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Intouch Insight Ltd. Interim / Quarterly Report 2025
44051_rns_2025-08-27_884934f7-bdef-4745-b4ca-237e37f82e1c.pdf
Interim / Quarterly Report
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INTOUCH INSIGHT
Interim Condensed Consolidated Financial Statements
Intouch Insight Ltd.
for the three and six months ended June 30, 2025, and 2024
(Unaudited, expressed in Canadian Dollars)
NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying unaudited interim condensed consolidated financial statements of Intouch Insight Ltd. have been prepared by and are the responsibility of the Company's management.
The Company's independent auditor has not performed a review of these financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.
Cameron Watt
President and Chief Executive Officer
Cathy Smith
Chief Financial Officer
Intouch Insight Ltd.
Interim Condensed Consolidated Financial Statements (unaudited)
As of June 30, 2025
| PAGE | |
|---|---|
| Interim Condensed Consolidated Statements of Loss and Comprehensive Loss | 2 |
| Interim Condensed Consolidated Statements of Financial Position | 3 |
| Interim Condensed Consolidated Statements of Changes in Equity | 4 |
| Interim Condensed Consolidated Statements of Cash Flows | 5 |
| Notes to the Interim Condensed Consolidated Financial Statements | 6-15 |
INTOUCH INSIGHT LTD.
Interim Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
Three and six months ended June 30, 2025 and 2024
(Unaudited- in Canadian Dollars)
| Note | Three months ended | Six months ended | |||
|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | ||
| Revenue | 3 | $6,503,539 | $ 7,353,518 | $12,823,202 | $ 15,199,374 |
| Cost of services | 3,225,447 | 4,288,732 | 6,354,595 | 9,066,906 | |
| Gross margin | 3,278,092 | 3,064,786 | 6,468,607 | 6,132,468 | |
| Operating expenses | |||||
| Selling | 4 | 681,283 | 649,369 | 1,232,837 | 1,193,161 |
| General and administrative | 5 | 1,955,882 | 1,662,798 | 3,791,991 | 3,433,674 |
| Product development | 6 | 468,563 | 665,144 | 900,064 | 1,273,108 |
| Impairment of intangible assets and goodwill | 10 | 1,193,484 | - | 1,193,484 | - |
| Total operating expenses | 4,299,212 | 2,977,311 | 7,118,376 | 5,899,943 | |
| Income (loss) from operating activities | (1,021,120) | 87,475 | (649,769) | 232,525 | |
| Non-operating expenses | |||||
| Finance costs | 96,682 | 101,401 | 178,779 | 219,881 | |
| Loss (gain) in fair value of contingent consideration payable | 11 | (14,259) | (847,155) | (14,259) | (890,389) |
| Net earnings (loss) before income taxes | (1,103,543) | 833,229 | (814,289) | 903,033 | |
| Income taxes | 17 | ||||
| Deferred tax expense | - | - | - | - | |
| Current income tax expense (recovery) | 8,480 | 6,799 | 85,132 | 6,799 | |
| NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) | $(1,112,023) | $ 826,430 | $(899,421) | $ 896,234 | |
| Earnings (loss) per share | 7 | ||||
| Basic | $(0.04) | $ 0.03 | $(0.04) | $ 0.04 | |
| Diluted | $(0.04) | $ 0.03 | $(0.04) | $ 0.04 | |
| Weighted average number of shares - basic | 25,669,239 | 25,522,600 | 25,636,351 | 25,521,064 | |
| Weighted average number of shares - diluted | 25,669,239 | 25,593,243 | 25,636,351 | 25,593,141 |
The accompanying notes are an integral part of these interim condensed consolidated financial statements
3
INTOUCH INSIGHT LTD.
Interim Condensed Consolidated Statements of Financial Position
As of June 30, 2025 and December 31, 2024
(Unaudited- in Canadian Dollars)
| Notes | June 30, 2025 | December 31, 2024 (audited) | |
|---|---|---|---|
| ASSETS | |||
| Current Assets | |||
| Cash and cash equivalents | $ 1,188,832 | $ 1,245,793 | |
| Trade and other receivables | 8 | 4,511,097 | 3,763,140 |
| Contract assets | 8 | 206,678 | 334,333 |
| Prepaid expenses | 287,098 | 304,806 | |
| Total Current Assets | 6,193,705 | 5,648,072 | |
| Non-Current Assets | |||
| Property and equipment | 9 | 609,645 | 365,081 |
| Intangible assets | 10 | 3,703,606 | 4,199,838 |
| Goodwill | 10 | 841,276 | 1,761,186 |
| Total Non-Current Assets | 5,154,527 | 6,326,105 | |
| TOTAL ASSETS | $ 11,348,232 | $ 11,974,177 | |
| LIABILITIES | |||
| Current Liabilities | |||
| Bank borrowings | 13 | $ 490,000 | $ - |
| Trade and other liabilities | 1,130,229 | 1,259,446 | |
| Contract liabilities | 202,054 | 163,893 | |
| Current portion of contingent consideration payable | 11 | - | - |
| Current portion of long-term debt | 14 | 616,855 | 606,204 |
| Current portion of lease liabilities | 12 | 170,574 | 170,574 |
| Total Current Liabilities | 2,609,712 | 2,200,117 | |
| Non-Current Liabilities | |||
| Long-term debt | 14 | 1,155,568 | 1,591,714 |
| Contingent consideration payable | 11 | - | 15,001 |
| Deferred tax liabilities | 80,377 | 80,377 | |
| Lease liabilities | 12 | 428,951 | 176,001 |
| Total Non-Current Liabilities | 1,664,896 | 1,863,093 | |
| TOTAL LIABILITIES | 4,274,608 | 4,063,210 | |
| SHAREHOLDERS' EQUITY | |||
| Share capital | 15 | 7,297,356 | 7,272,952 |
| Contributed surplus | 2,067,616 | 2,029,942 | |
| Deficit | (2,291,348) | (1,391,927) | |
| TOTAL SHAREHOLDERS' EQUITY | 7,073,624 | 7,910,967 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 11,348,232 | $ 11,974,177 |
Commitments and Contingencies 19
ON BEHALF OF THE BOARD
"Eric Beutel" Director
Eric Beutel
"W. David Oliver" Director
W. David Oliver
The accompanying notes are an integral part of these interim condensed consolidated financial statements
INTOUCH INSIGHT LTD.
