UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549
                                   ----------

                                   FORM 10-KSB/A

(Mark One)

|X|   ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934

                   For the fiscal year ended December 31, 2005

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

    For the transition period from ________________ to _____________________

                         Commission File Number 0-26843


                                RG America, Inc.
                 ----------------------------------------------
                 (Name of Small Business Issuer in Its Charter)


          Nevada                                                 75-2823489
          ------                                                 ----------
(State or Other Jurisdiction of                              (I.R.S. Employer
of Incorporation or Organization)                            Identification No.)


1507 Capital Avenue, Suite 101, Plano, Texas                       75074
-----------------------------------------------              ------------------
  (Address of Principal Executive Offices)                      (Zip Code)


                                     (972) 919-4774
                   -----------------------------------------------
                   (Issuer's Telephone Number, Including Area Code)


Securities registered under Section 12(b) of the Exchange Act:

Title of Each Class                   Name of Each Exchange on Which Registered
-------------------                   -----------------------------------------
     None                                            None

Securities registered under Section 12(g) of the Exchange Act:

                    Common Stock, $0.001 Par Value Per Share
                    ----------------------------------------
                                (Title of Class)

      Check whether the issuer is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act.                                     |_|

      Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
                                                                  Yes |X| No |_|


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<PAGE>

      Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.                                        |_|

      Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).                       Yes |_| No |X|

      State issuer's revenues for its most recent fiscal year.  $ 20,624,443

      As of March 23, 2006, the aggregate market value of our common stock,
$0.001 par value, held by non-affiliates was approximately $10,273,652
(14,889,351 shares at $0.69 per share, which was the last reported sales price
of the Company's common stock on the Over the Counter Bulletin Board for such
date). (See definition of affiliate in Rule 12b-2 of the Exchange Act.)

      As of March 23, 2006, there were 26,457,637 shares of our common stock
issued and outstanding. Additionally, there were 4,246,532 shares authorized for
issuance but not yet issued as of March 23, 2006.

      Transitional Small Business Disclosure Format (check one):  Yes |_| No |X|


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<PAGE>

                                TABLE OF CONTENTS

PART I

Item 1.           Description of Business
Item 2.           Description of Property
Item 3.           Legal Proceedings
Item 4.           Submission of Matters to a Vote of Security Holders

PART II

Item 5.           Market for Common Equity, Related Stockholder Matters and
                  Small Business  Issuer  Purchases of
                    Equity Securities
Item 6.           Management's Discussion and Analysis or Plan of Operation
Item 7.           Financial Statements
Item 8.           Changes in and Disagreements with Accountants on Accounting
                    and Financial Disclosure
Item 8A.          Controls and Procedures
Item 8B.          Other Information

PART III

Item 9.           Directors, Executive Officers, Promoters and Control Persons;
                  Compliance with Section 16(a) of the Exchange Act
Item 10.          Executive Compensation
Item 11.          Security Ownership of Certain Beneficial Owners and Management
                    and  Related Stockholder Matters
Item 12.          Certain Relationships and Related Transactions
Item 13.          Exhibits
Item 14.          Principal Accountant Fees and Services

SIGNATURES

EXHIBITS


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                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this Annual Report contains statements
that plan for or anticipate the future, including without limitation statements
under the captions "Description of Business," "Risk Factors" and "Management's
Discussion and Analysis or Plan of Operation." These forward-looking statements
include statements about our future business plans and strategies, future
actions, future performance, costs and expenses, interest rates, outcome of
contingencies, financial condition, results of operations, liquidity, objectives
of management, and other such matters, as well as certain projections and
business trends, and most other statements that are not historical in nature,
that are "forward-looking" within the meaning of the Private Securities
Litigation Reform Act of 1995.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking information to encourage companies to provide prospective
information about themselves without fear of litigation so long as that
information is identified as forward-looking and is accompanied by meaningful
cautionary statements identifying important factors that could cause actual
results to differ materially from those projected in the information.
Forward-looking information may be included in this Annual Report or may be
incorporated by reference from other documents we have filed with the Securities
and Exchange Commission (the "SEC"). You can identify these forward-looking
statements by the use of words like "may," "will," "could," "should," "project,"
"believe," "anticipate," "expect," "plan," "estimate," "forecast," "potential,"
"intend," "continue" and variations of these words or comparable words.
Forward-looking statements do not guarantee future performance, and because
forward-looking statements involve future risks and uncertainties, there are
factors that could cause actual results to differ materially from those
expressed or implied. These risks and uncertainties include, without limitation,
those described under "RISK FACTORS" beginning on page 15 of this Annual Report
and those detailed from time to time in our filings with the SEC.

We have based the forward-looking statements relating to our operations on
management's current expectations, estimates, and projections about us and the
industry in which we operate. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that we cannot
predict. In particular, we have based many of these forward-looking statements
on assumptions about future events that may prove to be inaccurate. Because
forward-looking statements involve future risks and uncertainties, there are
factors that could cause actual results to differ materially from those
anticipated by these forward-looking statements. For example, a few of the
uncertainties that could affect the accuracy of forward-looking statements
include:

      o     Changes in general economic and business conditions affecting us;

      o     Changes in the assumptions used in making forward-looking
            statements;

      o     Legal or policy developments that diminish our appeal;

      o     Changes in our business strategies;

      o     Our limited operating history;

      o     The degree and nature of our competition;

      o     Our ability to employ and retain qualified employees; and

      o     The other factors referenced in this Annual Report, including
            without limitation, under the captions "Description of Business,"
            "Risk Factors" and "Management's Discussion and Analysis or Plan of
            Operation."

These risks are not exhaustive. Other sections of this Annual Report include
additional factors which could adversely impact our business and financial
performance. Moreover, we operate in a competitive and changing environment. New
risk factors emerge from time to time and it is not possible for our management
to predict all risk factors, nor can we assess the impact of all factors on our
business or to the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any
forward-looking statements. Given these risks and uncertainties, we caution you
not to place undue reliance on forward-looking statements as a prediction of
actual results. All forward-looking statements are made only as of the date of
this Annual Report. Except for our ongoing obligation to disclose material
information as required by federal securities laws, we do not intend to update
you concerning any future revisions to any forward-looking statements to reflect
events or circumstances occurring after the date of this Annual Report. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information or future events.


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<PAGE>

                                     PART I

Registrant is filing this Form 10-KSB/A to add non-material disclosure items
inadvertently excluded from our Form 10-KSB filing. None of the additional
disclosure items reduce or adjust earnings as originally reported.


Item 1. Description of Business.

                            OUR BUSINESS DEVELOPMENT

RG America, Inc. ("we," "us," "our" or "the Company"), a Nevada corporation
formerly known as Invvision Capital, Inc., is a publicly-traded company (OTCBB:
RGMI.OB) that provides a broad array of fee-based services that address clients'
risk management needs for their real estate assets. This is accomplished by
addressing procedures and costs associated with the risk of a possible loss such
as loss control activities and purchasing traditional insurance products. We
also address the consequences of a loss after it has occurred by adjusting
claims, restoring property and minimizing business interruption costs.

We were incorporated in May 1998 under the name "Asset Servicing Corporation."
On July 10, 2000, we merged with ParkPass.com, Inc. and changed our name to
"Omni ParkPass, Inc." On April 28, 2001, we acquired all of the outstanding
shares of Invvision Capital, Inc., a Texas corporation, and changed our name to
"Invvision Capital, Inc." In August 2002, after a series of sales of our active
business lines, we became an inactive publicly-held corporation. From August
2002 through November 2003, we remained an inactive publicly-held corporation
pursuing business ventures with a privately-held company in the commercial and
industrial real estate business.

Effective as of December 30, 2003, we acquired all of the capital stock of
Restoration Group America 2003, Inc. ("RGA 2003"), which holds the intellectual
property rights to PropertySMART(R) and its wholly-owned subsidiaries: (a) RG
Insurance Services, Inc. ("RGIS"), which is a general insurance agency; (b) RG
Risk Management, Inc. ("RGRM"), which is engaged in the business of providing
claims management services; (c) RG Restoration, Inc., also known as "The
Restoration Group" ("TRG"), which is engaged in the business of performing
commercial property insurance restoration services; and (d) Restoration Group
America, Inc. ("RGAI"), which held employment contracts with Key Management.
Restoration Group America 2003 holds the IP. Restoration Group America, Inc.
holds the employees. All of the foregoing entities are Texas corporations, and
RGIS, RGRM, TRG and RGAI are now our indirect wholly-owned subsidiaries.

We were a development stage company through December 31, 2003. As a result of
the acquisition of RGA 2003, as discussed above, we became an operating entity
as of January 1, 2004 and are no longer in the development stage.

In August 2004, our stockholders approved the change of our name from "Invvision
Capital, Inc." to our current name, "RG America, Inc." Information about us can
also be found on our website at www.rgamerica.com.

On August 10, 2004, we acquired all of the common stock of Practical Business
Solutions 2000, Inc. ("PBS 2000"). The aggregate purchase price was $350,000,
which payment consisted of 166,667 restricted shares of our common stock. The
terms included (i) an agreement by the stockholders of PBS 2000 to escrow 55,555
shares of our common stock for a period of two years to satisfy certain
potential indemnifiable claims; and (ii) an agreement granting piggyback
registration rights for the resale of 5,850 of the purchase consideration
shares.

On December 16, 2004, we determined that as a result of a material impairment of
PBS 2000, we would wind down and close the PBS 2000 operation. As a result of
the loss of the key employee as related to PBS 2000, its valuation was
significantly impaired and the entire goodwill recorded from the acquisition of
PBS 2000 in the amount of $401,033 was recorded as an Impairment of Goodwill in
the Consolidated Statement of Operations for the year ended December 31, 2004.
Additionally, PBS 2000's net book assets of $144,661 were written off and
charged to Impairment of Subsidiary in the Consolidated Statement of Operations
for the year ended December 31, 2004.

On March 16, 2005, 55,556 shares of our common stock held in escrow related to
the acquisition of PBS 2000 were cancelled as a result of failed negotiations
with previous owners. This transaction was recorded as a recovery of impairment
of $116,669 in the first quarter of 2005 as reflected in the accompanying
Consolidated Statement of Operations for the year ended December 31, 2005.


                                       5
<PAGE>

On October 12, 2005, RGA 2003 acquired all of the common stock of Total
Professional Restoration, Inc. from Mr. Jerod Yates. The aggregate purchase
price was $750,000 plus an option to Mr. Yates to convert our outstanding debt
to Mr. Yates into restricted stock as described below. In addition to the
$750,000 purchase price, which was paid by the issuance of 1,875,000 restricted
shares of our common stock, based upon a price of $0.40 per share, which
restricted shares will vest ratably to Mr. Yates over five years of employment
with RGA 2003, we also granted to Mr. Yates, at his sole option, an option to
convert our outstanding debt to the seller into restricted shares of our common
stock based upon a price of $0.30 per share. The option period expired on
January 10, 2006 without being exercised and we have paid this debt in cash.
However, since the fair market value of our common stock was $0.45 per share as
determined by recent private offerings of stock, we recorded the purchase price
at $843,750. When recording this transaction, $843,750 was recorded as deferred
compensation and will be amortized over Mr. Yates' five year employment
agreement with RGA 2003. Also on October 12, 2005, in connection with the
acquisition of Total Professional Restoration, Inc., we entered into an
employment agreement with Mr. Yates.

For a description of certain recent developments to our business, please refer
to "Item 6. Management's Discussion and Analysis or Plan of Operation - RECENT
DEVELOPMENTS" beginning on page 23 of this Annual Report.


                                       6
<PAGE>

                                  OUR COMPANIES

Financial Services Division

RG Insurance Services, Inc ("RGIS").

      Retail-

      o     RGIS is a Texas-based agency licensed to operate as a full lines
            general insurance agency.

      o     RGIS is a multi-lines general agency licensed to write property,
            casualty and employee benefits coverage.

      o     RGIS will serve as the lead retail agent for our PropertySMART(R)
            insurance program as described below.

      o     RGIS will continue to grow both commercial and personal insurance
            business lines and non- PropertySMART(R) business lines, and expand
            existing relationships.

      Wholesale-

      o     We are in the process of investigating other highly rated carriers
            to front our PropertySMART(R) program and to be the administrator
            and underwriter for PropertySMART(R).

RG Financial Services ("RGFS")

      o     RGFS intends to market credit and financial products for owners,
            managers and tenants with a target market of approximately 38
            million residential rental units in North America.

Insurance Restoration Services Division

RG Risk Management, Inc. ("RGRM")

      o     RGRM provides claims management, inspection and underwriting
            services, administers our loss prevention program and supports our
            PropertySMART(R) program by performing all of these services for the
            client.

      o     Our goal is to lower the incidence of loss and thereby lower premium
            rates upon renewal. We have created a comprehensive risk avoidance
            guide developed by our in-house professional, certified arson
            investigator with a Masters degree in fire safety.

RG Restoration, Inc., d/b/a The Restoration Group ("TRG")

      o     TRG performs restoration, remediation, construction and construction
            management on all property types, but specializes in garden style
            multi-family and high rise condo and other commercial properties
            that have suffered an insured loss such as fire, flood, hurricane,
            wind or hail damage.

      o     TRG chooses whether to perform work as the contractor on each
            project or as a construction manager, earning management fees. TRG
            will also manage all PropertySMART(R) losses.

      o     TRG will work both for PropertySMART(R) policy holders as well as on
            losses outside the program.

      o     TRG has focused primarily on hurricane insurance restoration in
            recent years and continues to work on restoration projects from
            hurricanes Katrina, Rita and Wilma.

RG Roofing, Inc. ("RGR")

      o     RGR provides both full and emergency roofing restoration and
            re-construction of condo, multi-family, single family and commercial
            real estate properties that have suffered an insurance loss and are
            in need of repair or replacement.

      o     RGR's roofing team has significant experience in all forms of
            roofing, from traditional composite shingle to metal, flat and
            high-rise roof structures.

      o     RGRI also provides us with more flexibility to work on multiple
            stages of numerous restoration projects at the same time.


                                       7
<PAGE>

Additional Companies

The following subsidiaries support our primary business lines:

      o     CTFD, Inc. - Rental of construction, site remediation and
            restoration equipment.

      o     CTFD Marine, Inc. - Ownership of a marine equipment.

      o     Urban Logic, Inc. - Non-operating entity.

      o     RG Florida GC, Inc. - General contractor entity for Florida
            operations.

      o     RG Florida SC, Inc. - Subcontractor entity for Florida operations.

      o     Invvision Funding Inc. - Non-operating entity.

      o     RG Industries, Inc. - Non-operating entity.

      o     RG Roofing, Inc. - Roofing contractor

      o     Practical Business Solutions 2000, Inc. - Non-operating entity.

      o     Restoration Group America, 2003, Inc. - holding company for
            Intellectual Property.

      o     Restoration Group America, Inc. - holding company for employees,
            payroll, rents and overhead.

      o     Total Professional Restoration, Inc. d/b/a Remediation Group -
            remediation contractor.


                                       8
<PAGE>

                                  OUR BUSINESS

We focus on two main lines of business: (1) insurance restoration services and
(2) financial services which are detailed below:

Insurance Restoration Services Division "Restoration Group"

Recovery

The recovery division's licensed insurance adjusters address our client's
immediate questions and concerns about their insurance loss. Immediately after a
loss, we begin assisting them by examining their policy to analyze any coverage
questions and establish a professional line of communication with the insurance
company's representative. Our in-house adjusters prepare an independent estimate
and establish an agreed scope of the damage to present in the insurance claim
package to the insurance company's adjuster in a familiar format, all in an
effort to maximize our client's interests within the policy and settle the
claim.

Remediation

The remediation division provides immediate response to handle all forms of
fire, smoke and water restoration, from emergency clean up, demolition and board
to-up water extraction, drying and dehumidification. As a licensed and
authorized mold remediation company, our personnel are fully trained to provide
the highest quality of service with the most advanced equipment. The team has
project experience ranging from single, multi-family and high-rise condos to
casinos and government buildings. With our mobile catastrophe equipment and
teams, we can handle projects throughout the United States.

Reconstruction

The reconstruction division that involves selective demolition and complete
reconstruction, to return the structure to it's pre-loss condition. It focuses
on both interior and exterior re-construction of condo, multi-family, retail,
commercial and industrial properties.

Roofing

The roofing division provides both full and emergency roofing restoration and
re-build of condo, multi-family, single family and commercial real estate
properties that have suffered an insurance loss and are in need of repair or
replacement. Our roofing team has experience in all forms of roofing, from
traditional single and multi-family shingle to metal, flat, and high rise
structures.

Financial Services Division

Insurance Division

The insurance division multi-lines general agency, licensed to write property,
casualty, and employee benefits coverage with a specific focus in the
proprietary PropertySMART(R) program, a property and casualty insurance solution
for the multi-family housing and commercial property industries. This innovative
insurance product saves the policy holder money, reduces loss exposure for the
carrier, and provides a higher level of service to all parties.

Risk Management

A full-service risk management division designed primarily for the multi-family
housing and commercial property industries. Additionally, the Company provides
the sales and marketing of selected financial services (including
PropertySMART(R)), targeted at the multi-family housing and commercial real
estate industries and their tenants.


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<PAGE>

All our businesses are built upon superior service and customer value
generation. We believe these provide synergies for our clients and provide us
with a diversified stream of recurring revenue. Our corporate objective is to
ensure that each business compliments and reinforces the other divisions.
Marketing efforts for each of the divisions are both closely coordinated and
complementary, sharing certain key elements.

The Market

Below are a few basic facts and figures about the industries in which we do
business:

      o     Overall construction, put in place in 2005, exceeded $1.1 trillion
            in the U.S., nearly 9% of the GDP, up from $1 trillion in 2004.

      o     World insurance premiums (property/casualty and life/health) totaled
            $3.2 trillion in 2004, (according to Swiss Re).

      o     Data from Highline/National Association of Insurance Commissioners
            shows U.S. insurance premiums totaled $960.3 billion in 2004, up 5.6
            percent from $909.7 billion in 2003.

      o     U.S. property/casualty insurers are expected to pay homeowners and
            businesses a record $56.8 billion for 2005 insured property losses
            from (24) catastrophic events, more than twice the prior record set
            in 2004, when insurers paid $27.3 billion in catastrophe claims
            (according to preliminary estimates by ISO's Property Claim Services
            (PCS) unit).

      o     In 2005, five hurricanes -- Katrina, Wilma, Rita, Ophelia and Dennis
            -- accounted for $52.7 billion, nearly 93 percent of last year's
            insured losses, affecting nine states. Five states accounted for
            more than 80 percent of those claims and almost half the dollar
            loss. They are: Louisiana ($27.2 billion); Mississippi ($12.2
            billion); Florida ($9.9 billion); Texas ($2.9 billion); and Alabama
            ($1.5 billion).

      o     The 2005 Hurricane Season was also unusual with Tropical Storm Zeta
            developing in late December, well beyond the official end of the
            recognized hurricane season, November 30th.

                 Hurricane Seasons and their Associated Losses:

        Year                     Number of Events                  Losses
        1996                            41                      $7.4 billion
        1997                            25                      $2.6 billion
        1998                            37                     $10.1 billion
        1999                            27                      $8.3 billion
        2000                            24                      $4.6 billion
        2001                            20                     $26.5 billion
        2002                            25                      $5.9 billion
        2003                            21                     $12.9 billion
        2004                            22                     $27.3 billion
        2005                            24                     $56.8 billion

Insurance is one of the largest and fastest growing operating expenses of all
real estate operating costs, such as apartments and other commercial properties,
exceeded only by debt service costs and (occasionally) property taxes. Market
research indicates a near-crisis situation exists in many segments of the
multi-family housing industry, caused by significant increases in premiums,
higher deductibles, and in some cases the inability to obtain adequate insurance
coverage under virtually any terms and conditions. Near-record low interest
rates in the recent past have enticed first time home buyers out of apartments,
as unemployment forces other tenants to leave and move in with family or
friends. The resulting higher-than-planned-for vacancy rates have made rapidly
rising insurance costs even more difficult to absorb. This is especially true in
"B", "C" and "D" rated properties. Other than reducing insurance coverage
through higher policy deductibles or some form of self-insurance (which
increases business risk and usually violates mortgage requirements), property
owners and managers have little opportunity to control insurance costs when
"hard markets" in the insurance industry restrict their ability to obtain
competitive insurance.

These conditions have aggravated the adversarial relationship that historically
exists between insurance carriers, adjusters and property owners, which is a
major reason for spiraling premiums and the cost of claims. This tenuous
relationship is further complicated by the confusion that often arises regarding
who the ultimate decision maker is in the restoration contractor selection
process. The standard Insurance Services Office (ISO) commercial fire insurance
policy reads in part:


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<PAGE>

      "In the event of loss or damage covered by this Coverage Form, at our
      option, we will either:

      1.    Pay the value of lost or damaged property;

      2.    Pay the cost of repairing or replacing the lost or damaged property;

      3.    Take all or any part of the property at an agreed or appraised
            value; or

      4.    Repair, rebuild or replace the property with other property of like
            kind and quality."

However, insurers traditionally do not exercise clause 4, effectively abdicating
the contractor selection decision to the property owner/manager. This situation
leads to turmoil, extra costs and ineffectiveness, and we determined there were
business opportunities available if we could influence the resolution process.
As a result, we created PropertySMART(R). We believe that PropertySMART(R) and
our various integrated operating businesses provide us with a business
opportunity. We also believe that we can manage each of these businesses to
compliment each other so that growth in any one area will drive growth in our
other divisions.

Each of our subsidiaries claims either the States of Texas or Florida as its
home and its largest markets. Although we will focus nationally, our operating
companies share a primary marketing territory in the Gulf and Southern Atlantic
Coast states through Virginia, as well as interior states including Arizona,
Arkansas, Colorado, Kansas, Kentucky, Missouri, Nevada, New Mexico, Oklahoma and
Tennessee (to name the major target areas). These states comprise approximately
40% of the U.S. population (113 million people). Additionally, according to the
U.S. Census Bureau, these states include approximately 38% of all
renter-occupied housing units, including 5 million housing units in structures
with 10 or more units (approximately 34% of the national total). Historically,
at an average of $560 per month, the median gross rent in these states is $42
below the national average, putting property owners and managers under
additional pressure to control insurance and other operating costs. According to
the U.S. Census Bureau, the median household income in our target markets is
5.7% higher than the national average. Additionally, these states are largely
non-union, and are generally recognized as having above-average insurance
regulatory climates. Demographics aside, natural disasters such as coastal
winds, floods, hurricanes, hail and tornado losses have caused traditional
insurers to withdraw or curtail business while simultaneously raising premiums
in recent years, thereby encouraging self-insurance and spawning non-standard
residual market vehicles.

Our Services and Products

PropertySMART(R) (Property Strategically Managed Alternative Risk Transfer)

Property owners and managers enter into a "loss control partnership" with us to
reduce loss frequency and severity. This partnership includes developing and
implementing an effective loss control program, and restoring properties quickly
and economically. The benefits of this partnership include:

      o     Significantly reduced "loss of rents" costs, due to a reduction in
            restoration periods.

      o     Pre-Agreed upon construction profit margins over actual costs, as
            compared to much higher margins in traditional restoration
            contracts.

      o     Reduced loss frequency and severity, due to stronger underwriting
            and loss control efforts, including encouraging the use of fire
            suppression systems in oven hoods, fire retardant paint sealers,
            safety education and incentive programs for property owners and
            property managers.

      o     Elimination of "inherited tails" on pre-existing hail-damaged roofs
            through more thorough pre-underwriting loss control inspections.

      o     Elimination of claims inflation through accelerated loss resolution,
            settled equitably for all parties.

      o     Improved retention of high quality insurance clients.

      o     Minimal or no deductibles.

      o     Realignment of the interests of both insurance carriers and property
            owners, to provide both adequate coverage and prompt claim
            settlements, resulting in reduced premiums.

      o     Extensive loss control consulting efforts and comprehensive
            underwriting.


