TSX VENTURE : EGN Incorporated

August 12, 2011 15:17 ET

ENGINEERING.COM Incorporated Announces Second Quarter Results

TORONTO, ONTARIO--(Marketwire - Aug. 12, 2011) - Incorporated (TSX VENTURE:EGN), developer of the online resource for engineers today announced its unaudited financial results for the second quarter ended June 30, 2011.

Beginning with the first quarter of 2011, reported its financial results in accordance with International Financial Reporting Standards (IFRS), as required for public companies in Canada. Previously, the Company reported its financial results under Canadian Generally Accepted Accounting Standards (GAAP). Financial results for the corresponding period in 2010 have been restated to reflect the adoption of IFRS. revenue was $370,682 for the three month ended June 30, 2011, compared to revenue of $412,667 for the second quarter in 2010. The net loss for the three months ended June 30, 2011, totaled ($75,459) and ($0.00) per Common Share compared with a net loss of ($111,939) and ($0.00) for the same period a year ago. The decrease in revenue is the result of decreasing software sales.

Operating loss (EBITDA) measured as earnings before interest, taxes, amortization and stock-based compensation, was ($67,213) or ($0.00) per Common Share for the second quarter of 2011 compared with an operating loss of ($58,402) or ($0.00) per Common Share for the three month period ended June 30, 2010. The operating expenses in the latest period were $275,400, down from $285,875 in the second quarter a year earlier.

"Traffic to our primary web site more than doubled in the year to date as compared to the first six months of 2010," said John Hayes, President of "In addition, advertisers are discovering that our new sponsored video series like the Product Design Show and Some Assembly Required represent a powerful way for them to connect with engineers."

As at June 30, 2011, the Company had a cash balance of $30,635 compared to a cash balance of $78,244 as at December 31, 2010. This cash balance is relatively small when compared to the Company's ongoing obligations and in light of continued operating losses. On August 4, 2011 the Company announced a private placement of up to 7,000,000 Common Shares at a subscription price of $0.05 per share for gross proceeds of up to $350,000. The proceeds from this private placement will be used for general working capital purposes. This pending transaction is subject to regulatory approval. Readers are referred to page 9 of the Company's 2010 Annual Management Discussion & Analysis under the heading, "Present Status and Risk Factors" as filed on April 28, 2011.

About Incorporated Incorporated (TSX VENTURE:EGN) is the developer-owner of the Web site and business. offers marketing and lead generation services to manufacturers, design consultants and engineering academia around the world. The Incorporated head office is located in Mississauga, Ontario, Canada and can be reached toll-free at 1-877-997-9917, by facsimile at 905-273-6691 or through the Internet at


EBITDA is defined by the Company as operating income before interest expense, income taxes, amortization, stock-based compensation, asset dispositions and provision for discontinued operations. The Company has included information concerning EBITDA because it believes that EBITDA is used by certain investors as one measure of the Company's financial performance. EBITDA is not a measure of financial performance under IFRS principles and is not necessarily comparable to similarly titled measures used by other companies. EBITDA should not be construed as an alternative to operating income or to cash flows from operating activities (as determined in accordance with IFRS principles) as a measure of liquidity.

Forward Looking Statements

This press release may contain forward-looking statements based on management's current projections, beliefs and opinions at the date of this press release. Actual results could differ materially from those anticipated in these statements. The Company's ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Incorporated undertakes no responsibility to update forward-looking statements if circumstances or management's projections, beliefs or opinions change.

The contents of this News Release have been reviewed and approved by the Audit Committee and the Board of Directors.

Condensed Interim Statements of Financial Position
(In Canadian dollars, Unaudited)
June 30, December 31,
2011 2010
$ $
Cash30,635 78,244
Accounts receivable312,601 316,302
Prepaid expenses and deposits20,889 13,895
INTANGIBLE ASSETS320,368 316,063
TOTAL ASSETS699,884 745,231
Accounts payable and accrued liabilities525,529 489,015
Deferred revenue115,759 65,640
TOTAL LIABILITIES641,288 554,655
Share capital15,113,752 15,113,752
Contributed surplus483,846 472,843
Condensed Interim Statements of Loss and Comprehensive Loss
(In Canadian dollars, Unaudited)
Three months Six month months
ended June 30, ended June 30,
2011 2010 2011 2010
$ $ $ $
(Note 6) (Note 6)
REVENUE (Note 5)370,682 412,667 726,241 730,438
COST OF SALES162,495 185,194 320,790 295,559
GROSS PROFIT208,187 227,473 405,415 434,879
Salaries and benefits138,085 145,179 276,983 279,197
Marketing expenses21,489 28,702 44,171 48,499
Development costs49,946 56,154 97,126 106,237
General and administrative65,880 55,840 112,782 124,066
275,400 285,875 531,062 557,999
LOSS BEFORE UNDERNOTED ITEMS:(67,213)(58,402)(125,611)(123,120)
Stock based compensation(5,201)(5,411)(11,003)(12,025)
Amortization expense(3,045)(48,126)(6,369)(97,699)
NET LOSS(75,459)(111,939)(142,983)(232,845)
Loss per share
Basic0.00 0.00 0.00 (0.01)
Diluted0.00 0.00 0.00 (0.01)
Weighted average number of Common Shares
(basic and diluted)36,870,623 36,870,623 36,870,623 36,870,623
Condensed Statements of Changes in Shareholder's Equity
(In Canadian dollars, Unaudited)
Six months ended June 30, 2011:
# $ $
Number of Share Contributed$ $
Common Shares Capital SurplusDeficit Total
At December 31, 2010 38,870,623 15,113,752 472,843(15,396,019)190,576
Net Loss for the period -- -- --(142,983)(142,983)
Stock based compensation -- -- 11,003 11,003
At June 30, 2011 38,870,623 15,113,752 483,846(15,539,002)58,596
Six months ended June 30, 2010:
At January 1, 2010 38,870,623 15,113,752 445,548(15,468,881)90,419
Net Loss for the period -- -- --(232,845)(232,845)
Stock based compensation -- -- 12,025 12,025
At June 30, 2010 38,870,623 15,113,752 457,575(15,701,726)130,399
Condensed Interim Statements of Cash Flows
(In Canadian dollars, Unaudited)
Three months Six months
ended June 30, ended June 30,
2011 2010 2011 2010
$ $ $ $
Net loss(75,459)(111,939)(142,983)(232,845)
Add items not affecting cash:
Stock based compensation5,201 5,411 11,003 12,025
Amortization3,045 48,126 6,369 97,699
Changes in operating assets and liabilities other than cash(40,093)122,906 83,340 243,980
CASH FLOWS FROM OPERATING ACTIVITIES(107,306)64,504 (42,271)120,860
Promissory notes-- (12,004)-- (20,968)
Additions to property and equipment(487)(333)(1,033)(5,822)
Additions to intangible assets(1,284)(2,743)(4,305)(2,743)
CASH FLOWS FROM INVESTING ACTIVITIES(1,771)(3,076)(5,338)(8,565)
INCREASE IN CASH(109,077)49,424 (47,609)91,327
CASH, beginning of period139,712 148,021 78,244 106,118
CASH, end of period30,635 197,445 30,635 197,445

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

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