Vitalhub Corp. — Management Reports 2025

Aug 7, 2025

vitalhub

Management's Discussion & Analysis

For the three and six months ended June 30, 2025 and 2024

Vitalhub Corp.
480 University Avenue, Suite 1001, Toronto, ON M5G 1V2

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FORWARD LOOKING STATEMENTS

This MD&A contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budgets", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or "recurring", or variations of such words and phrases or state certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including but not limited to: the ability of the issuer to obtain financing if required; the economy generally; consumer interest in the services and products of the Company; competition; and anticipated and unanticipated costs. While the Company anticipates that subsequent events and developments may cause its views to change, the Company specifically disclaims any obligation to update these forward-looking statements except as may be required by applicable securities legislation. These forward looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this MD&A. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the Company.

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GENERAL INFORMATION

The following Management's Discussion and Analysis of Financial Conditions and Results of Operations ("MD&A") prepared as of August 7, 2025 supplements, but does not form part of the unaudited interim condensed consolidated financial statements and notes of Vitalhub Corp. ("VitalHub", or the "Company") for the three and six months ended June 30, 2025 and 2024.

The Company prepares its interim condensed consolidated financial statements in accordance with IFRS® Accounting Standards as set out in the Chartered Professional Accountants Canada Handbook ("CPA Canada Handbook"). All financial information contained in this MD&A and in the unaudited interim condensed consolidated financial statements have been prepared in accordance with IFRS except for certain "Non-IFRS Measures" as indicated in this MD&A.

All currency amounts in this MD&A are expressed in Canadian dollars, unless specified otherwise.

COMPANY PROFILE

Overview

VitalHub is a leading software company dedicated to empowering health and human services providers globally. VitalHub's comprehensive product suite includes electronic health records, operational intelligence, and workforce automation solutions that serve clients across the UK, Canada, and other geographies. The Company has a robust two-pronged growth strategy, targeting organic opportunities within its product suite and pursuing an aggressive M&A plan.

VitalHub is headquartered in Toronto with employees globally, across key regions and the VitalHub Innovations Lab in Sri Lanka. The Company's shares trade on the TSX under the symbol "VHI" and on the OTC Markets OTCQX Exchange under the symbol "VHIBF".

Products and services

VitalHub's portfolio of Patient Flow, Operational Visibility and Patient Journey Optimization solutions are designed for complex hospital and integrated health environments. Our technologies empower frontline teams, clinicians, and leadership to improve patient experiences and achieve higher levels of operational efficiency, resulting in safer care for patients. We deliver solutions which optimize patient flow, perioperative care, demand and capacity, virtual consultations, clinic management, and the patient journey. VitalHub solutions improve transparency and communication through real-time whole system visibility, integrated information for coordinated care, and optimization of patient movement.

VitalHub offers market leading Electronic Health Record ("EHR"), Case Management, Care Coordination and Optimization Solutions to Inpatient/Outpatient care providers, Long-Term Care, and Community and Social Services focused organizations. VitalHub's EHR suite of solutions go beyond standard clinical data collection. The solutions provide a comprehensive, holistic view of patients and clients at the point of care. Customers and partners work closely with the Company's development team to provide insights into what care providers need to help them advance delivery of care. The outcome has been solutions that are evidence-based repositories of patient and client medical history, diagnoses, medications, care plans etc. VitalHub EHR solutions are easy to use, workflow adaptable and customizable.

The Workforce Automation and Compliance suite integrates and centralizes workforce and compliance data to elevate user experience and reduce risks. VitalHub's solutions are simple, yet powerful technologies that enable integration and management of real-time data to support workforce management, health and safety compliance, health education and recruitment. The collection of tools span a number of industry sectors, including health, government, and education.

Two-pronged growth strategy

The Company has a two-pronged approach to growth, targeting organic growth opportunities within its product suite, and pursuing an aggressive merger and acquisition ("M&A") strategy. By combining similar software companies focused on Healthcare IT, growth and profitability can be increased. Research and development spend can be reduced by moving development into the VitalHub Innovation Lab located in Sri Lanka. This offshore development team is a wholly-owned subsidiary of the Company, critical to the strategy of providing cost and development technology synergies. General and Administrative functions can be consolidated, resulting in cost savings. VitalHub can cross-sell its products into the installed customer bases of the merged companies and can optimize sales and marketing processes across the organization, which can also drive sales growth. Since 2017, the Company has completed the following acquisitions:

1. B Sharp Technologies (B Care EHR), for patient information sharing, team and care coordination and communication.
2. HI Next (TREAT EHR), a participant management system that captures demographic and clinical data in standard modules; progress notes, assessments and interdisciplinary care plans.
3. Clarity EHR, an Ontario Mental Health-based web-based assessments company.
4. Roxy Software, whose flagship product, Pirouette, is a Software-as-a-Service ("SaaS") based software solution that allows community health agencies to manage their client activities.
5. MCAP from Oakgroup UK Limited. MCAP is a SaaS-based software solution that allows community health agencies to manage their client activities.
6. Oculys provides a real-time and predictive operational management system for hospitals, focusing on the efficiency and effectiveness of patient care.

