RGS Energy (RGSE) Provides Business Update

RGS Energy (NASDAQ: RGSE), a residential and small commercial solar company since 1978, provided a business update following its recently completed offerings that raised total net proceeds of $16.0 million. The company reported updated pro forma unaudited results that include the additional capital and debt repayments as if completed on December 31, 2016.

“Since our last business update, we successfully took advantage of capital market opportunities and raised additional financial capital,” said Dennis Lacey, CEO of RGS Energy. “As planned, we are now Nasdaq compliant. We also have a much stronger balance sheet which is debt-free. Our focus is on executing our growth strategy. For this purpose, we have recently expanded our sales organization, including our on the ground field sales teams and our call center based sales team. We will continue to expand our sales organization this year. Additionally, we are currently competing for solarize programs across the East Coast.”

“Last year, our financial position made it challenging to win solarize programs,” added Lacey. “This year, however, we expect that our much stronger financial position will enable us to be the chosen installer for solarize programs.”

Preliminary Fourth Quarter Results and Pro Forma The following unaudited preliminary results are subject to the completion of RGS Energy’s quarterly closing and review procedures, as well as the regular annual audit by the company’s independent registered public accounting firm. These results are therefore subject to change. RGS Energy plans to file its 2016 annual report on Form 10-K in the second week of March.

The pro forma results below present the company’s balance sheet as if the net proceeds of the $16.0 million raised last week and the debt repayments made in January were completed on December 31, 2016.

Nasdaq ComplianceAs previously reported on Form 8-Ks, the Company received notification from Nasdaq that it is in compliance with (i) the minimum trading price of $1.00 a share and (ii) the minimum stockholders’ equity requirement of $2.5 million and will be monitored by Nasdaq for the next 12 months for maintaining stockholders’ equity of at least $2.5 million.

Repayment in Full of Revolving Line of Credit FacilityAs previously reported on Form 8-K, the company repaid in full its revolving line of credit facility and terminated the revolving line of credit facility and a supply agreement with the lender in February 2017.

“With our level of cash and working capital, there is no reason for a revolving line of credit facility,” said Alan Fine, Principal Financial Officer and Treasurer of RGS Energy. “We also terminated the related supply agreement with the lender which by elimination of the lender’s mark-up, will allow us to purchase materials at a lower price, which is beneficial for our gross margin percentage.”

Upcoming Investor ConferenceRGS Energy plans to present and participate in one-on-one meetings at the 29th Annual Roth Conference being held on March 13-15, 2017 at The Ritz-Carlton in Dana Point, California. Management will discuss the company’s growth strategy, including expanding its sales organization and national footprint. The company’s presentation date and time will be announced when available.

This conference will feature presentations from hundreds of growth companies, Q&A sessions, expert panels and thousands of management one-on-one / small group meetings, and is one of the largest of its kind in the U.S. This event is designed to provide investors with a unique opportunity to gain insight into emerging growth companies across a variety of sectors including: Cleantech, Consumer & Retail, Energy & Industrial, Enterprise Software, Healthcare, Resources, Semiconductors & Electronics, Services and Technology & Media.

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