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<PAGE>

Additionally, the following items represent attributes of the PropertySMART(R)
program that we believe provide significant advantages for us:

      o     We have filed an application with the United States Patent and
            Trademark Office and PropertySMART(R) is now patent pending.

      o     PropertySMART(R) is now a registered trademark.

      o     The program will be launched with commitments for exclusive initial
            capacity from a highly rated insurance carrier.

      o     We are currently investigating several highly rated carriers to
            front the program in the United States.

      o     The program includes up to six potential revenues streams including:
            wholesale commissions; retail commissions; adjusting and claims
            administration fees; restoration or construction management fees;
            and a contingent element of incentive-based commissions.

      o     We believe that the future carrier partner in the PropertySMART(R)
            program will commit to pricing that is competitive with or better
            than the current pricing available in the marketplace.

      o     Historically, there are approximately over 16 million apartment
            units in the United States (approximately 38 million total rental
            units in North America). Initially, the program's market focus for
            multi-family will be on two and three-story garden style apartment
            complexes with wood frame construction. We anticipate that the
            program will launch initially in Texas, then grow to the surrounding
            southwestern states and ultimately across North America.

      o     We have previously performed work for the owners of several hundred
            thousand apartment units and have existing relationships with owners
            and managers of approximately 1,000,000 additional units.

      o     We do not plan to perform much, if any, of the actual restoration
            construction work itself under the PropertySMART(R) program. Rather,
            we will be the construction manager, allowing us to significantly
            expand the scope of work we are able to handle.

      o     PropertySMART(R) is anticipated to deliver significant economic
            advantages including cost controls or reduction in costs,
            streamlined claims administration and superior services to
            multi-family and commercial property owners and managers.

Insurance Coverage

      o     We currently operate both a retail and wholesale insurance agency
            and have the ability to handle the insurance placement needs for
            virtually all lines of consumer and business insurance including
            general liability, workers compensation, property, commercial
            automobile, umbrella, directors and officers liability (D&O), errors
            and omissions (E&O), employment practices liability (EPLI), surety
            bonds, group health, life and disability insurance. We place these
            types of coverage through major insurance companies including, but
            not limited to, Zurich, Travelers, Hartford, AIG, and Lloyd's of
            London, among others.

      o     In addition to providing property insurance for the future
            PropertySMART(R) program, we currently offer multi-line agency
            services for apartment owners' other insurance needs including
            workers compensation, employee benefits, automobile, general
            liability policies, etc.

Risk Management Services (Within PropertySMART(R))

      o     We have established a vertically integrated set of services to
            address the various levels of risk at covered properties. Risk
            management includes all procedures and costs associated with the
            "risk" of a possible loss, such as loss control activities,
            pre-inspections and purchasing appropriate insurance products. It
            also includes dealing with the consequences of a loss after it has
            occurred, such as adjusting claims, restoring damaged property and
            minimizing business interruption costs.

      o     We are not the insurance carrier. However, we consider the ability
            to generate fee income from risk management services without
            incurring certain business risks typically associated with
            underwriting (insurance cycles, adverse loss reserve development,
            regulatory issues, etc.) as a significant strategic advantage of our
            business plan.


                                       12
<PAGE>

Insurance Restoration Services

      o     Our insurance restoration division has traditionally targeted the
            multi-family housing industry. We do not actively pursue contracts
            involving total losses or rebuilding "from the ground up", but
            concentrate on projects where the restoration of damaged structures
            is possible.

      o     Hurricanes, tornadoes, hail storms, floods and fires, along with a
            host of other natural and man-made perils, combine to generate a
            year-round stream of potential customers without regard for the
            state of the economy or global market influences.

      o     There are generally two parts to the insurance restoration industry:
            remediation (or mitigation) and reconstruction. Currently, the
            majority of our revenues are derived from reconstruction.

      o     Although the primary source of future business is expected to come
            from servicing customers of the program PropertySMART(R) and their
            losses, we intend to continue to pursue non-PropertySMART(R) related
            business through historic marketing channels and efforts.

      o     The hospitality (hotel/motel) and restaurant industries are both
            likely candidates for a near-term breakout opportunity into a new
            market segment. Because of their similarities to the multi-family
            industry.

Our Business Plan

      o     We anticipate that the introduction of PropertySMART(R) will be made
            to our first potential customers before the end of fiscal 2006.

      o     We believe our growth will be partly self-directed and exponential.
            We foresee long term potential growth in a largely untapped market
            for this type of solution and our plans anticipate eventually having
            a significant number of units in PropertySMART(R).

      o     We believe that we can expand this program into other segments, such
            as the hospitality and restaurant industries, thereby fueling
            further growth with minimal increase of overhead.

      o     We believe that the cash generation from PropertySMART(R) will
            permit us to evaluate opportunities to continue to add to our suite
            of services, thereby further fueling growth and the generation of
            additional profit.

      o     Growing our restoration subsidiary is one of our critical
            objectives. We will continue to pursue projects both resulting from
            claims for PropertySMART(R) customers as well as from outside the
            program.

Our Competition

While any business faces competition, we do not believe that we have any direct
competitors with respect to the integrated "suite of services" we offer,
particularly with respect to PropertySMART(R).

Independent of PropertySMART(R), our financial services and insurance
restoration entities both operate in very large industries, each with
substantial competition. In Texas, there are approximately 5,400 separate
insurance agencies, employing 80,000 insurance agents. Of these, approximately
2,500 insurance agencies provide commercial insurance services. We focus on
commission-based property and casualty insurance placements, as well as
providing ancillary Life, Accident and Health insurance for selected businesses.
We seek to maintain a competitive advantage over the other agencies discussed
above through our customer service and the future promotion of our
PropertySMART(R) program.

Our insurance restoration divisions operate in a multi-billion dollar per year
industry where there are low barriers to entry and minimal regulation.
Consequently, the industry is highly fragmented, with thousands of restoration
contractors ranging in size from international giants to individual handymen
working from the back of a pickup truck. However, despite the industry confusion
and competition, we seek to maintain a competitive advantage over other
restoration companies through PropertySMART(R).

Government Regulations That Affect Our Business

Our insurance agency subsidiary, RGIS, is regulated by the Texas Department of
Insurance ("TDI") and other state insurance regulatory bodies where we may do
business. Among other regulations and requirements, TDI requires the following
from our agency:


                                       13
<PAGE>

      o     Errors & Omissions insurance in the amount of at least $1,000,000;

      o     All RGIS officers and voting shareholders must be licensed
            individually as insurance agents; and

      o     All RGIS employees producing new business or consulting clients on
            insurance purchasing or premium issues must hold an insurance
            license.

RGIS meets all of the above TDI requirements as well as other statutory
regulations where applicable. Our other subsidiaries are subject to various
state and local laws and regulations regarding construction activities and
building codes.

None of our employees are represented by a labor union. We believe we have, and
will continue to have, a good working relationship with all of our employees.
Management meets with employees periodically to discuss our objectives, as well
as more specific labor issues, such as scheduling, compensation, work rules and
safety. Much of the labor on our re-construction and restoration crews are
independent laborers hired on a job-by-job basis.

Additionally, we have a large non-employee workforce of contractors and
sub-contractors providing services to the Company on an as needed basis.

Our Employees

As of December 31, 2005, we had a total workforce comprised of 50 people, made
up of 31 full-time employees and 19 part-time consultants as detailed below:

                 Sales                   6
                 Administration         21
                 Operations             23

Additionally, we have a large non-employee workforce of contractors and
sub-contractors providing services to the Company.


                                       14
<PAGE>

                                  RISK FACTORS

Any investment in our common stock involves a high degree of risk. In addition
to the other information contained in this report, including risks and
uncertainties described elsewhere, you should carefully consider the following
risk factors and all of the information contained in this Annual Report in
evaluating us or deciding whether to purchase our common stock. The risks and
uncertainties described below or elsewhere in this Annual Report are not the
only ones we face. Additional risks and uncertainties not presently known to us
or that we currently deem immaterial also may impair our business and
operations. The following list of risk factors should not be considered as all
inclusive. If any of the following risks were to occur, our business, financial
condition, operating results and cash flows could be materially affected, all of
which might cause the trading price of our common stock to decline, and you
could lose all or part of any investment you may make in our common stock.

Our actual results may differ materially from those anticipated in our
forward-looking statements. We operate in a market environment that is difficult
to predict and that involves significant risks and uncertainties, many of which
will be beyond our control. Refer also to "SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS" at the beginning of this Annual Report.

Going Concern Risk

We have had in the past and could have future losses, deficits and deficiencies
in liquidity, which could impair our ability to continue as a going concern. Our
independent registered public accounting firm has indicated that certain factors
raise doubt about our ability to continue as a going concern and these factors
are discussed in Note 2 to our audited financial statements as of December 31,
2005. Since our inception, we have suffered recurring losses from operations and
have been dependent on existing stockholders, new investors, and capital sources
to provide the cash resources to sustain our operations.

Our accompanying consolidated financial statements have been prepared assuming
that we will continue as a going concern. Although we had net income of
$2,068,551 for the year ended December 31, 2005, we have previously incurred net
losses, which have resulted in a significant accumulated deficit at December 31,
2005. We previously had a net loss of $2,283,451 for the year ended December 31,
2004. At December 31, 2005, current assets exceeded current liabilities by
$2,554,610, stockholders' equity was $3,651,290 and we had an accumulated
deficit of $4,884,000.

Our long-term viability as a going concern is dependent on certain key factors,
including without limitation our ability to continue to obtain sources of
outside financing to support near term operations and to allow us to continue to
make investments, and our ability to increase profitability and sustain a cash
flow level that will ensure support for continuing operations.

Although we were profitable for the year ended December 31, 2005, we cannot give
assurance that we will achieve or sustain profitability or generate sufficient
cash flow from operations in the future to meet our planned capital
expenditures, working capital and debt service requirements. If required, our
ability to obtain additional financing from other sources depends on many
factors beyond our control, including the state of the capital markets and the
prospects for our business. The necessary additional financing may not be
available to us or may be available only on terms that would result in further
dilution to the current owners of our common stock.

We have substantial current obligations in the form of trade accounts payable,
accrued expenses and notes payable as of December 31, 2005. Our substantial debt
obligations pose risks to our business and stockholders by:

      o     Making it more difficult for us to satisfy our obligations;

      o     Requiring us to dedicate a substantial portion of our cash flow to
            principal and interest payments on our debt obligations, thereby
            reducing the availability of our cash flow to fund working capital,
            capital expenditures and other corporate requirements;

      o     Impeding us from obtaining additional financing in the future for
            working capital, capital expenditures and general corporate
            purposes; and

      o     Making us more vulnerable to a downturn in our business and limiting
            our flexibility to plan for, or react to, changes in our business.


                                       15
<PAGE>

We cannot give assurance that we will generate sufficient cash flow from
operations or obtain additional financing to meet scheduled debt payments and
financial covenants. If we fail to make any required payment under the
agreements and related documents governing our indebtedness or fail to comply
with the financial and operating covenants contained in them, we would be in
default.

We have a need for additional financing.

We require substantial capital to pursue our operating strategy. We need
additional working capital to finance the accounts receivables generated by our
construction division and to hire additional sales and marketing people as our
business grows in states outside of Texas. Although we have successfully
structured a $10,000,000 credit facility for funding construction accounts
receivable, we will need additional funding beyond this facility and we do not
have an alternate funding facility in place to handle these additional business
needs. We will need additional capital (i) to retire our indebtedness; (ii) for
working capital requirements; (iii) to obtain additional systems and
improvements to our facilities and equipment; and (iv) to satisfy further
capital requirements. We cannot assure you that we will be able to raise needed
capital from other sources on terms favorable to us. If we are unable to obtain
sufficient capital in the future, our ability to pursue our business strategy
and our results of operations for future operations may be impaired.

We have significant financial and operational covenants.

We currently have a $10,000,000 credit facility that contains an amended and
restated Security Agreement including, among other things, a stock pledge
agreement, a guaranty from us and all of our subsidiaries and certain covenants
and obligations in order to secure the funds obtained from the credit facility.
If we are determined to be in default of the credit facility covenants, the
impact on our business could be materially detrimental.

Our additional financing requirements could result in dilution to existing
stockholders.

If additional financing is required, it could be obtained through one or more
transactions that could effectively dilute the ownership interests of our
then-current stockholders. Further, there can be no assurances that we will be
able to secure such additional financing. We have the authority to issue
additional shares of our common stock, as well as additional classes or series
of ownership interests or debt obligations that may be convertible into any
class or series of our ownership interests. We are authorized to issue up to
300,000,000 shares of our common stock and 35,000,000 shares of preferred stock,
$0.001 par value per share. Such securities may be issued without the approval
or other consent of the holders of our common stock.

Public adjusting firms in Texas may not make referrals to restoration companies
in which they have a financial interest.

Since September 1, 2003, under the provisions of S.B. 127, the Texas legislature
has banned public adjusting firms within the State of Texas from referring
restoration services contracts to restoration companies in which they have a
financial interest or financial gain. Prior to September 1, 2003, restoration
companies such as our company had historically derived a large portion of their
revenues from contracts for restoration services that had been referred to them
by public adjustment firms that had a financial interest in the referral.
Accordingly, public adjustment firms may be less likely to make referrals of
restoration services to companies such as ours because they may no longer have a
direct financial incentive to do so. As a result, there is no assurance that we
will be able to obtain sufficient revenues from new restoration services
contracts in the future. This would have a material adverse affect on our
financial results.

Established competitors with greater resources may make it difficult for us to
market our products effectively, offer our products or services, and compete
effectively

The property insurance and insurance restoration businesses are highly
competitive and many of our competitors have substantially greater resources
than we do. We compete with both large national writers and smaller regional
companies, including companies that serve the independent agency market and
companies that sell insurance directly to consumers. Some of these companies may
have certain competitive advantages over us, including increased name
recognition, loyalty of their customer base, lower cost structures and longer
operating histories. Competition in the property insurance market has
historically included offering significant rate discounts, and there can be no
assurance that these conditions will not recur. Although a number of national
insurers that are much larger than us do not currently compete in a material way
in the multi-family property market, if one or more of these companies decided
to enter the market, it could have a material adverse effect on us. These
companies include some that may be able to sustain significant losses in order
to acquire market share, as well as others that use distribution methods that
compete with our distribution channels. There can be no assurance that we will
be able to compete effectively against these companies in the future.


                                       16
<PAGE>

Our future success will be dependent on our ability to attract and retain key
personnel

Our future success depends significantly upon the efforts of certain key
management personnel, including: John E. (Ted) Rea, our Chief Executive Officer;
James A. Rea, our President and Chief Operating Officer; Bruce A. Hall, our
Chief Financial Officer; Kevin L. Dahlberg, our Executive Vice President and
President of our subsidiary RGIS; William Fink, the Chief Operating Officer of
RGIS; and John N. Brobjorg, our Corporate Controller. We have entered into
agreements with Messrs. Rea, Rea, Hall, Dahlberg, Fink and Brobjorg as members
of our management team. There is no assurance that we will be able to
satisfactorily maintain such agreements. The loss of key personnel could
adversely affect our business. As we continue to grow, we will need to recruit
and retain additional qualified management personnel, and there can be no
assurance that we will be able to do so. We currently do not maintain key man
life insurance on any of our management team members.

We have a limited market for our common stock, and our stock price is volatile

Our common stock is not listed on a national securities exchange or quoted on
the Nasdaq National Market or Nasdaq Small Cap Market. Instead, our common stock
is currently quoted on the OTC Bulletin Board under the symbol "RGMI.OB."
Trading on the OTC Bulletin Board is sporadic and highly volatile. The market
price for our common stock has fluctuated in the past and may continue to
fluctuate in the future. The market price of our common stock is subject to, and
will continue to be subject to, a variety of factors, including without
limitation:

      o     the business environment;

      o     the operating results of companies in the industries we serve;

      o     future announcements concerning our business or that of our
            competitors or customers;

      o     the introduction of new products or changes in product pricing
            policies by us or our competitors;

      o     litigation matters;

      o     changes in analysts' earnings statements or performance estimates;

      o     developments in the financial markets;

      o     quarterly operating results;

      o     perceived dilution from stock issuances for acquisitions and other
            transactions; and

      o     market conditions of securities traded on the OTC Bulletin Board.

Furthermore, stock prices for many companies fluctuate for reasons that may be
unrelated to their operating results. Those fluctuations and general economic,
political and market conditions, such as recessions, international currency
fluctuations or terrorist or military actions, as well as public perception of
equity values of publicly traded companies, may adversely affect the market
price of our common stock.

There is no assurance of an established public trading market for our common
stock

Although our common stock trades on the OTC Bulletin Board, a regular trading
market for our common stock may not be sustained in the future. The NASD
(National Association of Stock Dealers) has enacted recent changes that limit
quotations on the OTC Bulletin Board to securities of issuers that are current
in their reports filed with the SEC. The effect on the OTC Bulletin Board of
these rule changes and other proposed changes cannot be determined at this time.
The OTC Bulletin Board is an inter-dealer, over-the-counter market that provides
significantly less liquidity than the NASD's automated quotation system (the
"Nasdaq Stock Market"). Quotes for stocks included on the OTC Bulletin Board are
not listed in the financial sections of newspapers as are those for the NASDAQ
Stock Market. Therefore, prices for securities traded solely on the OTC Bulletin
Board may be difficult to obtain and holders of our common stock may be unable
to resell their securities at or near their original offering price, or at any
price.


                                       17
<PAGE>

Our common stock is considered a "penny stock" and may be difficult to sell

Our common stock is considered to be a "penny stock" since it meets one or more
of the definitions in Rule 3a51-1 promulgated under the Exchange Act. These
include but are not limited to the following: (i) the stock trades at a price
less than $5 per share; (ii) we are NOT traded on a "recognized" national
securities exchange; (iii) we are NOT quoted on the Nasdaq Stock Market; (iv) we
are NOT have a market value of listed securities of $50 million; or (v) it does
NOT have a minimum bid price of $4 per share. The principal result or effect of
being designated a "penny stock" is that securities broker-dealers cannot
recommend the stock but must trade in it on an unsolicited basis. Section 15(g)
of the Exchange Act, and Rule 15g-2 promulgated thereunder by the SEC, require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor's account.

Potential investors in our common stock are urged to obtain and read such
disclosure carefully before purchasing any shares that are deemed to be "penny
stock." Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve
the account of any investor for transactions in such stocks before selling any
penny stock to that investor. This procedure requires the broker-dealer to (i)
obtain from the investor information concerning his or her financial situation,
investment experience and investment objectives; (ii) reasonably determine,
based on that information, that transactions in penny stocks are suitable for
the investor and that the investor has sufficient knowledge and experience as to
be reasonably capable of evaluating the risks of penny stock transactions; (iii)
provide the investor with a written statement setting forth the basis on which
the broker-dealer made the determination in clause (ii) above; and (iv) receive
a signed and dated copy of such statement from the investor, confirming that it
accurately reflects the investor's financial situation, investment experience
and investment objectives. Compliance with these requirements may make it more
difficult for holders of our common stock to resell their shares to third
parties or to otherwise dispose of them in the market or otherwise.

Shares eligible for future sale may adversely affect the market price of our
common stock, as the future sale of a substantial amount of our stock in the
public marketplace could reduce the price of our common stock.

From time to time, certain of our stockholders may be eligible to sell all or
some of their shares of common stock by means of ordinary brokerage transactions
in the open market pursuant to Rule 144 ("Rule 144") promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), subject to certain
limitations. In general, pursuant to Rule 144, a stockholder (or stockholders
whose shares are aggregated) who has satisfied a one-year holding period may,
under certain circumstances, sell within any three-month period a number of
securities that does not exceed the greater of 1% of the then outstanding shares
of common stock or the average weekly trading volume of the class during the
four calendar weeks prior to such sale. Rule 144 also permits, under certain
circumstances, the sale of securities, without any limitations, by a
non-affiliate of the Registrant that has satisfied a two-year holding period.
Any substantial sale of common stock pursuant to Rule 144 may have an adverse
effect on the market price of our common stock by creating an excessive supply.

Concentration of stock ownership

Our officers, directors and a small number of principal stockholders directly
and beneficially own approximately 67% of the issued and outstanding shares of
our common stock. As a result, these stockholders possess significant influence,
giving them the ability, if they were to vote in unison, to control the election
of our directors, to authorize or prevent proposed significant corporate
transactions and to control any other corporate actions requiring stockholder
approval. Such stock ownership and control may also have the effect of delaying
or preventing a future change in control; impeding a merger, consolidation,
takeover or other business combination; or discouraging a potential acquirer
from making a tender offer.


                                       18
<PAGE>

The substantial growth projected by us, if achieved, must be efficiently and
effectively managed

Our projected growth will likely place a significant strain on our managerial,
operational and financial resources. We need to:

      o     improve our financial and management controls, reporting systems and
            procedures;

      o     expand, train and manage our workforce for marketing, sales and
            support; and

      o     manage multiple relationships with various customers, investors and
            third parties.

We are dependent on the results of operations of our subsidiaries

As a holding company without significant operations of our own, the principal
sources of our funds are management fees, dividends and other distributions from
our operating subsidiaries. In turn, our principal sources of revenues for our
operating subsidiaries are construction revenues on the restoration services
provided to our clients and commissions earned on insurance policies. Our
rights, and consequently your rights as stockholders, to participate in any
distribution of assets of our operating subsidiaries are subject to prior claims
of customers and creditors, if any (except to the extent that our rights, if
any, as a creditor are recognized). Consequently, our ability to pay debts,
expenses and cash dividends to our stockholders may be limited.

We have not officially launched PropertySMART(R)

We have not yet partnered with the required highly-rated insurance carrier to
launch the PropertySMART(R) program and, provide commitments for exclusive
initial capacity for the program and front the program in the United States. Our
business plan and projections are focused significantly on the PropertySMART(R)
program and if we are unable to successfully launch PropertySMART(R), it could
have a material adverse effect on our business plan.

The market pricing for PropertySMART(R) may not be competitive

We believe that the future carrier partner in the PropertySMART(R) program will
commit to pricing that is competitive with or better than the current pricing
available in the marketplace. If we are unable to obtain such competitive or
favorable pricing, the advantages of PropertySMART(R) discussed in this Annual
Report may not provide enough of an incentive for clients to utilize the
program. If this happens, it could have a material adverse effect on our
business plan and projections.

If we fail to maintain effective internal controls over financial reporting, the
price of our common stock may be adversely affected

Although we have not identified any material weaknesses in our internal controls
over financial reporting to date, the assessment required pursuant to rules
adopted by the SEC pursuant to the Sarbanes-Oxley Act of 2002 may uncover
weaknesses or conditions that need to be addressed, the disclosure of which may
have an adverse impact on investor confidence and the price of our common stock.
Failure to establish and maintain appropriate internal controls over financial
reporting, or any failure of those controls once established, could have a
material adverse effect on our business, financial condition or results of
operations or raise concerns for investors. Any actual or perceived weaknesses
or conditions in our internal controls over financial reporting that need to be
addressed may have a material adverse effect on the price of our common stock.

We do not expect to pay cash dividends in the foreseeable future.

We have not paid cash dividends on our common stock since our inception, and we
do not plan to pay any cash dividends on our common stock in the foreseeable
future.

Item 2. Properties.