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1. Intouch with Health Ltd, a UK Patient Flow management solutions company.
2. Transforming Systems Ltd, a UK-based real-time access to information company operating in the health and social services sector.
3. S12 Solutions Ltd, a UK-based company that helps mental health professionals efficiently complete Mental Health Act 1983 processes.
4. Jayex Healthcare Limited, a leading UK and Australian e-health provider of integrated SaaS healthcare services delivery platforms.
5. Alamac Limited, a UK-based company that provides technological and advisory solutions that assist healthcare organizations across the NHS.
6. Beautiful Information Limited, a UK-based company that offers unique real-time information to NHS trusts to help them plan and resource clinical services to meet hourly fluctuations in patient flow.
7. Hicom Technology Limited, a UK-based company that develops software that automates healthcare and business processes.
8. Community Data Solutions, an Australian-based company, offering an online case management system and supporting products.
9. Advanced Digital Innovation (UK) Limited, with the product widely known as MyPathway. A digital health platform which is used to improve patient interactions during treatment.
10. Coyote Software Corporation, a Canadian-based company that specializes in tailored software solutions that streamline the workflows of health and social service organizations.
11. BookWise Solutions Limited, a UK-based company that offers specialist scheduling software for healthcare and corporate organizations ranging from general room booking software to more specialist scheduling systems.
12. Premier I.T. Partnership Limited, is a UK-based company, which offers market-leading workforce planning, development and performance solutions for the healthcare sector.
13. MedCurrent, a physician-founded Clinical Decision Support company based in Canada, is primarily focused on improving appropriateness of orders for medical imaging tests.
14. Strata Health, a Canadian-based company that designs, builds, and deploys software that improves access and navigation to care.
15. Induction Healthcare Group, a UK-based company that offers care consultation and patient coordination tools to hospitals.

Customers

VitalHub serves customers across Canada, USA, UK, Australia, the Middle East, and Europe. The Company's offerings serve a large addressable market for Digital Health Solutions. The focus has been on publicly funded acute hospital, mental health, community and social services sectors. VitalHub is a provider of Patient Flow, Operational Visibility, Patient Journey Optimization, Workforce Automation and Patient Engagement Solutions in the United Kingdom and Australia and in the Community and Social Services sector in Canada and Australia with its EHR, Case Management and Care Coordination solutions. VitalHub is cross-selling its new portfolio products into the markets where it has a strong presence.

Sales Strategy

The Company sells and markets its solutions in specific geographies through a team of sales leaders and sales development representatives. Marketing is multipronged and maintained via a variety of channels including the Company's partner network, across social media, an active online presence, the Company's participation in events and trade shows, by hosting webinars, and customer referrals. These efforts collectively support the sales team and contribute to driving organic growth. The Company primarily focuses on government funded healthcare systems in Canada and internationally including the UK, Australia, and the Middle East.

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Second Quarter 2025 Highlights

• Revenue of $23,857,548 as compared to $16,237,605 in the equivalent prior year period, an increase of $7,619,943 or 47%.
  This increase was due to organic growth coupled with revenue derived from completed acquisitions.

• Gross profit as a percentage of revenue was 81% in Q2 2025 and Q2 2024.
  Gross profit as a percentage of revenue is largely dependent upon the sales mix, with software licenses generating a higher margin than services and other revenue.

• ARR (Non-IFRS measure) as at June 30, 2025 was $79,589,081 as compared to $73,687,666 at March 31, 2025, an increase of $5,901,415 or 8%.
  Over the previous quarter, ARR movement in Q2 2025 from Q1 2025 was attributable to the following:

• Organic growth of $1,860,849 or 3%.
• Acquisition growth of $3,870,000 or 5%.

• Gain of $170,566 due to fluctuations in foreign exchange rates.

• Net income before income taxes of $2,255,226 as compared to $1,383,605 in the equivalent prior year period, an increase of $871,621 or 63%.
  The increase was due to higher revenues during the three months ended June 30, 2025, as compared to the equivalent prior year period, coupled with an ongoing effort to manage costs and gain operating cost synergies.

• EBITDA (Non-IFRS measure) of $3,599,683 as compared to $1,972,452 in the equivalent prior year period, an increase of $1,627,231 or 82%.
  The increase was due to higher revenues during the three months ended June 30, 2025, as compared to the equivalent prior year period, coupled with an ongoing effort to manage costs and gain operating cost synergies.

• Adjusted EBITDA (Non-IFRS measure) of $6,304,647 or 26% of revenue, as compared to $4,193,985 or 26% of revenue in the equivalent prior year period, an increase of $2,110,662 or 50%.
  The increase in adjusted EBITDA was primarily attributable to the higher revenues in Q2 2025 as compared to Q2 2024, coupled with an ongoing effort to manage costs and gain operating cost synergies.

