redCity Search Company Inc.
TSX VENTURE : RDC

redCity Search Company Inc.

November 30, 2006 09:17 ET

redCity Search Company Inc. Reports First Quarter Results for Fiscal 2007

TORONTO, ONTARIO--(CCNMatthews - Nov. 30, 2006) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE DISTRIBUTION SERVICES

REDCITY SEARCH COMPANY INC. (TSX VENTURE:RDC)("redCity" or the "Company"), a local internet search engine company, today released its financial results for the three-months ended September 30, 2006.

Net revenues increased by $207,732 to $1,046,763 for the three months ended September 30, 2006 compared to $839,031 for the same period in 2005. The increase in advertising revenues and data base sales and other income of $244,773 and $129,612 respectively is primarily due to the inclusion of advertising revenues and data base sales and other income from Zip411 Enterprises Inc. ("Zip411") for the period August 19, 2006 to September 30, 2006. redCity acquired all of the issued and outstanding securities of Zip411 on August 18, 2006.

Net loss from continuing operations for the three months ended September 30, 2006 was $2,298,448, or $0.02 per common share, compared to $1,118,487, or $0.04 per common share, for the same period in 2005. Cash and cash equivalents increased by $2,377,629 for the three months ended September 30, 2006. Cash used by operating activities was $887,483 for the three months ended September 30, 2006, compared to $1,158,819 for the same period in 2005, a decrease of $271,336. Cash used in investing activities amounted to $2,235,290 for the three months ended September 30, 2006, compared to cash provided by investing activities of $851,259 for the same period in 2005, an increase of $3,086,549. Investing activities for the three months ended September 30, 2006 include the acquisitions of Zip411 and Offsite Corporation ("Offsite") along with purchases of software and computer equipment. A more detailed discussion of liquidity and capital resources is contained in the Management Discussion & Analysis of the Corporation for the three months ended September 30, 2006.

Financial highlights for the three months ended September 30, 2006 include the following:

- On August 18, 2006, the Company completed a series of transactions including:

i) a private placement of 184,000,000 common shares at an issue price of $0.05 per common share, for gross proceeds of $9,200,000;

ii) the acquisition of all of the issued and outstanding securities of Zip411, a national database publisher and internet service provider based in Montreal, Quebec;

iii) the acquisition of all of the issued and outstanding securities of Offsite, a custom software development company located in Toronto, Ontario that had been providing system development services to the Company under a contract that was terminated immediately after the acquisition;

iv) the redemption of all outstanding Series A preference shares and settlement of payment of the redemption amount by the issuance of, 2,612,702 common shares of the Company at a deemed prices per common share ranging from $0.2135 to $0.5374 for each common share; and,

v) the settlement of $6,427,248 of outstanding debt by payment of $1,500,000 from the proceeds of the private placement and the issuance of common shares for $4,927,248 of the outstanding debt at deemed prices per common share ranging from $0.05 to $0.854.

All currencies are stated in Canadian dollars.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless an exemption from such registration is available.

About redCity Search Company Inc.

redCity Search Company Inc. (www.redcitysearch.com) operates local search engines that allow users to find local businesses quickly and easily across Canada . Its search sites include www.Zip411.net, www.redToronto.com, www.redMississauga.ca and 411Canada.com.

The Company compiles and maintains an up to date database of over 1 million Canadian business establishments that attracts more than 1.4 million unique visitors per month. The Company also supplies branch locator services to the Desjardins Credit Union movement, Laurentian Bank of Canada, the Rona hardware chain and other multi branch Canadian business organizations.

FORWARD-LOOKING STATEMENTS

This news release may contain forward-looking statements based on management's current projections, beliefs and opinions at the date of this news release. Actual results could differ materially from those anticipated in the statements due to risks and uncertainties which affect the Company's business and operations. Reference should be made to the Company's continuous disclosure documents filed from time to time with Canadian securities regulatory authorities for a detailed description of such risks and uncertainties. The Company takes no responsibility to update forward-looking statements if circumstances or management's projections, beliefs or opinions change.

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

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