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Item 2. Management's Discussion and Analysis or Plan of Operation.(Edgar Glimpses Via Acquire Media NewsEdge) Overview The following discussion and analysis of the operations, results, and financial position of IGEN Networks Corp. ("IGEN","We" or the "Company"), for the six months ended June 30, 2010 should be read in conjunction with the June 30, 2010 Financial Statements and the related Notes. These documents are available at www.edgar.com and www.sedar.com. The Company is traded on the Nasdaq OTC Exchange under the symbol IGEN. The effective date of this report is August 10, 2010. Corporate Organization The Company ("IGEN" or the "Company") was incorporated in the State of Nevada on November 14, 2006 under the name of Nurse Solutions Inc. On September 19, 2008 the Company changed its name to Sync2 Entertainment Corporation and traded under the symbol SYTO. On May 26, 2009, the Company changed its name to Igen Networks Corp. and in accordance with the name change, the Company's common stock has assigned 45172B 10 2 as its new Cusip number, and the Company's trading symbol was changed to IGEN effective June 30, 2009. IGEN Networks is in the business of providing high-speed Internet, Phone and Data services to rural communities in trade areas up to a radius of 30 miles from the main broadband connections, at a fraction of the cost of competing technologies. IGEN's licensed technology, developed by Machlink, uses near line-of-sight radio in the UHF band to deliver signals from the Company's radio masts to customer premises. The market for high-speed Internet has been proven as an essential part of education, social interaction, the delivery of goods and services (including government goods and services) and financial matters. It has become an essential part of the fabric of life for most Countries. The Company will compete on the basis of superior quality of service and superior technology in these mostly rural areas. The current network design is capable of offering download speeds of up to 12 Mbps (typically 7) and upload speeds of up to 1.5 Mbps. IGEN Networks Corp. aims to offer consumers a choice of 3 High Speed Internet, Voice and Data packages to suit various levels of service, from the very basic internet and voice requirements to heavy-use requirements. The Company's corporate offices are located at 119 North Henry Street, Alexandria, Virginia, 22314, phone (703) 684-5755. Its registered office address is 8430 West Lake Mead Boulevard, Suite 100, Las Vegas, NV, 89128 and the Company also has an office in Canada located at 18136 - 102 Avenue, Edmonton, Alberta, T5S 1S7, phone (780)-701-7360 or toll (866) 497-0286. The Company is also has offices in Honduras and Dominican Republic and is reviewing other global locations to service the build out of our distribution network. The Company's fiscal year end is December 31. Directors and Officers Robert Nealon - Chairman of the Board Mr. Nealon is the Principal Attorney in Nealon & Associates, P.C., a Washington, D.C. based law and government relations firm. He has been practicing law for twenty-seven years and has achieved an AV rating from Martindale-Hubbell, the leading rating bureau for the legal profession. Mr. Nealon has a B.A. from University of Rochester (1977) and M.B.A. from Rochester Institute of Technology (1978). He received his Juris Doctorate, magna cum laude, from the University of Bridgeport in 1982 and his Masters of Law in Taxation (L.L.M.) degree from Georgetown University in 1984. He is a member of the bar associations of New York State and Virginia, the American Bar Association and the Federal Bar Association. Mr. Nealon served as Adjunct Instructor of Corporate Law, George Washington University from 1985 until 2005. 2 --------------------------------------------------------------------------------Mr. Nealon has been lead counsel on hundreds of commercial trials, including multi-million dollar derivative action lawsuits, security fraud and government contract fraud. He has been counsel to hundreds of corporations, including insurance affinity marketing, manufacturing and multiple financial institutions. Mr. Nealon has been active over the years in national politics and government relations. Mr. Nealon was appointed to the Virginia Small Business Advisory Board by former Virginia Governor Warner and has been reappointed to this state board by Governor Kaine through 2010 as its Chairman. Mr. Nealon is also a current appointee to the George Mason University Advisory Board for the Institute for Conflict Analysis and Resolution in Arlington, Virginia. He currently sits on the Board of the Virginia Chamber of Commerce Small Business Committee and is a Director of the Alexandria Small Business Development Corporation. He is also an