Due to the relatively high amortization of intangibles and periodic restructuring and integration costs from acquisitions, management believes that adjusted EBITDA as a percentage of revenue is a relevant KPI ("key performance indicator") to measure.

Six Month 2025 Highlights

• Revenue of $45,532,514 as compared to $31,494,396 in the equivalent prior year period, an increase of $14,038,118 or 45%.
  This increase was due to organic growth coupled with revenue derived from completed acquisitions.

• Gross profit as a percentage of revenue was 81% in the first six months of 2025 and 2024.
  Gross profit as a percentage of revenue is largely dependent upon the sales mix, with software licenses generating a higher margin than services and other revenue.

• ARR (Non-IFRS measure) as at June 30, 2025 was $79,589,081 as compared to $51,283,570 at June 30, 2024, an increase of $28,305,511 or 55%.
  Over the previous year, ARR movement in Q2 2025 from Q2 2024 was attributable to the following:

• Organic growth of $7,329,129 or 14%.
• Acquisition growth of $18,470,000 or 36%.

• Gain of $2,506,382 due to fluctuations in foreign exchange rates.

• Net income before income taxes of $3,742,639 as compared to net income before income taxes of $3,362,500 in the equivalent prior year period, an increase of $380,139 or 11%.
  The increase was due to higher revenues during the six months ended June 30, 2025, as compared to the equivalent prior year period, coupled with an ongoing effort to manage costs and gain operating cost synergies.

• EBITDA (Non-IFRS Measure) of $6,750,057 compared to $5,071,468 in the prior year, an increase of $1,678,589 or 33%.
  The increase was due to higher revenues during the six months ended June 30, 2025, as compared to the equivalent prior year period, coupled with an ongoing effort to manage costs and gain operating cost synergies.

• Adjusted EBITDA (Non-IFRS Measure) of $11,919,333 or 26% of revenue, compared to $8,238,917 or 26% of revenue in the equivalent prior year period, an increase of $3,680,416 or 45%.
  The increase was due to higher revenues for the six months ended June 30, 2025, as compared to the equivalent prior year period, coupled with an ongoing effort to manage costs and gain operating cost synergies.

• Cash on hand as at June 30, 2025 was $94,008,665 compared to $56,574,904 as at December 31, 2024.
  The movement is primarily due to a bought deal offering, acquisition activity, plus cash generated from operations.

• The Company arranged a $15,000,000 loan to finance an acquisition and fully repaid the balance subsequent to quarter-end.

• On July 4, 2025, the Company acquired all of the issued and outstanding shares of Novari Health Inc. and its subsidiaries ("Novari") for total consideration, subject to any post-closing working capital, of approximately $35.8 million in cash subject to a $1.0 million escrow for 120 days, and the issuance of 733,726 common shares of VitalHub. Novari's platform offers a series of integrated software modules providing referral management, surgical wait list management, central intake, and care coordination.

• With the addition of the ARR (Non-IFRS Measure) of Novari subsequent to the quarter, the Company's pro forma ARR as at June 30, 2025, is approximately $91.6 million.

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Selected Financial Information
	Three months ended					Six months ended
	June 30,2025	% Revenue	June 30,2024	% Revenue	Change	June 30,2025	% Revenue	June 30,2024	% Revenue	Change
	$		$		%	$		$		%
Revenue	23,857,548	100%	16,237,605	100%	47%	45,532,514	100%	31,494,396	100%	45%
Cost of sales	4,499,328	19%	3,068,801	19%	(47%)	8,730,001	19%	6,042,493	19%	(44%)
Gross profit	19,358,220	81%	13,168,804	81%	47%	36,802,513	81%	25,451,903	81%	45%
Operating expenses
General and administrative	4,677,904	20%	3,260,964	20%	(43%)	9,948,653	22%	6,452,821	20%	(54%)
Sales and marketing	2,695,935	11%	1,821,834	11%	(48%)	4,724,947	10%	3,518,298	11%	(34%)
Research and development	6,033,028	25%	3,675,359	23%	(64%)	11,253,211	25%	7,093,481	23%	(59%)
Depreciation of property and equipment	250,861	1%	81,174	0%	(209%)	392,938	1%	159,004	1%	(147%)
Depreciation of right-of-use assets	105,499	0%	111,245	1%	5%	225,395	0%	218,007	1%	(3%)
Share-based compensation	644,811	3%	675,674	4%	5%	1,410,211	3%	1,024,253	3%	(38%)
Deferred share-based compensation	90,000	0%	0	0%	(100%)	90,000	0%	0	0%	(100%)
Foreign currency loss (gain)	(353,294)	(1%)	216,662	1%	263%	(1,047,701)	(2%)	148,386	0%	806%
Other expenses (income)
Amortization of intangible assets	1,437,740	6%	1,114,299	7%	(29%)	3,359,134	7%	2,220,841	7%	(51%)
Business acquisition, restructuring and integration costs	1,970,153	8%	1,199,964	7%	(64%)	3,433,567	8%	1,797,301	6%	(91%)
Loss on change in fair value of contingent consideration	0	0%	345,895	2%	100%	235,498	1%	345,895	1%	32%
Interest expense (net of interest income)	(462,564)	(2%)	(729,595)	(4%)	(37%)	(997,873)	(2%)	(914,402)	(3%)	9%
Interest expense from lease liabilities	12,921	0%	11,724	0%	(10%)	27,824	0%	25,518	0%	(9%)
Loss on disposal of property and equipment	0	0%	0	0%	0%	4,070	0%	0	0%	(100%)
Current and deferred income taxes	483,009	2%	1,718,658	11%	(72%)	808,950	2%	2,379,087	8%	(66%)
Net income	1,772,217	7%	(335,053)	(2%)	(629%)	2,933,689	6%	983,413	3%	198%
EBITDA (Non-IFRS measure)	3,599,683	15%	1,972,452	12%	82%	6,750,057	15%	5,071,468	16%	33%
Adjusted EBITDA (Non-IFRS measure)	6,304,647	26%	4,193,985	26%	50%	11,919,333	26%	8,238,917	26%	45%
Annual recurring revenue (Non-IFRS measure)	79,589,081		51,283,570		55%	79,589,081		51,283,570		55%
Term licences, maintenance and support revenue	19,894,544	83%	13,039,369	80%	53%	38,238,110	84%	25,504,431	81%	50%
	As at
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	June 30, 2025	December 31, 2024
	$	$
	94,008,665	56,574,904
Deferred revenue	45,303,289	35,636,002