Interim Condensed Consolidated Statements of Changes in Equity
Three and six months ended June 30, 2025 and 2024
(Unaudited- in Canadian Dollars)
| Note | Number of Common Shares | Share Capital | Contributed Surplus | Retained Earnings (Deficit) | Total Equity | |
|---|---|---|---|---|---|---|
| Balance as at January 1, 2024 | 25,515,594 | $ 7,227,691 | $ 1,864,083 | $ (2,794,719) | $ 6,297,055 | |
| Issuance of share capital related to the exercise of share options | 15 | 7,006 | 6,939 | (6,939) | - | - |
| Share-based compensation | - | - | 82,828 | - | 82,828 | |
| Net loss and comprehensive loss | - | - | - | 896,234 | 896,234 | |
| Balance as at June 30, 2024 | 25,522,600 | $ 7,234,630 | $ 1,939,972 | $ (1,898,485) | $ 7,276,117 | |
| Balance as at January 1, 2025 | 25,603,825 | $ 7,272,952 | $ 2,029,942 | $ (1,391,927) | $ 7,910,967 | |
| Issuance of share capital related to the exercise of share options | 15 | 89,026 | 50,756 | (35,506) | - | 15,250 |
| Share-based compensation | - | - | 73,180 | - | 73,180 | |
| Repurchase and cancellation of shares per Normal Course Issuer Bid | 15 | (59,000) | (26,352) | - | - | (26,352) |
| Net income and comprehensive income | - | - | - | (899,421) | (899,421) | |
| Balance as at June 30, 2025 | 25,633,851 | $ 7,297,356 | $ 2,067,616 | $ (2,291,348) | $ 7,073,624 |
The accompanying notes are an integral part of these interim condensed consolidated financial statements
INTOUCH INSIGHT LTD.
Interim Condensed Consolidated Statements of Cash Flows
Three and six months ended June 30, 2025 and 2024
(Unaudited - in Canadian Dollars)
| Note | Three months | Six months | |||
|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | ||
| Cash flows from operating activities | |||||
| Net income (loss) | $ (1,112,023) | $ 826,430 | $ (899,421) | $ 896,234 | |
| Adjustments for non-cash items: | |||||
| Amortization of property and equipment | 9 | 44,871 | 44,343 | 89,005 | 98,932 |
| Amortization of intangible assets | 10 | 111,236 | 113,036 | 222,658 | 226,072 |
| Allowance for doubtful accounts | - | (2,122) | 39,787 | (2,122) | |
| Finance costs | 96,684 | 101,401 | 178,781 | 219,881 | |
| Impairment of intangible assets | 10 | 273,574 | - | 273,574 | - |
| Impairment of goodwill | 10 | 919,910 | - | 919,910 | - |
| Loss (gain) on contingent consideration | 11 | (14,259) | (847,155) | (14,259) | (890,389) |
| Share-based compensation | 15, 16 | 42,339 | 51,660 | 73,180 | 82,828 |
| Loss (gain) on disposal of property and equipment | (13,588) | - | (13,588) | (16,129) | |
| Net change in non-cash operating working capital | 18 | (426,728) | 10,924 | (733,437) | 186,920 |
| Net cash flows from (used in) operating activities | (77,984) | 298,517 | 136,190 | 802,227 | |
| Cash flows from financing activities | |||||
| Net proceeds (repayments) from bank borrowings | $ 490,000 | $ 120,000 | 490,000 | (310,000) | |
| Issuance of share capital net of cash issue costs | 15,250 | - | 15,250 | - | |
| Repurchase of share capital | (26,352) | - | (26,352) | - | |
| Repayment of short-term debt | - | - | - | (181,777) | |
| Repayment of long-term debt | 14 | (275,885) | (145,941) | (425,495) | (182,582) |
| Repayment of lease liabilities | 12 | (31,260) | (33,693) | (67,031) | (75,871) |
| Repayment of contingent consideration payable | - | - | - | (61,811) | |
| Foreign exchange loss (gain) on financing activities | (728) | 15,155 | (742) | 49,513 | |
| Finance costs paid | (96,684) | (101,401) | (178,781) | (219,881) | |
| Net cash flows from (used in) financing activities | 74,341 | (145,880) | (193,151) | (982,409) | |
| Cash flows from investing activities | |||||
| Purchase of property and equipment | 9 | - | (1,796) | - | (3,495) |
| Net cash flows used in investing activities | - | (1,796) | - | (3,495) | |
| NET INCREASE (DECREASE) IN CASH | (3,643) | 150,841 | (56,961) | (183,677) | |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,192,475 | 563,617 | 1,245,793 | 898,135 | |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 1,188,832 | $ 714,458 | $ 1,188,832 | $ 714,458 | |
| Additional Information | |||||
| Interest paid | 45,734 | 69,116 | 95,230 | 151,449 | |
| Income tax paid (recovered) included in operating activities | - | - | - | - |
The accompanying notes are an integral part of these interim condensed consolidated financial statements
INTOUCH INSIGHT LTD.
