Intermap has entered into a series of related arrangements with Vertex One Asset Management, on behalf of the Vertex Fund, 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 $6 million of Intermap’s common shares through an exempt equity rights offering to all existing shareholders. The proceeds will be used to repay the $6 million bridge loan Vertex has provided 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. 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:
- 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 issued by the company to Vertex in the principal amounts of $2 million due on the earlier of July 8, 2017 and the date on which the corporation receives a down payment from a geospatial project and $25.8 million due September 1, 2017
- Termination of the royalty and cash sweep: terminating a royalty interest equal to 17.5% of the net revenues of the corporation 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 for repayment of the promissory notes owing to Vertex. As consideration for terminating the royalty and cash sweep, Intermap issued a non-interest bearing note maturing September 1, 2020, in the principal amount of $3 million
- Provision of $6 million bridge financing due on the earlier of March 31, 2017 and the completion of the rights offering
- Provision of a $6 million standby purchase commitment to backstop the rights offering
The Vertex transactions were unanimously approved by the board of directors of Intermap.
Denver-based Intermap is a provider of geospatial intelligence solutions.