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REVENUE

The Company generates revenue from the sale of renewable software licenses, professional services support, and other healthcare solutions. Certain agreements provide for the delivery of application software and continuing post contract services, such as maintenance and support for the application software sold.

Revenue Composition	Three months ended			Six months ended
	June 30, 2025	June 30, 2024	Change	June 30, 2025	June 30, 2024	Change
	$	$	%	$	$	%
Term licenses, maintenance and support	19,894,544	13,039,369	53%	38,238,110	25,504,431	50%
Virtual care term license	324,477	0	100%	324,477	0	100%
Perpetual licenses	965,281	22,231	4,242%	1,122,464	144,002	679%
Services, hardware and other	2,673,246	3,176,005	(16%)	5,847,463	5,845,963	0%
Total Revenues	23,857,548	16,237,605	47%	45,532,514	31,494,396	45%

Revenue for Q2 2025 was $23,857,548, as compared to $16,237,605 in Q2 2024, an increase of $7,619,943 or 47%.

The changes are explained by:

• An increase of $6,855,175 or 53% in term licenses, maintenance and support revenue from Q2 2024 to Q2 2025.

The positive increase reflects the impact of continued organic revenue growth in the Company's suite of products, coupled with revenue derived from completed acquisitions.

Term licenses, maintenance and support represent an important strategic source of revenue given its predictability and recurring nature and represented 83% of revenues in Q2 2025 (Q2 2024 - 80%).

• An increase of $324,477 in virtual care revenue from Q2 2024 to Q2 2025.

Virtual care revenue is generated from usage-based subscription contracts of the Company's video consultation platform, Attend Anywhere, which came from the acquisition of Induction.

• An increase of $943,050 in perpetual software licenses from Q2 2024 to Q2 2025.

Perpetual software licenses are dependent on the type of products sold. The increase was primarily attributable to the timing of deliveries of the Company's products. The Company's preferred sales model is term licenses.

• A decrease of $502,759 or 16% in services, hardware and other revenue from Q2 2024 to Q2 2025.

Professional services, hardware and other revenue can vary depending on the timing of hardware deliveries and the progression of customer projects. The decrease is primarily attributable to the timing of deployments of new and ongoing customer projects.

Revenue for the six months ended June 30, 2025 was $45,532,514, as compared to $31,494,396 in the equivalent prior year period, an increase of $14,038,118 or 45%.

The changes are explained by:

• An increase of $12,733,679 or 50% in term licenses, maintenance and support revenue for the six months ended June 30, 2025.

The positive increase reflects the impact of continued organic revenue growth in the Company's suite of products, coupled with revenue derived from completed acquisitions.

Term licenses, maintenance and support represented 84% of revenues for the six months ended June 30, 2025 (six months ended June 30, 2024 - 81%).

• An increase of $324,477 in virtual care revenue for the six months ended June 30, 2025.

Virtual care revenue is generated from usage-based subscription contracts of the Company's video consultation platform, Attend Anywhere, which came from the acquisition of Induction.

• An increase of $978,462 in perpetual software licenses for the six months ended June 30, 2025.

Perpetual software licenses are dependent on the type of products sold. The increase was primarily attributable to the timing of deliveries of the Company's products. The Company's preferred sales model is term licenses.

