RG Global Reports Second Quarter Fiscal 2008 Financial Results: Revenues Increase
November 21 2007RANCHO SANTA MARGARITA, CA – November 20, 2007 –RG Global (OTCBB: RGBL) posted the second consecutive quarter of increased revenues after its major corporate strategy change effected in fiscal 2007. In the quarter ended September 30, 2007, RG Global generated revenues of $537,600 compared to $0 (as restated) in the comparable quarter ended September 30, 2006.
SEPTMEMBER 30, 2007 QUARTER HIGHLIGHTS:
· Second consecutive quarter of revenue growth with new corporate strategy/product lines
· Physical construction commences for first CBM water treatment plant in Wyoming.
· Business partnership formed with Rimón Ltd. for turnkey manufacture of components for water treatment plant.
· Transferred 24% ownership of OC Energy Drinks subsidiary to three individuals for transfer of OC Energy Drink related assets, and development and marketing services for OC Energy.
During the quarter ended September 30, 2007 (Q2 2007): Gross profit was $46,100 compared to gross loss of ($58,600) in Q2 2006, an increase of $104,700. During the second quarter of fiscal 2007, a significant portion of the cost of revenues was related to CBM water treatment plant being constructed for a customer in Wyoming.
Total operating expenses were $1,301,200 for the quarter ended September 30, 2007 compared to $565,500 in the comparable fiscal 2006 quarter. RG’s rents paid decreased by $51,900, and its legal and accounting fees increased to $270,000 versus $134,400 in the comparable quarter.
Other income for the quarter ended September 30, 2007 was $2,956,500 versus a loss of $(2,793,200) for the comparable quarter in 2006. The increase in other income during the quarter ended September 30, 2007 was directly attributed to a change in the fair value of warrants issued in connection with convertible notes and the fair value of the beneficial conversion feature of the secured convertible notes. During the quarters ended September 30, 2007 and 2006, change in the fair value of derivative liabilities were $3,588,421 and ($1,968,960), respectively.
The net profit for the second quarter of fiscal 2007 was $1,720,100 versus a net loss of ($3,417,300) for the comparable 2006 quarter. Net profit was $.06 per share compared to a net loss of $(0.19) for the second quarter of fiscal 2006.
“RG Global is poised for rapid growth in the coming months as it begins to realize the benefits of its investments in its new corporate strategy and product lines,” said Grant King, CEO of RG Global. “Our CTO Juzer Jangbarwala and his team are making great progress on our Catalyx coal bed methane (CBM) water treatment business. Since establishing a business partnership with Rimón Ltd during the second quarter, they have completed manufacturing of the components for our first Catalyx CBM water treatment plant and installation of the components is expected to begin shortly. We anticipate that our water treatment plant for Yates Petroleum will be operational in January 2008 as scheduled. When water treatment production commences, we expect revenue to increase dramatically and produce a consistent and ongoing revenue stream that will increase as the scaleable production in the plant increases to its full capacity and more plants are constructed and operational.” King noted, “In late October, Juzer conducted a workshop on CBM water treatment technologies that was very well received by the energy companies, environmental engineers and government representatives in attendance. Many expressed a keen interest in our Catalyx solution and are anxious to see the Wyoming plant in operation. Our Catalyx solution offers a very cost effection option to solve the water treatment issues that have stymied growth for all the coal bed methane production companies in the U.S. thus far. With the increased global attention being focused on unconventional fuels, particularly coal bed methane, we believe our Catalyx technology’s potential is virtually unlimited.”
“Additionally, our new partnership with Rimón offers some exciting possibilities for the future,” King said. “Rimón and RG Global are exploring the possibility of using our Catalyx technology for other water treatment projects Rimón is involved in.”
King added, “We’re excited about the growing momentum of our OC Energy Drink subsidiary as well. During the quarter we transferred 24% ownership in OC Energy to three individuals for their services to development, operate and market OC Energy. The new season of Bravo TV’s “Real Housewives of Orange County,” which features three of our OC Angels spokespeople as regulars, aired the first new episodes in November and included extensive coverage of the OC Angels in their OC Energy promotional appearances. The exposure was invaluable and prompted dozens of calls from distributors interested in carrying our product. With Fusion, we are currently pursuing additional distribution contracts for OC Energy as well as coordinating numerous promotional campaigns to increase OC Energy’s visibility. As our distribution expands to new markets, we anticipate a corresponding growth in product sales and revenue.”
“We are dedicated to growing shareholder value and turning the corner to profitability within the next calendar year as we grow sales and revenues from both businesses,” King concluded.
RG Global’s 10-QSB financial results can be viewed in their entirety at www.sec.gov.
RG Global's primary source of revenues was sales of its water treatment technology which accounted for $469,100. The remaining revenues were derived from sales of OC Energy™ brand beverages, as compared with no revenues for Q2 2006. The increase in revenues related to the continuation of sales of water treatment technology and the commencement of sales of the Company’s energy drink products.