E.G. Capital Inc.
NEX BOARD : EGC.H

October 28, 2005 18:24 ET

E.G. Capital Inc. Announces Results for the Second Quarter Ended August 31, 2005

BROSSARD, QUEBEC--(CCNMatthews - Oct. 28, 2005) - E.G. Capital Inc. (NEX:EGC.H), (the "Corporation"), formally National Construction Inc., today announces results for the second quarter ended August 31, 2005.

Second Quarter ended August 31, 2005

Revenues decreased by 98.6% from $6.6 million for the three months ended August 31, 2004 to $94,368 for the three months ended August 31, 2005. This decrease was entirely due to the sale of the Plant Maintenance Division in February, 2005. Revenues decreased by 98.5% from $14.5 million for the six months ended August 31, 2004 to $224,898 for the six months ended August 31, 2005. This decrease was entirely due to the sale of the Plant Maintenance Division in February, 2005.

For the three months ended August 31, 2005, the Corporation achieved a gross profit of $94,368 representing 100% of total revenue compared to $387,402 or 5.85% for the three months ended August 31, 2004. This decrease was entirely due to the sale of the Plant Maintenance Division in February, 2005. For the six months ended August 31, 2005, the Corporation achieved a gross profit of $224,898 representing 100% of total revenue compared to $991,176 or 6.83% for the six months ended August 31, 2004. This decrease was entirely due to the sale of the Plant Maintenance Division in February, 2005.

Selling, General and Administrative Expenses were $144,230 for the three months ended August 31, 2005 as compared to $438,028 for the same period last year. The reduction is entirely due to the sale of the Plant Maintenance Division in February, 2005. Selling, General and Administrative Expenses were $294,793 for the six months ended August 31, 2005 as compared to $1,005,967 for the same period last year. The reduction is entirely due to the sale of the Plant Maintenance Division in February, 2005.

The Corporation incurred interest and bank charges of $11,123 for the three months ended August 31, 2005 as compared to interest expense of $30,521 for the same period last year. Interest on the note and loan due to shareholders for the three months ended August 31, 2005 was $Nil as compared to $47,988 for the same period last year. The Corporation incurred interest and bank charges of $19,916 for the six months ended August 31, 2005 as compared to interest expense of $56,896 for the same period last year. Interest on the note and loan due to shareholders for the six months ended August 31, 2005 was $Nil as compared to $95,788 for the same period last year.

The Corporation incurred amortization expenses of $2,715 for the three months ended August 31, 2005 as compared to $50,874 for the same period last year. The Corporation incurred amortization expenses of $5,573 for the six months ended August 31, 2005 as compared to $101,751 for the same period last year.
As a result of the foregoing factors, the loss before income taxes for the three months ended August 31, 2005 was $63,700 as compared to a loss before income taxes of $180,369 for the same period last year. As a result of the foregoing factors, the loss before income taxes for the six months ended August 31, 2005 was $95,384 as compared to a loss before income taxes of $269,226 for the same period last year.

The net loss for the three months ended August 31, 2005 was $88,386 after income tax expense of $24,686 as compared to a net loss of $180,369 for the same period last year. The net loss for the six months ended August 31, 2005 was $120,070 after income taxes of $24,686 as compared to a net loss of $269,226 for the same period last year.

About E.G. Capital Inc.

The Corporation is an inactive company listed on the NEX board of the TSX Venture Exchange Inc ("the Exchange"). The business of the Corporation is to identify and evaluate businesses or assets with a view to completing a reactivation transaction on the Exchange. The Corporation's principal activities in the first six months of the current fiscal year have been the wind-down of remaining current assets and liabilities subsequent to the sale of its Plant Maintenance Division on February 4, 2004 and preparation for the completion of a private placement which was completed on July 11, 2005.

On July 11, 2005, the Corporation announced that it had completed a private placement of 3,500,000 units at a price of $0.10 per unit (the "Private Placement"). Each unit (the "Units") consists of one common share to be issued on a "flow-through" basis under the Income Tax Act (Canada) and one warrant, with each warrant entitling the holder thereof to purchase one common share also to be issued on a "flow-through" basis under the Income Tax Act (Canada) at a price of $0.10 per share for a period of one year (the "Warrants").

The Corporation intends to use the proceeds of the Private Placement to review and pursue oil and gas acquisitions and farm-in opportunities in the Western Canadian Sedimentary Basin. The Corporation further intends to attempt to unlock the value of its tax pools of approximately $25,000,000. In connection therewith, the Corporation intends to pursue a new management team, including a President, Chief Financial Officer, Vice-President, Exploration and Vice-President, Land, during 2005.

The Corporation also cancelled 1,400,000 stock options and granted options to purchase up to 1,882,000 common shares at a price of $0.10 per share to directors and officers.

This press release may contain forward-looking statements relating to the Corporation. Among the important factors that could cause actual results to differ materially from those indicated by such forward looking statements are competitive pressures, technical difficulties, market acceptance, changes in customer requirements, and general economic conditions, and other risks and uncertainties as described from time to time in the Corporation's reports, registration statements and filings filed by the Corporation with securities regulatory authorities.

The TSX Venture Exchange Inc. does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • E.G. Capital Inc.
    William G. Edwards
    CFO
    (450) 444-2405 ext 237