• An increase of $1,500 or 0% in services, hardware and other revenue for the six months ended June 30, 2025.

Professional services, hardware and other revenue can vary depending on the timing of hardware deliveries and the progression of customer projects. Services, hardware, and other revenue was generally unchanged over the comparable prior year period.

COST OF SALES, GROSS PROFIT AND EXPENSES

Cost of sales

Cost of sales consists of commissions, hosting, royalties, hardware, and employee salaries for development and support staff.

For Q2 2025, cost of sales was $4,499,328 or 19% of revenue, as compared to $3,068,801 or 19% of revenue for Q2 2024, an increase of $1,430,527 or 47%. The increase was primarily attributable to new acquisitions and costs associated with increased revenue.

For the six months ended June 30, 2025, cost of sales was $8,730,001 or 19% of revenue, as compared to $6,042,493 or 19% of revenue for the equivalent prior year period, an increase of $2,687,508 or 44%. The increase was primarily attributable to new acquisitions and costs associated with increased revenue.

Cost of sales is largely dependent on sales mix. High margin software license sales cost less to deliver, while professional services and other sales cost more to deliver. Cost of sales is expected to fluctuate with increased revenues and based on the revenue mix. Management continuously works to improve margins by growing recurring revenues, and by generating synergies on acquired businesses and overall efficiencies to reduce cost of sales.

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Gross profit

Gross profit for Q2 2025 was $19,358,220 or 81% of revenue, as compared to $13,168,804 or 81% of revenue for Q2 2024, an increase of $6,189,416 or 47%.

Gross profit for the six months ended June 30, 2025 was $36,802,513 or 81% of revenue, as compared to $25,451,903 or 81% of revenue for the equivalent prior year period.

Gross margin is in line with the Company's expectations and comparable to the equivalent prior year period. Management continuously works to improve margins by generating synergies on acquired businesses and overall efficiencies to reduce cost of sales.

Gross profit as a percentage of revenue changes is largely dependent upon the sales mix, with software licenses generating a higher margin than professional services and other revenue. The positive increase in amount reflects both higher recurring revenue due to organic revenue growth, along with revenue from acquisitions completed during the previous year.

Expenses as a % of Revenues for the three months ended June 30, 2025 and 2024

Expenses as a % of Revenues for the six months ended June 30, 2025 and 2024

General and administrative expenses

General and administrative expenses include employee salaries related to finance and administration personnel, travel, professional fees (legal, audit, tax and consultants), public company expenses, listing fees and related expenses, and overhead expenses associated with maintaining the Company's office and premises.

General and administrative expenses for Q2 2025 were $4,677,904 or 20% of revenue, as compared to $3,260,964 or 20% of revenue for the equivalent prior year period.

For the six months ended June 30, 2025, general and administrative expenses were $9,948,653 or 22% of revenue, as compared to $6,452,821 or 20% of revenue for the equivalent prior year period, an increase of 2% of revenue. Typically, following an acquisition, general and administrative expenses as a percentage of revenue increase until synergies from the acquisition are realized.

The increase in dollars was driven by increased costs from completed acquisitions and additional resources added.

Sales and marketing expenses

Sales and marketing expenses include the salaries, benefits, travel costs for our direct sales team, and marketing costs.

Sales and marketing expenses for Q2 2025 were $2,695,935 or 11% of revenue, as compared to $1,821,834 or 11% of revenue for the equivalent prior year period.

For the six months ended June 30, 2025, sales and marketing expenses were $4,724,947 or 10% of revenue, as compared to $3,518,298 or 11% of revenue for the equivalent prior year period, a decrease of 1% of revenue.

The increase in dollars was driven by increased costs from completed acquisitions and additional resources added.

Research and development expenses

Research and development ("R&D") expenses consist of the salaries, benefits, travel and training costs of our R&D team.

R&D expenses for Q2 2025 were $6,033,028 or 25% of revenue, as compared to $3,675,359 or 23% of revenue for the equivalent prior year period.

For the six months ended June 30, 2025, R&D expenses were $11,253,211 or 25% of revenue, as compared to $7,093,481 or 23% of revenue for the equivalent prior year period, an increase of 2% of revenue.

The increase in dollars was driven by increased costs from completed acquisitions and additional resources added. Typically, following an acquisition, R&D expenses as a percentage of revenue increase until synergies from the acquisition are realized.

Depreciation and amortization

Depreciation consists of depreciation and amortization of the Company's tangible and intangible assets and right-of-use assets which include computers, furniture and fixtures, leasehold improvements, acquired technologies, customer relationships, brands and premise leases.

Depreciation and amortization for Q2 2025 was $1,794,100, as compared to $1,306,718 for Q2 2024, an increase of 37%.

For the six months ended June 30, 2025, depreciation and amortization expenses were $3,977,467 as compared to $2,597,852 for the equivalent prior year period, an increase of 53%.