active member of the U.S. Chamber of Commerce and the Democratic National Club. Monty Ormsby, Director, President Mr. Ormsby has had a distinguished 40 year career in all areas of business real estate development, marketing and sales, and is licensed as a California real Estate Broker. Mr. Ormsby graduated from USC with a bachelor's degree and became a well known sports commentator in his early years in the LA region. He has also been extensively involved in many aspects of major construction projects, the film and entertainment industry and the thoroughbred racing industry, and has spent the last few years working on web based social networking for seniors. Mr. Ormsby has recently completed the development of the Senior NetworkTM, an expansive model for web-based delivery of services to seniors. Mr. Ormsby brings his experience in project financing, and business growth to assist the Board of Directors in establishing a business model for success. Richard Gilbertson, Director & CFO Richard Gilbertson is currently President of Caribbean Call Services, headquartered in La Ceiba, Honduras, Central America. He is also president and co-owner of Offices International, an international business development company, headquartered in Belize City, Belize, Central America. He has been involved for the past 35 years in various senior management and business development positions related to the acquisition and divestiture and valuation of operating businesses and real estate In recent years, Mr. Gilbertson has concentrated on activities in Latin America with public accounting firms, serving as Regional Manager of the International Division of Arthur Consulting Group, Inc. (formerly a division of Arthur D. Little, Inc.); Principal and Director (1984 to 1989) of Arthur Young & Company (now Ernst & Young). Prior to Arthur Young & Co., he was a valuation consultant for Stone & Webster. From 1974 to 1980 Mr. Gilbertson was vice president in charge of eastern operations with Valuation Research Corporation, a nationwide valuation-consulting firm. Mr. Gilbertson's involvement in Latin American business began in the mid-1980's through USAID sponsored privatization projects in Honduras. He later consulted on various privatization projects in El Salvador, Guatemala, Honduras and Trinidad. Mr. Gilbertson is a graduate of Northwestern University (Evanston, Illinois) with a BS in Business Administration (Finance) and an MBA in Marketing and Transportation. He is a retired Lt. Commander in the U.S. Navy. He will assume the position of CFO and corporate compliance from Michael Grudman, who will remain as a director of the Company 3 --------------------------------------------------------------------------------Chris Shade - Director Chris brings the experience to IGEN as we build out in rural Canada with his knowledge of the reserves across Canada and the need to have a sustainable telecommunications. Chris will be responsible for our Canadian rural build out. Chris was Chief of Blood Tribe for eight years also was Grand Chief of Treaty 7 for five years. Chris managed all the health facility and programs for his reserve and was the financial Comptroller for eight years. Chris's experience allows IGEN the opportunity to create a First Nations all encompassing communications platform that would be joint- ventured with IGEN. º 1986-1996 Senior Executive Officer Blood Tribe Department of Health Inc. º 1983 -1992 Consultant Self employed º 1975 -1983 Financial Comptroller Blood Tribe Administration º 1973-1975 Accountant Edmonton Power º Certified Management Accounting (4th Level) 1973-1975, Society of Industrial Accountants º Business Administration (Accounting) 1973 University of Alberta º Business Administration 1966 Lethbridge Community College º Canadian College of Health Service Executives 1995 Advisory Board Edward T. Guy, III, Ph.D. Edward is a recognized innovator, entrepreneur, and consultant with over 25 years of Internet and communications experience. He recently founded CleverSpoke, a mobile services provider. He also founded e*MC Software, a software services firm which enables emerging IP telephony technologies to be commercialized and brought to market. In this role, he was a founding team member and Chief Architect of Truphone, the first mobile VoIP provider, where he is a regular contributor. Ed also was founder and CTO of IPeerx, which was acquired by XConnect in 2006. He was CTO and Chief Scientist at pulver.com where he deployed the Free World Dialup, the largest open VoIP system of the time. His team developed and distributed softphones and provided Internet systems engineering for Bellcore (Telcordia) Technologies as they first entered the VoIP market. Ed has been awarded a patent in advanced communication techniques and has additional patents pending. He also