IBSG International Announces First Quarter 2006 Financial Results; First Quarter Revenue Tops $2.1 Million; Seventh Straight Quarter of Profitability; IBSG International Will Host a Conference Call Today at 4:00 P.M. Eastern.CELEBRATION, Fla. -- IBSG IBSG Internet Business Solutions Group IBSG Internetwork Broadcast Sub-Group (ATM Forum, MPOA SWG) International, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :IGII IGII Islamic Government Investment Issue (Malaysian securities) ), a holding company for four technology and software subsidiaries, announced today its financial results for the first quarter 2006. Revenue for the three months ended March 31, 2006 reached $2.1 million, almost double the $1.1 million for the first quarter of 2005. Most of this additional revenue came from the Company's international business. IBSG International also had deferred revenues for the latest quarter of over $900,000. In first quarter 2006, the Company had operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. of $900,000, almost exactly what they were in the same period of 2005; there was a $6,000 increase, which was primarily the result of establishing the technical center in Ahmedabad Ahmedabad, India: see Ahmadabad. Ahmedabad or Ahmadabad City (pop., 2001: metro. area, 4,525,013), Gujarat state, west-central India. It is located on the Sabarmati River 275 mi (440 km) north of Mumbai (Bombay). , India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. in February 2006. As a result, IBSG International reported an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $1.2 million for the quarter ended March 31, 2006 compared to $182,000 for the quarter months ended March 31, 2005. The Company had other expenses of $1.1 million for the three months ended March 31, 2006 compared to other expenses restated of $32,000 for the three months ended March 31, 2005. The increase of other expenses for 2006 was due to the settlement of the debt and warrants outstanding, the sale of an asset and a provision for taxes. The loss associated with the settlement of the debt and warrants was $471,000. The Company also recorded a loss of $532,000 as a result of the sale of the CAC See Consumer Advisory Council. asset, on which the Company had recognized a total of $3.5 million at the time of the sale. The sale was for $4 million, of which $1 million is due in 2006 and the balance is due for each subsequent year over the next 3 years. This figure is reflected in the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. receivable category on the balance sheet under assets. Net income for the quarter ended March 31, 2006 was $112,000 compared to $150,000 for the same quarter of 2005 primarily due to the extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt and warrants as described above. Dr. Michael Rivers, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of IGII stated, "We are very pleased with our progress in the first quarter of 2006. Our revenue is growing year-over-year in a fashion that is both healthy and sustainable. The expansion of our Johannesburg project to cover the entire Union of South Africa Union of South Africa: see South Africa. may have seemed challenging, but it is up and running across that country, and it will contribute to revenues for the second quarter and beyond." He added, "We are continuing our discussions with the Malaysian government to launch a similar project there, and our relationship with BAE through our purchase of A-Division in the first quarter will help ensure that we are in the running for other such projects globally. We expect the success that we are seeing in South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. can and will be replicated elsewhere." Rivers observed, "In the U.S., IBS IBS Irritable bowel syndrome, see there Group has launched the implementation of our digital management solution for use within the state of Connecticut's Small Business Development Center network. This network is also capable of being replicated in other jurisdictions in the U.S., and we are exploring opportunities to do just that." He concluded, "IBSG International is on a trajectory Trajectory The curve described by a body moving through space, as of a meteor through the atmosphere, a planet around the Sun, a projectile fired from a gun, or a rocket in flight. toward significant growth this year as measured both at the top and bottom lines." Management of IBSG International will host a conference call today at 4:00 P.M. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss the company's financial results and achievements. Those who wish to participate in the conference call may telephone (888) 335-6674, from the U.S., or for international callers (973) 935-2100, passcode # 7399598 approximately 15 minutes before the call. A digital replay will be available by telephone for two weeks and may be accessed by dialing (877) 519-4471, from the U.S., or (973) 341-3080, for international callers, and entering PIN # 7399598. About IBSG International, Inc. IBSG International, Inc. is a holding company for four technology and software subsidiaries: Intelligent Business Systems Group, Inc. (IBSG), a provider of turnkey See turnkey system. digital service center software; Secure Blue, Inc., a Sarbanes-Oxley and security software solution provider; Intelligent Business Systems Development (IBSD IBSD ion beam sputter deposition IBSD Integrated Business Systems Division (Cannon) IBSD Ion Backscatter Diffraction ), a software development, maintenance and data storage company; and, A-Division IT, a consultant company focused on development of IT projects for multi-national corporations. IBSG offers enterprise solutions designed to enhance the operating efficiency and create revenue for State Small Business Development Centers, business associations (e.g., Chambers of Commerce) and Fortune 1000 corporations by licensing its unique turnkey digital service center software, which provides a broad range of digital budgetary, administrative and commercial services (B2B (Business to Business) Refers to one business communicating with or selling to another. See B2B e-commerce, B2C and B2G. B2B - business to business , e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. , government to business and enterprise business services) on a single platform known as the BizWorldPro(C). Secure Blue, Inc. provides a robust economical Sarbanes-Oxley (SOX (1) (Schema for Object-oriented XML) An XML schema developed by Veo Systems and Muzino Communications, which was submitted to the W3C. SOX is based on DTD, but adds data typing and reuse mechanisms. ) compliance and security software suite, Secure Blue SOX Pro. It is targeted at small and mid cap public companies as well as private companies requiring SOX compliance to enable them to continue working with public companies. As software providers, system integrators See systems integrator. and Application Service Providers, IBSG, Inc. and Secure Blue, Inc. generate revenue from license sales, system modifications, systems support and a percentage of monthly customer fees. The typical IBSG/Secure Blue license agreement has a five-year term which is updated on an annual basis and almost invariably in·var·i·a·ble adj. Not changing or subject to change; constant. in·var  i·a·bil renewed upon expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute.2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created ; to date the company has had only one licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor) LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. not renew, due to the expiration of the licensee's contract with another party. IBSD, Inc. will provide ongoing support of International's other subsidiaries, IBS Group and Secure Blue. The company provides development, system support and secure data storage, and will maintain offices in the U.S. and India, where its current offshore development and support team is located. A-Division IT establishes it projects for multi-national corporations around the world. The projects are recognized off set program qualified and provide a required contractual obligation of theses corporations. A-Division IT is the sole IT off set provider to BAE Systems BAE Systems British manufacturer of aircraft, missiles, avionics, naval vessels, and other aerospace and defense products. BAE Systems was formed (1999) from the merger of British Aerospace (BAe) with Marconi Electronic Systems. and maintains relationships with various other multi national corporations. A-Division maintains office in the United Kingdom. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Except for historical information contained herein, the statements in this release are forward-looking statements that are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The above information does not guarantee any successful closing of new business. No assurances can be given that any projections related to gross revenues or profit margins will be realized. Forward-looking statements involve known and unknown risks and uncertainties that may cause the companies' actual results in future periods to differ materially from forecasted results. Such risks and uncertainties include, but are not limited to, market conditions, competitive factors, the ability to successfully complete additional financings and other risks.
IBSG INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
(Unaudited)
ASSETS
March 31, 2006
CURRENT ASSETS
Cash $ 1,158,026
Accounts receivable 8,652,500
Prepaid expenses 574,209
-------------
Total Current Assets 10,384,735
FURNITURE, FIXTURES AND SOFTWARE, NET 859,841
-------------
OTHER ASSETS
Account receivable - Long term 3,000,000
Deposits 5,564
Deferred Consulting Services 4,438,029
-------------
Total Other Assets 7,443,593
-------------
TOTAL ASSETS $ 18,688,169
=============
IBSG INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Balance Sheet (Continued)
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, 2006
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 793,370
Accrued tax provision 116,688
Deferred revenue 918,176
Capital leases payable 10,571
-------------
Total Current Liabilities 1,838,805
-------------
TOTAL LIABILITIES 1,838,805
-------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock authorized 100,000,000 shares at $0.001
par value; 69,056,194 shares issued and outstanding 65,223
Additional paid-in capital 16,498,933
Stock Subscription Payable 353,270
Accumulated deficit (68,062)
-------------
Total Stockholders' Equity 16,849,364
-------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,688,169
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IBSG INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended
March 31
2006 2005
--------- ---------
(Restated)
SALES $2,125,746 $1,108,544
COST OF SALES 68,043 88,884
--------- ---------
GROSS PROFIT 2,057,703 1,019,660
OTHER EXPENSES
Services paid for with common stock 346,589 481,947
Amortization and depreciation 10,394 1,022
Bonus shares expense - 19,200
Bonus expense 25,000 -
Bad debt expense - related party - 5,009
General and administrative expenses 468,659 330,779
--------- ---------
Total Expenses 850,642 837,957
--------- ---------
Income from operations 1,207,061 181,703
--------- ---------
OTHER EXPENSES
Loss on release of debt and warrants (470,897) 52,317
Change in Fair Value of embedded
conv. options (18,683) (358,291)
Change in Fair Value of warrants (61,181) 294,524
Loss on asset sale (531,729) -
Interest expense - (20,537)
Tax Provision (12,188) -
--------- ---------
Total Other Expenses (1,094,678) (31,987)
--------- ---------
NET INCOME $ 112,383 $ 149,716
========= =========
NET INCOME PER SHARE - Basic $ 0.00 $ 0.00
========= =========
NET INCOME PER SHARE - Diluted $ 0.00 $ 0.00
========= =========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 62,255,769 38,112,717
========== ==========
DILUTED WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING 62,255,769 39,262,717
========== ==========
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