With acquisitions, depreciation and amortization will continue to increase due to acquired intangible assets and the related amortization taken over their estimated useful lives which range from 2-14 years. While this is an income statement expense, it is a non-cash item.

Share-based compensation

Share-based compensation for Q2 2025 was $644,811, as compared to $675,674 for Q2 2024, a decrease of 5%.

For the six months ended June 30, 2025, share-based compensation expense was $1,410,211, as compared to $1,024,253 for the equivalent prior year period, an increase of 38%.

The change was driven by the issuance and change in price of share-based compensation.

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Business acquisition, restructuring and integration costs

Business acquisition, restructuring and integration costs for Q2 2025 were $1,970,153, as compared to $1,199,964 for Q2 2024, an increase of $770,189 or 64%.

For the six months ended June 30, 2025, business acquisition, restructuring and integration costs were $3,433,567, as compared to $1,797,301 for the equivalent prior year period, an increase of $1,636,266 or 91%.

These expenses were recognized in connection with the acquisitions completed in both periods, with the majority of the costs relating to professional fees to acquire the businesses and employee restructuring to gain synergies across the organization.

Interest and accretion expense (net of interest income)

Interest expense consists of bank charges and accretion on contingent consideration net of interest income.

Interest income for Q2 2025 was $462,564, as compared to interest income of $729,595 for Q2 2024, a decrease of $267,031.

For the six months ended June 30, 2025, interest income was $997,873, as compared to interest income of $914,402 for the equivalent prior year period, an increase of $83,471.

The increase was due to the Company having more cash and cash equivalents on hand, leading to higher interest earnings from short-term investments.

RESULTS OF OPERATIONS

The following table highlights selected financial information for the eight consecutive quarters ended June 30, 2025:

	Q3 2023	Q4 2023	Q1 2024	Q2 2024	Q3 2024	Q4 2024	Q1 2025	Q2 2025
Revenues ($)	13,224,264	13,603,419	15,256,791	16,237,605	16,509,135	20,590,779	21,674,966	23,857,548
Net income (loss) ($)	2,827,077	938,789	1,318,466	(335,053)	1,228,387	787,244	1,161,472	1,772,217
EBITDA (Non-IFRS measure) ($)	2,928,358	2,992,273	3,099,016	1,972,452	3,004,034	1,875,370	3,150,374	3,599,683
Adjusted EBITDA (Non-IFRS measure) ($)	3,411,871	3,985,553	4,044,932	4,193,985	4,554,597	5,046,758	5,614,686	6,304,647
Net income (loss) per share - basic and diluted ($)	0.07	0.03	0.04	(0.01)	0.03	0.02	0.02	0.03
Weighted average number of shares outstanding - basic	43,657,411	43,691,949	43,854,629	49,965,234	50,882,020	52,066,133	55,468,448	55,852,045
Weighted average number of shares outstanding - diluted	46,215,618	46,638,656	45,017,991	51,243,050	52,272,366	54,580,727	57,606,987	57,910,705

Revenues and Adjusted EBITDA

Due to the relatively high amortization of intangibles and periodic restructuring and integration costs from acquisitions, management believes that adjusted EBITDA as a percentage of revenue is a relevant KPI to measure. Adjusted EBITDA as a percentage of revenue is a non-IFRS measure.

OUTSTANDING SHARE DATA

Share Capital

The authorized capital of the Company consists of an unlimited number of common shares. As at June 30, 2025, the Company had 56,082,462 (December 31, 2024 - 52,619,817) common shares issued and outstanding. The increase in common shares is primarily due to a bought deal offering.

Deferred share units outstanding as at June 30, 2025 were 132,283 (December 31, 2024 - 123,414).

Share options outstanding as at June 30, 2025 were 3,670,868 (December 31, 2024 - 3,760,026) which entitle the holders to purchase one common share of the Company.

The number of exercisable share options as at June 30, 2025 was 2,234,842 (December 31, 2024 - 1,950,544).

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10

FINANCIAL CONDITION

Liquidity and Capital Resources

As at June 30, 2025, the Company had $94,008,665 in cash and cash equivalents on hand, compared to $56,574,904 as at December 31, 2024.

The movement is primarily due to a bought deal offering, acquisition activity, plus cash generated from operations.

CASH PROVIDED BY OPERATING ACTIVITIES

	Six months ended
Net income	June 30, 2025	June 30, 2024	Change
	$	$	$
	2,933,689	983,413	1,950,276
Items not affecting cash	4,697,369	4,141,904	555,465
Cash from operations before changes in working capital	7,631,058	5,125,317	2,505,741
Net change in non-cash working capital	(2,370,544)	1,035,854	(3,406,398)
Cash provided by operating activities	5,260,514	6,161,171	(900,657)

Cash provided by operating activities was $5,260,514 for the six months ended June 30, 2025, as compared to $6,161,171 for the same period last year, a decrease of $900,657.

The decrease is driven by net change in non-cash working capital and the timing of certain receivables, payables, and other balance sheet items.

