IBIN IBSG International Inc (CE)

IBSG International, Inc., (the �Company�), (OTC BB: IBIN) announced today its financial results for the second quarter and six month ended June 30, 2007. For the second quarter 2007, recognized revenues were approximately $3.1 million, exceeding the nearly $3.0 million recognized in second quarter 2006. Gross profit at almost $3.0 million for 2007�s second quarter was an improvement from 2006�s second quarter result of just approximately $2.9 million. Net Income reported for the three months ending June 30, 2007 was almost $1.9 million, or $0.26 per fully diluted share, compared to a net income in same period prior year of $1.0 million, or $0.15 per fully diluted share. In second quarter 2007, operating expenses fell approximately 8% to $960,000 from $1.2 million the same period in 2006. The company had other expenses for the three months ended June 30, 2007 of $128,000 compared to other expenses of $678,000 for the three months ended June 30, 2006. The decrease in other expenses for 2007 was due the accrual of taxes which was previously over estimated. The balance sheet shows the Company had $3.1 million in cash as of June 30, 2007 against $706,000 as of March 31, 2007, and against $1.2 million as of June 30, 2006. The Company has current account receivables, less allowance for bad debts, of almost $20 million. Looking at the six month 2007 results, recognized revenue was $6.1 million up from $4.7 million for the first six months of 2006. Gross profit was $5.9 million for the first six months of 2007, approximately $1.3 million higher than the $4.6 million reported for the half year ended June 30, 2006. The Company had deferred revenues, which the Company received but cannot recognize yet, for the six months ended June 30, 2007 of $2.7 million. This was an increase from 2006�s deferred revenues of $875,000. The company net income for the six months ended June 30, 2007 was $2.9 million, or $0.42 per fully diluted share, as compared to $1.3 million, or $0.19 per fully diluted share, for the half year ended June 30, 2006. For first half 2007, operating expenses at approximately $2.1 million were slightly higher by $7,000 than operating expenses were for first half 2006. Other expenses in the first half of 2007 were $900,000 down from $1.2 million in the same period prior year. This includes a tax provision of $966,000 during first half 2007, more than the almost $690,000 in tax provision during first half 2006. The Company anticipates that there will be additional expenses over the course of the balance of the 2007 year for operational expansion as contracts continue to grow and pursuing listings on other exchanges. Dr. Michael Rivers, CEO of IBSGI, said, �IBSGI continues to implement its business plan according to the internal timelines we have set for ourselves. Both in the United States and internationally, our BizWorldPro� e-commerce platform continues to attract attention, customers and supporters. Currently, we are working with 200,000 small business domestically and internationally. We are continuing the process of listing our shares on the AIM, and we have expanded our offices in the UK as we prepare to raise our market presence in the European Union. Our expansion in Africa is moving rapidly, especially in South Africa and Kenya. �With our subscriber base rising, investors should note that we generate revenue from license fees and user subscriptions (post-contract customers). The majority of our current revenues are derived from existing contracts rather then new business. New business continues to be developed but as our model continues to prove out, we are not reliant on new business for our continued growth. Our revenue recognition policy for multiple-element arrangements generally results in 65% of the first year arrangement fee being allocated to license revenue, the delivered elements. Recognition of license revenue occurs in the first month, once all the recognition criteria discussed above are met. The remaining 35% of the initial arrangement fee is allocated to PCS, the amortized element at the time the license arrangement is entered into. In practical terms, this means that we are going to have recurring revenue beyond the initial payment of fees that will keep our top line strong. We have collected just under $1 million per quarter for the first half of 2007, however with the size of the additional projects and the roll up of appropriate deferred revenue to