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ANAHEIM, Calif., Sept. 4 /PRNewswire-FirstCall/ -- RG Global
(OTC Bulletin Board: RGBL) (http://www.rgglife.com) management announced today
that it is modifying its business structure to facilitate growth and increase
profitability from its patented coal bed methane water treatment technology.
The company is projecting to turn the corner to profitability in the fiscal
fourth quarter ending March 31, 2009. The company also announced that it wants
to sell its interest in the OC Energy(TM) beverage line in order to focus its
resources on solidifying and growing its Catalyx Fluid Solutions (CFS) water
treatment business.
Transition to licensing/royalties model
RG Global generates the majority of its revenue from its CFS water
treatment business -- primarily from its plant in Wyoming that treats produced
water from coal bed methane (CBM) wells. RG Global is rapidly transitioning
from a build/own/operate (B/O/O) business model for its water treatment
plants, to having the customer or a third party own the water treatment plants
and pay RG Global licensing fees and royalties for the use of its patented
water treatment technologies.
"By licensing our technology for CBM water treatment, rather than owning
or operating the plants, RG Global will be able to make its technology
available for more plants in a shorter time span without having to raise the
capital and incur stock dilution to build/own/operate the plants," said Grant
King, RG Global CEO.
Projecting profitability
King stated, "We make the greatest margin on the licensing of our water
treatment technology. By reducing overhead related to the ownership of the
plant, we expect to turn the corner to profitability for our water treatment
business for the quarter ending March 31, 2009."
With the transition to the licensing and royalties model, RG Global's
revenue per barrel will be less than under the B/O/O model, but the company
anticipates that expenses will greatly decrease and profit margins on the
revenues will increase significantly.
RG Global's first plant commenced production in late April 2008 and the
technology is working well. However extreme rainfall in May, June and July
raised groundwater and regen pond levels to the point where production had to
slow or cease to prevent overflowing the pond, resulting in substantially
decreased revenue for the period. Prices quadrupled for sulfuric acid used in
CBM water treatment, due to dramatically increased demand related to ethanol
production, and also caused hiccups in the acid supply chain, slowing plant
production in June, July and August. RG Global's planned transition to a
licensing/royalties model and other steps it has taken are expected to remedy
this situation and eliminate the impact the commodity pricing has on its
operations.
RG Global has received funding from several large shareholders in exchange
for equity to tide the company over until it reaches profitability.
"We believe raising funds from 'friendly hands' gives us far more control
and much more favorable terms than we would get from VCs or investment
bankers," King stated. "We are very excited about the prospect of turning the
corner to profitability in the near future and ending our dependence on
outside funding."
Seeking to sell OC Energy
"Our OC Energy beverage line does not fit within our core business of
water treatment and purification technologies, so we are looking to sell our
76% shareholding in it or its assets," said King. "The beverage business is
vastly different from water treatment and requires an entirely different set
of resources. While OC Energy's signature formula, packaging, branding and
television tie-ins give it great potential for success, we believe that others
with greater financial resources and a focus on beverage marketing will be
better able to fully exploit its potential in the energy drink sector and
bring it to profitability."
He concluded, "By focusing all our resources on water treatment
technologies, we believe potential customers and the investment community will
more easily understand our business and more readily embrace our business
model and product offering. We believe our new water treatment business model
and our projected improved financials will make RG Global very appealing to
the investment community."
About RG Global
RG Global Lifestyles, Inc. develops and markets innovative technologies
for water purification and wastewater treatment. Major energy production
companies have selected RG's proven CFS technology to economically treat coal
bed methane wastewater, making production of this plentiful, clean-burning gas
more economically feasible and environmentally friendly. RG manufactures OC
Energy(TM) brand energy drinks that boast a proprietary energy pack, natural
vitamins and low sugar levels to intensify alertness without the typical
crash. RG's Aquair(TM) atmospheric water generators produce purified water
from air -- the ideal solution for military troops, disaster and
drought-stricken areas and situations where drinkable water isn't easily
accessible. For more information, visit http://www.rgglife.com.
Safe Harbor Statement
The statements contained herein that are not historical are
forward-looking statements that are subject to risks and uncertainties that
could cause actual results to differ materially from those expressed in the
forward-looking statements, including, but not limited to, risks associated
with water generation products, risks associated with dependence on third
parties, and other risks identified from time to time in the Company's reports
and registration statements filed with the Securities and Exchange Commission.
All forward-looking statements attributable to the Company, or persons acting
for the Company, are expressly qualified in their entirety by these cautionary
statements.
Contact: Julie Shepherd, Accentuate PR, (815) 479 1833,
Julie@accentuatepr.com
Existing and potential shareholders who wish to receive email notification
of RG Global's company news should send an email to Julie@accentuatepr.com
with "RGBL Email Updates" in the subject line.
SOURCE RG Global Lifestyles, Inc.
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