CASH USED IN INVESTING ACTIVITIES

	Six months ended
	June 30, 2025	June 30, 2024	Change
	$	$	$
Cash used in investing activities	(14,955,345)	(7,588,705)	(7,366,640)

Cash used in investing activities relates primarily to the net cash portion of the completed acquisition in the period.

CASH PROVIDED BY FINANCING ACTIVITIES

	Six months ended
	June 30, 2025	June 30, 2024	Change
	$	$	$
Cash provided by financing activities	47,926,613	38,437,488	9,489,125

Cash provided by financing activities primarily relates to a $15,000,000 loan to finance an acquisition and $32,196,900 net proceeds from a bought deal offering in the period.

UPDATE ON PRIOR USE OF PROCEEDS

On April 11, 2024, the Company raised gross proceeds of approximately $40.3 million by way of an equity offering for growth initiatives, specifically focused on acquisitions. The following tabular comparison details the Company's actual use of proceeds to date, with any remaining proceeds allocated to future acquisitions.

Proposed Use of Proceeds	Actual Use of Proceeds	Actual Amount	Variance
Acquisitions	June 2024: Acquisition of Premier I.T. Partnership Limited	$3.8 million (1)	No Variance
Acquisitions	October 2024: Acquisition of MedCurrent Corporation	$8.5 million (1)	No Variance
Acquisitions	October 2024: Acquisition of Strata Health Solutions Inc.	$18.6 million (1)	No Variance

Notes:
1) This approximate amount was paid on closing in GBP and assumes an exchange rate of C$1.00 = £0.5710 GBP. This amount is subject to additional maximum earn-out consideration of approximately £0.5 million over the 24-month period following the closing of the acquisition.
2) This approximate amount, paid on closing, was subject to customary working capital adjustments and other similar closing adjustments. This amount is subject to additional maximum earn-out consideration of approximately $21.9 million over the 36-month period following the closing of the acquisition.
3) This approximate amount is subject to additional maximum earn-out consideration of approximately $4.5 million over the 32-month period following the closing of the acquisition.

On January 9, 2025, the Company raised gross proceeds of approximately $34.5 million by way of an equity offering for growth initiatives, specifically focused on acquisitions. The following tabular comparison details the Company's actual use of proceeds to date, with any remaining proceeds allocated to future acquisitions.

Proposed Use of Proceeds	Actual Use of Proceeds	Actual Amount	Variance
Acquisitions	June 2025: Acquisition of Induction Healthcare Group PLC	$17.6 million (1)	No Variance

Notes:
1) This approximate amount was paid on closing in GBP and assumes an exchange rate of C$1.00 = £0.5443 GBP.

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11

CREDIT FACILITY

The Company has an agreement with The Bank of Nova Scotia ("Scotia") to provide a $5,000,000 operating credit limit, and a $60,000,000 revolving term facility. Depending on the type of advances, the operating credit limit and revolving term facility, bears interest at Scotia's prime rate/CORRA/SOFR plus an applicable margin.

The Company is subject to maintain the following covenants:

i) A Fixed Charge Coverage Ratio (calculated on a trailing 12-month basis that is) of not less than 1.20:1.
ii) Total Funded Debt to Combined EBITDA ratio (calculated on a trailing 12-month basis that is) of less than or equal to 3.75:1.

As at June 30, 2025, the Company is in compliance with all of its covenants. The Company arranged a $15,000,000 loan, which was repaid subsequent to June 30, 2025.

CONTINGENT OFF-BALANCE SHEET AND OTHER ARRANGEMENTS

The Company has obligations with respect to licence, maintenance and support arrangements for any 12-month period. This obligation is reflected on the Company's statement of financial position through its deferred revenue balance. The Company has no material off-balance sheet obligations or contingencies.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

This is a description of the Company's accounting estimates that are critical to determining the Company's financial results and changes to accounting policies.

The Company's Financial Statements are prepared in accordance with IFRS, which require the Company to make estimates and assumptions that affect the amounts reported in its Financial Statements. It has identified several policies as critical to the business operations and essential for an understanding of the results of operations. The application of these and other accounting policies are described in Note 3 of the Company's annual consolidated financial statements. There have been no significant changes in its critical accounting estimates from what was previously disclosed in its MD&A for the year ended December 31, 2024. These policies are incorporated herein by reference. Preparation of the Financial Statements requires the Company to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Financial Statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could vary significantly from those estimates. Significant areas requiring the Company to make estimates include: the useful life of and value of assets, the valuation allowance of income tax accounts, the recognition of revenue and accrued liabilities.

INTERNAL CONTROL OVER FINANCIAL REPORTING

During the quarter, there were no changes that are likely to materially affect the internal control over the Company's financial reporting.

RECONCILIATION AND DEFINITION OF NON-IFRS MEASURES

Annual recurring revenue

Annual recurring revenue ("ARR") is defined as annual renewable software licence fees and maintenance services. The Company defines ARR as the recurring revenue that is expected based on yearly subscriptions of the renewable software license fees and maintenance services. ARR excludes perpetual license and virtual care revenue. ARR is a non-IFRS measure.