Notes to the Interim Condensed Consolidated Financial Statements
Three and six months ended June 30, 2025 and 2024
(Unaudited - in Canadian Dollars)
- CORPORATE INFORMATION
Intouch Insight Ltd. ("Intouch" or the "Company") is a publicly listed company and is incorporated under the Canada Business Corporations Act. The Company's shares are listed on the TSX Venture Exchange ("TSX-V") under the symbol INX and on the OTC Markets Group ("OTCQX") under the symbol INXSF. The address of Intouch's registered office and its principal place of business is 400 March Road, Ottawa, Ontario, Canada K2K 3H4.
Founded in 1992, Intouch and its subsidiaries offer a portfolio of customer experience management (CEM) products and solutions. These include customer surveys, mystery shopping, mobile forms, operational and compliance audits, and event marketing automation solutions.
- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation and statement of compliance with IFRS
The interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required in annual consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS") and International Accounting Standards as issued by the International Accounting Standards Board (IASB) and Interpretations (collectively IFRS Accounting Standards) and should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2024.
The preparation of the interim condensed consolidated financial statements in accordance with IAS 34 requires the use of certain critical accounting estimates. It also requires Management to exercise judgment in the process of applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the interim condensed consolidated financial statements are the same as those applied in the Company's most recent annual consolidated financial statements. The only exception is the estimate used for the income tax provision. This provision is determined using the estimated average annual effective income tax rate applied to the pre-tax income of the interim period.
(b) Significant accounting policies
The Company's significant accounting policies are consistent with those disclosed in Note 2 of the Company's last annual audited consolidated financial statements for the year ended December 31, 2024.
(c) Critical accounting estimates and judgments
The Company's interim consolidated financial statements are prepared in accordance with IFRS recognition and measurement principles that often require Management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts presented and disclosed in the measurement of assets, liabilities, income and expenses. Management reviews these estimates and assumptions on an ongoing basis based on historical experience, changes in business conditions and other relevant factors as it believes to be reasonable under the circumstances. Changes in facts and circumstances may result in revised estimates, and actual results could differ from those estimates. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
The estimates, judgments and assumptions applied in the interim consolidated financial statements, including the key sources of estimation uncertainty were the same as those applied in the Company's last annual audited consolidated financial statements for the year ended December 31, 2024. The only exception is the estimate used for the income tax provision. This provision is determined using the estimated average annual effective income tax rate applied to the pre-tax income of the interim period.
INTOUCH INSIGHT LTD.
Notes to the Interim Condensed Consolidated Financial Statements
Three and six months ended June 30, 2025 and 2024
(Unaudited - in Canadian Dollars)
3. REVENUE
Geographical
The Company reports its revenue by the geographical location of its customers. No significant property and equipment are maintained outside of Canada.
| Three months | Six months | |||
|---|---|---|---|---|
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |
| Canada | $ 1,429,544 | $ 1,277,481 | $ 2,582,724 | $ 2,474,272 |
| US | 5,062,194 | 6,052,872 | 10,206,416 | 12,676,497 |
| Other | 11,801 | 23,165 | 34,062 | 48,605 |
| Total revenue | $ 6,503,539 | $ 7,353,518 | $ 12,823,202 | $ 15,199,374 |
Major customers
Revenues from specific clients, each with 10% or more of total Company revenues, are summarized as follows:
| Three months | Six months | |||
|---|---|---|---|---|
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |
| Customer 1 | $ 914,040 | $ 843,753 | $ 1,865,754 | $ 1,657,160 |
| Customer 2 | - | 1,177,695 | - | 2,490,513 |
Major trade accounts receivable
Accounts receivable from specific clients, each with 10% or more of total Company receivables, are summarized as follows:
| June 30, 2025 | June 30, 2024 | |
|---|---|---|
| Customer 1 | $ 477,651 | $ 421,531 |
| Customer 2 | - | 1,208,562 |
The customers presented may not be the same as in the previous table.
4. SELLING EXPENSES
Selling expenses for the Company are broken down as follows:
| Three months | Six months | |||
|---|---|---|---|---|
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |
| Marketing expenses | $ 297,654 | $ 260,692 | $ 507,251 | $ 393,597 |
| Travel expenses | 67,234 | 88,949 | 117,086 | 185,945 |
| Salaries and benefits | 274,687 | 299,728 | 566,792 | 613,619 |
| Consultant fees | 41,708 | - | 41,708 | - |
| Selling expenses | $ 681,283 | $ 649,369 | $ 1,232,837 | $ 1,193,161 |
INTOUCH INSIGHT LTD.