Our principal executive and administrative offices are presently located at 1507
Capital Avenue, Suite 101, Plano, Texas 75074. These offices, which are leased
pursuant to a 26 month lease that became effective September 1, 2005, consist of
approximately 6,636 square feet of office and warehouse space at a base rent of
$4,000 per month, with two months free rent, commencing November 1, 2005, with a
total of $96,000 to be paid over the life of the lease. We consider these
facilities to be suitable and adequate for our needs for the foreseeable future.
In the opinion of our management, our properties are adequately covered by
insurance.


                                       19
<PAGE>

Through our subsidiary Restoration Group America, Inc., we previously leased our
corporate headquarters under a short-term lease that expired in December 2003
and that was continued on a month-to-month basis at a monthly rental rate of
$12,971 through August 31, 2005.

Item 3. Legal Proceedings.

During the period covered by this Annual Report, and as of the present date, we
were not and are not a party to any material legal proceedings, nor were or are
we aware of any threatened litigation of a material nature against us, except as
set forth below.

Dale Ferraro, a former consultant with TRG, has threatened litigation against
the Company based upon a memorandum of understanding. Mr. Ferraro claims that he
is owed $90,000 in commissions for work performed by TRG in Florida and
Mississippi. The Company disputes that these monies are owed to Mr. Ferraro.

The Company has not yet been served with a lawsuit, but in the event such a suit
is filed, the Company anticipates that it will raise a number of affirmative
defenses and file counterclaims against Mr. Ferraro. We are unable at this time
to make an assessment of the outcome of this dispute.

The Company has recorded $150,000 in other expense related to the anticipated
settlement of a lawsuit with a shareholder from Invvision Capital, Inc., which
is in accrued expenses at December 31, 2005.

We have $91,351 of unpaid Federal payroll taxes and employee withholdings and
related penalties and interest as of December 31, 2005. We previously received a
notice of a federal tax lien from the Internal Revenue Service and have
structured an agreement with the Internal Revenue Service to pay the outstanding
amount on an installment basis. We expect to satisfy these amounts by the end of
2006.

Item 4. Submission of Matters to a Vote of Security Holders.

Our annual meeting of stockholders was held on December 15, 2005. At such
meeting, our stockholders voted upon proposals to elect six directors to serve
until the next annual meeting of stockholders or until their respective
successors are duly elected and qualified; and to ratify and approve the
appointment of Whitley Penn LLP as our Independent Registered Public Accounting
Firm for the fiscal year ending December 31, 2005. As to each such proposal,
15,710,335 votes were cast for such proposal, and no votes were cast against or
withheld with respect to any such proposal. There were no abstentions or broker
non-votes on any of such proposals.


                                       20
<PAGE>

                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

Market Information

Our common stock is traded over the counter and is currently quoted on the OTC
Bulletin Board under the ticker symbol "RGMI.OB." The table below sets forth the
high and low bid information for our common stock for the periods indicated, as
reported on the OTC Bulletin Board. These quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission, and may not represent
actual transactions. These quotations are also adjusted for the one-for-six
reverse stock split discussed previously.

                                                   High          Low
                                                   ----          ---
            Fiscal Year Ending 2005
                    Fourth Quarter                $ 0.95       $ 0.30
                    Third Quarter                 $ 1.00       $ 0.21
                    Second Quarter                $ 0.62       $ 0.21
                    First Quarter                 $ 1.00       $ 0.48

            Fiscal Year Ended 2004
                    Fourth Quarter                $ 1.08       $ 0.66
                    Third Quarter                 $ 2.64       $ 0.72
                    Second Quarter                $ 4.50       $ 1.20
                    First Quarter                 $ 1.44       $ 0.90

On March 23, 2006, the closing bid price for a share our common stock, as
reported on the OTC Bulletin Board, was $0.69.

Holders

As of March 23, 2006, there were approximately 499 stockholders of record of our
common stock and no shares of our preferred stock were issued or outstanding.

Dividends

No cash dividends have been declared or paid on our common stock since our
inception. No restrictions limit our ability to pay dividends on our common
stock. We do not expect to pay any dividends in the near future.


                                       21
<PAGE>

Securities Authorized For Issuance Under Equity Compensation Plans

The following table sets forth information as of December 31, 2005 concerning
shares of our common stock authorized for issuance under our 2004 Omnibus Stock
Option Plan, which is the only equity compensation plan under which any of our
equity securities are authorized for issuance.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                                  Number of                         Number of securities
                                                securities to        Weighted-       remaining available
                                                be issued upon   average exercise    for future issuance
                                                 exercise of         price of           under equity
                                                 outstanding        outstanding      compensation plans
                                                   options,          options,       (excluding securities
                                                   warrants          warrants        reflected in column
                                                  and rights        and rights               (a))
                                                     (a)                (b)                  (c)
--------------------------------------------------------------------------------------------------------
<S>                                             <C>               <C>                 <C>
Equity compensation plans approved by             4,468,336           $ 0.37               531,664
     securityholders
--------------------------------------------------------------------------------------------------------
Equity compensation plans not approved by             0                  0                    0
     securityholders .
--------------------------------------------------------------------------------------------------------
         Total                                    4,468,336           $ 0.37               531,664
--------------------------------------------------------------------------------------------------------
</TABLE>

Recent Sales of Unregistered Securities

In December 2005, we issued 8,889 shares of our common stock at a price of $0.45
per share as compensation to a third party [NTD: Need more specific
identification of the "persons or class of persons" to whom sold.] valued at
$4,000. This stock was issued as payment for equity consulting services, and the
related cost was recorded as a reduction of additional paid in capital. The
price of $0.45 per share was utilized as the fair market value on the grant date
based upon the price of our common stock sold in a recent private placement
offering. [NTD: Need to disclose the exemption claimed and the facts relied upon
to make the exemption available.]

Other than as described above, we did not issue any securities during the period
covered by this Annual Report.


                                       22
<PAGE>

Item 6. Management's Discussion and Analysis or Plan of Operation.

The following discussion and analysis of our financial condition and results of
operations is qualified by reference to, and should be read in conjunction with,
our audited consolidated financial statements included in this Annual Report
(the "Financial Statements"), and the accompanying notes thereto, and the other
financial information appearing elsewhere in this Annual Report. The analysis
set forth below is provided pursuant to applicable SEC regulations and is not
intended to serve as a basis for projections of future events. As discussed
above, our actual results may differ materially from those anticipated in our
forward-looking statements. Please also refer to "SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS" beginning on page 4 of this Annual Report and "RISK
FACTORS" beginning on page 15 of this Annual Report.

OVERVIEW

For a description of the historical development of our business, please refer to
"Item 1. Description of Business - OUR BUSINESS DEVELOPMENT" beginning on page 5
of this Annual Report.

Although we had net income of $2,068,551 for the year ended December 31, 2005,
we have previously incurred net losses from operations since our inception,
which have resulted in a significant accumulated deficit at December 31, 2005,
and in prior years we have been dependent on existing stockholders and new
investors to provide the cash resources to sustain our operations. We had a net
loss of $2,283,451 for the year ended December 31, 2004. At December 31, 2005,
current assets exceeded current liabilities by $2,554,610, stockholders' equity
was $3,651,290 and we had an accumulated deficit of $4,884,000.

Our long-term viability as a going concern is dependent on certain key factors,
including without limitation our ability to continue to obtain sources of
outside financing to support near term operations and to allow us to continue to
make investments, and our ability to increase profitability and sustain a cash
flow level that will ensure support for continuing operations.

RECENT DEVELOPMENTS

Effective October 31, 2005, we entered into a Security Agreement with Laurus
Master Fund, Ltd. ("Laurus") for the sale by us to Laurus of a $1,400,000
secured convertible minimum borrowing note (the "Minimum Borrowing Note") and a
secured revolving note up to a maximum of $10,000,000 (the "Revolving Note"). In
connection with the Minimum Borrowing Note and the Revolving Note, we issued to
Laurus a common stock purchase warrant (the "Original Warrant") to purchase up
to 2,962,963 shares of our common stock at a price of $0.78 per share. The
Original Warrant has a seven year term, expiring October 31, 2012. Additionally,
we entered into a registration rights agreement with Laurus (the "Registration
Rights Agreement") covering the future registration of the shares of common
stock underlying the Minimum Borrowing Note and the Original Warrant.

Each of the Minimum Borrowing Note and the Revolving Note has an interest rate
of prime plus 2.0% with a floor rate of 6.0%, and each is due, together with any
unpaid and accrued interest thereon, on October 31, 2008. Laurus had the option,
but not the obligation, at any time until October 31, 2008 to convert all or any
portion of either or both of the Minimum Borrowing Note and the Revolving Note,
and accrued interest thereon, into shares of our common stock at an exercise
price of $0.71 per share. Additionally, we have the option, but not the
obligation, to prepay the Minimum Borrowing Note by paying Laurus 130% of the
principal amount of the Minimum Borrowing Note plus accrued and unpaid interest.
As a result of the Minimum Borrowing Note, we obtained $4,907,805 of proceeds,
net of $841,195 of expenses. Of the $841,195 of expenses, $396,195 was paid to
our financial agent, Spencer Clarke, LLC, for financial agent fees; $418,000 was
paid to Laurus Capital Management, LLC, for management, due-diligence and
documentation fees; $25,000 was paid to Synergy Structures, for financial agent
fees; and $2,000 was paid to Loeb & Loeb LLP for escrow fees. This debt is
classified as current in accordance wth EITF 95-22, Balance sheet classification
of borrowings outstanding under revolving credit agreements that include both a
subjective acceleration clause and a lock-box agreement.

The Security Agreement includes, among other things, a stock pledge agreement, a
guaranty from us and all of our subsidiaries and certain covenants and
obligations in order to secure the funds obtained from the above mentioned
items. The Security Agreement also includes a funding formula that determines a
maximum amount of funds that we may be advanced at any time and an allowance for
Laurus to override the funding formula and advance funds in excess of those
allowed pursuant to the funding formula. Laurus exercised its option to override
the funding formula and advanced us $250,000 on January 12, 2006. This advance
has an interest rate of prime plus 5.0% and is due and payable with accrued
interest on May 1, 2006.


                                       23
<PAGE>

The loan documents comprising the above items were filed as exhibits to our
Current Report on Form 8-K filed with the SEC on November 9, 2005.

Effective February 15, 2006, we amended and restated the above-referenced loan
documents with Laurus.

The Minimum Borrowing Note was amended and restated as a Secured Convertible
Note (the "Secured Convertible Note") and was increased from $1,400,000 to
$5,000,000, and the exercise price for Laurus' option to convert all or any
portion of the Secured Convertible Note and accrued interest into shares of our
common stock was decreased from $0.71 per share to $0.41 per share. The Secured
Convertible Note continues to have an interest rate of prime plus 2.0% with a
floor rate of 6.0%, and is still due on October 31, 2008 together with any
unpaid and accrued interest thereon. Additionally, we continue to have the
option, but not the obligation, to prepay the Secured Convertible Note by paying
Laurus 130% of the principal amount of the Secured Convertible Note plus accrued
and unpaid interest.

The Revolving Note was amended and restated to be non-convertible, such that
Laurus no longer has an option to convert all or any portion of the Revolving
Note into shares of our common stock. The amended and restated Revolving Note
continues to have an interest rate of prime plus 2.0% with a floor rate of 6.0%,
and is still due on October 31, 2008 together with any unpaid and accrued
interest thereon.

The Original Warrant was amended and restated to decrease the exercise price
from $0.78 per share to $0.55 per share. The Original Warrant continues to have
an expiration date of October 31, 2012 and all other provisions of the Original
Warrant remain the same.

Also on February 15, 2006, we issued to Laurus a new common stock purchase
warrant (the "New Warrant") to purchase up to 1,363,636 shares of our common
stock at an exercise price of $0.55 per share. The New Warrant has a seven year
term, expiring February 15, 2013.

The amended and restated Security Agreement continues to include, among other
things, a stock pledge agreement, a guaranty from us and all of our subsidiaries
and certain covenants and obligations in order to secure the funds obtained from
the above mentioned items. The amended and restated Security Agreement continues
to include a funding formula that determines a maximum amount of funds that we
may be advanced at any time and an allowance for Laurus to override the funding
formula and advance funds in excess of those allowed pursuant to the funding
formula.

The amended and restated loan documents comprising the above items were filed as
exhibits to our Current Report on Form 8-K filed with the SEC on February 23,
2006.

GOING CONCERN

Please refer to "RISK FACTORS - Going Concern Risk" beginning on page 15 of this
Annual Report.

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

The methods, estimates and judgment we use in applying our most critical
accounting policies have a significant impact on the results we report in our
financial statements. The SEC has defined the most critical accounting policies
as the ones that are most important to the portrayal of our financial condition
and results, and require us to make our most difficult and subjective judgments,
often as a result of the need to make estimates of matters that are inherently
uncertain. Based upon this definition, our most critical estimates include the
impairment of goodwill, the impairment of long-lived assets, the valuation for
non-cash issuances of common stock, the allowance for doubtful accounts, revenue
recognition for construction contracts and insurance premiums and the valuation
allowance for deferred tax assets and liabilities. We also have other key
accounting estimates and policies, but we believe that these other policies
either do not generally require us to make estimates and judgments that are as
difficult or as subjective, or it is less likely that they would have a material
impact on our reported results of operations for a given period. For additional
information see Note 3, "Summary of Significant Accounting Policies," in the
notes to the Financial Statements. Although we believe that our estimates and
assumptions are reasonable, they are based upon information presently available.
Actual results may differ significantly from these estimates.


                                       24
<PAGE>

IMPAIRMENT OF GOODWILL

Goodwill represents the excess purchase price over the fair market value of the
nets assets acquired. In accordance with Statement of Financial Accounting
Standards ("SFAS") No. 141, "Business Combinations", and SFAS No. 142, "Goodwill
and Other Intangible Assets", goodwill is not amortized but is subject to annual
impairment tests. On December 16, 2004, we determined that as a result of a
material impairment of PBS 2000, we wound down and closed the PBS 2000
operation. As a result, we believe that the PBS 2000 valuation was significantly
impaired and as a result of our impairment analysis, the entire goodwill
recorded from the acquisition of PBS 2000 in the amount of $401,033 was impaired
and was recorded as an impairment expense in the Statement of Operations as of
December 31, 2004. On March 16, 2005, the 55,556 shares of common stock held in
escrow related to the acquisition of PBS 2000 were cancelled due to failed
negotiations with previous owners. This transaction was recorded as a recovery
of impairment of $116,669 in the first quarter of 2005 as reflected in the
accompanying Consolidated Statement of Operations for the year ended December
31, 2005.

IMPAIRMENT OF LONG-LIVED ASSETS

We account for the impairment of long-lived assets in accordance with SFAS No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets," which
requires that long-lived assets be reviewed for impairment whenever events or
changes in circumstances indicate that the book value of the asset may not be
recoverable. Recoverability of the asset is measured by comparison of its
carrying amount to the undiscounted cash flow that the asset or asset group is
expected to generate. If such assets or asset groups are considered to be
impaired, the loss recognized is the amount by which the carrying amount of the
property, if any, exceeds its fair market value. On December 16, 2004, due to
lack of expected PBS 2000 future cash flows, we wound down and closed the PBS
2000 operation. As a result, we believe that the PBS 2000 valuation was
significantly impaired and as a result of our impairment analysis, the net book
value of PBS 2000 assets of $144,661 were written off and recorded as an
Impairment of Subsidiary in the Statement of Operations for the year ended
December 31, 2004. On March 16, 2005, the 55,556 shares of common stock held in
escrow related to the acquisition of PBS 2000 were cancelled. This transaction
was recorded as a recovery of impairment of $116,669 in the first quarter of
2005 as reflected in the accompanying Consolidated Statement of Operations for
the year ended December 31, 2005.

VALUATION OF NON-CASH ISSUANCES OF COMMON STOCK

We issued common stock to several parties in non-cash transactions during the
year ended December 31, 2005. For these issuances, valuation was determined
based upon the recent sales of stock prices obtained in private offerings of our
common stock completed during the year ended December 31, 2005, quoted market
prices, or the value of such existing liabilities satisfied.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

We estimate the allowance for doubtful accounts based upon a review of
outstanding receivables, historical collection information, and existing
economic conditions. Our management reviews the customer accounts on a routine
basis to determine if an account should be charged off.

REVENUE RECOGNITION ON CONSTRUCTION CONTRACTS

The majority of our revenues are generated through the successful bidding and
execution of remediation and reconstruction contracts. We perform work under
fixed price as well as negotiated contracts. The contract period varies with
approximately ninety percent of the contracts being completed within twelve
months of the start date. We recognize revenues from contracts on the percentage
of completion method, measured by multiplying the contract amount, including
change orders, by the proportion of costs incurred to date, to estimated total
costs for each contract. Contracts in progress are valued at cost plus accrued
profit, less billings to date on uncompleted contracts. This method is used
because our management considers it to be the best available measure of progress
on contracts in process. Allocated job costs include all direct material, labor
costs and sub-contracting expenses and various direct costs which can be
specifically allocated to individual contracts. Unallocated contract costs as
well as general and administrative expenses are charged to expense as incurred.
Provisions for losses on uncompleted contracts are made in the period in which
such losses are determined without reference to percentage completion. No
significant losses on uncompleted contracts existed at December 31, 2005.
Changes in job performance, job conditions and estimated profitability,
including those arising from contract penalty provisions, and final contract
settlements may result in revisions to costs as well as income and are
recognized in the period in which revisions are determined.


                                       25
<PAGE>

REVENUE RECOGNITION FOR INSURANCE PREMIUMS

Insurance premiums collected are primarily for terms of one year. We recognize
commission revenue ratably over the course of the year as the commissions are
earned and defer revenue recognition on commissions not yet earned. The
liability account Deferred Revenue in the accompanying Consolidated Balance
Sheet includes those amounts that would have to be paid to the insurance carrier
if an insurance policy was cancelled. Insurance revenue represented 0.7% and
4.0% in 2005 and 2004, respectively, of total revenues.

The Company accounts for employee stock awards in accordance with Accounting
Principles Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to
Employees". Under APB 25, the Company recognizes no compensation expense related
to employee stock awards when awards are granted with exercise prices equal to
or greater than the estimated fair value of the stock on the date of grant. The
Company provides the supplemental disclosures required by Statement of Financial
Accounting Standard No. 123 ("SFAS 123"), "Accounting for Stock-Based
Compensation," as amended by SFAS No 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure," which assumes the recognition of
compensation expense based on the fair value of options on the grant date. The
Company follows the provisions of SFAS 123, as amended, and Emerging Issues Task
Force No. 96-18, "Accounting for Equity Instruments That Are Issued to Other
Than Employees for Acquiring or in Connection with Selling Goods or Services,"
for equity instruments granted to non-employees.

VALUATION ALLOWANCE FOR DEFERRED TAX ASSETS AND LIABILITIES

In assessing the recoverability of deferred tax assets and liabilities, our
management considers whether it is more likely than not that some portion or all
of the deferred tax assets and liabilities will be realized.


                                       26
<PAGE>

RESULTS OF OPERATIONS

Fiscal year ended December 31, 2005 compared to fiscal year ended December 31,
2004:

                                                  Fiscal Year Ended December 31,
                                                      2005             2004
                                                  ------------     ------------
Revenues                                          $ 20,624,443     $  5,100,111
Cost of revenues                                    11,448,710        2,907,886
                                                  ------------     ------------
Gross profit                                         9,175,733        2,192,225

Operating expenses:
Selling, general and administrative                  1,992,582          755,496
Compensation, payroll taxes and benefits             2,698,112        1,739,652
Stock compensation                                     358,237          515,738
Consulting and contract labor                          503,820          477,991
Professional                                           367,599          283,012
Impairment of subsidiary                                    --          144,661
Impairment of goodwill                                      --          401,033
Recovery of impairment                                (116,669)              --
Impairment of leasehold improvements                   123,230
Rent                                                   411,609          137,506
Depreciation                                           109,211           48,579
                                                  ------------     ------------
Total operating expenses                             6,447,731        4,503,668
                                                  ------------     ------------

Operating income (loss)                              2,728,002       (2,311,443)

Other income (expense):
Other income (expense), net                           (143,000)          79,814
Interest and financing cost, net                      (516,451)         (51,822)
                                                  ------------     ------------
Total other income (expense)                          (659,451)          27,992
                                                  ------------     ------------

Net income (loss)                                 $  2,068,551     $ (2,283,451)
                                                  ============     ============

Revenues:

Revenues increased $15,524,332, or 304%, to $20,624,443 for 2005 from $5,100,111
in 2004. The increase was primarily the result of our hurricane storm related
construction work in Florida, Louisiana and Mississippi.

Cost of Revenues:

Cost of revenues increased $8,540,824, or 294%, to $11,448,710 for 2005 from
$2,907,886 in 2004. The increase was primarily the result of our hurricane storm
related construction work in Florida, Louisiana and Mississippi.

Operating Expenses:

Operating expenses increased $1,944,063, or 43%, to $6,447,731 for 2005 from
$4,503,668 for 2004. The increase was primarily due to a $1,237,086 increase in
selling, general and administrative and an $958,460 increase in compensation,
payroll taxes and benefits. The increase in both of these was directly related
to our hurricane storm related construction work in Florida, Louisiana and
Mississippi.


                                       27
<PAGE>


Other Income (Expense):

Other income (expense) increased $687,443 of expense, to $659,451 of expense for
2005 from $27,992 of income for 2004. The increase in expense was primarily from
a $464,629 increase in interest and financing cost and a $222,814 increase in
other expense. The increase in interest and financing cost was primarily the
result of the valuation for warrants and placement fees from financing
transactions. The warrants were valued at $1,155,230 and are being amortized to
interest expense over the life of the associated debt. The $222,814 increase in
other expense was primarily from a $150,000 accrual for a lawsuit that was
recorded in the fourth quarter of 2005.

Liquidity and Capital Resources:

Cash was $683,346 at December 31, 2005 as compared to $111,345 at December 31,
2004, an increase of $572,001, or 514%. Working capital surplus was $2,554,610
at December 31, 2005 as compared to a working capital deficit of $1,877,384 at
December 31, 2004, an increase of $4,431,994, or 236%. The increase in cash was
primarily due to $4,924,805 of cash proceeds from the issuance of notes payable
$1,055,150 of cash proceeds received from the sale of common stock, $400,000 of
cash proceeds from the issuance of convertible debentures and $309,582 of cash
proceeds from a bank line of credit; offset by $4,229,692 of cash used in
operations, $1,474,342 of cash used in investing activities, $334,597 of
repayments for a bank line of credit, $57,831 of repayments for notes payable
and $23,950 of repayments for a note payable-related party.

Operating Activities

Cash used in operating activities was $4,229,692 for the year ended December 31,
2005 as compared to $241,489 for the year ended December 31, 2004, an increase
of $3,988,203, or 1,652%. The increase in cash used in operating activities
resulted primarily from an $8,032,657 increase in contracts receivable, a
$3,304,659 increase in unbilled revenue and deferred revenue, net; offset by a
$3,358,505 increase in trade accounts payable and a $940,766 increase in accrued
expenses.

Investing Activities

Cash used in investing activities was $1,474,342 for the year ended December 31,
2005 as compared to $479,980 for the year ended December 31, 2004, an increase
of $994,362, or 207%. The increase in cash used in investing activities resulted
primarily from $999,342 of purchases for property and equipment and $140,000 of
net investment in certificates of deposit, and a $335,000 increase in notes
receivable.

