Intouch Insight Ltd (INXSF)

[MikeDDKing]

a. The company has $309,645 available on it's bank line. The bank line plus cashflow will be enough to pay off the loan when it comes due. Also, they probably will get a larger bank line.

b. The bonus has been fixed and was refinanced as announced in the Q3 filings. Here is the relevant text from their filing: "During the fourth quarter of 2011, the Company has negotiated with one of its Lenders terms for fixing and paying out the bonus component of its term loan (this loan, for an initial principal of $550,000 bears interest at 11.7% and was subject to a bonus payment at term). The Company and the Lender have agreed to fix the final bonus payment amount now at $398,243 based on a market capitalization of the common shares of the Company of $4,978,043, and to convert this bonus amount to a four-year term loan bearing interest at 13.5% repayable by monthly payments of $5,100 for 47 months and one final payment of $158,543 at the end of the term. This loan will be subject to a cash flow sweep based on excess available funds up to a maximum of $50,000 per year. Terms for the principal component of the loan, which was initially $550,000 and which has subsequently been paid down through cash flow sweeps to $387,080, have not changed (Note 18)."

c. The cash flow sweeps are covered by a. above as it is paydown of that debt.

The only impact the above items have to earnings is in the areas of derivative charges and interest. There will be one final derivative charge in Q4'11 that is the same as that in Q3'11. Going into 2012 we will have lower combined derivative/interest charges due to the lower combined interest rate. The fixing of the bonus payment this quarter was a big plus as it removed a big uncertainty!