relating to the customization of dedicated applications for the sovereign client, the requirements for which, by the very nature of the product, will develop over the course of the Project, and be separately priced.
“We are pleased to report the signing of this landmark contract”, said Todd Oseth, President and CEO of Intermap Technologies. “It has taken an extended period of time, particularly given the inherent complexity, both technical and financial, of completing a definitive contract for an innovative SDI program of this scale and scope. The know-how generated in this process will serve the Company well in other SDI programs currently under consideration as well as strengthen the Company’s positioning within the geospatial technology sector. Governments and commercial clients alike are increasingly seeking location-based solutions to guide decision-making across their organizations. The Orion Platform is capable of delivering just that. The project announcement coincides with the recent publication of the United Nations report on future trends in geospatial information management. We believe that we are well positioned to engage in this developing market.”
The Contract is subject to customary closing conditions and the finalization of the Project’s financing facility, with product and service delivery scheduled to commence during the second quarter of this year.
The twelve-year SDI program will be administered within a public-private-partnership (“PPP”) framework, under the build-operate-transfer (“BOT”) model, with the Company serving as the prime contractor, on a turnkey basis. The PPP concession agreement and associated government approvals were granted over the course of the past three months.
As previously announced, the letter of award was the result of a competitive tender process during which the Company demonstrated the enabling versatility of its proprietary Orion Platform, the industry’s first software-driven, big-data, geospatial analytics platform, capable of delivering customized solutions, at scale, to governments and commercial enterprises across multiple verticals from one unified control point. The Orion Platform is based on the Company’s proprietary software, data, airborne radar collection and data fusion technologies.
The sovereign client intends to use the Orion Platform for the planning, development and management of national interests, including land administration and registration (residential, commercial, industrial, agricultural), telecommunication, transportation and power networks, natural resources exploration and production, environmental protection, defense and homeland security. The SDI program includes nationwide data acquisition, utilizing the Company’s proprietary Interferometric Synthetic Aperture Radar (IFSAR) technology, alongside satellite imagery and selective Light Detection and Ranging (LiDAR) coverage.
Headquartered in Denver, Colorado, Intermap is a leading provider of geospatial solutions on demand with its secure, cloud-based Orion Platform®. Through its powerful suite of software applications and proprietary development of contiguous databases that fuse volumes of geospatial data into a single source, the Orion Platform is able to provide location-based solutions for customers in diverse markets around the world. For additional information, please visit www.intermap.com.
Intermap Reader Advisory
This news release contains forward-looking statements relating to (i) the commencement and implementation of an SDI contract; (ii) the finalization of the required project financing; and (iii) future global demand for the Orion Platform. These forward-looking statements include opinions, assumptions, estimates and management’s assessment of future plans and operations.
Forward-looking statements typically use words such as “will,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “project,” “should,” “plan,” and similar expressions suggesting future outcomes, and include statements that actions, events, or conditions “may,” “would,” “could,” or “will” be taken or occur in the future. The forward-looking statements are based on various assumptions including expectations regarding the nature and success of negotiations to finalize the terms of the project financing; the Company’s ability to carry out the SDI program; geopolitical and country-based risks of the SDI program’s jurisdiction; the expectation that the risks outlined in the Company’s most recent Annual Information Form as well as the risks outlined at the bottom of this press release will not materialize in a manner materially detrimental to the Company; net debt; availability of capital in the short term; estimated amounts and timing of capital expenditures; estimates of future revenue generation activity; assumptions concerning the timing of regulatory approvals; the state of the economy and the spatial data infrastructure business; results of operations; business prospects and opportunities; future exchange and interest rates; the Company’s ability to obtain personnel and equipment in a timely manner to carry out its business activities; and the ability of the Company to access capital and credit in the short term, if required.
Although Intermap believes these statements and assumptions to be reasonable based on information currently available to it, they are necessarily subject to a variety of known and unknown risks and uncertainties. You can find a discussion of such risks and uncertainties in the Annual Information Form and other securities filings, including those risks highlighted below. While the Company 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 Company 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 Company 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.