Financing Activities

Cash flows provided by financing activities was $6,276,035 for the year ended
December 31, 2005 as compared to $824,724 for the year ended December 31, 2004,
an increase of $5,451,311, or 661%. The increase in cash provided by financing
activities was primarily due to $4,924,805 of cash proceeds from the issuance of
notes payable, $1,055,150 of cash proceeds received from the sale of common
stock, $400,000 of cash proceeds from the issuance of convertible debentures and
$309,582 of cash proceeds from a bank line of credit; offset by $334,597 of
repayments for a bank line of credit, $57,831 of repayments for notes payable
and $23,950 of repayments for a note payable-related party.

Our principal uses of cash to date have been for operating activities and we
have funded our operations primarily by incurring indebtedness and selling our
common stock.

Our indebtedness obligations pose a significant liquidity risk to our business
and stockholders by requiring us to dedicate a substantial portion of our cash
flow to principal and interest payments on our debt obligations, thereby
reducing the availability of our cash flow to fund working capital, capital
expenditures and other corporate requirements. Additionally, these debt
obligations may impede us from obtaining additional financing in the future for
working capital, capital expenditures and other corporate requirements and may
make us more vulnerable to a downturn in our business and limit our flexibility
to plan for, or react to, changes in our business.


                                       28
<PAGE>

DEBT OBLIGATIONS

The following summarizes our debt obligations at December 31, 2005:

SHORT-TERM DEBT

Our short-term debt at December 31, 2005 consisted of the following:

Bank Line of Credit

$40,000 bank line of credit, dated May 17, 2005, bearing interest
at the bank's prime rate plus 1.25% (8.5% at December 31, 2005),
with an open ended payment term.                                   $     40,000

$100,000 bank line of credit, dated July 28, 2005, bearing
interest at 3.97%, payable monthly with principal due at
maturity on July 28, 2006.
                                                                        100,000
                                                                     ----------
                                                                     $  140,000
                                                                     ==========

On March 1, 2005, we entered into a revolving line of credit facility with a
bank in the amount of $50,000, and we initially received $47,676 against this
facility. This balance was repaid and the facility was closed prior to December
31, 2005.

On April 26, 2005, we entered into a revolving line of credit facility with a
bank in the amount of $40,000 and received $40,000 against this facility. This
facility is fully secured by a $40,000 certificate of deposit. The outstanding
balance of this facility was $40,000 at December 31, 2005.

On July 28, 2005, we entered into a revolving line of credit facility with a
bank in the amount of $100,000 and received $100,000 against this facility. This
facility is fully secured by a $100,000 certificate of deposit. The outstanding
balance of this facility was $100,000 at December 31, 2005.

Notes Payable - Related Parties

$75,000 unsecured promissory note, dated October 2003, bearing
interest at 10% per annum and due on demand.                            $19,336

$5,000 unsecured promissory note, dated July 30, 2004, bearing
interest at 10% per annum and due on demand.                              5,000

$15,000 unsecured promissory note dated October 2003, bearing
interest at 9.2% - monthly payments of $432 - due March 2007              6,867
                                                                        -------

Less: Current portion                                                   26,518
                                                                        ------
Long-term portion                                                       $ 4,685
                                                                        =======

In October 2003, we issued a $75,000 unsecured promissory note to J. E. Rea, our
CEO, of which $19,336 was outstanding at December 31, 2005. This promissory note
was issued in exchange for working capital advances to the Company, bears
interest at 10% per annum and is due on demand. During the year ended December
31, 2005, our subsidiary Restoration Group America, Inc. made an aggregate of
$20,000 in principal payments on this note and an aggregate of $14,543 was
reclassed from Mr. Rea's accrued payroll and added to this note, leaving an
outstanding balance of $19,336 at December 31, 2005.

In October 2003, we issued a $15,000 unsecured promissory note to J.A. Rea, our
President/CEO, of which $2,182 was the current-term portion outstanding at
December 31, 2005. This promissory note was issued in exchange for working
capital advances to the Company, bears interest at 9.2% per annum with monthly
principal and interest payments of $432.62 and is due in March 2007.


                                       29
<PAGE>

In July 2004, we issued a $5,000 unsecured promissory note to Michael Mayor, our
VP Sales of Marketing, of which $5,000 is outstanding at December 31, 2005. This
promissory note was issued in exchange for the purchase of a vehicle from Mr.
Mayor, bears interest at 10% per annum and is due on demand.

Notes Payable - Non-Related Parties

$185,100 unsecured promissory note, dated May 2004, bearing
interest at 10% for 90 days and 18% subsequently.                      $182,600

$8,099 unsecured promissory note, dated July 2003, bearing
interest at 8% per annum and due on demand                                8,099

$17,000 unsecured promissory note, dated February 26, 2005,
non interest bearing and no defined repayment date                       17,000

$5,000 unsecured promissory note, dated August 9, 2005, bearing
interest at 10% per annum and due January 2006.                           5,000

$10,000,000 secured revolving note, dated October 31, 2005,
bearing interest at prime plus 2% (but never less than 6%)
per annum and due October 31, 2008                                    5,749,000

Less: un-amortized debt discount on $10,000,000 secured
revolving note dated October 31, 2005.                               (1,091,051)
                                                                     ----------
                                                                     $4,870,648
                                                                     ==========

In September 2003, we received $75,000 of proceeds from an unrelated third party
with the anticipation of structuring a promissory note. However, the third party
has not signed the promissory note as of the date of the Financial Statements.
We are accruing interest at the rate of 15% per annum with the intent to repay
the obligation when funds are available. The debt and accrued interest were
repaid through construction related work and cash payments reducing the
liability balance to zero at December 31, 2005.

Through May 2004, we had received $185,100 of proceeds in the form of a loan
from an unrelated third party. We are accruing interest at the rate of 18% per
annum. On February 9, 2005, $2,500 of this loan was converted into 4,167 shares
of the our common stock, leaving a balance of $182,600 at December 31, 2005.

On August 8, 2004, through the acquisition of PBS 2000, we assumed a $6,000
unsecured promissory note from an unrelated third party. We were accruing
interest at the rate of 8% per annum with the intent to repay the obligation
when funds were available or through the issuance of common stock in exchange
for the retirement of this note. In December 2005, we negotiated a settlement
for the retirement of this note, which included a $5,000 principal payment and
forgiveness of $1000 in principal and all related interest, reducing the
outstanding balance of this note to zero at December 31, 2005.

On August 8, 2004, in connection with our acquisition of PBS 2000, we assumed an
$8,099 unsecured promissory note from an unrelated third party. We are accruing
interest at the rate of 8% per annum with the intent to repay the obligation
when funds are available or through the issuance of common stock in exchange for
the retirement of this note. The outstanding balance of this note was $8,099 at
December 31, 2005.

On February 2005, we received an aggregate of $17,000 of proceeds in the form of
a loan from an unrelated third party in exchange for a non-interest bearing
promissory note with no specified maturity date. The outstanding balance of this
note was $17,000 at December 31, 2005.

On August 9, 2005, we received $5,000 of property and equipment from an
unrelated third party in exchange for a promissory note bearing interest at the
rate of 10% per annum with a maturity date of January 2006. The outstanding
balance of this note was $5,000 at December 31, 2005.


                                       30
<PAGE>

Effective October 31, 2005, as disclosed in our Current Report on Form 8-K filed
with the SEC on November 9, 2005, we entered into certain loan documents with
Laurus Master Fund, Ltd. Effective February 15, 2006, as disclosed in our
Current Report on Form 8-K filed with the SEC on February 23, 2006, we amended
and restated certain of those loan documents with Laurus Master Fund, Ltd., and
issued a new common stock purchase warrant to Laurus Master Fund, Ltd. For a
more detailed description of these transactions and the underlying loan
documents, please refer to our Current Reports on Form 8-K filed with the SEC on
November 9, 2005 and February 23, 2006, and the discussion above under the
caption "RECENT DEVELOPMENTS."


Effective October 31, 2005, the Company entered into a Security Agreement with
Laurus Master Fund, Ltd. ("Laurus") for the sale by the Company to Laurus of a
$1,400,000 secured convertible minimum borrowing note ("Minimum Borrowing Note")
and a secured revolving note up to a maximum of $10,000,000 ("Revolving Note").
In connection with the Minimum Borrowing Note and the Revolving Note, the
Company issued to Laurus a common stock purchase warrant ("Warrant") to purchase
up to 2,962,963 shares of the Company's $0.001 par value per share common stock
("Common Stock") at $0.78 per share with a seven year term. The Company
evaluated the warrant issuance in accordance with FAS 123 and utilized the Black
Scholes method to determine valuation. As a result of its evaluation, the
Company determined that the warrant valuation was $1,155,230 and recorded this
amount to debt discount and common stock warrants. The Company amortized $64,179
of the debt discount in 2005 and recorded this cost to interest expense,
resulting in $1,091,051 in un-amortized debt discount on December 31, 2005.
Additionally, the Company and Laurus entered into a registration rights
agreement ("Registration Rights Agreement") covering the registration Common
Stock underlying the Minimum Borrowing Note and the Warrant.


The Minimum Borrowing Note has an interest rate of Prime plus two percent (2.0%)
and shall not be any time less than six percent (6.0%). The Minimum Borrowing
Note is due together with any unpaid and accrued interest hereon, on October 31,
2008 ("Maturity Date"). Laurus shall have the option, but not the obligation, at
any time until the Maturity Date to convert all or any portion of the Minimum
Borrowing Note and accrued interest into Common Stock at an exercise price of
$0.71 per share. Additionally, the Company has the option, but not the
obligation, to prepay the Minimum Borrowing Note by paying Laurus one hundred
thirty percent (130%) of the principal amount of the Minimum Borrowing Note plus
accrued and unpaid interest. As a result of the Minimum Borrowing Note, the
Company obtained $4,907,805 of proceeds, net of $841,195 of expenses. Of the
$841,195 of expenses, $396,195 was paid to the Company's financial agent,
Spencer Clarke, LLC for financial agent fees, $418,000 was paid to Laurus
Capital Management, LLC for management, due-diligence and documentation fees,
$25,000 was paid to Synergy Structures, for financial agent fees; and $2,000 was
paid to Loeb & Loeb LLP for escrow fees. The Company has recorded this note
under current liabilities because the agreement with Laurus requires that monies
borrowed are returned within 210 days.


The Revolving Note has an interest rate of Prime plus two percent (2.0%) and
shall not be any time less than six percent (6.0%). The interest rate was 9.25%
at December 31, 2005. The Revolving Note is due together with any unpaid and
accrued interest hereon, on the Maturity Date. Laurus shall have the option, but
not the obligation, at any time until the Maturity Date to convert all or any
portion of the Revolving Note and accrued interest into Common Stock at an
exercise price of $0.71 per share.

The Security Agreement includes among other things, a stock pledge agreement, a
guaranty from the Company and all of its subsidiaries and certain covenants and
obligations in order to secure the funds obtained from the above mentioned
items. The Security Agreement also includes a funding formula that determines a
maximum amount of funds that the Company can be advanced at any point in time
and an allowance for Laurus to override the formula and advance registrant funds
over the funding formula. Laurus elected the option to override the formula and
advanced the Company $250,000 on October 31, 2005 and cash was received January
12, 2006. The advance has an interest rate of Prime plus five percent (5.0%) and
is due and payable with accrued interest on May 1, 2006. At December 31, 2005,
$4,501,000 was available for additional borrowing under the Revolving Note.


                                       31
<PAGE>

Convertible Debentures

In February 2005, we signed an agreement with Spencer Clarke LLC in which
Spencer Clarke LLC was engaged as our financial advisor for up to $1,000,000 of
senior subordinated convertible debentures. From January through March 2005, we
issued $400,000 of senior subordinated convertible debentures and received
$323,000 of cash proceeds, net of $77,000 of expenses. We used the proceeds of
this debenture transaction to retire selected debt, finance the growth of
several restoration projects in areas severely damaged by recent hurricanes and
for other strategic corporate initiatives.

In accordance with EITF Issue 98-5 (Accounting for Convertible Securities with
Beneficial Conversion Features or Contingently Adjustable Conversion Ratios) as
amended by EITF Issue 00-27 (Application of Issue No. 98-5 to Certain
Convertible Instruments), we have determined that the $400,000 of the senior
subordinated convertible debentures described above have a beneficial conversion
feature, as the exercise price is less than the fair value of our common stock
on the measurement date. However, the beneficial conversion feature was
determined to be immaterial and we recorded no entry.

Effective July 30, 2005, our convertible debentures were amended such that the
maturity date was changed to October 31, 2005 or our having completed an
offering of either debt or equity or both in excess of $2,000,000. The holder
waived any and all defaults without further recourse until the amended maturity
date of October 31, 2005 was reached. In consideration of this waiver and
extension of the maturity date to October 31, 2005, we issued warrants to
purchase our common stock such that for every $10,000 of principal amount of
debentures outstanding, the holder received a warrant to purchase 1,000 shares
of our common stock at an exercise price of $0.38 per share. As a result of
there being $400,000 in principal amount of convertible debentures outstanding,
we issued 40,000 warrants to the holder, which warrants will expire on July 30,
2008. Additionally, the Company's Convertible Debenture Note was amended to
provide additional incentive to convert in the future by adding a "sweetener" by
lowering the conversion price from $0.60 per share to $0.45 per share. In
accordance with SFAS 84 (induced conversions of convertible debt), the Company
booked $116,881 of interest expense and additional paid in capital for such
"sweetener" upon conversion, for the additional shares issued due to the reduced
conversion price.

In September 2005, our $400,000 of convertible debentures were converted into
888,896 shares of our common stock at a price of $0.45 per share. The
convertible debentures related accrued interest of $30,386 was converted into
67,525 shares of our common stock at a price of $0.45 per share. On November 15,
2005, additional convertible debentures related accrued interest of $450 was
converted into 999 shares of our common stock at a price of $0.45 per share.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to investors.

Recent Accounting Developments

On December 16, 2004, the Financial Accounting Standards Board issued SFAS 123
(revised 2004), "Share-Based Payments" ("SFAS 123(R)"), which is a revision of
SFAS 123, "Accounting for Stock-Based Compensation." SFAS 123(R) supersedes APB
Opinion 25, "Accounting for Stock Issued to Employees," and amends SFAS 95,
"Statement of Cash Flows." Generally, the approach in SFAS 123(R) is similar to
the approach described in SFAS No. 123. However, SFAS 123(R) requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the income statement based on their fair values. Pro-forma
disclosure is no longer an alternative.

SFAS No. 123(R) permits public companies to adopt its requirements using one of
two methods:

1). A "modified prospective" method in which compensation cost is recognized
beginning with the effective date (a) based on the requirements of SFAS No.
123(R) for all share-based payments granted after the effective date and (b)
based on the requirements of SFAS No. 123 for all awards granted to employees
prior to the effective date of SFAS No. 123(R) that remain unvested on the
effective date.


                                       32
<PAGE>

(2) A "modified retrospective" method which includes the requirements of the
modified prospective method described above, but also permits entities to
restate based on the amounts previously recognized under SFAS No. 123 for
purposes of pro-forma disclosures either (a) all prior periods presented or (b)
prior interim periods of the year of adoption.

We are required to adopt SFAS No. 123(R) for periods beginning January 1, 2006,
and are currently evaluating the adoption procedures.

As permitted by SFAS 123, we currently account for share-based payments to
employees, vendors or outside consultants/contractors using APB Opinion No. 25's
intrinsic value method and, as such, we generally recognize expense to the
extent of the fair market value of the shares exchanged, after taking into
account various factors, such as but not limited to, number of shares, market
and other stock restrictions. Accordingly, the adoption of SFAS 123(R)'s fair
value method may or may not have a significant impact on our consolidated
results of operations, although it will have no impact on our overall
consolidated financial position. The impact of adopting SFAS 123(R) in future
periods will depend on levels of share-based payments granted in the future.

2006 Outlook

Our ability to successfully implement our business plan will be heavily
dependent on securing additional capital to finance the accounts receivable for
our insurance restoration business. Although we have an existing $10,000,000
credit facility, we believe that this amount will not be sufficient to handle
our anticipated growth. As a result, we are searching for an alternative means
of securing additional capital, which may include the sale of additional shares
of our common stock or the issuance of additional debt securities. Additionally,
we require additional funds for working capital and for growth opportunities.
However, there is no assurance that additional equity or debt financing will be
available on terms acceptable to our management or that the additional financing
will be available when we require the funds.

Item 7. Financial Statements.

Our Financial Statements are attached as Appendix A (following the Exhibits) and
are hereby incorporated by reference and included as part of this Annual Report.

Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure.

None.

      Item 8A. Controls and Procedures.

      (a) Evaluation of Disclosure Controls and Procedures: Based on their
evaluation required by Rule 13a-15(b) promulgated under the Exchange Act, our
Chief Executive Officer and Chief Financial Officer have concluded that, as of
December 31, 2005, our disclosure controls and procedures (as defined in Rule
13a-15(e) promulgated under the Exchange Act) are effective in alerting them on
a timely basis to material information relating to us (including our
consolidated subsidiaries) required to be included in our periodic filings under
the Exchange Act. Since December 31, 2005, there have not been any significant
changes in our disclosure controls and procedures or in other factors that could
significantly affect such controls.

      (b) Changes in Internal Control Over Financial Reporting: There were no
significant changes in our internal control over financial reporting identified
in connection with the evaluation required by Rule 13a-15(d) promulgated under
the Exchange Act that occurred during the fiscal quarter ended December 31, 2005
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.


                                       33
<PAGE>

Limitations on the Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial
Officer, does not expect that our disclosure controls and internal controls will
prevent all error and all fraud. A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management or board override of the control.

The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, control may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.

CEO and CFO Certifications

Appearing as exhibits 31.1 and 31.2 to this Annual Report are certifications of
our Chief Executive Officer and Chief Financial Officer, as required in
accordance with Section 302 of the Sarbanes-Oxley Act of 2002. The disclosures
in this Item 8A of this Annual Report are related to the evaluation referred to
in the Section 302 certifications and this information should be read in
conjunction with the Section 302 certifications for a more complete
understanding of the topics presented.

Item 8B. Other Information.

None.


                                       34
<PAGE>

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(A) Of the Exchange Act.

Directors and Executive Officers

The following table sets forth the name, age, positions held and term of service
for each of our directors and executive officers. All of our current directors
were elected at our annual meeting of stockholders on December 15, 2005 to serve
for one year or until their respective successors are duly elected and qualify.
All of our officers serve at the pleasure of the board of directors. There are
no arrangements or understandings with respect to the selection of directors or
officers.

<TABLE>
<CAPTION>
Name                          Age    Positions with the Company                          Term of Service
----                          ---    --------------------------                          ---------------
<S>                           <C>    <C>                                                 <C>
John Brobjorg                  49    Corporate Controller                                Since July 2004
Kevin L. Dahlberg              43    Executive Vice President,                           Since December 2003
                                     Vice President - Investor Relations
                                     and Secretary; President of RG
                                     Insurance Services, Inc.
J. Kenneth Dunn (1)            47    Director                                            Since August 2004
Bruce A. Hall                  49    Chief Financial Officer                             Since May 2004
Michael A. Jenkins (1,2,3)     64    Director                                            Since March 2004
Paul S. Johnson (1,2,3)        72    Director                                            Since February 2004
Edward P. Rea                  65    Director and Executive Chairman                     Since December 2003
James A. Rea                   38    Director, President and Chief Operating Officer     Since December 2003
John E. Rea                    40    Director and Chief Executive Officer                Since December 2003
</TABLE>

---------------

(1)   Current member of Audit Committee.
(2)   Current member of Compensation Committee.
(3)   Current member of Nominating Committee.

John N. Brobjorg, Corporate Controller

Mr. Brobjorg has been our Corporate Controller on a consulting basis since
January 2005. Prior to that, he served as our Corporate Controller as an
employee from July 2004 to January 2005. Mr. Brobjorg is a financial executive
with extensive experience as a corporate controller and in related financial
management positions in the hi-tech, manufacturing, energy, clinical laboratory
and consulting industries. He is also the Corporate Controller of Dent Zone
International, Inc., a paintless dent repair company, a position he has held
since April 2005, and he was the Corporate Controller of Claridge Capital
Partners, a medical services company, from December 2004 to March 2005. Prior to
joining us, Mr. Brobjorg performed financial and accounting contract work for
various companies from June 2003 to June 2004. Prior to that, from October 1999
to May 2003, he was the Corporate Controller of Probex Corporation, a formerly
publicly traded used oil recycling company that filed for protection under
Chapter 7 of the United States Bankruptcy Code in May 2003. He has also held
senior level positions at Praxair Inc., Corning Clinical Laboratories, Convex
Computer Corporation and Amsoil, Inc. Mr. Brobjorg holds a CMA designation and
earned a Master of Arts degree in International Business from the University of
Texas and a Bachelor of Arts degree in Economics and a Senior Accounting
Certificate from the University of Minnesota.

Kevin L. Dahlberg, Executive Vice President, Vice President - Investor Relations
and Secretary; President of RG Insurance Services, Inc.

Mr. Dahlberg has been our Executive Vice President since December 2004, Vice
President - Investor Relations since June 2004, and Secretary since January
2005. Mr. Dahlberg has also been President of our subsidiary RG Insurance
Services, Inc. since January 2005. He also previously served as our Senior Vice
President - Finance from December 2003 to June 2004. He was previously employed
with Moore Remodeling & Construction, L.P. and MCS, L.P. as a principal and
partner from September 2002 to December 2003. Prior to that, Mr. Dahlberg was
employed by Hillwood Investments, a Perot Company, from March 2000 to August
2002 as a Vice President. Mr. Dahlberg obtained a Bachelor of Arts in Business
Administration degree from Baylor University with majors in Entrepreneurship,
Management and Real Estate in 1985. He also holds Series 6, Series 7 and Series
63 Securities Licenses and a Texas Property & Casualty Insurance License.


                                       35
<PAGE>

J. Kenneth Dunn, Independent Director

Mr. Dunn has been a member of our board of directors since August 2004. He is
currently the President of Rainier Capital Management, a banking and financial
consulting firm, which he formed in 2003. Prior to that, from 1992 to 2003, Mr.
Dunn was Executive Vice President of Meridian Capital Management, a real estate
management firm. Prior to that, from 1988 to 1992, Mr. Dunn was Executive Vice
President of Hampton Real Estate Group, a real estate management company that
owned or controlled approximately 10,000 apartment units and 1,500,000 square
feet of commercial property. Mr. Dunn was employed as a commercial loan officer
from 1982 to 1988 with First National Bank of Commerce in New Orleans, Louisiana
and Banc Texas in Dallas, Texas in the general business and real estate lending
divisions. Mr. Dunn received his Masters of Business Administration degree from
the University of Arkansas in 1982.

Bruce A. Hall, Chief Financial Officer

Mr. Hall has been our Chief Financial Officer on a consulting basis since
January 2005. Prior to that, he served as our CFO as an employee from May 2004
to January 2005. He also served as our Secretary from May 2004 to March 2005.
Mr. Hall is a senior financial executive with extensive experience serving as a
CFO and in related financial management positions in the real estate
development, energy, consulting and manufacturing industries. He is also the
Chief Executive Officer and Chief Financial Officer of Dent Zone International,
Inc., a paintless dent repair company, a position he has held since January
2005. He has also held senior level positions at Recognition Equipment, Inc. and
Harris Adacom Corporation. Mr. Hall was formerly Chief Financial Officer of
Probex Corporation, a formerly publicly traded used oil recycling company that
filed for protection under Chapter 7 of the United States Bankruptcy Code in May
2003. He has also been a senior financial and management consultant and
multi-family housing developer and began his career in public accounting with
Arthur Young & Company, a predecessor of Ernst & Young LLP. Mr. Hall holds both
CPA (Certified Public Accountant) and CMA (Certified Management Accountant)
designations and is a graduate of the University of Texas at Austin.