Notes to the Interim Condensed Consolidated Financial Statements
Three and six months ended June 30, 2025 and 2024
(Unaudited - in Canadian Dollars)
5. GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses for the Company are broken down as follows:
| Three months | Six months | |||
|---|---|---|---|---|
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |
| Corporate administration | $ 319,346 | $ 318,532 | $ 681,142 | $ 662,383 |
| Consultant fees | 9,500 | - | 9,500 | 2,506 |
| Professional fees | 132,904 | 51,570 | 195,643 | 120,472 |
| Public company fees | 65,916 | 78,394 | 121,798 | 153,768 |
| Salaries and benefits(1) | 1,057,263 | 1,048,454 | 2,166,604 | 2,205,512 |
| Loss (gain) on disposal of property and equipment | (13,589) | - | (13,589) | (16,129) |
| Loss (gain) on foreign exchange | 228,516 | 8,742 | 279,021 | (17,720) |
| Bad debt expense (recovery) | - | (2,122) | 39,787 | (2,122) |
| Amortization expense | 156,026 | 159,228 | 312,085 | 325,004 |
| General and administrative expenses | $ 1,955,882 | $ 1,662,798 | $ 3,791,991 | $ 3,433,674 |
(1) Share-based compensation (a non-cash item) of $42,339 (Q2 2024- $51,660) has been included in Salaries and benefits. YTD 2025, $73,180 (YTD 2024- $82,828) was included.
6. PRODUCT DEVELOPMENT EXPENSES
Product development expenses for the Company are broken down as follows:
| Three months | Six months | |||
|---|---|---|---|---|
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |
| Salaries and benefits | $ 542,615 | $ 665,144 | $ 1,066,233 | $ 1,273,108 |
| Investment tax credits and other government contributions towards development | (84,551) | - | (176,669) | - |
| Consultant fees | 10,500 | - | 10,500 | - |
| Total product development expenses | $ 468,564 | $ 665,144 | $ 900,064 | $ 1,273,108 |
7. EARNINGS (LOSS) PER SHARE
The calculation of basic and diluted earnings (loss) per share for the relevant periods is based on the following information:
| Three months | Six months | |||
|---|---|---|---|---|
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |
| Weighted average number of common shares - basic | 25,669,239 | 25,522,600 | 25,636,351 | 25,521,064 |
| Additions to reflect the dilutive effect of employee stock options | - | 70,643 | - | 72,077 |
| Weighted average number of common shares - diluted | 25,669,239 | 25,593,243 | 25,636,351 | 25,593,141 |
8. TRADE, OTHER RECEIVABLES AND CONTRACT ASSETS
Trade and other receivables consist primarily of trade receivables from billings of recurring revenue including system use and license fees, consulting, custom development and reports as well as other receivables. Contract assets consist of services in process and not yet billed.
INTOUCH INSIGHT LTD.
Notes to the Interim Condensed Consolidated Financial Statements
Three and six months ended June 30, 2025 and 2024
(Unaudited - in Canadian Dollars)
| As of June 30, 2025 | As of December 31, 2024 | |
|---|---|---|
| Trade accounts receivable, gross | $ 4,497,349 | $ 3,752,251 |
| Provision for expected credit losses | - | - |
| Trade accounts receivable, net | 4,497,349 | 3,752,251 |
| Sales taxes recoverable | 13,748 | 10,889 |
| Other receivables | - | - |
| Contract assets | 206,678 | 334,333 |
| Trade, other receivables and contract assets | $ 4,717,775 | $ 4,097,472 |
Trade receivables past due but not impaired can be shown as follows:
| As of June 30, 2025 | As of December 31, 2024 | |
|---|---|---|
| 1 - 60 days past due | $ 1,408,217 | $ 1,438,910 |
| Greater than 60 days past due | 473,907 | 366,881 |
| $ 1,882,124 | $ 1,805,791 |
Management considers that the above-stated financial assets, including those 1-60 days and greater than 60 days, are of good credit quality.
9. PROPERTY AND EQUIPMENT
The following tables summarize the changes in the carrying amount of property and equipment:
INTOUCH INSIGHT LTD.
Notes to the Interim Condensed Consolidated Financial Statements
Three and six months ended June 30, 2025 and 2024
(Unaudited - in Canadian Dollars)
| Computer Equipment | Survey Tablets | Furniture and Equipment | Leasehold Improvements | Right of Use Assets | Total | |
|---|---|---|---|---|---|---|
| Cost: | ||||||
| At December 31, 2023 | $ 347,977 | $ 1,528,148 | $ 228,825 | $ 197,180 | $ 1,555,977 | $ 3,858,107 |
| Additions | 1,449 | 5,413 | - | - | 247,213 | 254,075 |
| Disposals^{1} | - | - | (39,439) | - | (986,384) | (1,025,823) |
| At December 31, 2024 | 349,426 | 1,533,561 | 189,386 | 197,180 | 816,806 | 3,086,359 |
| Additions | - | - | - | - | 413,500 | 413,500 |
| Removal | (329,404) | - | - | - | - | (329,404) |
| Disposals^{2} | - | - | - | - | (569,592) | (569,592) |
| At June 30, 2025 | $ 20,022 | $ 1,533,561 | $ 189,386 | $ 197,180 | $ 660,714 | $ 2,600,863 |
| Accumulated Amortization: | ||||||
| At December 31, 2023 | $ 330,437 | $ 1,522,980 | $ 193,051 | $ 180,785 | $ 910,139 | $ 3,137,392 |
| Amortization | 6,672 | 2,964 | 19,265 | 7,287 | 151,169 | 187,357 |
| Disposals^{1} | - | - | (32,445) | - | (571,026) | (603,471) |
| At December 31, 2024 | 337,109 | 1,525,944 | 179,871 | 188,072 | 490,282 | 2,721,278 |
| Amortization | 3,337 | 950 | 9,515 | 3,643 | 71,560 | 89,005 |
| Removal | (329,404) | - | - | - | - | (329,404) |
| Disposals^{2} | - | - | - | - | (489,661) | (489,661) |
| At June 30, 2025 | $ 11,042 | $ 1,526,894 | $ 189,386 | $ 191,715 | $ 72,181 | $ 1,991,218 |
| Carrying amounts: | ||||||
| At December 31, 2024 | $ 12,317 | $ 7,617 | $ 9,515 | $ 9,108 | $ 326,524 | $ 365,081 |