revenue, the cash collections are still being out paced by revenue growth. � He concluded, �We believe the proceeds from our receivables, subscriptions and reserves will continue to generate sufficient cash for the operating needs of the company. The company is continuing to inquire into new investments to provide for further cash reserves, additional fees for the various registrations and assisting further acquisitions over the next twelve months. Management of IBSG International will host a conference call at 2 p.m. EDT tomorrow, Wednesday August 15, 2007, to discuss the company�s financial results and achievements. Those who wish to participate in the conference call may telephone (888) 682-6100 from the US or (201) 499-0416 for international callers. No PIN number is necessary for the live call. To access the digital replay, dial (888) 346-3949. When prompted enter 08152001, at the second prompt enter 4, and at the final prompt enter 20070814167233. 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 IBSGI - UK, a consultant company focused on development of IT projects for Governmental bodies and 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. IBSGI - UK establishes IT projects for various countries and multi-national corporations around the world. IBSGI - UK has already introduced the BizWorldPro platform to a number of countries and continues to provide demonstrations of the system on an international scale. For multinational corporations, the projects are normally recognized offset program qualified and provide a required contractual obligation of these corporations. IBSGI � UK maintains relationships with various multinational corporations and operates from centrally located offices in London. * Management has determined that an allowance should be set aside due to the current and potential growth of its client bases. This allowance is not for set aside for any specific customer. 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) � ASSETS � CURRENT ASSETS June 30, 2007 � Cash $ 3,122,319 Accounts receivable net of allowance for bad debt 19,941,267 Prepaid expenses � 380,840 � Total Current Assets � 23,444,426 � FURNITURE, FIXTURES AND SOFTWARE, NET � 881,732 � OTHER ASSETS Account receivable - long term 1,769,379 Deposits 4,164 Other assets 425,700 Deferred consulting services � 2,945,705 � Total Other Assets � 5,144,948 � TOTAL ASSETS $ 29,471,106 � LIABILITIES AND STOCKHOLDERS� EQUITY � CURRENT LIABILITIES June 30, 2007 � Accounts payable and accrued expenses $ 887,555 Accrued tax provision 3,302,981 Deferred revenue 2,733,196 Capital leases payable � 1,782 � Total Current Liabilities � 6,925,514 � � COMMITMENTS AND CONTINGENCIES � STOCKHOLDERS� EQUITY � Common stock authorized 100,000,000 shares at $0.001 par value; 9,071,430 shares issued and outstanding 9,071 Additional paid-in capital 18,367,997 Retained Earnings � 4,168,524 � Total Stockholders� Equity � 22,545,592 � TOTAL LIABILITIES AND STOCKHOLDERS� EQUITY $ 29,471,106 IBSG INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited) � Three months ended June 30, � Six months ended June 30, � 2007 � � � 2006 � � � 2007 � � � 2006 � � � Sales $ 3,058,544 $ 3,000,772 $ 6,089,260 $ 4,699,584 � Cost of Sales � 89,093 � � � 68,042 � � � 178,186 � � � 136,085 � � Gross Profit 2,969,451 2,932,730 5,911,074 4,563,499 � Operating Expenses Amortization and Depreciation 6,915 9,425 14,819 19,819 Stock based compensation 412,477 301,332 710,142 647,921 Bonus - - - 25,000 Bad debt expense 110,000 - 286,000 - General and Administrative � 430,007 � � � 897,332 � � � 1,053,988 � � � 1,365,991 � Total Operating Expenses 959,399 1,208,089 2,064,949 2,058,731 � Income from Operations � 2,010,052 � � � 1,724,641 � � � 3,846,125 � � � 2,504,768 � � Other Income (Expense) Loss on debt settlement and warrants - - - (470,897 ) Change in Fair Value of embedded options - - - (18,683 ) Change in Fair Value of warrants - - - (61,181 ) Liquidated damages expense - - - - Interest Income 32,946 65,893 Tax Provision (160,988 ) (677,556 ) (965,741 ) (689,744 ) � � � � � � � � - � � � - � Total Other Income (Expense), net � (128,041 ) � � (677,556 ) � � (899,848 ) � � (1,240,505 ) � Net Income $ 1,882,011 � � $ 1,047,085 � � $ 2,946,277 � � $ 1,264,263 � � Net Income Per Share - Basic/Diluted $ 0.26 � � $ 0.15 � � $ 0.42 � � $ 0.19 � � � Weighted average number of shares outstanding during the period � Basic � 7,234,173 � � � 6,827,154 � � � 7,072,895 � � � 6,720,714 