Michael A. Jenkins, Independent Director

Mr. Jenkins has been a member of our board of directors since March 2004. He is
currently President of Leisure and Recreation Concepts, Inc., a design and
consulting firm located in Dallas, Texas, a position he has held since 1970.
Additionally, Mr. Jenkins has been President and Managing Director of Dallas
Summer Musicals, Inc., a musical theater company, since 1974. Mr. Jenkins
attended Baylor University from 1960 to 1963.

Paul S. Johnson Jr., Independent Director

Mr. Johnson has been a member of our board of directors since February 2004. Mr.
Johnson retired from the U.S. Naval Reserves in 1991 with the rank of 2-star
admiral. From November 2003 to October 2005, he was the Chief Executive Officer
of two car rental companies, Addison Auto Rental, LLC and North Texas Auto
Rental, LLC. Prior to that, from June 2001 to November 2003, he was Chief
Executive Officer of Classic Auto, an automobile body work company. From July
1989 to the present, Mr. Johnson has been employed by American East as a Captain
on Boeing 727 aircraft. He is a graduate of Iowa State University where he
obtained a Bachelors of Science degree. On October 14, 2005, Mr. Johnson filed
for personal protection under Chapter 7 of the United States Bankruptcy Code.

Edward P. Rea, Director and Executive Chairman

Edward P. Rea has been our Executive Chairman and a director since April 2001.
Mr. Rea is also the Chairman of Rea Brothers Limited, an Ontario, Canada
corporation, which is an investment company, a position he has held since
September 1964. From June 1994 to October 2004, he served as Chairman of The
Crafter's Marketplace, Ltd., which operated a chain of retail stores in Canada.
He has also been an independent business consultant since 1998. Mr. Rea was
formerly Chairman of INVA #1, Inc., a former wholly-owned nominee subsidiary of
the Company that filed involuntary bankruptcy under Chapter 11 of the United
States Bankruptcy Code on December 3, 2002 and was ultimately sold to an
investor through the bankruptcy court. Mr. Rea is the father of our Chief
Executive Officer and director, John E. Rea, and our President, Chief Operating
Officer and director, James A. Rea.


                                       36
<PAGE>

James A. Rea, Director, President and Chief Operating Officer

James A. Rea has been our President since March 2005, our Chief Operating
Officer since December 2003, and a director since March 2004. Mr. Rea also
previously served as our President from December 2003 to June 2004. Prior to
joining us, Mr. Rea was President and Chief Operating Officer of The Restoration
Group, Inc. from June 2001 to December 2003. He was President of Tenax, Inc., a
home building company, from February 1999 to June 2001. Mr. Rea attended Texas
Tech University. Mr. Rea is the brother of our Chief Executive Officer and
director, John E. Rea, and the son of our Executive Chairman, Mr. Edward P. Rea.

John E. Rea, Director and Chief Executive Officer

John E. Rea has been our Chief Executive Officer since December 2003, and has
been a director since April 2001. Mr. Rea also served as our President prior to
December 2003. He was President of The Crafter's Marketplace, Ltd., which
operated a chain of retail stores operating in Canada, from June 1994 to October
2004. He attended Southern Methodist University. Mr. Rea is the brother of our
President, Chief Operating Officer and director, James A. Rea, and the son of
our Executive Chairman, Edward P. Rea.

Family Relationships

Our Executive Chairman and director, Edward P. Rea, is the father of our
President, Chief Operating Officer and director, James A. Rea; and our Chief
Executive Officer and director, John E. Rea.

Identification of the Audit Committee

Our board of directors maintain a standing Audit Committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee
assists the board of directors in exercising its fiduciary responsibilities for
oversight of audit and related matters, including corporate accounting,
reporting and control practices. It is also responsible for recommending to our
board of directors the independent auditors to be engaged for the following
fiscal year. The Audit Committee is currently comprised of Messrs. Dunn, Jenkins
and Johnson. All of the current members of the Audit Committee are independent
in accordance with the existing requirements of NASDAQ's listing standards. The
Audit Committee will meet periodically with our management, financial personnel
and independent auditors to review our internal accounting controls and auditing
and financial reporting matters.

Audit Committee Financial Expert

Our board of directors has determined that we do not currently have an audit
committee financial expert serving on our Audit Committee, despite our continued
efforts to attract an audit committee financial expert. Previously, we did not
provide Directors and Officers ("D&O") liability insurance and this was a
detriment to our ability to attract qualified candidates to fill this position.
However, we now do provide D&O coverage and are currently in the process of
searching for an individual to serve on our board of directors and the Audit
Committee who would qualify as an audit committee financial expert.


                                       37
<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
us during, and Forms 5 and amendments thereto furnished to us with respect to,
the fiscal year ended December 31, 2005, and any written representations from
reporting persons that no Form 5 is required, the following table sets forth
information regarding each person who, at any time during the fiscal year ended
December 31, 2005, was a director, officer or beneficial owner of more than 10%
of our common stock who failed to file on a timely basis, as disclosed in the
above forms, reports required by Section 16(a) of the Exchange Act during the
fiscal year ended December 31, 2005 or prior fiscal years:

<TABLE>
<CAPTION>
                                                 Number of
                                             Transactions Not                     Known Failures
                            Number of Late     Reported On a                         To File a
Name                            Reports        Timely Basis                        Required Form
----                        --------------    ---------------                     --------------
                                  (#)               (#)
<S>                          <C>               <C>                <C>
John Brobjorg                      1                 1            Form 3 due July 22, 2004 (filed Oct. 27, 2005)
Kevin L. Dahlberg                  2                 2            Form 3 due Dec. 26, 2003 (filed Oct. 28, 2005)
J. Kenneth Dunn                    1                 1            Form 3 due Aug. 30, 2004 (filed Oct. 27, 2005)
Bruce A. Hall                      1                 1             Form 3 due May 14, 2004 (filed Oct. 27, 2005)
Michael A. Jenkins                 2                 2            Form 3 due Mar. 25, 2004 (filed Oct. 27, 2005);
                                                                  Form 4 due Mar. 24, 2004 (filed Oct. 27, 2005)
Paul S. Johnson                    2                 2            Form 3 due Feb. 25, 2004 (filed Oct. 27, 2005);
                                                                  Form 4 due Mar. 24, 2004 (filed Oct. 27, 2005)
Edward P. Rea                      1                 1            Form 4 due Jan. 5, 2004 (filed Oct. 31, 2005);
                                                                             Form 5 due Feb. 16, 2004
James A. Rea                       3                 4            Form 3 due Jun. 11, 2003 (filed Oct. 28, 2005);
                                                                  Form 4 due Jan. 23, 2004 (filed Oct. 27, 2005);
                                                                  Form 4 due Apr. 16, 2004 (filed Oct. 27, 2005);
                                                                             Form 5 due Feb. 16, 2004
John E. Rea                        1                 2                       Form 5 due Feb. 16, 2004
Robert A. England                  1                 1                        Form 3 due in Dec. 2003
Ralph Hunter                       1                 1                        Form 3 due in Aug. 2004
Michael Mayor                      1                 1                        Form 3 due in Mar. 2004
Richard S. Nelson                  1                 1                        Form 3 due in Feb. 2004
Crafter's Marketplace, Ltd.        1                 1                        Form 3 due in Apr. 2004
DKWFLP LP                          1                 1                        Form 3 due in Jan. 2004
J 2 Family LP                      1                 1                        Form 3 due in Jan. 2004
JAAVBR LP                          1                 1                        Form 3 due in Jan. 2004
Jades Family LP                    1                 1                        Form 3 due in Jan. 2004
Rea Brothers Ltd.                  1                 1                        Form 3 due in Apr. 2004
Rea Capital Corporation            1                 4
</TABLE>

Principal Executive and Financial Code of Ethics

In fiscal 2004, we adopted a code of ethics that applies to our Chief Executive
Officer, Chief Financial Officer and Corporate Controller. We will provide a
copy of our code of ethics to any person without charge, upon request sent to
our Corporate Secretary at 1507 Capital Avenue, Suite 101, Plano, Texas 75074.


                                       38
<PAGE>

Item 10. Executive Compensation.

Summary Compensation Table

The following table sets forth information concerning the compensation of our
named executive officers for the fiscal years ended December 31, 2003, 2004 and
2005. None of our other executive officers were compensated in excess of
$100,000 in total annual salary and bonus during the fiscal year ended December
31, 2005.

<TABLE>
<CAPTION>
                                                  Annual Compensation                         Long-Term Compensation
                                                                                            Awards                  Payouts
                                                                                               Securities
                                                                                                 Under-
                                                                                   Restricted    lying           LTIP     All Other
                                                                  Other Annual       Stock      Options/       Payouts     Compen-
Name And                                   Salary       Comm.     Compensation       Awards       SARs         Payouts     sation
    Principal Position         Year         ($)          ($)           ($)            ($)          (#)           ($)         ($)
<S>                            <C>        <C>        <C>          <C>              <C>          <C>            <C>         <C>
John E. Rea                     2005      120,000      31,000         6,000(1)         --             --           --        --
    Chief Executive Officer     2004      120,000          --        21,611            --             --           --        --
                                2003           --          --            --            --        833,333           --        --

James A. Rea                    2005      120,000     101,745        95,538(2)         --             --           --        --
   President and                2004       65,723          --         5,723            --             --           --        --
   Chief Operating Officer      2003       63,997          --         2,907            --        833,333           --        --

Kevin L. Dahlberg               2005      120,000          --        23,000(3)         --             --           --        --
   Executive Vice President     2004       44,846          --         2,538            --        583,333           --        --
                                2003        4,077          --           203            --             --           --        --
</TABLE>

---------------

(1)   John E. Rea receives an annual transportation allowance of $12,000, an
      annual health insurance allowance of up to $9,000 and an annual membership
      and education dues and fees allowance of $10,000 for the Young President's
      Organization and is paid commission on sales.
(2)   James A. Rea receives an annual transportation allowance of $12,000, an
      annual health insurance allowance of up to $9,000 and is paid commissions
      on sales.
(3)   Mr. Dahlberg receives an annual transportation allowance of $6,000 and an
      annual health insurance allowance of up to $6,000 and we accrued salary of
      $20,000 payable to him.

Employee Stock Option Plan

In August 2004, our shareholders approved the 2004 Omnibus Stock Option Plan for
the issue of up to 5,000,000 shares of our $0.001 par value common stock. As of
December 31, 2005, options to acquire 4,468,336 shares of our common stock are
issued and outstanding under the plan.

Option Grants Table

In March 2005, Bruce A. Hall, our Chief Financial Officer and a consultant for
the Company, was granted 666,667 stock options at an exercise price of $0.50 per
share. The option price was based upon a previous private placement offering and
adjusted higher to reflect a premium of 67% in exchange for immediate vesting of
the stock options.

In March 2005, John N. Brobjorg, our Corporate Controller and a consultant for
the Company, was granted 166,667 stock options at an exercise price of $0.50 per
share. The option price was based upon a previous private placement offering and
adjusted higher to reflect a premium of 67% in exchange for immediate vesting of
the stock options.

There were no other grants of stock options or stock appreciation rights (SARs)
made to our named executive officers during the fiscal year ended December 31,
2005.

Aggregated Option Exercises and Fiscal Year-End Option Value Table


                                       39
<PAGE>

The following table sets forth information concerning each exercise of stock
options during the fiscal year ended December 31, 2005 by each of our named
executive officers, and the value as of December 31, 2005 of all unexercised
stock options, on an aggregated basis. We do not currently have any outstanding
stock appreciation rights (SARs).

<TABLE>
<CAPTION>
                                                             Number Of                         Value Of
                                                            Securities                        Unexercised
                                                            Underlying                       In-The-Money
                         Shares                       Unexercised Options At                  Options At
                      Acquired On      Value               Dec. 31, 2005                     Dec. 31, 2005
Name                    Exercise      Realized                  (#)                               ($)
                          (#)           ($)         Exercisable / Unexercisable         Exercisable / Unexercisable

<S>                   <C>             <C>           <C>                                 <C>
John E. Rea                --             --               430,556 / 402,777               $8,611.12 / $8,055.54

James A. Rea               --             --               430,556 / 402,777               $8,611.12 / $8,055.54

Kevin L. Dahlberg          --             --               276,667 / 306,666               $5,533.34 / $6,133.32

Bruce A. Hall              --             --                  666,667 / --                       -- / --

John N. Brobjorg           --             --                  166,667 / --                       -- / --
</TABLE>

Long-Term Incentive Plan ("LTIP") Awards Table

The following table sets forth information regarding each award made to any of
our named executive officers during the fiscal year ended December 31, 2005
under any LTIP.

<TABLE>
<CAPTION>
                                           Performance                  Estimated Future Payouts Under
                         Number Of          Or Other                      Non-Stock Price-Based Plans
                      Shares, Units Or    Period Until
Name                    Other Rights       Maturation           Threshold            Target             Maximum
                            (#)             Or Payout           ($ or #)            ($ or #)            ($ or #)
<S>                    <C>                 <C>                  <C>               <C>                  <C>
John E. Rea                  --                  --                 --                  --                   --

James A. Rea                 --                  --                 --                  --                   --

Kevin L. Dahlberg            --(1)               --(1)           $    0(1)         $30,000/year(1)     $30,000/year(1)
                             --(2)               --(2)           $    0(2)         $60,000/year(2)     $60,000/year(2)

Bruce A. Hall           666,667(3)               --                  --                 --                   --

John N. Brobjorg        166,667(4)               --                  --                 --                   --
</TABLE>

---------------

(1)   Mr. Dahlberg's employment agreement provides that his annual base salary
      will increase from its current $120,000 to $150,000 upon the Company's
      raising a total of $4,000,000 in new equity or upon the Company's
      obtaining either 50,000 or more apartment units placed into its
      PropertySMART(R) program or $8,000,000 in annual PropertySMART(R) gross
      revenues.


                                       40
<PAGE>

(2)   Mr. Dahlberg's employment agreement also provides that his annual base
      salary will increase from its current $120,000 to $180,000 upon the
      Company's becoming cash flow positive with a net operating income equal to
      5% of sales.
(3)   Mr. Hall is a consultant for the Company under a consulting agreement at
      $5,000 monthly. The stock options were granted at $0.50 per share, based
      upon a previous private placement offering and adjusted higher to reflect
      a premium of 67% in exchange for immediate vesting of the stock options.
(4)   Mr. Brobjorg is a consultant for the Company under a consulting agreement
      at $1,500 monthly. The stock options were granted at $0.50 per share,
      based upon a previous private placement offering and adjusted higher to
      reflect a premium of 67% in exchange for immediate vesting of the stock
      options.


                                       41
<PAGE>

Compensation of Directors

In fiscal 2005, our board of directors approved a plan for director
compensation. Each director is paid $12,000 as an annual retainer for services;
$1,500 for each board meeting attended in person or $1,000 for each board
meeting attended via teleconference; $1,500 for attending our annual meeting of
stockholders. Additionally, committee members are paid $750 for each committee
meeting attended, with the chairman paid $1,000. The approved director
compensation plan applied to both 2004 and 2005, but due to cash flow
constraints no actual payments were made. Accordingly, the entire amount for
both 2004 and 2005 director compensation, in the aggregate amount of $258,250,
has been recorded as accrued expenses as of December 31, 2005.

Employment Contracts and Termination of Employment, and Change-in-Control
Arrangements

We have an employment agreement with our Chief Executive Officer, John E. Rea
(the "John E. Rea Agreement"). The John E. Rea Agreement provides for an annual
base salary of $120,000, a transportation allowance of $1,000 per month, a
health insurance allowance of up to $750 per month, a sales commission equal to
1.75% of our consolidated gross revenue, participation in any savings and
retirement plan and welfare benefit plans adopted by us and other standard
provisions. Additionally, the John E. Rea Agreement provides for an annual
$10,000 dues allowance for the Young Presidents Organization. The John E. Rea
Agreement also provides for a one-time net termination fee of $1,000,000 upon
any early termination by us.

We have an employment agreement with our President and Chief Operating Officer,
James A. Rea (the "James A. Rea Agreement"). The James A. Rea Agreement provides
for an annual base salary of $120,000, a transportation allowance of $1,000 per
month, a health insurance allowance of up to $750 per month, a sales commission
equal to 1.75% of the Company's consolidated gross revenue, participation in any
savings and retirement plan and welfare benefit plans adopted by us and other
standard provisions. The James A. Rea Agreement also provides for a one-time net
termination fee of $1,000,000 upon any early termination by us.

We have an employment agreement with our Executive Vice President, Vice
President - Investor Relations and Secretary, Kevin L. Dahlberg (the "Dahlberg
Agreement"). The Dahlberg Agreement provides for an annual base salary of
$120,000, a transportation allowance of $500 per month, a health insurance
allowance of up to $500 per month, participation in certain commission programs,
savings and retirement plan and welfare benefit plans adopted by us and other
standard provisions. In addition, the Dahlberg Agreement provides that Mr.
Dahlberg's annual base salary will increase to $150,000 upon our raising a total
of $4,000,000 in new equity or upon our obtaining either of 50,000 or more
apartment units placed into our PropertySMART(R) program or $8,000,000 in annual
PropertySMART(R) gross revenues, and will increase to $180,000 upon our becoming
cash flow positive with a net operating income equal to 5% of sales.


                                       42
<PAGE>

Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.

Security Ownership of Certain Beneficial Owners

The following table sets forth, as of March 23, 2006, the name, address, amount
and nature of beneficial ownership and percentage of such ownership of each
person or group known to us to be the beneficial owner of more than 5% of the
outstanding shares of our common stock. Except as noted below, each holder has
sole voting and investment power with respect to all shares of common stock
listed as beneficially owned.

Name And Address Of                          Amount And Nature       Percent Of
Beneficial Owner                         Of Beneficial Ownership(1)  Class((2))
----------------                         --------------------------  ----------

JAAVBR, LP((3))                               3,216,667                10.5%
    1507 Capital Avenue, Suite 101
    Plano, Texas 75074

DKWFLP LP                                     3,200,000                10.4%
    8235 Douglas Ave., Suite 106
    Dallas, Texas 75225

J 2 Family LP((4))                            3,200,000                10.4%
    1507 Capital Avenue, Suite 101
    Plano, Texas 75074

Jades Family LP                               3,200,000                10.4%
    8235 Douglas Ave., Suite 106
    Dallas, Texas 75225

Jerod Yates                                   1,875,000                 6.1%
    1233 Tracey Lynn Drive, Suite A
    Abilene, Texas 79601

---------------

(1)   Includes all shares of our common stock with respect to which each holder
      directly, through any contract, arrangement, understanding, relationship
      or otherwise, has or shares the power to vote or direct voting of such
      shares or to dispose or direct the disposition of such shares.
(2)   Based upon 30,704,169 shares, consisting of 26,457,637 shares outstanding
      as of March 23, 2006, and 4,246,532 shares authorized for issuance as of
      March 23, 2006, but subsequently issued.
(3)   James A. Rea, our President, Chief Operating Officer and director, is a
      limited partner of JAAVBR, LP.
(4)   John E. Rea, our Chief Executive Officer and director, is a limited
      partner of J 2 Family LP and the President of its general partner


                                       43
<PAGE>

Security Ownership of Management

The following table sets forth, as of March 23, 2006, the name, address, amount
and nature of beneficial ownership and percentage of such ownership of (i) each
of our current directors and executive officers; and (ii) all directors and
executive officers as a group. Except as noted below, each holder has sole
voting and investment power with respect to all shares of common stock listed as
beneficially owned.
                                                Amount And Nature
Name And Address Of                               Of Beneficial       Percent Of
Beneficial Owner                                  Ownership(1)        Class((2))

James A. Rea                                      3,680,485(3)          12.0%
    1507 Capital Avenue, Suite 101
    Plano, Texas 75074

John E. Rea                                       3,658,958(4)          11.9%
    1507 Capital Avenue, Suite 101
    Plano, Texas 75074

Edward P. Rea                                       834,744(5)           2.7%
    1507 Capital Avenue, Suite 101
    Plano, Texas 75074

Bruce A. Hall                                       714,286(6)           2.3%
    836 Blue Jay Lane
    Coppell, Texas 75019

Kevin L. Dahlberg                                  343,242(7)            1.1%
    1507 Capital Avenue, Suite 101
    Plano, Texas 75074

John N. Brobjorg                                   214,286(8)              *
    4209 Cedarbrook Circle
    Richardson, Texas 75082

Paul S. Johnson                                      19,584(9)             *
    2122 Country Club Drive, # 280
    Carrollton, Texas 75006

Michael A. Jenkins                                   17,500                *
    2151 Fort Worth Avenue
    Dallas, Texas 75211

J. Kenneth Dunn                                      16,886                *
    14139 Valley Creek Drive
    Dallas, Texas 75240

All directors and executive officers
    as a group (9 persons)                        9,414,848             35.7%

---------------

(*)    Less than 1 percent

(1)   Includes all shares of our common stock with respect to which each holder
      directly, through any contract, arrangement, understanding, relationship
      or otherwise, has or shares the power to vote or direct voting of such
      shares or to dispose or direct the disposition of such shares.

(2)   Based upon 30,704,169 shares, consisting of 26,457,637 shares outstanding
      as of March 23, 2006, and 4,246,532 shares authorized for issuance as of
      March 23, 2006, but subsequently issued.

                                       44
<PAGE>

(3)   Includes (i) 458,333 shares that James A. Rea has the right to acquire
      within 60 days upon the exercise of options; (ii) 1,784 shares owned by
      Tenax, Inc.; (iii) 3,451 shares owned by JR Holdings, Inc.; (iv) 3,216,667
      shares owned by JAAVBR, LP; and (v) 250 shares owned by members of James
      A. Rea's immediate family. James A. Rea is President of Tenax, Inc. and JR
      Holdings, Inc. and a limited partner of JAAVBR, LP.

(4)   Includes (i) 458,333 shares that John E. Rea has the right to acquire
      within 60 days upon the exercise of options; (ii) 3,200,000 shares owned
      by J 2 Family LP; and (iii) 625 shares owned by members of John E. Rea's
      immediate family. John E. Rea is a limited partner of J 2 Family LP and
      the President of its general partner.

(5)   Includes (i) 250,000 shares that Edward P. Rea has the right to acquire
      within 60 days upon the exercise of options; and (ii) 584,744 shares owned
      by Rea Brothers Limited. Edward P. Rea is Chairman of Rea Brothers
      Limited.

(6)   Includes (i) 666,667 shares that Mr. Hall has the right to acquire within
      60 days upon the exercise of options; and (ii) 47,619 shares owned by BHDH
      Family, L.P., an entity owned by members of Mr. Hall's immediate family.
      Mr. Hall has no ownership interest or position in BHDH Family, L.P.

(7)   Includes 280,000 shares that Mr. Dahlberg has the right to acquire within
      60 days upon the exercise of options.

(8)   Includes (i) 166,667 shares that Mr. Brobjorg has the right to acquire
      within 60 days upon the exercise of options.

(9)   Includes 42 shares owned by members of Mr. Johnson's immediate family.

Item 12. Certain Relationships and Related Transactions.

In October 2003, we issued a $75,000 unsecured promissory note to J. E. Rea, our
CEO, of which $24,792 was outstanding at December 31, 2004. This promissory note
was issued in exchange for working capital advanced to the Company, bears
interest at 10% per annum and is due on demand. During the year ended December
31, 2005, our subsidiary Restoration Group America, Inc. made an aggregate of
$20,000 in principal payments on this note and an aggregate of $14,543 was
reclassed from Mr. Rea's accrued payroll and added to this note, leaving an
outstanding balance of $19,336 at December 31, 2005.

