redCity Search Company Inc.
TSX VENTURE : RDC

redCity Search Company Inc.

November 01, 2006 09:24 ET

redCity Search Company Inc. Reports Year End Results for Fiscal 2006 and Announces Grant of Stock Options

TORONTO, ONTARIO--(CCNMatthews - Nov. 1, 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 year ended June 30, 2006.

Net revenues increased by $3,664,070 to $4,027,674 for the fifteen months ended June 30, 2006 compared to $363,604 for the twelve months ended March 31, 2005. Net revenues decreased by $17,011 to $575,901 for the three months ended June 30, 2006 compared to $592,912 for the same period in 2005.

The changes in revenues for the three months ended June 30, 2006 compared to the same period in 2005 consists of an increase in cash revenues of $139,449 and a decrease in barter denominated revenues of $156,500. This decrease in barter denominated revenues is consistent with the Company's decision in November 2005 to cease selling barter denominated contracts on four of the six barter networks in which it had membership.

Net loss from continuing operations for the fifteen months ended June 30, 2006 was $5,038,571, or $0.19 per common share, compared to $2,833,023, or $0.24 per common share, for the twelve months ended March 31, 2005. Net loss from continuing operations for the three months ended June 30, 2006 was $1,099,040 or $0.04 per weighted common share compared to $1,233,781 or $0.06 per weighted common share for the same period in 2005.

A detailed discussion of liquidity and capital resources is contained in "Subsequent Events" in the Management Discussion & Analysis of Financial Condition and Results of Operations for the year ended June 30, 2006.

Highlights include the following:

During the fifteen months ended June 30, 2006:

- Effective August 22, 2005, redCity was formed upon the amalgamation of Red Media Corp. and First One Capital Inc., resulting in the Company becoming a reporting issuer under the securities laws of Ontario, Alberta and British Columbia and a listed issuer on the TSX Venture Exchange.

- In December 2005 and February 2006, redCity completed a non-brokered private placement of 3,410,000 units, at a price of $0.25 per unit, for gross proceeds of $852,500.

- On March 10, 2006, redCity purchased the Canadian Internet properties "411Canada.com" and "411Canada.ca" from Great Exposure Inc. for a total purchase price of $90,600.

Subsequent to June 30, 2006:

- On August 18, 2006, the Company completed a series of transactions including (i) a private placement of 184,000,000 common shares, at $0.05 per share, for gross proceeds of $9,200,000, (ii) the acquisition of all of the issued and outstanding securities of Zip411 Enterprises Inc., (iii) the settlement of $6,427,248 of outstanding debt by payment of $1,500,000 cash 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 share ranging from $0.05 to $0.854.

- On September 28, 2006, Elaine Kunda joined the Company assuming the role of President and Chief Executive Officer.

In addition, the Company announces that 10,417,813 options have been granted to Elaine Kunda, President and Chief Executive Officer, effective October 26, 2006. The option exercise price is $0.10 per common share, and the options expire five years from the date of grant in accordance with redCity's stock option plan. The grant of the options to Ms. Kunda, and proposed amendments to redCity's stock option plan, are subject to shareholder and regulatory approval, including approval of the TSX Venture Exchange.

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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