authored two Internet Engineering Task Force (IETF) Internet RFCs. He started his career at Digital Equipment Corporation and General Electric and earned a Ph.D. in Computer Engineering from Syracuse University. Christopher Celiberti Chris is a communications industry leader and entrepreneur shaping strategies, technology, product and standardization of IP communications for wireline, mobile, and cable. Christopher is currently the Co-Founder and CEO of CleverSpoke, Inc., a Mobile Services Application Platform company. Before joining CleverSpoke, Christopher spent the past five years as a Director; Distinguished Member of the Technical Staff for NeuStar, Inc. Prior to NeuStar, he was on the founding team of Tello, Inc. and several other Pulver.com startups as well as an advisor at Open Media Labs and Parlerai. Christopher has also held key technology positions at EDS, Bellcore (Telcordia), Portal Software (Oracle) and other leading technology companies. He is a recognized industry standards participant and speaker. Christopher has earned a BS in Environmental Studies from Chadwick University, International Degree from University of California Berkeley in Computer Information Systems and completed MIT's Sloan School of Management's Product Design, Development and Management Executive Program. 4 --------------------------------------------------------------------------------Philip L. Gardner Philip will work advising IGEN on the international market for our systems and will be instrumental in assisting the Board in making sound intelligent decisions on expanding our presence globally. Currently he is president, CEO and Director of Advanced Applied Physics Solutions, Inc. UBC (Triumf) Vancouver, Canada. Mr. Gardner's career in Canada has included providing economic and financial advice to cabinet committees of governments and oil industry leaders. Recently, as senior commercialization executive at TRIUMF, Canada's National laboratory for research into sub-atomic physics, Mr. Gardner oversaw an increase in commercial revenues by twenty times their value, which resulted in the institution receiving several national awards for its commercial achievements. Mr. Gardner has held memberships and executive positions in a number of national and international professional organizations and is currently on the Board of Directors of several companies. He has published over fifty papers, several of which have been selected by international editors to be chapters in their published books. Carlos Eduardo Arzu Carlos, a native of Guatemala, Central America, holds a PhD, Sociology and Political Science from Universidad Pontificia de Salamanca, Madrid, Spain and both an MBA and B.S. Industrial Engineering from Universidad Rafael Landivar, Guatemala City, Guatemala. He spent 8 years in the U.S. Navy; enlisting as an Aviation Electronics Technician, achieving the rank of Lieutenant, J.G., serving as an Avionics Officer. Upon his return to Guatemala, Carlos held several senior governmental positions, including Consultant to the Ministry of Finance and Sub-Director of the Science, Technology and Natural Resources Division. He spent three years as the First Secretariat General of the Central American Parliament. Carlos worked in private industry as General Manager, Guatemala Communications Network, and General Manager, Moore Business Forms and Systems. He was also Professor of Sociology and Latin American Politics at Universidad Rafael Landivar. Carlos taught courses in the Colleges of Engineering (Industrial, Mechanical, and Civil), Economy (Business Administration and Marketing). Carlos will be responsible for assisting the IGEN Board in evaluating its Central America build out of new systems and related projects. Stephan M.M. Fijneman Stephan, a native of Holland, holds a Master of Security in Information Technology from Eindhoven University of Technology, Eindhoven, Netherlands. He will oversee our Honduran operations and office. Stephan has a firm background in electronic engineering, industrial hardware and software development, advanced test & measurement systems, computer systems and information security. He developed embedded systems for the semi-conductor industry (IBM, Siemens and their suppliers), designed analog/digital systems and developed software. He is also an expert in EMC (Electro Magnetic Compatibility) and conducted and supervised CE (Conformite Europeenne) certification for customer equipment and installations. He worked for I.P.D. in Germany, HAS (now Corus) and at Volker Stevin Rail & Traffic in Holland. Since 1998, Stephan has specialized in office automation. He gained thorough knowledge of Windows, HPUX and Solaris systems, while working in a variety of positions in security compliancy and intrusion testing. Stephan worked for the KIWA Institute, Fortis