| At June 30, 2025 | $ 8,980 | $ 6,667 | $ - | $ 5,465 | $ 588,533 | 609,645 |
1 Part of the termination of the Laval lease (Note 12).
2 Part of the termination and renewal of the Kanata lease (Note 12).
As part of the disposal of the Laval lease in Q1 2024 (Note 12), furniture and equipment with a cost of $39,439 and accumulated amortization of $32,445 was disposed for $nil proceeds. The right-of-use asset with a cost of $679,784 and accumulated amortization of $512,877 was disposed for $nil proceeds.
On April 1, 2025, the Kanata lease was terminated, and a new lease commenced on the same day. The right-of-use asset with a cost of $569,592 and accumulated amortization of $489,661 was disposed for $nil proceeds.
For Q2 2025, amortization of $475 (Q2 2024 - $277) is included in cost of services while an amount of $44,396 (Q2 2024 - $44,067) is included in general and administrative expenses.
For YTD 2025, amortization of $950 (YTD 2024 - $2,126) is included in cost of services while an amount of $88,055 (YTD 2024 - $96,806) is included in general and administrative expenses.
10. INTANGIBLE ASSETS AND GOODWILL
INTOUCH INSIGHT LTD.
Notes to the Interim Condensed Consolidated Financial Statements
Three and six months ended June 30, 2025 and 2024
(Unaudited - in Canadian Dollars)
| Cost: | Acquired Trademarks | Acquired customer relationships | Software | Total intangible assets | Goodwill |
|---|---|---|---|---|---|
| At December 31, 2023 | $ 416,646 | $ 7,367,264 | $ 706,216 | $ 8,490,126 | $ 2,622,770 |
| Additions | - | - | - | - | - |
| At December 31, 2024 | $ 416,646 | $ 7,367,264 | $ 706,216 | $ 8,490,126 | $ 2,622,770 |
| Additions | $ - | - | - | - | - |
| At June 30, 2025 | $ 416,646 | $ 7,367,264 | $ 706,216 | $ 8,490,126 | $ 2,622,770 |
| Accumulated Amortization: | |||||
| At December 31, 2023 | $ 192,136 | $ 2,939,792 | $ 706,216 | 3,838,144 | $ 400,411 |
| Amortization | 31,993 | 420,151 | - | 452,144 | - |
| Impairment | - | - | - | - | 461,173 |
| At December 31, 2024 | $ 224,129 | $ 3,359,943 | $ 706,216 | $ 4,290,288 | $ 861,584 |
| Amortization | 12,583 | 210,076 | - | 222,659 | - |
| Impairment | - | 273,574 | - | 273,574 | 919,910 |
| At June 30, 2025 | $ 236,712 | $ 3,843,593 | $ 706,216 | $ 4,786,521 | $ 1,781,494 |
| Carrying Amounts: | |||||
| At December 31, 2024 | $ 192,517 | $ 4,007,321 | $ - | $ 4,199,838 | $ 1,761,186 |
| At June 30, 2025 | $ 179,934 | $ 3,523,671 | $ - | $ 3,703,605 | $ 841,276 |
Amortization expense is recorded in general and administrative expenses (Note 5). The remaining amortization period of the customer relationships ends between December 31, 2026 and June 30, 2036.
Impairment
The Company performed an impairment test for all acquired companies (the separate cash-generating units "CGUs" are: Statopex, RetailTrack, PerformaLogics/MobilForce, SeeLevel, and Alta/Ardent/BEB).
The total carrying amount of goodwill and intangibles for these CGUs is as follows:
| CGU: | Intangibles | Goodwill | Total |
|---|---|---|---|
| RetailTrack | $ 657 | $ - | $ 657 |
| PerformaLogics and MobilForce | 48,107 | - | 48,107 |
| SeeLevel | 1,915,650 | 841,276 | 2,756,926 |
| Alta/Ardent/BEB | 1,739,191 | - | 1,739,191 |
| Carrying Value - June 30, 2025 | $ 3,703,605 | $ 841,276 | $ 4,544,881 |
The recoverable amount of each CGU was determined based on value-in-use calculations being higher than fair value less costs of disposal, covering a detailed four to five-year forecasts based on the past financial results and the Company's assessment of the future performance of each CGU. The following are the key assumptions (based on historical experience) on which the Company has based its cash flow projections:
- Perpetual growth rate of 2%
- After-tax discount rates applied to the CGUs are as follows:
- Alta/Ardent/BEB: 19.65%
- SeeLevel: 25.82%
INTOUCH INSIGHT LTD.
