IBIN IBSG International Inc (CE)

IBSG International, Inc. (OTC BB: IBIN) a holding company for four technology and software subsidiaries, announced today its financial results for the third quarter and nine months ended September 30, 2006. Revenues for the three months ended September 30, 2006 increased to just under $2.8 million compared to revenues same three-month period ended September 2005 of $1.4 million, an increase of 103%. Most of the increase came from expansion of international business of $3.8 million, of which $2.47 million was recognized in this quarter. Gross profit in the third quarter 2006 reached $2.7 million, up from $1.3 million in the same period 2005. Third quarter 2006 operating expenses totaled $1.8 million compared to $856,000 in operating expenses third quarter 2005. The increase largely results from additional consulting services of $592,500 due to the international contracts obtained and $264,000 of stock compensation granted to the board of directors. Other third quarter expenses totaled $468,000 for a tax provision accrual, compared to other expenses of $388,000 for the three months ended September 30, 2005. Net income for the third quarter 2006 was $485,000, up sharply from $16,000 generated in third quarter 2005. With weighted average number of shares of 6,865,880 basic and diluted shares outstanding, earnings per share this quarter was $0.07. Third quarter 2005, with 4,947,730 diluted shares outstanding, earnings per share came in at $0.00 � figure for shares outstanding is restated to reflect the reverse split that became effective in third quarter 2006. Dr. Michael Rivers, CEO of IBSG stated, �IBSG International has shown great progress in the third quarter and subsequently, growing the business both in the US and abroad. In America, we have expanded our network of Small Business Development Centers to include such states as Mississippi and Alabama and recently added Kentucky and the US territory of Guam. Investors should expect to continue to see high or even rising revenues even with an increase in cash collections. Our customers are larger then the same time last year with the addition of foreign governments to our customer base of US states. As a result, the year one license fees are higher. Cash collections of revenue are increasing but as more small- to mid-size enterprises (SMEs) are added to the system by state of foreign governments, monthly subscriptions will increase and become part of the cash collections which are not part of revenues generally and therefore will not reduce revenues. Revenues are primarily comprised of license revenues. This is the challenge of understanding our model however, because our approach is scalable, flexible and practical, although management cannot make any assurances, we believe every state and territory in the nation as well as a large number of international governments could benefit from using our BizWorldPro� services. �Moreover, we have established ourselves internationally, most recently in cooperation with the World Bank. BizWorldPro will function as the transactional platform for the support of Small- and Mid-size Enterprises (SMEs) and create an investment management platform for investors worldwide � the Health Business World (HBW) Gateway. We are in the process of populating the platform with health care providers from Nigeria, South Africa and Kenya, and by year-end, the HBW gateway will be able to locate health care providers in most of the 47 African nations for investment opportunities. This represents a major step forward in attracting capital to these SME Health Care providers.� For the nine months ended September 30, 2006, revenues were slightly above $7.5 million compared to the result for nine months ended September 30, 2005 of $3.8 million. The Company had deferred revenues for the nine months ended September 30, 2006 of $2.1 million Operating expenses rose to $3.8 million for the nine months ended September 30, 2006 from $2.7 million for the nine months ended September 30, 2005. Other expenses rose to $1.7 million in the first nine months of 2006 from $240,000 in the same period 2005. The other expenses for the nine months ending 2006 were $1.7 million compared to $240,000 for 2005. The 2005 figures were restated to reflect the change in fair value of the embedded conventional options and in the fair value of the warrants. The increase of other expenses for 2006 was due to the settlement of the debt and warrants outstanding, and a provision for taxes. The losses associated with the settlement of the debt and warrants were $471,000. The Company has allocated $1.1 million for proposed taxes. The Company accrued $12,000 of taxes for the first quarter, an additional $678,000 for the second quarter and $469,000 for the third quarter. Net income reported for the nine months ending September 30, 2006 was $1.7 million, almost three times the $598,000 net income for the first nine months of 2005. Management of IBSG International will host a conference call today at 11:00 A.M. EST 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 US, or 973-935-2100 for international callers, PIN #8115161 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 US, or 973-341-3080 for international callers, and entering PIN #8115161. 