Special attention is brought to the “Risk Factors” sections of the Company’s most recent Annual Information Form (available under the Company’s profile at www.sedar.com) and other public filings which include the following risks, all of which are applicable to and could have a material impact on the Company and the aforementioned Contract.
Finalization of Project Finance Facility
Intermap will not receive the USD$12 million down payment and will not commence work under the SDI contract until the concessionaire has finalized the project finance facility. While Intermap believes the facility will be finalized in a reasonable period of time, Intermap is not a party to the facility negotiations and both finalization and timing of the financing facility are outside of Intermap’s control.
Nature of Government Contracts
Intermap conducts a significant portion of its business either directly from, or in cooperation with, the United States government, other governments around the world, and international funding agencies. In many cases, the terms of these contracts provide for cancellation at the option of the government or agency at any time. The current state of the public finances in many of the countries that the Company has historically operated in has led to reductions in the amount of products and services ordered by its government customers. In addition, many of Intermap's products and services require government appropriations and regulatory licenses, permits, and approvals, the timing and receipt of which are not within Intermap's control. Any of these factors could have an effect on Intermap's revenue, earnings, and cash flow.
Defects in the Company’s 3DBI software applications, delays in delivery, and failures or mistakes in the Company’s software code could materially harm the Company’s business, including customer relationships and operating results.
Information Technology Security
The Company’s 3DBI software applications are dependent on the Company’s ability to protect its computer equipment and the information stored in the Company’s data centers against damage that may be caused by fire, power loss, telecommunication failures, unauthorized intrusion, computer viruses, disabling devices and other similar events. A failure in the Company’s production systems or a disaster or other event affecting production systems or business operations, both internally and externally, could result in a disruption to the Company’s software services. Such a disruption could also impact the Company’s reputation and cause it to lose customers, revenue, face litigation, or necessitate customer service/repair work that would involve substantial costs and could ultimately have a material impact on the Company.
Breakdown of Strategic Alliances
Intermap has fostered a number of key alliances over the past several years and intends to enter into new alliances in the future. These alliances occasionally take the form of performing contract services in tandem with, or as a sub-contractor to, another geographic information systems (GIS) company. The Company believes these new alliances will help enable access to significant scalable markets that would not otherwise be accessible in a timely manner. The breakdown or termination of some or all of those alliances could have a material impact on the Company. At this time, the Company is not aware of any material issues in its strategic relationships. Should any one of these companies be unable to continue its alliance with Intermap, or otherwise choose to dissolve the relationship, the Company would seek to replace the connection with other entities, but there is no guarantee such replacement would occur.
Exporting Products – Political Considerations
Intermap’s data collection systems contain technology that is classified as a defense article under the International Traffic and Arms Regulations. All IFSAR data collection efforts undertaken outside the United States, therefore, constitute a temporary export of a defense article, requiring prior written approval by the United States Department of State for each country within which data collection operations are to be performed. The Company does not currently anticipate that requirements for export permits will have a material impact on the Company's operations, although either government policy or government relations with select foreign countries may change to the point of affecting the Company's operational opportunities. The data produced by Intermap's IFSAR radar system falls under Department of Commerce regulations and is virtually unrestricted.
A significant portion of Intermap's revenue is expected to come from customers outside of the United States and is therefore subject to additional risks, including foreign currency exchange rate fluctuations, agreements that may be difficult to enforce, receivables difficult to collect through a foreign country's legal system, and the imposition of foreign-country-imposed withholding taxes or other foreign taxes. Intermap relies on contract prepayments or letters of credit to secure payment from certain of its customers when deemed necessary. The Company has in the past secured export credit insurance on certain of its international receivables, which greatly reduces the commercial and political risks of operating outside of North America.
Intermap understands that not every region enjoys the political stability that is taken for granted in North America. Developments in recent years in the Middle East, Asia, and other parts of the world illustrate this clearly. Political or significant instability in a region where Intermap is conducting data collection activities and any of its other services, or where Intermap has clients, could adversely impact Intermap's business.
For additional information, please contact:
Rich Mohr, Senior Vice-President & Chief Financial Officer
+1 (303) 708-0955
Canada – Financial
Cory Pala, Investor Relations
e.vestor Communications Inc.
+1 (416) 657-2400