In October 2003, we issued a $15,000 unsecured promissory note to J. E. Rea, our
President/CEO, of which $3,120 was the short- term portion outstanding at
December 31, 2005. This promissory note was issued in exchange for working
capital advanced to the Company, bears interest at 9.2% per annum with monthly
principal and interest payments of $432.62 and is due in March 2007. During the
year ended December 31, 2005, our subsidiary Restoration Group America, Inc.
made an aggregate of $3,952 in principal payments on this note and an aggregate
of $3,014 was reclassed from the long-term portion, leaving an outstanding
balance of $2,182 at December 31, 2005.

In January 2004, Restoration Group America, Inc., one of our subsidiaries,
entered into a consulting agreement with Edward P. Rea, our then-Chairman of the
Board, pursuant to which we paid Mr. Rea $8,500 per month, plus a transportation
allowance of $500 per month, in exchange for his services rendered to us and our
subsidiaries. This agreement was subsequently replaced on October 1, 2005 by a
new consulting agreement between us and Edward P. Rea, via Schooner Realty, Inc.
(the "Edward P. Rea Agreement"). The Edward P. Rea Agreement grants Mr. Rea the
title of Executive Chairman and provides for annual consulting fees of $120,000,
a transportation allowance of $1,000 per month, a health insurance allowance of
up to $750 per month, a sales commission equal to 0.50% of the Company's
consolidated gross revenue, and a one-time net termination fee of $1,000,000
upon any early termination by the Company. For January through March 2005,
$1,050 was paid resulting in a balance of $38,700 outstanding as of March 31,
2005. For April through June 2005, $29,250 was paid resulting in a balance of
$39,200 outstanding as of June 30, 2005. For July through September 2005,
$30,700 was paid resulting in a balance of $38,250 outstanding as of September
30, 2005. For October through December 2005, $30,250 was paid resulting in a
balance of $31,000 outstanding as of December 31, 2005.

In June 2004, one of our significant shareholders and founders paid $71,004 on
our behalf to a bank for a mandatory payment required under a line of credit. On
August 27, 2004, we made a principal payment of $35,502. The promissory note is
unsecured and is due on demand.


                                       45
<PAGE>

In June 2004, we issued 66,667 shares of common stock at $0.30 per share for the
purchase of property and equipment from Rea Brothers, Limited, an Ontario
corporation that is wholly owned by Edward P. Rea, our Executive Chairman and
director. As a result of this transaction, we recorded $20,000 of PP&E on our
consolidated balance sheet for 2004.

In July 2004, we issued a $5,000 unsecured promissory note to Michael Mayor, our
VP Sales and Marketing, of which $5,000 is outstanding at December 31, 2005.
This promissory note was issued in exchange for the purchase of a vehicle from
Mr. Mayor, bears interest at 10% per annum and is due on demand.

In June 2004, we issued an aggregate of 239,000 restricted shares of our common
stock to Rea Capital Corporation and The Crafter's Marketplace, Ltd., in full
satisfaction of certain indebtedness incurred prior to June 2002, to cover
working capital requirements. This indebtedness accrued interest at 8% and was
due and payable in June 2003. Rea Capital Corporation is wholly owned and The
Crafter's Marketplace, Ltd. was majority-owned by Rea Brothers, Limited, which
is wholly owned by Elga Rea, the wife of our Executive Chairman and director,
Edward P. Rea, and the mother of our Chief Executive Officer and director, John
E. Rea, and our President, Chief Operating Officer and director, James A. Rea.
Edward P. Rea serves as Chairman of Rea Capital Corporation and Rea Brothers,
Limited, and was formerly the Chairman of The Crafter's Marketplace, Ltd.

During a period in excess of 8 months following the damage inflicted by
Hurricane Ivan in September 2004, we paid an aggregate of approximately $200,000
to Elga Rea, the wife of Edward P. Rea and the mother of John E. Rea and James
A. Rea, as reimbursement for food costs, materials and preparation and lodging
costs, materials and coordination services she provided for the Company's
restoration management team and its subcontractors (as many as three meals per
day for up to 200 people per day) during the cleanup and rebuilding period
following Hurricane Ivan.

In June 2005, certain of our directors, executive officers and consultants
forgave an aggregate of $263,380 in moneys due and payable, comprised of
$223,380 of commissions, $20,000 of salary, and $20,000 of consulting fees, as
follows: (a) James A. Rea, our President, Chief Operating Officer and director,
forgave $179,369 of commissions due and payable in relation to Florida storm
related business; (b) Frank Iver Dahlberg, the father of Kevin Dahlberg, our
Executive Vice President, forgave $44,011 of commissions due and payable in
relation to Florida storm related business; (c) John E. Rea, our Chief Executive
Officer and director, forgave $10,000 of salary due and payable; (d) Kevin
Dahlberg, our Executive Vice President, forgave $10,000 of salary due and
payable; (e) Edward P. Rea, our Executive Chairman, forgave $10,000 of
consulting fees due and payable; and (f) Bruce Hall, our Chief Financial Officer
on a consulting basis, forgave $10,000 of consulting fees due and payable.

In June 2005, we issued 47,842 shares of common stock, at $0.21 per share, to
Kevin Dahlberg, our Executive Vice President, in exchange for expense
reimbursements owed, and reduced our accounts payable by $10,047. The share
price of $0.21 was utilized as the fair market value based upon the closing
price of our common stock on the date of issuance.

In June 2005, we issued 95,238 shares of common stock, at $0.21 per share,
47,619 each to Bruce Hall and John Brobjorg, our Chief Financial Officer and
Corporate Controller, each on a consulting basis, in exchange for consulting
services owed, and reduced our accrued expenses by $20,000. The share price of
$0.21 was utilized as the fair market value based upon the closing price of
common stock on the date of issuance.

In December 2005, one of the Company's construction crews made $1,500 of
personal repairs in the home of the Company's Chief Operating Officer in
exchange for a reduction of monies previously owed this officer.


                                       46
<PAGE>

Item 13.   Exhibits

Exhibits are incorporated herein by reference or are filed with this Form 10-K
as indicated below (numbered in accordance with Item 601 of Regulation S-B):

Exhibit No.       Description
-----------       -----------

3.1               Amended and Restated Articles of Incorporation
3.2(*)            Restated Bylaws (incorporated herein by reference to Exhibit
                  3.2 to Form 10-KSB filed April 15, 2004)
4.1(*)            2004 Omnibus Stock Option Plan (incorporated herein by
                  reference to Exhibit 4.1 to Form 10-QSB filed August 24, 2005)
4.2(*)            Form of Senior Subordinated Convertible Debenture
                  (incorporated herein by reference to Exhibit 4.3 to Form
                  10-QSB filed August 24, 2005)
4.3(*)            Amendment Number 1 to Subordinated Secured Convertible
                  Debenture (incorporated herein by reference to Exhibit 99.1 to
                  Form 8-K filed August 4, 2005)
4.4(*)            Form of Common Stock Warrant (incorporated herein by reference
                  to Exhibit 99.2 to Form 8-K filed August 4, 2005)
10.1(*)           Consulting Agreement dated February 1, 2005 between Bruce A.
                  Hall and the Company (incorporated herein by reference to
                  Exhibit 10.1 to Form 10-QSB filed August 24, 2005)
10.2(*)           Consulting Agreement dated February 1, 2005 between John N.
                  Brobjorg and the Company (incorporated herein by reference to
                  Exhibit 10.2 to Form 10-QSB filed August 24, 2005)
10.3(*)           Consulting Agreement dated January 1, 2005 between Schooner
                  Realty and the Company (incorporated herein by reference to
                  Exhibit 10.3 to Form 10-QSB filed August 24, 2005)
10.4(*)           Employment Agreement dated March 1, 2005 between Frank
                  Dahlberg and the Company (incorporated herein by reference to
                  Exhibit 10.4 to Form 10-QSB filed August 24, 2005)
10.5(*)+          Employment Agreement dated October 19, 2004 between James A.
                  Rea and the Company (incorporated herein by reference to
                  Exhibit 10.5 to Form 10-QSB filed August 24, 2005)
10.6(*)           Employment Agreement dated October 19, 2004 between John E.
                  Rea and the Company (incorporated herein by reference to
                  Exhibit 10.6 to Form 10-QSB filed August 24, 2005)
10.7(*)           Employment Agreement dated December 1, 2004 between Kevin
                  Dahlberg and the Company (incorporated herein by reference to
                  Exhibit 10.7 to Form 10-QSB filed August 24, 2005)
10.8(*)           Consulting Agreement dated April 1, 2005 between Richard
                  Nelson and the Company (incorporated herein by reference to
                  Exhibit 10.8 to Form 10-QSB filed August 24, 2005)
10.9(*)           Financial Advisory Agreement dated February 1, 2005 between
                  Spencer Clarke LLC and the Company (incorporated herein by
                  reference to Exhibit 10.9 to Form 10-QSB filed August 24,
                  2005)
10.10(*)          Memorandum of Understanding for the Acquisition of Total
                  Professional Restoration, Inc. and Offer of Employment for Mr.
                  Jerod Yates (incorporated herein by reference to Exhibit 10.1
                  to Form 8-K filed October 13, 2005)
10.11(*)          Amended and Restated Security Agreement dated February 15,
                  2006 among Laurus Master Fund, Ltd., the Company and certain
                  of its subsidiaries (incorporated herein by reference to
                  Exhibit 99.1 to Form 8-K filed February 23, 2006)
10.12(*)          Master Security Agreement dated October 31, 2005 among Laurus
                  Master Fund, Ltd., the Company and certain of its subsidiaries
                  (incorporated herein by reference to Exhibit 99.2 to Form 8-K
                  filed November 9, 2005)
10.13(*)          Amended and Restated Secured Convertible Note dated February
                  15, 2006 among Laurus Master Fund, Ltd., the Company and
                  certain of its subsidiaries (incorporated herein by reference
                  to Exhibit 99.3 to Form 8-K filed February 23, 2006)
10.14(*)          Amended and Restated Secured Non-Convertible Revolving Note
                  dated February 15, 2006 among Laurus Master Fund, Ltd., the
                  Company and certain of its subsidiaries (incorporated herein
                  by reference to Exhibit 99.4 to Form 8-K filed February 23,
                  2006)
10.15(*)          Amended and Restated Registration Rights Agreement dated
                  February 15, 2006 between the Company and Laurus Master Fund,
                  Ltd. (incorporated herein by reference to Exhibit 99.5 to Form
                  8-K filed February 23, 2006)

                                       47
<PAGE>

10.16(*)          Funds Escrow Agreement dated October 31, 2005 among the
                  Company, Laurus Master Fund, Ltd. and Loeb & Loeb LLP
                  (incorporated herein by reference to Exhibit 99.6 to Form 8-K
                  filed November 9, 2005)
10.17(*)          Amended and Restated Common Stock Purchase Warrant dated
                  February 15, 2006 between the Company and Laurus Master Fund,
                  Ltd. (incorporated herein by reference to Exhibit 99.6 to Form
                  8-K filed February 23, 2006)
10.18(*)          Stock Pledge Agreement dated October 31, 2005 among Laurus
                  Master Fund, Ltd., the Company and certain of its subsidiaries
                  (incorporated herein by reference to Exhibit 99.9 to Form 8-K
                  filed November 9, 2005)
10.19(*)          Subsidiary Guaranty dated October 31, 2005 among Laurus Master
                  Fund, Ltd. and certain subsidiaries of the Company
                  (incorporated herein by reference to Exhibit 99.10 to Form 8-K
                  filed November 9, 2005)
10.20(*)          Reaffirmation and Ratification Agreement dated February 15,
                  2006 among Laurus Master Fund, Ltd., the Company and certain
                  of its subsidiaries (incorporated herein by reference to
                  Exhibit 99.7 to Form 8-K filed February 23, 2006)
10.21(*)          Common Stock Purchase Warrant dated February 15, 2006 between
                  the Company and Laurus Master Fund, Ltd. (incorporated herein
                  by reference to Exhibit 99.7 to Form 8-K filed February 23,
                  2006)
21.1              Subsidiaries of RG America, Inc.
31.1              Certification Pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002
31.2              Certification Pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002
32.1              Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2              Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

--------------

*     Previously filed.


                                       48
<PAGE>

Item 14. Principal Accountant Fees And Services

Audit Fees

An aggregate of $77,648 in fees was billed by Whitley Penn LLP for the fiscal
year ended December 31, 2005 for professional services rendered by Whitley Penn
LLP for the audit of our annual financial statements and review of financial
statements included in our Form 10-QSB filings or services that are normally
provided by the accountant in connection with statutory and regulatory filings
or engagements for such fiscal year.

An aggregate of $46,076 in fees, of which $21,358 was billed by our former
auditors, Turner Stone, and $24,618 was billed by Whitley Penn LLP, was billed
for the fiscal year ended December 31, 2004 for professional services rendered
by Whitley Penn LLP subsequent to its appointment as our certifying accountant
on April 28, 2004, and by Turner Stone prior to its dismissal as our certifying
accountant on April 27, 2004, for the audit of our annual financial statements
and review of financial statements included in our Form 10-QSB filings or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for such fiscal year.

Audit-Related Fees

An aggregate of $9,910 in fees was billed by Whitley Penn LLP for the fiscal
year ended December 31, 2005 for assurance and related services by Whitley Penn
LLP that are reasonably related to the performance of the audit or review of our
financial statements and are not reported under the caption "Audit Fees" above.

No fees were billed for the fiscal year ended December 31, 2004 for assurance
and related services by Whitley Penn LLP or Turner Stone, as applicable, that
are reasonably related to the performance of the audit or review of our
financial statements and are not reported under the caption "Audit Fees" above.

Tax Fees

No fees were billed for the fiscal years ended December 31, 2005 or 2004 for
professional services rendered by Whitley Penn LLP or Turner Stone, as
applicable, for tax compliance, tax advice and tax planning.

All Other Fees

No fees were billed for the fiscal years ended December 31, 2005 or 2004 for
products and services provided by Whitley Penn LLP or Turner Stone, as
applicable, other than the services reported under the captions "Audit Fees" and
"Audit-Related Fees" above.

Pre-Approval Policies and Procedures

Our standing Audit Committee pre-approves all audit and non-audit services
provided by our independent auditors. The Audit Committee's charter prohibits
the Audit Committee from engaging our independent registered public accounting
firm to perform any specific non-audit services proscribed by law or regulation.
The Audit Committee may delegate pre-approval authority to one or more of its
members. The Audit Committee's pre-approval policies and procedures do not
include delegation to management of the Audit Committee's responsibilities under
the Exchange Act. The decisions of any Audit Committee member to whom
pre-approval authority is delegated must be presented to the full Audit
Committee at its next scheduled meeting. All "Audit-Related" fees billed for the
fiscal year ended December 31, 2005 were approved by the Audit Committee. Since
no "Audit-Related" fees were billed for the fiscal year ended December 31, 2004,
and no "Tax" or "All Other" fees were billed for the fiscal years ended December
31, 2005 or 2004, the Audit Committee was not required to approve any such fees.
None of the hours expended on Whitley Penn LLP's engagement to audit our
financial statements for the fiscal year ended December 31, 2005 were attributed
to work performed by persons other than Whitley Penn LLP's full-time, permanent
employees.


                                       49
<PAGE>

                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                               RG AMERICA, INC.


                               By:
                                       -----------------------------------------
                                       John E. Rea
                                       Chief Executive Officer
                               Date:   April 17, 2006

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
Signature                                 Title                                  Date

<S>                                       <C>                                    <C>
/s/ John E. Rea                           Chief Executive Officer (Principal     April 17, 2006
------------------------------------      Executive Officer) and Director
John E. Rea


/s/ Bruce A. Hall                         Chief Financial Officer (Principal     April 17, 2006
------------------------------------      Financial Officer)
Bruce A. Hall


/s/ Edward P. Rea                         Executive Chairman and Director        April 17, 2006
------------------------------------
Edward P. Rea


/s/ J. Kenneth Dunn                       Director                               April 17, 2006
------------------------------------
J. Kenneth Dunn


/s/ Michael A. Jenkins                    Director                               April 17, 2006
------------------------------------
Michael A. Jenkins


/s/ Paul S. Johnson, Jr.                  Director                               April 17, 2006
------------------------------------
Paul S. Johnson, Jr.


/s/ James A. Rea                          Director                               April 17, 2006
------------------------------------
James A. Rea
</TABLE>


                                       50
<PAGE>


                                    EXHIBIT A
                                    ---------



Filed herewith are our following audited financial statements:
                                                                        Page No.
Report of Independent Registered Public Accounting Firm.......................2
Consolidated Balance Sheet at December 31, 2005...............................4
Consolidated Statements of Operations for the years ended
  December 31, 2005 and 2004..................................................6
Consolidated  Statements of Changes in Stockholders' Equity  (Deficit)
  for the years ended December 31, 2005 and 2004..............................7
Consolidated Statements of Cash Flows for the years
  ended December 31, 2005 and 2004............................................8
Notes to Consolidated Financial Statements....................................9


                                       1
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders
RG America, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of RG America, Inc.
and subsidiaries as of December 31, 2005, and the related consolidated
statements of operations, changes in stockholders' equity (deficit) and cash
flows for the years ended December 31, 2005 and 2004. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of RG
America, Inc. and subsidiaries at December 31, 2005, and the results of their
consolidated operations and their consolidated cash flows for the years ended
December 31, 2005 and 2004, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has previously incurred net
losses, which have resulted in a significant accumulated deficit at December 31,
2005. Although the Company had net income of $2,068,551 for the year ended
December 31, 2005 and working capital of $2,554,610 at December 31, 2005 the
Company has substantial obligations with no current resources to satisfy these
obligations raising substantial doubt about its ability to continue as a going
concern. Management's plans as to these matters are also described in Note 2.
The consolidated financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and classification of assets
or the amounts and classification of liabilities that might result from the
outcome of this uncertainty.


/s/ Whitley Penn LLP
--------------------
Dallas, Texas
March 28, 2006


                                       2
<PAGE>

                        RG AMERICA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET

ASSETS
                                                                 December 31,
                                                                    2005
                                                                ------------
Current assets:
Cash and cash equivalents                                       $    683,346
Investment in certificate of deposit                                 140,000
Contracts receivable, net of allowance for doubtful
   accounts of $584,323                                            9,429,490
Unbilled revenue                                                   3,800,665
Prepaid expenses - net of accumulated amortization of $46,733        926,282
Other receivables                                                    513,616
Notes receivable                                                     351,000
                                                                ------------
Total current assets                                              15,844,399

Property and equipment, net of
   accumulated depreciation of $154,614                            1,042,515

Other non-current assets                                              58,850
                                                                ------------

Total assets                                                    $ 16,945,764
                                                                ============


         The accompanying notes are an integral part of the consolidated
                             financial statements.


                                       3
<PAGE>

                        RG AMERICA, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEET (continued)


                      LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
                                                      December 31,
                                                         2005
                                                      ------------
Current liabilities:
Accounts payable, trade                               $  5,123,329
Accrued expenses                                         2,217,530
Withholding taxes payable                                   91,720
Deferred revenue                                           820,044
Bank line-of-credit                                        140,000
Notes payable - related party                               26,518
Notes payable                                            4,870,648
                                                      ------------
Total current liabilities                               13,289,789

Long-term debt - related party                               4,685
                                                      ------------
Total liabilities                                       13,294,474

Commitments and contingencies                                   --

STOCKHOLDERS' EQUITY

Stockholders' equity
Preferred stock, $.001 par value, 35,000,000 shares

authorized, none issued and outstanding                         --
Common stock, $.001 par value, 300,000,000 shares
authorized, 26,373,861 issued and outstanding               26,373
Common stock subscribed, 4,212,441 shares                 (271,686)
Additional paid in capital                               8,044,105
Common stock warrants                                    1,610,329
Accumulated deficit                                     (4,884,000)
                                                      ------------
                                                         4,525,121

Less: Deferred stock compensation                         (873,831)
                                                      ------------

Total stockholders' equity                               3,651,290
                                                      ------------

Total liabilities and stockholders' equity            $ 16,945,764
                                                      ============


         The accompanying notes are an integral part of the consolidated
                             financial statements.


                                       4
<PAGE>


                        RG AMERICA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                     Year Ended
                                                     December 31,
                                                  2005            2004
                                              ------------    ------------
Revenues                                      $ 20,624,443    $  5,100,111

Cost of revenues                                11,448,710       2,907,886
                                              ------------    ------------
Gross profit                                     9,175,733
                                                                 2,192,225

Operating expenses:

Selling, general and administrative              1,992,582         755,496

Compensation, payroll taxes and benefits         2,698,112       1,739,652
Stock compensation                                 358,237         515,738

Consulting and contract labor                      503,820         477,991

Professional                                       367,599         283,012
Impairment of subsidiary                                --         144,661
Impairment of goodwill                                  --         401,033
Recovery of impairment                            (116,669)             --
Impairment of leasehold improvements               123,230              --

Rent                                               411,609         137,506

Depreciation                                       109,211          48,579
                                              ------------    ------------
Total operating expenses                         6,447,731       4,503,668
                                              ------------    ------------


Operating income (loss)                          2,728,002      (2,311,443)

Other income (expense):

Other income (expense), net                       (143,000)         79,814

Interest and financing cost, net                  (516,451)        (51,822)
                                              ------------    ------------
Total other income (expense)                      (659,451)         27,992
                                              ------------    ------------

Net income (loss)                             $  2,068,551    $ (2,283,451)
                                              ============    ============

Earnings (loss) per share - basic             $       0.08    $      (0.13)
                                              ============    ============
Earnings (loss) per share - diluted           $       0.08    $      (0.13)
                                              ============    ============

Basic weighted average outstanding shares       26,036,864      17,707,502
Diluted weighted average outstanding shares     27,901,621      17,707,502


         The accompanying notes are an integral part of the consolidated
                              financial statements


                                       5
<PAGE>

                        RG AMERICA, INC. AND SUBSIDIARIES
       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                     YEARS ENDED DECEMBER 31, 2005 and 2004



<TABLE>
<CAPTION>
                                                     Common Stock                                                          Total
          Preferred Stock      Common Stock            Subscribed       Additional               Common                Stockholders'
          --------------   ------------------    ------------------      Paid-In   Deferred      Stock    Accumulated      Equity
          Shares  Amount   Shares      Amount     Shares     Amount      Capital  Compensation  Warrants   Deficit       (Deficit)
          ------  ------   ------      ------     ------     ------      -------  ------------  --------   -------       ---------
<S>           <C> <C>    <C>          <C>        <C>        <C>        <C>           <C>        <C>       <C>           <C>
Balance
at
December
31, 2003      --    --    1,406,673      1,407          --        --     2,750,594         --    100,000   (4,669,100)   (1,817,099)
          ------  ----  -----------   --------   ---------  --------   -----------   --------    -------   ----------    ----------

Stock
issued
for
sub-
scribed
stock                       159,167        159    (159,167)     (159)           --         --         --           --            --

Stock
issued
for
pro-
fessional
services      --    --      343,008        343     176,667       177       474,218         --         --           --       474,738

Stock
issued
for
direct-
ors'
fees          --    --       50,000         50          --        --        19,950         --         --           --        20,000

Proceeds
from
sale of
common
stock         --    --    1,848,911      1,849     573,333       573       964,654         --         --           --       967,076

Stock
issued
in
exchange
for
note
receivable    --    --      448,167        448          --  (268,900)      268,452         --         --           --            --

Stock
issued
for
con-
version
of notes
payable       --    --    1,109,308      1,109     704,420       704       588,583         --         --           --       590,396

Stock
issued
for
con-
version
of
accounts
payable       --    --      737,328        737          --        --       406,096         --         --           --       406,833