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 digital service center software; Secure Blue, Inc., a Sarbanes-Oxley and security software solution provider; Intelligent Business Systems Development (IBSD), a software development, maintenance and data storage company; and A-Division IT, a consultant company focused on development of IT projects for multinational corporations. IBS Group offers enterprise solutions designed to enhance the operating efficiency and create revenue for State Small Business Development Centers, business associations (e.g., business associations) 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, e-commerce, government to business and enterprise business services) on a single platform known as the BizWorldPro�. Secure Blue, Inc. provides a robust economical Sarbanes-Oxley (SOX) 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 and Application Service Providers, IBS Group, Inc. and Secure Blue, Inc. generate revenue from license sales, system modifications, systems support and a percentage of monthly customer fees. The typical IBS Group/Secure Blue license agreement has a five-year term which is updated on an annual basis. IBS Development, 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 US and India, where its current offshore development and support team is located. A-Division IT establishes IT projects for various countries around the world and for multinational corporations around the world. A-Division has already introduced and continues to provide demonstrations of the system on a national scale for foreign governments around the world. For multinational corporations, the projects are recognized offset program qualified and provide a required contractual obligation of these corporations. A-Division IT is an offset provider to BAE Systems and maintains relationships with various other multinational corporations. A-Division maintains offices in the United Kingdom. Safe Harbor Forward-Looking Statements 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 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) CURRENT ASSETS September30, 2006 Cash $ 1,121,311� Accounts receivable 11,680,000� Prepaid expenses � 493,483� � Total Current Assets � 13,294,794� � FURNITURE, FIXTURES AND SOFTWARE, NET � 716,075� � OTHER ASSETS � Account receivable - Long term 3,000,000� Deposits 4,164� Deferred Consulting Services 3,850,695� Goodwill � 38,000� Total Other Assets � 6,892,859� � TOTAL ASSETS $ 20,903,728� CURRENT LIABILITIES Accounts payable and accrued expenses $ 378,821� Accrued tax provision 1,158,202� Deferred revenue 2,095,824� Capital leases payable � 5,374� � Total Current Liabilities � 3,638,221� � � COMMITMENTS AND CONTINGENCIES � STOCKHOLDERS� EQUITY � Common stock authorized 100,000,000 shares at $0.001 par value; 7,017,500 shares issued and outstanding 7,017� Additional paid-in capital 16,114,754� Retained Earnings � 1,143,735� � Total Stockholders� Equity � 17,265,507� � TOTAL LIABILITIES AND STOCKHOLDERS� EQUITY $ 20,903,728� IBSG INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited) Three months ended September 30, Nine months ended September 30, � 2006� � 2005� 2006� 2005� (Restated) (Restated) Sales $ 2,798,686� $ 1,379,537� $ 7,516,378� $ 3,819,018� Cost of Sales � 68,042� � 119,162� 204,129� � 321,842� Gross Profit 2,730,644� 1,260,375� 7,312,249� 3,497,176� Operating Expenses Amortization and Depreciation 8,829� 77,066� 28,647� 231,633� Stock based compensation 595,292� 351,724� 1,243,213� 1,150,619� Bonus shares expense -� -� -� 19,200� Bonus -� -� 25,000� -� Bad debt expense - related party -� -� -� 9,007� Professional Fees 165,003� 189,028� 643,979� 508,150� General and Administrative � 1,008,144� � 54,443� 1,913,267� � 207,670� Total Operating Expenses 1,777,268� 855,782� 3,854,106� 2,658,393� Income from Operations � 953,376� � 404,593� 3,458,143� � 838,783� Other Income (Expense) Gain on debt settlement -� -� -� 52,317� Loss on debt settlement and warrants -� -� (470,897) -� Change in Fair Value of embedded options -� (83,207) (18,683) (270,629) Change in Fair Value of warrants -� (118,163) (61,181) 371,993� Loss on asset sale -� -� -� -� Liquidated damages expense -� (60,000) -� (100,000) Interest expense (126,792) -� (294,096) Tax Provision (468,458) -� (1,158,202) -� Total Other Income (Expense), net (468,458) (388,162) (1,708,963) (240,415) Net Income $ 484,918� $ 16,431� $ 1,749,180� $ 598,368� Net Income Per Share - Basic $ 0.07� $ 0.00� $ 0.26� $ 0.13� Net Income Per Share - Diluted $ 0.07� $ 0.00� $ 0.26� $ 0.13� Weighted average number of shares outstanding during the period - Basic � 6,865,880� � 4,658,574� � 6,720,714� � 4,568,679� Weighted average number of shares outstanding during the period - Diluted � 6,865,880� � 4,947,730� � 6,720,714� � 4,568,679� IBSG International, Inc. (OTC BB: IBIN) a holding company for four technology and software subsidiaries, announced today its financial results for the third quarter and nine months ended September 