Annual Recurring Revenue	Q3 2023	Q4 2023	Q1 2024	Q2 2024	Q3 2024	Q4 2024	Q1 2025	Q2 2025
Opening balance ($)	41,008,702	42,612,166	44,573,739	47,834,002	51,283,570	53,452,108	71,054,210	73,687,666
Organic net of churn ($)	1,475,975	1,959,986	1,545,513	1,239,568	1,081,181	2,609,657	1,777,442	1,860,849
Organic net of churn (%)	4%	5%	3%	3%	2%	5%	3%	3%
Acquisition ($)	0	0	1,062,500	2,249,000	0	14,600,000	0	3,870,000
Acquisition (%)	0%	0%	2%	5%	0%	27%	0%	5%
Effect of foreign exchange	127,489	1,587	652,250	(39,000)	1,087,357	392,445	856,014	170,566
Effect of foreign exchange	0%	0%	1%	(0%)	2%	1%	1%	0%
Closing balance ($)	42,612,166	44,573,739	47,834,002	51,283,570	53,452,108	71,054,210	73,687,666	79,589,081

• ARR (Non-IFRS measure) as at June 30, 2025 was $79,589,081 as compared to $73,687,666 at March 31, 2025, an increase of $5,901,415 or 8%. Over the previous quarter, ARR movement in Q2 2025 from Q1 2025 was attributable to the following:
• Organic growth of $1,860,849 or 3%.
• Acquisition growth of $3,870,000 or 5%.

• Gain of $170,566 due to fluctuations in foreign exchange rates.

• ARR (Non-IFRS measure) as at June 30, 2025 was $79,589,081 as compared to $51,283,570 at June 30, 2024, an increase of $28,305,511 or 55%. Over the previous year, ARR movement in Q2 2025 from Q2 2024 was attributable to the following:

• Organic growth of $7,329,129 or 14%.
• Acquisition growth of $18,470,000 or 36%.
• Gain of $2,506,382 due to fluctuations in foreign exchange rates.

The continued increase in ARR growth is reflective of the Company's strategy to grow the business both organically and through acquisitions.

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Acquisition and organic revenue

Acquisition revenue is defined as the annual contract value of recurring revenues of the acquired companies at the time of acquisition. Organic revenue growth is defined as the revenue over and above the acquisition revenues, including all recurring and non-recurring revenues. Acquisition revenue is a non-IFRS measure. These charts reflect the success of the Company's robust M&A strategy, coupled with the Company's ability to organically grow the businesses acquired, where appropriate.

Earnings before interest, taxation, depreciation, and amortization ("EBITDA")

EBITDA is a measure used by management to evaluate operational performance. It is also a common measure that is reported on and used by investors in determining a company's ability to incur and service debt, as well as a valuation methodology. Management believes EBITDA enhances the information provided in the Financial Statements. EBITDA is a non-IFRS measure and should not be considered an alternative to operating income or net income (loss) in measuring the Company's performance. EBITDA should not be used as an exclusive measure of cash flows because it does not consider the impact of working capital growth, capital expenditures, debt principal reductions and other sources and uses of cash which are disclosed in the interim condensed consolidated statements of cash flows.

The following chart reflects the Company's calculation of EBITDA:

	Three months ended		Six months ended
	June 30, 2025	June 30, 2024	June 30, 2025	June 30, 2024
	$	$	$	$
Net income	1,772,217	(335,053)	2,933,689	983,413
Add: Interest	(449,643)	(717,871)	(970,049)	(888,884)
Add: Depreciation and amortization	1,794,100	1,306,718	3,977,467	2,597,852
Add: Current and deferred tax expense	483,009	1,718,658	808,950	2,379,087
EBITDA	3,599,683	1,972,452	6,750,057	5,071,468

Adjusted EBITDA

Adjusted EBITDA, defined as Earnings before interest, depreciation and amortization, taxation, share-based compensation, business acquisition, restructuring and integration costs are an additional measure used by management to evaluate cash flows and the Company's ability to service debt. Adjusted EBITDA is a non-IFRS measure and should not be considered an alternative to operating income or net income (loss) in measuring the Company's performance.

The following chart reflects the Company's calculation of adjusted EBITDA:

	Three months ended		Six months ended
	June 30, 2025	June 30, 2024	June 30, 2025	June 30, 2024
	$	$	$	$
EBITDA	3,599,683	1,972,452	6,750,057	5,071,468
Add: Share and deferred-based compensation expense	734,811	675,674	1,500,211	1,024,253
Add: Business acquisition, restructuring and integration costs	1,970,153	1,199,964	3,433,567	1,797,301
Add: Loss on change in fair value of contingent consideration	0	345,895	235,498	345,895
Adjusted EBITDA	6,304,647	4,193,985	11,919,333	8,238,917