Stock
issued
and
held by
transfer
agent
for
in-
struction      --    --        1,667          2          --        --           498         --         --           --           500

Stock
issued
for
property
and
equipment     --    --       81,667         81          --        --        28,919         --         --           --        29,000

Stock
issued
for
employee
compen-
sation        --    --       36,667         37      16,667        17        20,946         --         --           --        21,000

Stock
issued
in
exchange
for other
receiv-
ables         --    --       47,827         48      16,666    (6,983)       33,958         --         --           --        27,023

Stock
issued
for RGA
acqui-
sition        --    --   13,333,333     13,333   3,333,333     3,333       (16,666)        --         --           --            --

Stock
issued
for PBS
acqui-
sition        --    --      166,667        167          --        --       349,833         --         --           --       350,000

Stock
warrant
issued
for
equity
services      --    --           --         --          --        --       (30,000)        --     30,000           --            --

Issuance
of
employee
stock
options
and
related
amort-
ization       --    --           --         --          --        --        62,500    (53,125)        --           --         9,375

Purchase
price
adjust-
ment          --    --           --         --          --        --      (404,860)        --         --           --      (404,860)

Net loss,
year
ended
December
31, 2004      --    --           --         --          --        --            --         --         --   (2,283,451)   (2,283,451)
          ------  ----  -----------   --------   ---------  --------   -----------   --------    -------   ----------    ----------
Balance
at
December
31, 2004      --  $ --   19,770,390   $ 19,770   4,661,919  (271,238)  $ 5,517,675   $(53,125)  $130,000  $(6,952,551)  $(1,609,469)
          ======  ====  ===========   ========   =========  ========   ===========   ========    =======   ==========    ==========
</TABLE>


<TABLE>
<CAPTION>

                                                           Preferred Stock                    Common Stock
                                                   -----------------------------     ----------------------------
                                                      Shares           Amount           Shares           Amount
                                                   ------------     ------------     ------------     ------------
<S>                                                          <C>    <C>                <C>            <C>
Balance at December 31, 2004                                 --               --       19,770,390           19,770
                                                   ------------     ------------     ------------     ------------
Stock issued for subscribed stock                                                       4,158,049            4,158

Stock issued for professional services                       --               --            7,050                7

Proceeds from sale of common stock                           --               --           90,000               90

Stock issued for conversion of notes payable                 --               --            4,167                4

Stock issued for conversion of convertible
debentures                                                   --               --               --               --

Stock issued for conversion of accrued expense               --               --          331,594              333

Stock issued for conversion of accounts payable              --               --          121,042              121

Stock issued for other non current asset, net                --               --           45,455               45

Unrecorded stock adjustment                                  --               --           26,670               26

Stock issued for TPR acquisition                             --               --        1,875,000            1,875

Stock cancelled related to PBS acquisition                   --               --          (55,556)             (56)

Stock warrant issued for debt services                       --               --               --               --

Stock warrant issued for equity services                     --               --               --               --

Stock issued for equity services                             --               --               --               --

Issuance of employee stock options and related               --
amortization                                                 --               --               --               --

Stock issued for Conversion                                  --               --               --               --

     sweetener on convertible debentures                     --               --               --               --

Net income, year ended December 31, 2005                     --               --               --               --
                                                   ------------     ------------     ------------     ------------
Balance at December 31, 2005                                 --     $         --       26,373,861     $     26,373
                                                   ============     ============     ============     ============

<CAPTION>
                                                           Common Stock               Additional        Deferred         Common
                                                            Subscribed                 Paid-In        Compensation        Stock
                                                   -----------------------------
                                                      Shares           Amount          Capital                           Warrants
                                                   ------------     ------------     ------------     ------------     ------------
<S>                                                  <C>                <C>             <C>                <C>              <C>
Balance at December 31, 2004                          4,661,919         (271,238)       5,517,675          (53,125)         130,000
                                                   ------------     ------------     ------------     ------------     ------------
Stock issued for subscribed stock                    (4,158,049)          (4,158)              --               --               --

Stock issued for professional services                       --               --            4,223               --               --

Proceeds from sale of common stock                    2,655,556            2,656        1,052,404               --               --

Stock issued for conversion of notes payable                 --               --            2,496               --               --

Stock issued for conversion of convertible
debentures                                              888,896              889          399,111               --               --

Stock issued for conversion of accrued expense          162,763              163          152,254               --               --

Stock issued for conversion of accounts payable              --               --           24,346               --               --

Stock issued for other non current asset, net           (34,091)             (34)           7,489               --               --

Unrecorded stock adjustment                                  --               --              (26)              --               --

Stock issued for TPR acquisition                             --               --          841,875         (843,750)              --

Stock cancelled related to PBS acquisition                   --               --         (116,613)              --               --

Stock warrant issued for debt services                       --               --               --               --        1,189,629

Stock warrant issued for equity services                     --               --         (290,700)              --          290,700

Stock issued for equity services                         35,445               36            3,964               --               --

Issuance of employee stock options and related
amortization                                                 --               --           19,375           23,044               --

Stock issued for Conversion                                  --               --          309,351               --               --

     sweetener on convertible debentures                     --               --          116,881               --               --

Net income, year ended December 31, 2005                     --               --               --               --               --
                                                   ------------     ------------     ------------     ------------     ------------
Balance at December 31, 2005                          4,212,441     $   (271,686)    $  8,044,105     $   (873,831)    $  1,610,329
                                                   ============     ============     ============     ============     ============

<CAPTION>
                                                                       Total
                                                  Accumulated      Stockholders'
                                                                      Equity
                                                    Deficit          (Deficit)
                                                  ------------     ------------
<S>                                                 <C>              <C>
Balance at December 31, 2004                        (6,952,551)      (1,609,469)
                                                  ------------     ------------
Stock issued for subscribed stock                           --               --

Stock issued for professional services                      --            4,230

Proceeds from sale of common stock                          --        1,055,150

Stock issued for conversion of notes payable                --            2,500

Stock issued for conversion of convertible
debentures                                                  --          400,000

Stock issued for conversion of accrued expense              --          152,750

Stock issued for conversion of accounts payable             --           24,467

Stock issued for other non current asset, net               --            7,500

Unrecorded stock adjustment                                 --               --

Stock issued for TPR acquisition                            --               --

Stock cancelled related to PBS acquisition                  --         (116,669)

Stock warrant issued for debt services                      --        1,189,629

Stock warrant issued for equity services                    --               --

Stock issued for equity services                            --            4,000

Issuance of employee stock options and related
amortization                                            42,419

Stock issued for Conversion                                 --          309,351

     sweetener on convertible debentures                    --          116,881

Net income, year ended December 31, 2005             2,068,551        2,068,551
                                                  ------------     ------------
Balance at December 31, 2005                      $ (4,884,000)    $  3,651,290
                                                  ============     ============
</TABLE>

   The accompanying notes are an integral part of the consolidated financial
                                   statements


               The accompanying notes are an integral part of the
                       consolidated financial statements


                                       6
<PAGE>

                        RG AMERICA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                          Years Ended
                                                                         December 31,
                                                                       2005          2004
                                                                   -----------    -----------
<S>                                                                <C>            <C>
Operating Activities:
Net income (loss)                                                  $ 2,068,551    $(2,283,451)
Adjustments to reconcile net income (loss) to net cash (used in)
operating activities:
   Depreciation                                                        109,211         48,579

   Leasehold improvement impairment                                    123,230             --
   Provision for doubtful accounts                                     412,945         84,591

   Amortization of deferred compensation                                41,819          9,375
   Non cash interest expense                                           227,793             --
   Stock options issued for consulting services                        309,351             --
   Stock issued for professional services                                4,230        474,738
   Stock issued for employee compensation                                   --         21,000
   Stock issued for directors' fees                                         --         20,000
   Note issued for employee compensation                                    --          5,260
   Impairment of subsidiary long term assets                                --        144,661
   Impairment of goodwill                                                   --        401,033
   Recovery of impairment                                             (116,669)            --
   Stock warrant issued for debt services                               34,399             --
   Stock issued for services                                             4,000             --
   Gain on forgiveness of debt                                          (1,000)            --
   Changes in operating assets and liabilities:
      Contracts receivable                                          (8,032,657)    (1,211,096)
      Unbilled revenue and deferred revenue, net                    (3,304,659)      (196,353)
      Prepaid expenses                                                (129,651)        23,589
      Other receivables                                                (55,532)        43,459
      Other non current assets                                         (46,350)            --

      Accounts payable - trade                                       3,358,505        802,132
      Accrued expenses                                                 940,766      1,292,968
      Withholding taxes payable                                       (177,974)        78,026
                                                                   -----------    -----------
Net cash used in operating activities                               (4,229,692)      (241,489)

Investing Activities:
Investment in certificate of deposit                                  (279,728)            --
Proceeds from investment in certificate of deposit                     139,728             --
Acquisition purchase price adjustment                                       --       (404,860)
Note receivable - related party                                             --           (756)
Notes receivable                                                      (335,000)        (8,184)
Purchase of other non current asset                                         --         (5,000)
Purchases of property and equipment                                   (999,342)       (61,180)
                                                                   -----------    -----------
Net cash used in investing activities                               (1,474,342)      (479,980)

Financing Activities:
Repayments of notes payable - related party                            (23,950)      (192,474)

Repayments of notes payable                                            (57,831)       (26,256)
Repayments of bank line of credit                                     (334,597)      (234,985)
Proceeds from bank line of credit                                      309,582             --
Proceeds from sale of common stock                                   1,055,150        967,076
Proceeds from issuance of notes payable                              4,924,805        211,356
Proceeds from issuance of notes payable - related party                  2,876         90,305
Proceeds from issuance of convertible debenture notes                  400,000             --
Advances from stockholders                                                  --          9,702
                                                                   -----------    -----------
Net cash provided by financing activities                            6,276,035        824,724

Net (decrease) increase in cash and cash equivalents                   572,001        103,255
Cash and cash equivalents at beginning of period                       111,345          8,090
                                                                   -----------    -----------
Cash and cash equivalents at end of period                         $   683,346    $   111,345
                                                                   ===========    ===========

Supplemental Disclosure of Cash Flow Information:
-------------------------------------------------
Cash paid during the year for interest                             $   125,134    $    26,599
                                                                   ===========    ===========
Cash paid during the year for income taxes                         $        --    $        --
                                                                   ===========    ===========
</TABLE>


               The accompanying notes are an integral part of the
                       consolidated financial statements


                                       7
<PAGE>

                        RG AMERICA, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)


<TABLE>
<CAPTION>
                                                                                 Year Ended
                                                                                December 31,
                                                                              2005       2004
                                                                            --------   --------
<S>                                                                         <C>        <C>
Supplemental Disclosure of Non-Cash Investing and Financing Transactions:
-------------------------------------------------------------------------
Stock issued for conversion of accounts payable                             $ 24,467   $406,833
Stock issued for conversion of accrued expense                               152,750         --
Note payable related party issued for conversion of accrued expense           11,666         --
Note payable issued for purchase of property and equipment                     5,000         --
Stock issued for conversion of notes payable                                   2,500    590,396
Stock issued for purchase of property and equipment                               --     29,000
Stock issued in exchange for other receivable                                     --     34,023
Stock issued in exchange for note receivable                                      --    268,900
Stock issued for acquisition                                                      --    350,000
Stock issued in exchange for convertible debentures                          400,000         --
Stock issued for other non current asset                                       7,500         --
Net liabilities assumed in PBS acquisition                                        --     36,278
Stock issued and held by transfer agent for instruction                           --        500
Warrant issued for equity advisory services                                  290,700     30,000
Accounts receivable other issued for deferred revenue                        437,500         --
</TABLE>


               The accompanying notes are an integral part of the
                       consolidated financial statements


                                       8
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


1. HISTORY AND NATURE OF BUSINESS

RG America, Inc. ("RG" or the "Company"), formerly known as Invvision Capital,
Inc. ("Invvision") is a publicly-traded company that provides a broad array of
fee-based services that address clients' risk management needs for their real
estate assets. This is accomplished by addressing procedures and costs
associated with the risk of a possible loss such as loss control activities and
purchasing traditional insurance products. RG also addresses the consequences of
a loss after it has occurred by adjusting claims, restoring property and
minimizing business interruption costs.

Effective as of December 30, 2003, we acquired all of the capital stock of
Restoration Group America 2003, Inc., a Texas corporation ("RGA 2003") and its
wholly-owned subsidiaries in a transaction that was accounted for as a
combination of entities under common control. The wholly-owned subsidiaries of
RGA 2003 that were acquired included: (i) RG Insurance Services, Inc., a Texas
corporation ("RGIS") which is a general insurance agency, (ii) RG Risk
Management, Inc., a Texas corporation ("RGRM") which is engaged in the business
of providing claims management services, (iii) RG Restoration, Inc., a Texas
corporation ("RGR") which is engaged in the business of performing commercial
property restoration services and (iv) Restoration Group America, Inc., a Texas
corporation ("RGA") which holds the intellectual property rights to the
proprietary PropertySMARTSMSM program. The entities sometimes referred to herein
as RGIS, RGRM, RGR and RGA are now indirect wholly-owned subsidiaries of RG.

According to the terms of the Acquisition Agreement between RG and RGA 2003, in
April 2004, we issued 13,333,333 shares of our common stock to the shareholders
of RGA 2003 as follows: 10,000,000 shares once our Amended and Restated Articles
of Incorporation were declared effective and 3,333,333 shares upon the
satisfaction of certain conditions. As a result of this issuance, 3,333,333
shares were unissued subject to the satisfaction of certain additional
conditions. In June 2004, the required conditions were met and the Company has
recorded the 3,333,333 shares as Common Stock Subscribed.

Additional RGA Companies that support the Company's primary business lines are:

      o     CTFD, Inc. - Rental of construction, site remediation and
            restoration equipment.
      o     CTFD Marine, Inc. - Ownership of a quarter's housing barge.
      o     Urban Logic, Inc. - Non operating entity.
      o     RG Florida GC, Inc. - Holds a general contractor license in Florida.
      o     RG Florida SC, Inc. - Sub contractor entity in Florida.
      o     Invvision Funding Inc. - Non operating entity.
      o     RG Industries, Inc. - Non operating entity.
      o     RG Roofing, Inc. - Roofing construction entity.
      o     Restoration Group America 2003, Inc. - Holding Company for
            Intellectual Property.
      o     Restoration Group America, Inc. - Holding company for employees,
            payroll, rents and overhead.
      o     Total Professional Restoration, Inc. d/b/a Remediation Group -
            Remediation Contractor.

On August 10, 2004, RG acquired all of the common stock of Practical Business
Solutions 2000, Inc. ("PBS"). The aggregate purchase was $350,000, which payment
consisted of 166,667 restricted shares of RG's common stock. The terms included
(1) an agreement by the stockholders of PBS to escrow 55,555 shares of common
stock shares for a period of two years to satisfy certain potential
indemnifiable claims and (2) and an agreement by RG granting piggyback
registration rights for the resale of 5,850 of the purchase consideration
shares. (See Acquisition - Note 7)

On December 16, 2004, we determined that as a result of a material impairment of
PBS, we would wind down and close the PBS operation. As a result of the loss of
the key employee as related to PBS, its valuation has been significantly
impaired and the entire goodwill recorded from the acquisition of PBS in the
amount of $401,033 is impaired and we have recorded this amount as an Impairment
of Goodwill in the accompanying Consolidated Financial Statements as of December
31, 2004. Additionally, PBS net book assets of $144,661 have been written off
and charged to Impairment of Subsidiary in the accompanying Consolidated
Statement of Operations for the year ended December 31, 2004. On March 16, 2005,
the 55,556 shares of RG's common stock shares at $2.10 per share (post-split)
held in escrow related to the acquisition of PBS were cancelled as a result of
failed negotiations with the previous owners. This transaction was recorded as a
recovery of impairment of $116,669.


                                       9
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


We were a development stage company through December 31, 2003. As a result of
the acquisition of RGA 2003 as discussed above, we are an operating entity and
are no longer in the development stage effective as of January 1, 2004.

In August 2004, the shareholders of the Company approved the name of the Company
to be changed to RG from Invvision.

In August 2004, the stockholders of the Company approved a reverse stock split
of the issued and outstanding shares of the Company's common stock by a ratio of
between one-for-two and one-for-six, inclusive, to be made at the sole
discretion of the Board of Directors before December 31, 2004. In December 2004,
the Board approved and implemented a one-for-six reverse stock split. In
accordance with FAS 128, all share and per share amounts have been retroactively
adjusted to the beginning of the period to reflect the reverse stock split.

On October 12, 2005 RGA, acquired all of the common stock of Total Professional
Restoration, Inc. (TPR). The aggregate purchase was $750,000.00 plus the balance
of the Company's outstanding debt to Seller. The terms included (1) purchase
price of $750,000.00 paid by the issuance of one million eight Hundred Seventy
Five Thousand (1,875,000) restricted shares of The Company's $0.0001 par value
Common Stock ("Common Stock"), based upon a share price of forty cents ($0.40)
per share, that will vest ratably to seller over five year's of employment with
RGA, and (2) At Seller's sole option , the option to convert the outstanding
debt totaling $255,754 owed by Registrant to Seller into restricted shares of
The Company's Common Stock based upon a share price of thirty cents ($0.30) per
share. The option period was for ninety (90) days subsequent to the Transaction
Date and expired without being exercised. Most of this $255,754 owed to Seller
was paid by December 31, 2005. However, since the fair market value of the
Company's stock was $0.45 per share as determined by recent private offerings of
stock, we recorded the purchase price at $843,750. When recording this
transaction, $843,750 was recorded as deferred compensation and will be
amortized over the seller's five year employment agreement with RGA.

Additionally, on the Transaction Date, Registrant entered into an employment
agreement with Mr. Jerod Yates, the previous sole owner of Seller. The
acquisition and employment agreements are filed on Form 8-K.

Effective October 31, 2005, the Company entered into a Security Agreement with
Laurus Master Fund, Ltd. ("Laurus") for the sale by the Company to Laurus of a
$1,400,000 secured convertible minimum borrowing note ("Minimum Borrowing Note")
and a secured revolving note up to a maximum of $10,000,000 ("Revolving Note").
In connection with the Minimum Borrowing Note and the Revolving Note, the
Company issued to Laurus a common stock purchase warrant ("Warrant") to purchase
up to 2,962,963 shares of the Company's $0.001 par value per share common stock
("Common Stock") at $0.78 per share with a seven year term. Additionally, the
Company and Laurus entered into a registration rights agreement ("Registration
Rights Agreement") covering the registration Common Stock underlying the Minimum
Borrowing Note and the Warrant.

The Minimum Borrowing Note has an interest rate of Prime plus two percent (2.0%)
and shall not be any time less than six percent (6.0%). The Minimum Borrowing
Note is due together with any unpaid and accrued interest hereon, on October 31,
2008 ("Maturity Date"). Laurus shall have the option, but not the obligation, at
any time until the Maturity Date to convert all or any portion of the Minimum
Borrowing Note and accrued interest into Common Stock at an exercise price of
$0.71 per share. Additionally, the Company has the option, but not the
obligation, to prepay the Minimum Borrowing Note by paying Laurus one hundred
thirty percent (130%) of the principal amount of the Minimum Borrowing Note plus
accrued and unpaid interest. As a result of the Minimum Borrowing Note, the
Company obtained $4,907,805 of proceeds, net of $841,195 of expenses. Of the
$841,195 of expenses, $396,195 was paid to the Company's financial agent,
Spencer Clarke, LLC for financial agent fees, $418,000 was paid to Laurus
Capital Management, LLC for management, due-diligence and documentation fees,
$25,000 was paid to Synergy Structures, for financial agent fees; and $2,000 was
paid to Loeb & Loeb LLP for escrow fees. The Company has recorded this note
under current liabilities because the agreement with Laurus requires that monies
borrowed are returned within 210 days.

The Revolving Note has an interest rate of Prime plus two percent (2.0%) and
shall not be any time less than six percent (6.0%). The Revolving Note is due
together with any unpaid and accrued interest hereon, on the Maturity Date.
Laurus shall have the option, but not the obligation, at any time until the
Maturity Date to convert all or any portion of the Revolving Note and accrued
interest into Common Stock at an exercise price of $0.71 per share.


                                       10
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


The Security Agreement includes among other things, a stock pledge agreement, a
guaranty from the Company and all of its subsidiaries and certain covenants and
obligations in order to secure the funds obtained from the above mentioned
items. The Security Agreement also includes a funding formula that determines a
maximum amount of funds that the Company can be advanced at any point in time
and an allowance for Laurus to override the formula and advance registrant funds
over the funding formula. Laurus elected the option to override the formula and
advanced the Company $250,000 on October 31, 2005 and cash was received January
12, 2006. The advance has an interest rate of Prime plus five percent (5.0%) and
is due and payable with accrued interest on May 1, 2006.


                                       11
<PAGE>


                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005

2. GOING CONCERN

The accompanying consolidated financial statements of RG have been prepared
assuming that we will continue as a going concern. However, the Company has
previously incurred net losses, which have resulted in a significant accumulated
deficit at December 31, 2005. Although the Company had net income of $2,068,551
for the year ended December 31, 2005, we previously had a net loss of $2,283,451
for the year ended December 31, 2004. At December 31, 2005, current assets
exceeded current liabilities by $2,554,610, stockholders' equity was $3,651,290
and we had an accumulated deficit of $4,884,000.

The ability of RG to continue as a going concern is dependent on the successful
implementation of its business plan, obtaining additional capital, and
generating sufficient revenues and cash flows. The financial statements do not
include any adjustments that might be necessary if we are unable to continue as
a going concern.

The time required for RG to become profitable is highly uncertain, and we cannot
be assured that we will achieve or sustain profitability or generate sufficient
cash flow from operations to meet planned capital expenditures, working capital
and debt service requirements. If required, the ability to obtain additional
financing from other sources also depends on many factors beyond the control of
RG, including the state of the capital markets and the prospects for business
growth. The necessary additional financing may not be available or may be
available only on terms that would result in further dilution to the current
owners of RG common stock.

We cannot be assured that we will generate sufficient cash flow from operations
or obtain additional financing to meet scheduled debt payments and financial
covenants. If we fail to make any required payment under the agreements and
related documents governing indebtedness or fail to comply with the financial
and operating covenants contained in them, we would be in default. The financial
statements do not include any adjustments to reflect the possible effects on
recoverability and classification of assets or the amounts and classification of
liabilities which may result from the inability of RG to continue as a going
concern.

We expect revenues will increase in 2006 as a result of continued work
opportunities in Florida and Mississippi. Additionally, we have been successful
in obtaining funding from the private sale of common stock and debt in 2005 as
discussed in Debt - Note 9 and Stockholders' Equity - Note 10. There is no
guarantee that we will be successful in obtaining the required funding required
to successfully implement the business plan.


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

In the opinion of management, the accompanying balance sheet and related
statements of operations, changes in stockholders' equity (deficit) and cash
flows include all adjustments necessary for their fair presentation in
conformity with generally accepted accounting principles in the United States of
America (U.S. GAAP).

Principles of Consolidation

The accompanying consolidated financial statements include the general accounts
of RG and RGA 2003 and their subsidiaries as of December 31, 2005 and all
significant intercompany transactions, accounts and balances have been
eliminated.

Accounting Estimates

When preparing financial statements in conformity with U.S. GAAP, management
must make estimates based on future events which affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities as
of the date of the financial statements, and revenues and expenses during the
reporting period. Actual results could differ from these estimates. Significant
estimates in the accompanying financial statements includes the impairment of
goodwill, the valuation for non-cash issuances of common stock, the allowance
for doubtful accounts, revenue recognition for construction contracts and
insurance premiums and the valuation allowance for deferred tax assets and
liabilities.