Notes to the Interim Condensed Consolidated Financial Statements
Three and six months ended June 30, 2025 and 2024
(Unaudited - in Canadian Dollars)
PerformaLogics/MobilForce: 33.17%
The Company recorded impairment for the three and six months ended June 30, 2025 of $1,193,484 (Q2 and YTD 2024- nil).
Events and Circumstances Leading to Impairment
The following events and circumstances led to the recognition of impairment losses in the current year:
- Alta/Ardent/BEB: Loss of a specific client program.
11. CONTINGENT CONSIDERATION
As part of the acquisition of BEB and its subsidiaries Alta and Ardent, future consideration is payable over four years following the closing, based on a percentage of Alta customer experience revenues from existing and identified prospective customers. The first US$3 million of annual eligible revenues are exempt from contingent consideration. Between US$3 million and US$5 million of annual eligible revenues, the percentage for the contingent consideration is 20%. For annual eligible revenues over US$5 million, the percentage is 10%. An additional contingent consideration of 50% of gross profits from the Ardent field services business is due over the first 48 months post-acquisition; this was valued at zero at the time of acquisition.
The Company employs a discounted cash flow model when determining the amount of this future consideration. The duration of the cash flow projections is based on estimates of the revenues to be earned from the customer over the four years following the closing of the acquisition. The probabilities for the estimates equal 100% for each 12 months, and the discount rate is 19.65%.
As of June 30, 2025, $209,005 of the contingent consideration was paid. In addition, the fair value of the future consideration was $nil (all non-current).
12. LEASE LIABILITIES
The Company has the following non-discounted future commitments associated with its office lease liabilities:
| As of June 30, 2025 | |
|---|---|
| Less than one year | $ 170,574 |
| Between one and five years | 523,525 |
| More than five years | - |
| Total lease payments | 694,099 |
| Amounts representing interest over the term of the lease | 94,574 |
| Present value of net lease payments | 599,525 |
| Current portion of lease obligation | $ 170,574 |
| Non-current portion of lease obligation | $ 428,951 |
The following table show the movement for lease liabilities for the six months ended June 30, 2025:
| June 30, 2025 | |
|---|---|
| Balance, January 1, 2025 | $ 346,575 |
| Additions | 413,500 |
| Termination of lease | (93,519) |
| Repayments | (85,287) |
| Interest portion of repayments | 18,256 |
| Ending balance | $ 599,525 |
On January 14, 2024, the Company terminated its lease in Laval, Quebec, Canada, with the approval of its landlord. The lease ended on May 31, 2024.
INTOUCH INSIGHT LTD.
Notes to the Interim Condensed Consolidated Financial Statements
Three and six months ended June 30, 2025 and 2024
(Unaudited - in Canadian Dollars)
Accordingly, the lease liability and its related right-of-use asset (Note 9) are de-recognized on January 14, 2024. The removal of the lease liability results in a gain of $190,030, while the removal of the right-of-use asset results in a loss of $166,907, resulting in a net gain of $23,123.
On April 1, 2025, the Company terminated its lease in Kanata, Ontario, Canada (and signed a new lease on the same date), with the approval of its landlord. The prior lease ended on March 31, 2026, and the new lease began on April 1, 2025.
Accordingly, the lease liability and its related right-of-use asset for the old lease (Note 9) are de-recognized on April 1, 2025. The removal of the lease liability results in a gain of $93,518, while the removal of the right-of-use asset results in a loss of $79,930, with a net gain of $13,588.
For Q2 2025, $nil (Q2 2024- $19,509) payments for leases less than twelve months were included in operating expenses.
For YTD 2025, $nil (YTD 2024- $39,019) payments for leases less than twelve months were included in operating expenses.
13. BANK BORROWINGS
a) Credit facilities
As of June 30, 2025, bank borrowings were $490,000 (2024- $240,000). The Company has credit facilities with a chartered bank that will provide credit facilities up to $3,000,000 in a demand operating loan at 5.95% (prime plus 1%) [2024 -7.95% (prime plus 1%)], secured by a general security agreement. The Company was in compliance with its covenants as of June 30, 2025 (2024- compliant). The carrying amounts of any borrowings are a reasonable approximation of fair value.
14. LONG-TERM DEBT
| June 30, 2025 | December 31, 2024 | |
|---|---|---|
| Promissory Notes | $ 347,423 | $ 467,918 |
| Long-Term Bank Loan | 1,425,000 | 1,730,000 |
| $ 1,772,423 | $ 2,197,918 | |
| Less: Current portion | (616,855) | (606,204) |
| $ 1,155,568 | $ 1,591,714 |
The following table shows the movement for the long-term debt YTD 2025:
| Interest Rate | December 31, 2024 | Principal Paid | Interest Charged | Interest Paid | June 30, 2025 | |
|---|---|---|---|---|---|---|
| Promissory Notes | 8.5% per annum | $ 467,918 | (120,495) | 16,798 | (16,798) | 347,423 |
| Long-Term Bank Loan | Floating base rate + 0.6% (7.65%) | $ 1,730,000 | (305,000) | 62,984 | (62,984) | 1,425,000 |
| $ 2,197,918 | (425,495) | 79,782 | (79,782) | 1,772,423 |
a) Promissory Notes
The Company has outstanding long-term debt arising from promissory notes issued in connection with the acquisition of BEB on October 1, 2023. The promissory notes have a total principal amount of US$500,000 (C$676,000). The annual interest rate is 8.5%, and the term is for 2.75 years.