30, 2006. Revenues for the three months ended September 30, 2006 increased to just under $2.8 million compared to revenues same three-month period ended September 2005 of $1.4 million, an increase of 103%. Most of the increase came from expansion of international business of $3.8 million, of which $2.47 million was recognized in this quarter. Gross profit in the third quarter 2006 reached $2.7 million, up from $1.3 million in the same period 2005. Third quarter 2006 operating expenses totaled $1.8 million compared to $856,000 in operating expenses third quarter 2005. The increase largely results from additional consulting services of $592,500 due to the international contracts obtained and $264,000 of stock compensation granted to the board of directors. Other third quarter expenses totaled $468,000 for a tax provision accrual, compared to other expenses of $388,000 for the three months ended September 30, 2005. Net income for the third quarter 2006 was $485,000, up sharply from $16,000 generated in third quarter 2005. With weighted average number of shares of 6,865,880 basic and diluted shares outstanding, earnings per share this quarter was $0.07. Third quarter 2005, with 4,947,730 diluted shares outstanding, earnings per share came in at $0.00 -- figure for shares outstanding is restated to reflect the reverse split that became effective in third quarter 2006. Dr. Michael Rivers, CEO of IBSG stated, "IBSG International has shown great progress in the third quarter and subsequently, growing the business both in the US and abroad. In America, we have expanded our network of Small Business Development Centers to include such states as Mississippi and Alabama and recently added Kentucky and the US territory of Guam. Investors should expect to continue to see high or even rising revenues even with an increase in cash collections. Our customers are larger then the same time last year with the addition of foreign governments to our customer base of US states. As a result, the year one license fees are higher. Cash collections of revenue are increasing but as more small- to mid-size enterprises (SMEs) are added to the system by state of foreign governments, monthly subscriptions will increase and become part of the cash collections which are not part of revenues generally and therefore will not reduce revenues. Revenues are primarily comprised of license revenues. This is the challenge of understanding our model however, because our approach is scalable, flexible and practical, although management cannot make any assurances, we believe every state and territory in the nation as well as a large number of international governments could benefit from using our BizWorldPro(C) services. "Moreover, we have established ourselves internationally, most recently in cooperation with the World Bank. BizWorldPro will function as the transactional platform for the support of Small- and Mid-size Enterprises (SMEs) and create an investment management platform for investors worldwide -- the Health Business World (HBW) Gateway. We are in the process of populating the platform with health care providers from Nigeria, South Africa and Kenya, and by year-end, the HBW gateway will be able to locate health care providers in most of the 47 African nations for investment opportunities. This represents a major step forward in attracting capital to these SME Health Care providers." For the nine months ended September 30, 2006, revenues were slightly above $7.5 million compared to the result for nine months ended September 30, 2005 of $3.8 million. The Company had deferred revenues for the nine months ended September 30, 2006 of $2.1 million Operating expenses rose to $3.8 million for the nine months ended September 30, 2006 from $2.7 million for the nine months ended September 30, 2005. Other expenses rose to $1.7 million in the first nine months of 2006 from $240,000 in the same period 2005. The other expenses for the nine months ending 2006 were $1.7 million compared to $240,000 for 2005. The 2005 figures were restated to reflect the change in fair value of the embedded conventional options and in the fair value of the warrants. The increase of other expenses for 2006 was due to the settlement of the debt and warrants outstanding, and a provision for taxes. The losses associated with the settlement of the debt and warrants were $471,000. The Company has allocated $1.1 million for proposed taxes. The Company accrued $12,000 of taxes for the first quarter, an additional $678,000 for the second quarter and $469,000 for the third quarter. Net income reported for the nine months ending September 30, 2006 was $1.7 million, almost three times the $598,000 net income for the first nine months of 2005. Management of IBSG International will host a conference call today at 11:00 A.M. EST 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 US, or 973-935-2100 for international callers, PIN #8115161 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 US, or 973-341-3080 for international callers, and entering PIN #8115161. 