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

October 30, 2006 16:44 ET

E.G. Capital Inc. Announces Results for the Second Quarter Ended August 31, 2006

BROSSARD, QUEBEC--(CCNMatthews - Oct. 30, 2006) - E.G. Capital Inc. (NEX BOARD:EGC.H), ("E.G. Capital"), formally National Construction Inc., today announces results for the second quarter ended August 31, 2006.

Second Quarter Ended August 31, 2006

Revenues decreased by 100% from $94,368 for the three months ended August 31, 2005 to $nil for the three months ended August 31, 2006. This decrease was entirely due to the sale of the Plant Maintenance Division in February, 2005. Revenues decreased by 100% from $224,898 for the six months ended August 31, 2005 to $nil for the three months ended August 31, 2006. This decrease was entirely due to the sale of the Plant Maintenance Division in February, 2005.

For the three months ended August 31, 2006, the Corporation achieved a gross profit of $nil representing nil% of total revenue compared to $94,368 or 100% for the three months ended August 31, 2005. For the six months ended August 31, 2006, the Corporation achieved a gross profit of $nil representing nil% of total revenue compared to $224,898 or 100% for the six months ended August 31, 2005. This decrease was entirely due to the sale of the Plant Maintenance Division in February, 2005.

Selling, General and Administrative Expenses were a net recovery of $1,620 for the three months ended May 31, 2006 as compared to $144,230 for the same period last year. The reduction is entirely due to the sale of the Plant Maintenance Division in February, 2005 as well as approximately $42,000 in sales tax refunds which offset operating expenses of approximately the same amount. Selling, General and Administrative Expenses were $20,054 for the six months ended August 31, 2006 as compared to $294,793 for the same period last year. The reduction is entirely due to the sale of the Plant Maintenance Division in February, 2005 as well as approximately $42,000 in sales tax refunds which offset operating expenses of approximately the same amount.

The Corporation incurred interest and bank charges of $4,403 for the three months ended August 31, 2006 as compared to interest expense of $11,123 for the same period last year. The Corporation incurred interest and bank charges of $4,831 for the six months ended August 31, 2006 as compared to interest expense of $19,916 for the same period last year. The Corporation incurred amortization expenses of $nil for the three months ended August 31, 2006 as compared to $2,715 for the same period last year. The Corporation incurred amortization expenses of $nil for the six months ended August 31, 2006 as compared to $5,573 for the same period last year.

As a result of the foregoing factors, the loss before income taxes and special items for the three months ended August 31, 2006 was $2,783 as compared to a loss before income taxes and special items of $63,700 for the same period last year. The loss before income taxes and special items for the six months ended August 31, 2006 was $24,885 as compared to a loss before income taxes and special items of $95,384 for the same period last year.

The net loss for the three months ended August 31, 2006 was $2,783 after income tax of $nil as compared to a net loss of $88,386 after income tax expense of $24,686 for the same period last year. The net loss for the six months ended August 31, 2006 was $24,885 after income tax of $nil as compared to a net loss of $120,070 after income tax expense of $24,686 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 current fiscal year have been the wind-down of remaining current assets and liabilities subsequent to the sale of it's 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 $20,000,000. 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 2006.

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 during the year ended February 28, 2006.

This press release may contain forward-looking statements relating to E.G Capital. 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 E.G. Capital's reports, registration statements and filings filed by E.G. Capital 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