Monthly payments are on the first of the month and commenced on January 1, 2024. The first payment is interest-only; thereafter, other payments are blended payments (interest and principal), with the final payment due on October 1, 2026.
As of June 30, 2025, the total outstanding balance is US$256,969 (C$347,423), with US$189,981 (C$256,855) classified as short-term, and US$66,988 (C$90,568) as long-term.
b) Long-Term Bank Loan
On October 3, 2023 the Company received a long-term loan of $2 million from a chartered Canadian bank to finance the acquisition of BEB. The annual interest rate is a floating base rate plus 0.6% (7.05% + 0.6% = 7.65%), and the term is for 4.75 years.
Repayments are monthly on the 15th of the month and commenced in October 2023. The first six payments are interest-only; thereafter, the subsequent payments are blended payments (interest and principal), with the final payment being a balloon payment plus interest.
INTOUCH INSIGHT LTD.
Notes to the Interim Condensed Consolidated Financial Statements
Three and six months ended June 30, 2025 and 2024
(Unaudited - in Canadian Dollars)
15. SHARE CAPITAL
Authorized:
The Company's share capital consists of an unlimited number of common shares, without par value. All shares are equally eligible to receive dividends, the repayment of capital and represent one vote at the shareholders' meetings.
During the six months ended June 30, 2025, the Company issued 89,026 common shares (170,000 less 80,974 redeemed to allow for a cashless exercise) through the exercise of stock options for gross proceeds of $15,250.
During the six months ended June 30, 2024, the Company issued 7,006 common shares (110,000 less 102,994 redeemed to allow for a cashless exercise) through the exercise of stock options for gross proceeds of $nil.
On April 22, 2025, the Company announced that intended to commence a normal course issuer bid ("NCIB") through the facilities of the TSX Venture Exchange ("TSXV") to repurchase, for cancellation up to 1,284,000 common shares of the Company, representing less than 5% of the Company's presently issued and outstanding common shares. The NCIB remains subject to the approval of the TSXV and the Company's lenders. The Company received such approval and during Q2 2025, purchased and cancelled 59,000 of its outstanding common shares at between $0.44 and $0.45 per share.
16. STOCK OPTION PLAN
The stock option plan applies to directors, officers, employees, and consultants of the Company. The options are granted at the Company's current fair market value of the common shares under terms and conditions determined by the Board of Directors. Under the plan's terms, the options generally vest proportionately over three years and expire five years from the grant date. The Board of Directors can modify vesting periods and expiry dates at the time of option grant. At the shareholders' meeting on June 19, 2020, the amended Option Plan increased the number of common shares of the Company available under the Option Plan from 2,500,438 common shares to 3,378,272 common shares. On June 17, 2022, an Amended Stock Option plan was adopted, which increased the number of common shares of the Company available under the Amended Stock Option Plan from 3,378,272 to 3,769,118.
There were 635,000 options issued YTD 2025 (YTD 2024 - 740,000). The employee compensation expense related to options vested YTD 2025 is $73,180 (YTD 2024 - $82,828). The Company may issue up to 3,639,118 (YTD 2024 - 3,639,118) options for common shares under its stock option plan. At June 30, 2025, 414,118 common shares (619,118 at June 30, 2024) are reserved for additional options under this plan.
A summary of the status of the Company's issued and outstanding stock options as of June 30, 2025 and December 31, 2024, and changes during the quarter and year ended on those dates, is presented below:
| June 30, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Number of Options | Weighted average exercise price | Number of Options | Weighted average exercise price | |
| Outstanding, beginning of period | 2,480,000 | $ 0.47 | 2,490,000 | $ 0.47 |
| Granted | 635,000 | $ 0.41 | 790,000 | $ 0.46 |
| Exercised | 170,000 | $ 0.09 | 230,000 | $ 0.10 |
| Forfeited | (10,000) | $ 0.56 | (250,000) | $ 0.49 |
| Expired | - | - | (320,000) | $ 0.48 |
| Outstanding, end of period | 2,935,000 | $ 0.46 | 2,480,000 | $ 0.47 |
The following table summarizes information about stock options as of June 30, 2025
INTOUCH INSIGHT LTD.
Notes to the Interim Condensed Consolidated Financial Statements
Three and six months ended June 30, 2025 and 2024
(Unaudited - in Canadian Dollars)
| Options Outstanding | Options Exercisable | ||
|---|---|---|---|
| Exercise prices | Number outstanding at June 30, 2025 | Weighted average remaining contractual life (years) | Number exercisable at June 30, 2025 |
| $0.345 | 610,000 | 2.98 | 406,667 |
| $0.355 | 50,000 | 4.33 | - |
| $0.380 | 10,000 | 4.77 | - |
| $0.405 | 120,000 | 3.40 | 40,002 |
| $0.410 | 630,000 | 4.96 | 1,667 |
| $0.430 | 100,000 | 3.50 | 33,333 |
| $0.455 | 5,000 | 2.78 | 3,333 |
| $0.470 | 630,000 | 3.80 | 229,997 |
| $0.550 | 455,000 | 1.91 | 455,000 |
| $0.660 | 50,000 | 2.15 | 33,333 |
| $0.670 | 5,000 | 0.90 | 5,000 |
| $0.720 | 265,000 | 0.77 | 265,000 |
| $0.790 | 5,000 | 1.16 | 5,000 |
| $ 0.345 to $ 0.79 | 2,935,000 | 3.26 | 1,478,332 |
The weighted average exercise price was $0.51 at June 30, 2025 (June 30, 2024 - $0.50) for exercisable options.