Bank, Clockwork (Internet), KLM Royal Dutch Airlines, ASZ/PinkRoccade (social security) and Swift (Society for Worldwide Interbank Financial Telecommunication). He speaks Dutch, English, German and Spanish. Intellectual Property On April 13, 2010, the Company entered into a memorandum of understanding for a distribution license with Machlink Inc. for rights to the existing business of providing high-speed broadband internet, phone and data services to communities through its patented noise-free cable architecture technology. Machlink is a company which distributes, licenses, and supports telecommunications service providers on a global basis Ultra High Frequency (UHF) spectrum domiciled wireless broadband systems. 5 --------------------------------------------------------------------------------Under the MOU, the Company proposed to acquire from Machlink the exclusive license to market and distribute the wireless broadband systems, to deliver wideband signals using near line-of-sight radio in the UHF band in all countries and global markets (with the exception of certain areas designated by Machlink), to be further defined in the license agreement. Under the terms of the MOU, the parties agreed to execute a distribution licensing agreement, and in consideration, IGEN Networks issued two million restricted common shares to Machlink, which would be released in accordance with the terms and conditions of the ensuing license agreement. On May 7, 2010, the Company signed an exclusive distribution license agreement with Machlink Inc. for rights to its existing patent pending and proprietary technology in wireless broadband Internet technology, pursuant to the MOU as referred to above. Machlink's unique technology, utilizing Ultra High Frequency ("UHF") spectrum, permits deployment of high-speed Internet, Phone and Data services to rural communities. The License Agreement is for a period of ten years and renewable in ten year terms thereafter. Under the license agreement IGEN has an exclusive license to sell, distribute, sub-license and market the License Units, License Services and Systems in all countries and global markets excluding: , Mexico, Spain, Belize, Bahamas, Cambodia, Thailand, Australia, Vietnam, Philippines, Indonesia, the countries in South America and the Ectel Countries of the SE Caribbean, utilizing Machlink's System, Platform and proprietary information. Canada, Europe, Africa and US systems will be marketed on a non-exclusive basis only. In consideration, the Company issued two million restricted shares on April 13, 2010 pertaining to the memorandum of understanding, which will be held in trust and released in six months from the signing of the May 7, 2010 License Agreement. During the six month hold period, IGEN has the option to pay $1 per share in lieu of release of the shares. Additionally the Company agreed to pay Machlink $400,000 on terms of $50,000 down, $50,000 in thirty days, extended to and paid on July 23, 2010, and the balance of $300,000 on or before ninety days of signing the License agreement. The terms also provide for $200,000 of the cash payments to be credited towards the cost of a new system, and the balance of $200,000 as further consideration pertaining to the agreement. Further, IGEN will pay a platform fee at the rate of 3% of gross revenue for any systems deployed through the efforts of IGEN. On March 30, 2010, the company signed a memorandum of understanding (MOU) with Bio Business Development Corp. International, Inc. (BBDC) to negotiate the acquisition of the exclusive global distribution rights to the patented lateral-flow diagnostic testing platform technology for rapid detection of the infectious prion protein diseases. Prion diseases are neuro-degenerative or "brain wasting" diseases with severe symptoms and are always fatal. Under the terms of the MOU, the parties agreed to execute a distribution licensing agreement, and IGEN Networks issued three million restricted common shares to BBDC to be released in accordance with the terms and conditions of the ensuing license agreement. On May 25, 2010, the parties determined they would not proceed in negotiating a mutually beneficial license agreement and the MOU was terminated. IGEN cancelled and returned to treasury, the 3,000,000 restricted common shares originally issued to Bio Business Development Corp. International Inc. and held in-trust, pertaining to the memorandum of understanding regarding the acquisition of rights to intellectual property. The $3,000 par value recording and offsetting amount in additional paid-in capital was reversed. 