TMX group

OTTAWA, Oct. 27 /CNW Telbec/ - In-Touch Survey Systems Ltd. ("In-Touch"
or the "company" TSEV-INX) today announced that it has closed the agreement to
purchase Tenox Appraisal Systems Inc. ("Tenox", an arms length party) for
four hundred thousand dollars ($400,000) plus one million six hundred thousand
(1,600,000) common shares from treasury with the cash and shares paid
proportionally to the sellers over twelve quarters beginning at closing. The
effective date for this significant acquisition is October 31, 2005 and is
subject to final approval of regulatory authorities in Canada and the
company's filing of a 'business acquisition report' within sixty days.
Tenox holds a prominent position in Canada's Mystery Shopping industry
and has been providing services across the country since 1987. As a result of
this acquisition, In-Touch will become a market research company with a
broader product offering. The product offering of In-Touch is synergistic with
the client base of Tenox. Accordingly, management hopes that there will be a
potential for significant revenue growth beyond the mere combination of the
two businesses, but cautions that at least several quarters will be necessary
to see if In-Touch will be able to capture any such revenue growth. The total
number of employees after the merger is thirty-two. In addition, Tenox has
over 3,000 part-time field staff across the country primarily for mystery
shopping. Management expects that it will take six months to merge systems and
procedures but that careful integration should result in material cost
savings. However, because of transaction costs and re-structuring charges, it
may take several quarters before the benefits of cost reductions are observed.
Existing senior management of Tenox will remain with In-Touch and is
highly incented to facilitate a successful merger. In particular, Sean
Cavanagh, the CEO of Tenox, will receive the one million six hundred thousand
common shares of In-Touch, and these shares are subject to a reduction ratchet
if the performance of the Tenox division over the next three years does not
meet certain revenue and gross margin targets. Mr. Cavanagh will remain an
employee of Tenox/In-Touch with the title of Vice President, Business
Development.
On October 24, 2005 the company completed a one for five stock
consolidation that also resulted in a trading symbol change from INT to INX.
Immediately following the consolidation, the company had 4,577,678 common
shares outstanding. All 2004 Series Convertible Debentures including accrued
interest were converted effective today as a closing condition of the Tenox
acquisition, resulting in the issuance of a further 3,465,700 common shares.
Accordingly, in light of the consolidation, debenture conversion, and Tenox
acquisition, the company now has 9,643,378 common shares outstanding. On a
fully diluted basis, 62,800 share purchase warrants remain outstanding from
the issuance of the 2004 Series Convertible Debentures in addition to
approximately 588,000 options granted under the company's Stock Option Plan.
The following charts presents pro forma individual and combined financial
statements of In-Touch and Tenox for the twelve month period ending December
2004 and the first nine months of calendar 2005:

<<
                                             Fiscal year ended 2004
Consolidated Income Statement              Tenox    In-Touch    Combined

Revenue                                2,658,556   1,449,023   4,107,579
Direct costs                           1,583,487     367,891   1,951,378
Gross profit                           1,075,069   1,081,132   2,156,201
Expenses                               1,059,204   2,169,457   3,228,661
Net income                                15,864  (1,088,325) (1,072,461)

                                             YTD ending Sep 30, 2005
Consolidated Income Statement              Tenox    In-Touch    Combined

Revenue                                1,740,764   1,018,579   2,758,343
Direct costs                           1,034,484      92,150   1,126,634
Gross profit                             706,280     926,429   1,632,709
Expenses                                 699,569   1,075,387   1,774,956
Net income                                 6,711    (148,958)   (142,247)


                                                 As at Dec 31, 2004
Consolidated Balance Sheet                 Tenox    In-Touch    Combined

Current Assets                           503,573     384,364     887,937
Capital Assets                            63,946     670,321     734,267
Goodwill                                       0     100,000     100,000
Total Assets                             567,518   1,154,685   1,722,203
Current Liabilities                      271,406     609,388     880,794
Long term debt                                 0     380,345     380,345
Shareholders equity                      296,112     164,952     461,064
Total Liabilities and
 Shareholder equity                      567,518   1,154,685   1,722,203

                                                 As at Sep 30, 2005
Consolidated Balance Sheet                 Tenox    In-Touch    Combined

Current Assets                           464,649     380,422     845,071
Capital Assets                            56,552     599,117     655,669
Goodwill                                       0     100,000     100,000
Total Assets                             521,201   1,079,539   1,600,740
Current Liabilities                      268,578     479,832     748,410
Long term debt                                 0     475,349     475,349
Shareholders equity                      252,623     124,358     376,981
Total Liabilities and
 Shareholder equity                      521,201   1,079,539   1,600,740
>>
   Note: A compilation report has not yet been completed and post closing
         adjustments have not been taken into account.
         Pro-forma financial statements shall be posted onto SEDAR within
         60 days.


"The primary business development objective for In-Touch has been to
build sustainable scale and scope in the businesses in which we choose to
compete," said Michael Gaffney, Chief Executive Officer. "The Tenox
acquisition significantly strengthens the position of In-Touch as a complete
provider of market research products and services in Canada and provides a
platform for increased growth throughout North America. Among the many
benefits of this transaction, the acquisition will enable In-Touch to leverage
its market-leading expertise in data collection to the Tenox retail customer
base in Canada."
Neil Milton, Chair of In-Touch observed, "When we became involved with   
In-Touch 14 months ago it faced very serious financial and operational
challenges. Since then, management has worked hard to reduce costs
dramatically, stabilize revenue, and identify a promising potential new line
of business, and has done so within very tight cash constraints. We believe
that the transactions completed today now provide In-Touch with a realistic
platform from which to create shareholder value. The structure of the
transaction is consistent with In-Touch's circumstances, cleans up the balance
sheet, will reduce non-cash costs (particularly interest and amortization
costs on the debentures) and reflects the significant upside potential that
the board of In-Touch and our new partners from Tenox believe that the
combined entity has."

Insiders to Purchase In-Touch Shares

The board of directors has been informed that various insiders may begin
to purchase In-Touch common shares in the public market as they are of the
view that the company's shares represent an attractive investment at current
market prices.

About Tenox

Tenox provides a range of Mystery Shopping services and programs suited
specifically to retail organizations with front line demands based on
industry's best practices. Mystery Shopping is observational research,
reporting on the facts that take place during a customer's experience. Mystery
Shopping programs have been a successful tool used by retailers for many
years.

About In-Touch

In-Touch technology-based survey products, logistical support services
and integrated survey reporting enables companies to improve their business
performance by capturing, analyzing, reporting and acting on customer and
employee feedback. In-Touch makes doing surveys painless - whether customers
have two locations or 2,000, 50 employees or 50,000, whether the client is a
full-service market research firm, corporation, association or public entity.

Forward-Looking Statements

Some of the statements in this press release, including those relating to
the Company's strategies and other statements that are predictive in nature,
that depend upon or refer to future events or conditions, or that include
words such as "expects", "anticipates", "intends", "plans", "believes",
"estimates" or similar expressions, are forward-looking statements within the
meaning of securities laws. Forward-looking statements include, without
limitation, the information concerning possible or assumed future results of
operations of the Company. These statements are not historical facts but
instead represent only the Company's expectations, estimates and projections
regarding future events. The Company does not undertake any obligation to
update or release any revisions to these forward-looking statements to reflect
events or circumstances after the date of this presentation or to reflect the
occurrence of unanticipated events, except as required by law.

The TSX Venture Exchange Inc. has in no way passed upon the merits of
the proposed transaction and has neither approved nor disapproved the
contents of this press release.
%SEDAR: 00007687E