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 digital service center software; Secure Blue, Inc., a Sarbanes-Oxley and security software solution provider; Intelligent Business Systems Development (IBSD), a software development, maintenance and data storage company; and A-Division IT, a consultant company focused on development of IT projects for multinational corporations. IBS Group offers enterprise solutions designed to enhance the operating efficiency and create revenue for State Small Business Development Centers, business associations (e.g., business associations) 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, e-commerce, 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) 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 and Application Service Providers, IBS Group, Inc. and Secure Blue, Inc. generate revenue from license sales, system modifications, systems support and a percentage of monthly customer fees. The typical IBS Group/Secure Blue license agreement has a five-year term which is updated on an annual basis. IBS Development, 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 US and India, where its current offshore development and support team is located. A-Division IT establishes IT projects for various countries around the world and for multinational corporations around the world. A-Division has already introduced and continues to provide demonstrations of the system on a national scale for foreign governments around the world. For multinational corporations, the projects are recognized offset program qualified and provide a required contractual obligation of these corporations. A-Division IT is an offset provider to BAE Systems and maintains relationships with various other multinational corporations. A-Division maintains offices in the United Kingdom. Safe Harbor Forward-Looking Statements 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 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. -0- *T IBSG INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Balance Sheet (Unaudited) September CURRENT ASSETS 30, 2006 Cash $ 1,121,311 Accounts receivable 11,680,000 Prepaid expenses 493,483 ------------- Total Current Assets 13,294,794 ------------- FURNITURE, FIXTURES AND SOFTWARE, NET 716,075 ------------- OTHER ASSETS Account receivable - Long term 3,000,000 Deposits 4,164 Deferred Consulting Services 3,850,695 Goodwill 38,000 ------------- Total Other Assets 6,892,859 ------------- TOTAL ASSETS $ 20,903,728 ============= CURRENT LIABILITIES Accounts payable and accrued expenses $ 378,821 Accrued tax provision 1,158,202 Deferred revenue 2,095,824 Capital leases payable 5,374 ------------- Total Current Liabilities 3,638,221 ------------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock authorized 100,000,000 shares at $0.001 par value; 7,017,500 shares issued and outstanding 7,017 Additional paid-in capital 16,114,754 Retained Earnings 1,143,735 ------------- Total Stockholders' Equity 17,265,507 ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 20,903,728 ============= *T -0- *T IBSG INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited) Three months ended Nine months ended September 30, September 30, ----------------------- ------------------------ 2006 2005 2006 2005 ----------- ----------- ----------- ---------- (Restated) (Restated) Sales $2,798,686 $1,379,537 $ 7,516,378 $3,819,018 Cost of Sales 68,042 119,162 204,129 321,842 ----------- ----------- ----------- ----------- Gross Profit 2,730,644 1,260,375 7,312,249 3,497,176 Operating Expenses Amortization and Depreciation 8,829 77,066 28,647 231,633 Stock based compensation 595,292 351,724 1,243,213 1,150,619 Bonus shares expense - - - 19,200 Bonus - - 25,000 - Bad debt expense - related party - - - 9,007 Professional Fees 165,003 189,028 643,979 508,150 General and Administrative 1,008,144 54,443 1,913,267 207,670 ----------- ----------- ----------- ----------- Total Operating Expenses 1,777,268 855,782 3,854,106 2,658,393 Income from Operations 953,376 404,593 3,458,143 838,783 ----------- ----------- ----------- ----------- Other Income (Expense) Gain on debt settlement - - - 52,317 Loss on debt settlement and warrants - - (470,897) - Change in Fair Value of embedded options - (83,207) (18,683) (270,629) Change in Fair Value of warrants - (118,163) (61,181) 371,993 Loss on asset sale - - - - Liquidated damages expense - (60,000) - (100,000) Interest expense (126,792) - (294,096) Tax Provision (468,458) - (1,158,202) - Total Other Income (Expense), net (468,458) (388,162) (1,708,963) (240,415) Net Income $ 484,918 $ 16,431 $ 1,749,180 $ 598,368 =========== =========== ============ =========== Net Income Per Share - Basic $ 0.07 $ 0.00 $ 0.26 $ 0.13 =========== =========== ============ =========== Net Income Per Share - Diluted $ 0.07 $ 0.00 $ 0.26 $ 0.13 =========== =========== ============ =========== Weighted average number of shares outstanding during the period - Basic 6,865,880 4,658,574 6,720,714 4,568,679 =========== =========== ============ =========== Weighted average number of shares outstanding during the period - Diluted 6,865,880 4,947,730 6,720,714 4,568,679 =========== =========== ============ =========== *T