6 -------------------------------------------------------------------------------- Results of Operations - IGEN Networks Corp. Six months ended June 30, 2010 During the six months ended June 30, 2010 the Company recorded a net loss of $1,555,517 as compared to a net loss of $297,203 for the six months ended June 30, 2009, for an increase in net losses of $1,258,314. The net loss represents $0.22 per common share (June 2009 - $0.35 loss per share). The Company incurred $1,555,517 in expenses which consist of: consulting fees of $869,0001 (2009 - $217,500), management fees of $610,5002(2009 - $Nil), professional fees of $29,842 (2009 - $47,500), Transfer agent and filing fees of $16,534, travel and accommodation of $16,246 and general administrative of $13,395. The Company has not yet generated any revenues and our ability to expand and develop its intellectual properties is dependent, in large part, upon our raising additional equity financing Liquidity and Capital Resources As of June 30, 2010, IGEN had total liabilities of $82,313, which are all current liabilities, and is a decrease of $273,061 as compared to $355,374 liabilities recorded at December 31, 2009. The decrease in liabilities is due primarily to the reduction in accounts payable and accrued liabilities by issuance of shares in settlement of $195,000 and payment of $160,374. The Company also received $75,737 in shareholder's loans during the six months ended June 30, 2010. The Company's total assets at June 30, 2010, consisted of $5,955 in current assets and $1,350,000 in capital assets. The current assets are comprised of cash, which increased by $5,922 from $33 as at December 31, 2009. The capital assets consist $1,350,000 in technology license rights which includes the initial $50,000 cash payment and the issuance of 2,000,000 common shares at $0.65 per share. The Company had a working capital deficiency of $76,358 at June 30, 2010 compared to a working capital deficiency of $355,341 as of December 31, 2009. The improvement of $278,983 in the working capital deficiency is due primarily to the issuance of common stock for the subscription of $210,000 and the settlement of $195,000 of current liabilities. The Company's cash inflow has been generated mainly from the subscription of common stock and shareholder loans since inception. Subsequent to the period ended June 30, 2010, the Company received $150,000 on July 22, 2010 as a shareholder loan. The Company has utilized these funds to facilitate the second licence agreement payment with Machlink, pay down a significant portion of its liabilities and maintain cash for working capital requirements. Management continually reviews its overall capital and funding needs to ensure that the capital base can support the estimated needs of the business. These reviews take into account current business needs as well as the Company's future capital requirements. Based upon these reviews, to take advantage of strong market conditions and to fully implement our expansion strategy, management believes that the Company will continue to increase our net capital through the proceeds from sales of our securities. In the past, the Company has maintained minimal cash balances which were generally funded by management and shareholder loans to satisfy monthly cash requirements in the interim of raising external funding. The Company will undertake issuance of private placements of its securities to facilitate expansion in its development phase and maintain commitments under its license agreement. There is no assurance that the Company will be able to obtain additional funding through the sales of additional shares or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company. It is the intent of management and controlling shareholders to generate sufficient working capital necessary to support and preserve the integrity of the corporate entity. 71 The consulting fees of $869,000 consist of the issuance of 2,650,000 shares to consultants and advisors of the Company 2 The management fees of $610,500 consist of the issuance of 1,300,000 shares to directors and officers of the Company -------------------------------------------------------------------------------- Forward-Looking Statements From time to time, the Company may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause a deviation or divergence from the anticipated results or expectations contained in the forward looking statements and the Company's actual results. The risks and uncertainties that may affect the operations, performance, development and results of the Company's business include but are not limited to the following: lack of operating capital, revenue and capital resources; reliance upon joint venture members to provide technical and financial expertise to operations; the ability of the Company to access an economically viable energy deposit; the ability of the Company to recover natural resources, if found, and to deliver them to a refiner or distributor in an economically viable manner. |