The following table summarizes information about stock options as of December 31, 2024:
| Options Outstanding | Options Exercisable | ||
|---|---|---|---|
| Exercise prices | Number outstanding at Dec 31, 2024 | Weighted average remaining contractual life (years) | Number exercisable at Dec 31, 2024 |
| $0.305 | 170,000 | 0.27 | 170,000 |
| $0.345 | 610,000 | 3.48 | 203,334 |
| $0.355 | 50,000 | 4.83 | - |
| $0.405 | 125,000 | 3.90 | 41,669 |
| $0.410 | 5,000 | 4.27 | - |
| $0.430 | 100,000 | 4.00 | - |
| $0.455 | 5,000 | 3.28 | 1,667 |
| $0.470 | 630,000 | 4.30 | 30,000 |
| $0.550 | 455,000 | 2.41 | 303,332 |
| $0.660 | 50,000 | 2.65 | 33,333 |
| $0.670 | 5,000 | 1.40 | 5,000 |
| $0.720 | 265,000 | 1.27 | 265,000 |
| $0.790 | 10,000 | 1.66 | 10,000 |
| $ 0.305 to $ 0.79 | 2,480,000 | 3.07 | 1,063,335 |
Stock-based Compensation
The Company uses the Black-Scholes model to calculate option values.
There were no stock options issued in Q1 2025.
The assumptions using the Black-Scholes option pricing model for Q2 2025 were: a weighted average share price and an exercise price of $0.38-$0.41, risk free interest rate of 2.65% to 3.25%, volatility of 53% to 63% with no expected dividend yield, 6.4% assumed forfeiture and a five-year estimated life.
The assumptions using the Black-Scholes option pricing model for Q1 2024 were: a weighted average share price and an exercise price of $0.43, risk free interest rate of 3.90% to 4.00%, volatility of 72% to 81% with no expected dividend yield, 0% assumed forfeiture and a five-year estimated life.
INTOUCH INSIGHT LTD.
Notes to the Interim Condensed Consolidated Financial Statements
Three and six months ended June 30, 2025 and 2024
(Unaudited - in Canadian Dollars)
The assumptions using the Black-Scholes option pricing model for Q2 2024 were: a weighted average share price and an exercise price of $0.47, risk free interest rate of 3.90% to 3.95%, volatility of 72% to 89% with no expected dividend yield, 11% assumed forfeiture and a five-year estimated life.
The underlying expected volatility was determined by reference to historical data of the Company's shares over the expected life of the option.
17. INCOME TAXES
Income tax expense is recognized at each interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year. Amounts accrued for income tax expense in one interim period may have to be adjusted in a subsequent interim period of that financial year should the estimate of the annual income tax rate change.
The components of income tax expense are as follows:
| Three months | Six months | |||
|---|---|---|---|---|
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |
| Current tax expense (recovery) | $ 8,400 | $ 6,799 | $ 85,132 | $ 6,799 |
| Deferred tax expense (recovery) | - | - | - | - |
| Total income tax expense | $ 8,400 | $ 6,799 | $ 85,132 | $ 6,799 |
18. CASH FLOW INFORMATION
Net change in non-cash working capital items is comprised of:
| Three months | Six months | |||
|---|---|---|---|---|
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |
| Trade and other receivables | (241,875) | 325,856 | (787,743) | 1,589,817 |
| Contract assets | (102,862) | (10,965) | 127,655 | 29,995 |
| Prepaid expenses | (49,366) | (10,171) | 17,708 | 23,713 |
| Trade and other liabilities | (112,344) | (258,551) | (129,218) | (1,364,178) |
| Contract liabilities | 79,719 | (35,245) | 38,161 | (92,427) |
| Net change in non-cash working capital | $ (426,728) | $ 10,924 | $ (733,437) | $ 186,920 |
19. COMMITMENTS AND CONTINGENCIES
Contingencies
In the normal course of business, the Company is party to claims, the ultimate outcome of which cannot be reasonably estimated at this time. However, management believes that the likelihood of any cash outflow as a result of these matters is remote, therefore, no amounts have been provided for in these consolidated financial statements.
20. APPROVAL OF THE FINANCIAL STATEMENTS
The unaudited interim condensed consolidated financial statements of Intouch Insight Ltd. for the three and six months ended June 30, 2025 were approved and authorized for issue by the Audit Committee on August 27, 2025.
21. SUBSEQUENT EVENT
On July 3, 2025, the Company closed the acquisition (the Acquisition) of the assets of ClearPoint Solutions US, LLC (ClearPoint). ClearPoint is a merchandising company specializing in in-store services such as merchandising and re-branding since 2022. The definitive agreement was signed on June 16, 2025.
The purchase price for the Acquisition is approximately US$250,000 in cash of which, US$250,000 is payable at closing along with a profit-sharing agreement payable over the next four years based on the gross profits of the merchandising business. The Company is financing the Acquisition from its existing cash. No finder's fees are payable by the Company.