                                       12
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with a maturity
date of three months or less when purchased.

Contracts Receivable

Contracts receivable result from the performance of remediation and
reconstruction services based on both fixed-price and negotiated contract
prices. In accordance with terms of some contracts, a certain percentage of the
total contract price is withheld pending customer acceptance at the completion
of the contract. Accordingly, these amounts have been classified as "retainage"
and are included as a component of contracts receivable. We estimate the
allowance for doubtful accounts based upon a review of outstanding receivables,
historical collection information, and existing economic conditions. Management
reviews the customer accounts on a routine basis to determine collectibility and
if an account should be charged off. The Company generally does not require
collateral.

Property and Equipment

Fixed assets greater than $1,000 are recorded at cost and depreciated over their
useful lives, which range from three to seven years, using the straight-line
method. Maintenance and repair expense are expensed as incurred. Leasehold
improvements have estimated useful lives of the lesser of useful life or lease
agreement with expected renewals. Machinery and equipment have estimated useful
lives from 3 - 5 years. Furniture and fixtures have estimated useful lives of 3
years.

Accounting for the Impairment of Long-Lived Assets

We account for the impairment of long-lived assets in accordance with Statements
of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets", which requires that long-lived
assets be reviewed for impairment whenever events or changes in circumstances
indicate that the book value of the asset may not be recoverable. Recoverability
of the asset is measured by comparison of its carrying amount to the
undiscounted cash flow that the asset or asset group is expected to generate. If
such assets or asset groups are considered to be impaired, the loss recognized
is the amount by which the carrying amount of the property if any, exceeds its
fair market value.

Fair Value of Financial Instruments

We define the fair value of a financial instrument as the amount at which the
instrument could be exchanged in a current transaction between willing parties.
The carrying value of contracts receivable, accounts payable and accrued
liabilities approximates fair value because of the short maturity of those
instruments. The estimated fair value of our other obligations is estimated
based on the current rates offered to us for similar maturities. Based on
prevailing interest rates and the short-term maturity of all of our
indebtedness, management believes that the fair value of our obligations
approximates book value at December 31, 2005.

Goodwill

Goodwill represents the excess purchase price over the fair market value of the
net assets acquired. In accordance with SFAS No. 141, "Business Combinations",
and SFAS No. 142, "Goodwill and Other Intangible Assets", goodwill is not
amortized but is subject to annual impairment tests. On December 16, 2004, we
determined that as a result of a material impairment of PBS, we would wind down
and close the PBS operation. As a result, we believe that the PBS valuation was
significantly impaired and as a result of our impairment analysis, the entire
goodwill recorded from the acquisition of PBS in the amount of $401,033 was
impaired and we recorded this amount as Impairment of Goodwill in the
Consolidated Statement of Operations as of December 31, 2004.



                                       13
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


On March 16, 2005, the 55,556 shares of our common stock held in escrow related
to the acquisition of PBS were cancelled due to failed negotiations with
previous owners. This transaction was recorded as a recovery of impairment of
$116,669 in the first quarter of 2005 as reflected in the accompanying
Consolidated Statement of Operations as of December 31, 2005.


Revenue Recognition - Construction

The majority of revenues are generated through the successful bidding and
execution of remediation and reconstruction contracts. We perform work under
fixed price as well as negotiated contracts. The contract period varies with
approximately ninety percent of the contracts being completed within twelve
months of the start date. We recognize revenues from contracts on the percentage
of completion method, measured by multiplying the contract amount, including
change orders, by the proportion of costs incurred to date, to estimated total
costs for each contract. Contracts in progress are valued at cost plus accrued
profit, less billings to date on uncompleted contracts. This method is used
because management considers it to be the best available measure of progress on
contracts in process. Allocated job costs include all direct material, labor
costs and sub-contracting expenses and various direct costs which can be
specifically allocated to individual contracts. Unallocated contract costs as
well as general and administrative expenses are charged to expense as incurred.
Provisions for losses on uncompleted contracts are made in the period in which
such losses are determined without reference to percentage completion. No
significant losses on uncompleted contracts existed at December 31, 2005.
Changes in job performance, job conditions and estimated profitability,
including those arising from contract penalty provisions, and final contract
settlements may result in revisions to costs as well as income and are
recognized in the period in which revisions are determined. The liability
account deferred revenue in the accompanying Consolidated Balance Sheet includes
those amounts that have been billed out to the customer but the revenue has not
yet been earned.

Revenue Recognition - Insurance

Insurance premiums collected are primarily for terms of one year. We recognize
commission revenue ratably over the course of the year as the commissions are
earned and defer revenue recognition on commissions not yet earned. The
liability account Deferred Revenue in the accompanying Consolidated Balance
Sheet includes those amounts that would have to be paid to the insurance carrier
if an insurance policy was cancelled. Insurance revenue represented 0.7% and
4.0% in 2005 and 2004, respectively, of total revenues.

Stock-Based Compensation


The Company accounts for employee stock awards in accordance with Accounting
Principles Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to
Employees". Under APB 25, the Company recognizes no compensation expense related
to employee stock awards when awards are granted with exercise prices equal to
or greater than the estimated fair value of the stock on the date of grant. The
Company provides the supplemental disclosures required by Statement of Financial
Accounting Standard No. 123 ("SFAS 123"), "Accounting for Stock-Based
Compensation," as amended by SFAS No 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure," which assumes the recognition of
compensation expense based on the fair value of options on the grant date. The
Company follows the provisions of SFAS 123, as amended, and Emerging Issues Task
Force No. 96-18, "Accounting for Equity Instruments That Are Issued to Other
Than Employees for Acquiring or in Connection with Selling Goods or Services,"
for equity instruments granted to non-employees.


SFAS 123, as amended, requires the disclosure of pro forma net loss and net loss
per share as if the Company applied the fair value method. The Company's
computations for employee grants were made using a Black-Scholes model using the
following weighted average assumptions: 2005- expected life of 3.41 years; risk
free rate of 4.14%; no dividends during the expected life; and a volatility of
162.63%. The weighted average fair value of options granted in 2005 was $0.361.
2004- expected life of 7 years; risk free rate of 3.90%; no dividends during the
expected life; and a volatility of 220.3%. The weighted average fair value of
options granted in 2004 was $0.20.


If the computed fair values of all the Company's stock based awards were
amortized to expense over the vesting period of the awards as specified under
SFAS 123, as amended, net income (loss) would have been:


                                       14
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005

<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                                                     2005            2004
                                                                                  ------------   ------------
<S>                                                                               <C>            <C>
Net income (loss) from  continuing operations, as reported (thousands)            $      2,069   $     (2,283)
   Add: Stock-based compensation expense included in net income (loss)                      42              9
   Less: Stock-based compensation expense determined under the fair value based
      method for all rewards                                                               199            288
                                                                                  ------------   ------------
   Pro forma net income (loss)                                                    $      1,912   $     (2,562)

Earnings (loss) per share:
   Basic - as reported                                                            $        .08   $      (0.13)
   Diluted - as reported                                                          $        .08   $      (0.13)
   Basic - pro forma                                                              $        .07   $      (0.14)
   Diluted - pro forma                                                            $        .07   $      (0.14)

Basic weighted average outstanding shares                                           26,036,864     17,707,502
Diluted weighted average outstanding shares                                         27,901,621     17,707,502
</TABLE>

Income Taxes

Income taxes are accounted for under the asset and liability method of SFAS No.
109 "Accounting for Income Taxes." Under SFAS 109, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under SFAS 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date. Valuation reserves are provided for the deferred
tax assets when, based on available evidence, it is more likely than not that
some or all of the deferred tax assets will not be realized.

Earnings Per Share

Basic earnings (loss) per common share (Basic EPS) excludes dilution and is
computed by dividing net income (loss) by the weighted average number of common
shares outstanding or subscribed during the period. Diluted earnings (loss) per
share (Diluted EPS) reflects the potential dilution that could occur if stock
options or other contracts to issue common stock, such as warrants or
convertible notes, were exercised or converted into common stock.


                                       15
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


Basic earnings (loss) per common share (Basic                      Year Ended
EPS) excludes dilution and is computed by                         December 31,
dividing net income (loss) by the weighted
average number of common shares outstanding
or subscribed during the period.  Diluted
earnings (loss) per share (Diluted EPS) reflects
the potential dilution that could occur if stock
options or other contracts to issue common
stock, such as warrants or convertible notes,
were exercised or converted into common stock.

                                                        2005          2004
                                                    ------------   ------------
Net income (loss), as reported (numerator)          $  2,068,551   $ (2,283,451)
                                                    ============   ============
Net income (loss), for diluted earnings per share
- income available to shareholders after assumed
conversion as reported (numerator)                  $  2,099,387   $ (2,283,451)
                                                    ============   ============
Weighted average number of common shares
outstanding (denominator) - basic                     26,036,864     17,707,502
                                                    ------------   ------------
Effect of dilutive securities:
      Employee stock options                           1,393,216             --
      Warrants                                            41,686             --
      Convertible debentures                             429,855             --
Weighted average number of common shares
outstanding (denominator) - dilutive                  27,901,621     17,707,502
                                                    ------------   ------------

Net income (loss) per share - basic                 $       0.08   $      (0.13)
                                                    ============   ============

Net income (loss) per share - diluted               $       0.08   $      (0.13)
                                                    ============   ============

The number of outstanding employee stock options, warrants and any contingently
issuable shares that could potentially dilute earnings per share in the future,
but were not included in the computation of diluted earnings per share for these
periods presented because of their impact was anti-dilutive for the periods
presented are as follows: 5,335,184 for the year ended December 31, 2005 and all
potentially dilutive securities were excluded from the year ended December 31,
2004.

Accumulated Other Comprehensive Income

As of the date of these Consolidated Financial Statements, the Company had no
components of other comprehensive income as defined by SFAS No. 130 "Accumulated
Other Comprehensive Income" other than its net loss.

Reclassifications

Certain amounts in the year ended December 31, 2004 financial statements have
been reclassified to conform to the 2005 presentation.

New Accounting Standards

On December 16, 2004, the Financial Accounting Standards Board issued SFAS 123
(revised 2004), Share-Based Payment ("SFAS 123(R)"), which is a revision of SFAS
123, Accounting for Stock-Based Compensation. SFAS 123(R) supersedes APB Opinion
25, Accounting for Stock Issued to Employees, and amends SFAS 95, Statement of
Cash Flows. Generally, the approach in SFAS 123(R) is similar to the approach
described in SFAS No. 123. However, SFAS 123(R) requires all share-based
payments to employees, including grants of employee stock options, to be
recognized in the income statement based on their fair values. Pro-forma
disclosure is no longer an alternative.


                                       16
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


SFAS No. 123(R) permits public companies to adopt its requirements using one of
two methods:

1). A "modified prospective" method in which compensation cost is recognized
beginning with the effective date (a) based on the requirements of SFAS No.
123(R) for all share-based payments granted after the effective date and (b)
based on the requirements of SFAS No. 123 for all awards granted to employees
prior to the effective date of SFAS No. 123(R) that remain unvested on the
effective date.

(2) A "modified retrospective" method which includes the requirements of the
modified prospective method described above, but also permits entities to
restate based on the amounts previously recognized under SFAS No. 123 for
purposes of pro-forma disclosures either (a) all prior periods presented or (b)
prior interim periods of the year of adoption.

The Company is required to adopt SFAS No. 123(R) on January 1, 2006, and is
currently evaluating the adoption alternatives.

As permitted by SFAS 123, the Company currently accounts for share-based
payments to employees, vendors, or outside consultants/contractors, using APB
Opinion No. 25`s intrinsic value method and, as such, generally recognizes
expense to the extent of the fair market value of the shares exchanged, after
taking into account various factors, such as but not limited to, number of
shares, market, and other stock restrictions. Accordingly, the adoption of SFAS
123(R)`s fair value method may or may not have a significant impact on the
consolidated results of operations, although it will have no impact on the
Company's overall consolidated financial position. The impact of adopting SFAS
123(R) in future periods will depend on levels of share-based payments granted
in the future.

4. CONTRACTS

A) CONSTRUCTION CONTRACTS

Construction contracts receivable were comprised of the following at December
31, 2005:

Contract receivables billed:
----------------------------
Completed contracts                                                $  6,732,155
Contracts in progress                                                 3,070,837
Retainage                                                               210,821
Less: Allowance for doubtful accounts                                  (584,323)
                                                                   ------------
                                                                   $  9,429,490
                                                                   ============

The asset account, "Unbilled revenue", represents revenues recognized in excess
of amounts billed. The liability account "Deferred revenue" represents billings
in excess of revenues recognized.

Balances at December 31, 2005 were comprised of the following:

Costs incurred on uncompleted contracts                            $  7,077,883

Estimated earnings                                                    4,446,456
                                                                   ------------
                                                                     11,524,339
Less: Billings to date                                               (8,163,873)
                                                                   ------------
                                                                   $  3,360,466
                                                                   ============

Balance sheet presentation:
---------------------------
Unbilled revenue                                                   $  3,800,665
Deferred revenue                                                       (440,199)
                                                                   ------------
                                                                   $  3,360,466
                                                                   ============


                                       17
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


B) INSURANCE CONTRACTS
Balance sheet presentation:                                        $         --
---------------------------                                                  --
                                                                   ------------
Unbilled                                                                (11,622)
                                                                   ------------
Deferred revenue                                                   $    (11,622)
                                                                   ============

C) OTHER CONTRACTS

Balance sheet presentation:                                        $         --
---------------------------                                                  --
                                                                   ------------
Unbilled                                                               (368,223)
                                                                   ------------
Deferred revenue                                                   $   (368,223)
                                                                   ============

5. MARKETABLE SECURITIES AND NOTES RECEIVABLE

In June 2004, the Company received from a corporation, which is a strategic
partner of RG, a warrant to purchase 333,333 shares of RS Group of Companies'
common stock through June 2009 at a price of $19.50 per share in exchange for
current and ongoing strategic financial services. No value was assigned to the
warrant since the exercise price of $19.50 per share significantly exceeds the
fair market value of the stock price per share on the measurement date.

In December 2005, the Company entered into a consulting service agreement with a
third party unrelated client in which the Company will provide services over a
one year period in exchange for 700,000 shares in the client's common stock. As
of December 31, 2005, 350,000 of these shares should have been received and the
remaining 350,000 shares were to be received by March 31, 2006. At the time the
consulting agreement was executed, these shares had a fair market value of
$875,000 or $1.25 per share, as determined by the price of recent issuances of
stock by the client. The Company accrued for the receipt of the 350,000 shares
of common stock by recording a debit of $437,500 to accounts receivable-other
and crediting deferred revenue. The deferred revenue will be recognized over the
one year period of the consulting agreement through December 2006. When the
additional 350,000 shares of common stock are due in March 2006, the Company
will record a debit of $437,500 to investment in available for sale security and
credit deferred revenue, to be amortized over the remaining period of the
consulting agreement.

In June 2002, a third party issued the Company a promissory note for $20,000. In
May 2004, the third party repaid $4,000 on this promissory note, resulting in an
outstanding balance of $16,000 at December 31, 2005. There is no stated interest
rate or due date. In addition, there is no collateral on this promissory note.

On December 5, 2005, a third party issued the Company a secured promissory note
for $335,000. The rate of interest is 15% per annum and computed on the basis of
a 365 day year for the actual number of days lapsed. The principal plus all
accrued but previously unpaid interest is due and payable on the earliest of i)
February 5, 2006, ii) immediately prior to the closing of the acquisition of a
majority of stock of the third party by another entity by means of a transaction
or a series of related transactions, iii) the closing of a financing the third
party which results in at least $500,000 in net proceeds to the third party, or
iv) the closing of the sale of all or substantially all of the assets of the
third party, unless the third party stockholders of record prior to such
acquisition or sale set forth in ii) and iv) above shall hold at least 50% of
the voting power of the acquiring or surviving entity immediately after such
acquisition or sale. This note receivable is secured by a pledge of shares
representing 51% of the outstanding shares of the third party and 400,000 shares
of RG America, Inc. common stock registered in the name of Rea Brothers, Ltd., a
related party.

6. IMPAIRMENT

On August 10, 2004, RG acquired all of the common stock of Practical Building
Solutions Inc ("PBS"). The aggregate purchase was $350,000, which payment
consisted of 166,667 restricted shares of RG's common stock. In addition, the
Company incurred $14,755 in related transaction cost. The terms included (1) an
agreement by the stockholders of PBS to escrow 55,556 shares of common stock
shares for a period of two years to satisfy certain potential indemnifiable
claims and (2) and an agreement by RG granting piggyback registration rights for
the resale of 5,850 of the purchase consideration shares. The results of
operations of PBS have been included in RG's results of operations since the
completion of the acquisition.


                                       18
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


On December 16, 2004, the Company determined that as a result of a material
impairment of PBS, the Company would wind down and close the PBS operation. As a
result of the loss of the key employee as related to PBS, its valuation was
significantly impaired and the entire goodwill recorded from the acquisition of
PBS in the amount of $401,033 was impaired and the Company recorded this amount
as Impairment of Goodwill in the Consolidated Financial Statements as of
December 31, 2004. Additionally, PBS net book assets of $144,661 were written
off and charged to Impairment of Subsidiary in the Statement of Operations for
the year ended December 31, 2004.

On March 16, 2005, the 55,556 shares of our common stock held in escrow as
related to the acquisition of PBS were cancelled due to failed negotiations with
previous owners. This transaction was recorded as a recovery of impairment of
$116,669 in the first quarter of 2005 as reflected in the accompanying
Consolidated Statement of Operations.

7. PROPERTY AND EQUIPMENT

Property and equipment consists of the following at December 31, 2005:

Leasehold improvements     $   262,952
Machinery and equipment        827,111
Furniture and fixtures         107,066
Accumulated depreciation      (154,614)
                           -----------
                           $ 1,042,515
                           ===========

8. ACQUISITIONS

On October 12, 2005 RGA, acquired all of the common stock of Total Professional
Restoration, Inc. (TPR). The aggregate purchase was $750,000.00 plus the balance
of the company's outstanding debt to Seller. The terms included (1) purchase
price of $750,000.00 paid by the issuance of one million eight Hundred Seventy
Five Thousand (1,875,000) restricted shares of The Company's $0.0001 par value
Common Stock ("Common Stock"), based upon a share price of forty cents ($0.40)
per share, that will vest ratably to seller over five year's of employment with
RGA, and (2) At Seller's sole option , the option to convert the outstanding
debt totaling $255,754 owed by Registrant to Seller into restricted shares of
The Company's Common Stock based upon a share price of thirty cents ($0.30) per
share. The option period was for ninety (90) days subsequent to the Transaction
Date and expired without being exercised. At December 31, 2005, $53,754 was
still outstanding. However, since the fair market value of the Company's stock
was $0.45 per share as determined by recent private offerings of stock, we
recorded the purchase price at $843,750. When recording this transaction,
$843,750 was recorded as deferred compensation and will be amortized over the
seller's five year employment agreement with RGA. No value was assigned to the
net assets transferred to the Company from acquiring TPR.

Additionally, on the Transaction Date, Registrant entered into an employment
agreement with Mr. Jerod Yates, the previous sole owner of Seller. The
acquisition and employment agreements are filed on Form 8-K.

The Company started to use TPR as a mold abatement subcontractor for the storm
related business in first quarter 2005. All TPR subcontractor service fees prior
to the acquisition will be paid to the Seller without any adjustments. TPR's
results of operations were included in the Company's financial statements since
October 12, 2005.


                                       19
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


9. DEBT

SHORT-TERM DEBT

Our short-term debt at December 31, 2005 consisted of the following:

Bank Line of Credit
$40,000 bank line of credit, dated April 26, 2005,
bearing interest at the bank's prime rate plus 1.25%
(8.5% at December 31, 2005), with an open ended
payment term.

$100,000 bank line of credit, dated July 28, 2005,
bearing interest at 3.97% payable monthly with
principal due at maturity on July 28, 2006.

On March 1, 2005, RG entered into a revolving line of credit facility with a
bank in the amount of $50,000 and $47,676 was initially received by the Company
against the facility. This balance was repaid and the facility was closed prior
to December 31, 2005.

On May 17, 2005, RG entered into a revolving line of credit facility with a bank
in the amount of $40,000 and $40,000 was received by the Company against the
facility. The outstanding balance of this revolving line of credit facility is
$40,000 at December 31, 2005. The revolving line of credit facility is fully
secured by a $40,000 certificate of deposit.

On July 28, 2005, RG entered into a revolving line of credit facility with a
bank in the amount of $100,000 and $100,000 was received by the Company against
the facility. The outstanding balance of this revolving line of credit facility
is $100,000 at December 31, 2005. The revolving line of credit facility is fully
secured by a $100,000 certificate of deposit.

Notes payable - Related Party
$75,000 unsecured promissory note, dated October 2003,
bearing interest at 10% per annum and due on demand.                   $ 19,336

$5,000 unsecured promissory note, dated July 30, 2004,
bearing interest at 10% per annum and due on demand.                   $  5,000

$15,000 unsecured promissory note dated October 2003,
bearing interest at 9.2% - monthly payments of $432.32
- due March 2007                                                       $  6,867

Less: Current Portion                                                   (26,518)
                                                                       --------
Long term portion                                                      $  4,685
                                                                       ========

In October 2003, we executed a $75,000 unsecured promissory note, of which
$19,336 was outstanding at December 31, 2005. The promissory note is with an
officer of RG, interest of 10% per annum and is due on demand. (See Related
Party Transactions Note 14).


In October 2003, the Company executed a $15,000 unsecured promissory note, of
which $6,867 was outstanding at December 31, 2005. The promissory note is with
an officer of RG. The interest rate is 9.2% per annum with monthly principal and
interest payments of $432.62 and is due March of 2007. (See Related Party
Transactions Note 14).

In July 2004, we executed a $5,000 unsecured promissory note, of which $5,000 is
outstanding at December 31, 2005. The promissory note is with an officer of RG,
interest of 10% per annum and is due on demand. (See Related Party Transactions
Note 14).


                                       20
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


Notes payable
$185,100 unsecured promissory note, dated May 2004, bearing
interest at 10% for 90 days and 18% subsequently.
                                                                     $  182,600
$8,099 unsecured promissory note dated July 2003, bearing
interest at 8% per annum and due on demand                                8,099

$17,000 unsecured promissory note dated February 26, 2005,
non interest bearing and no defined repayment date                       17,000

$5,000 unsecured promissory note dated August 9, 2005,
bearing interest at 10% per annum and due January 2006.                   5,000

$10,000,000 secured revolving note dated October 31, 2005,
bearing interest at prime plus 2% (but never less than 6%)
per annum and due October 31, 2008                                    5,749,000
Less un-amortized debt discount on $10,000,000
secured revolving note dated                                         (1,091,051)
                                                                    -----------
October 31, 2005.                                                   $ 4,870,648
                                                                    ===========

In September 2003, the Company received $75,000 of proceeds from an unrelated
third party with the anticipation of structuring a promissory note. However, the
third party has not signed the promissory note as of the date of the
accompanying consolidated financial statements. The Company was accruing
interest at the rate of 15% per annum with the intent to repay the obligation
when funds were available. The debt and accrued interest was repaid through
construction related work and cash payments reducing the outstanding balance to
$0 as of December 31, 2005.

Through May 2004, the Company had received $185,100 of proceeds in the form of a
loan from an unrelated third party. The Company is accruing interest at the rate
of 10% per annum for 90 days from June 15, 2004 and 18% subsequently. On
February 9, 2005, $2,500 of this loan was converted into 4,167 shares of the
Company's common stock. The outstanding principal balance of this note was
$182,600 as of December 31, 2005.

On August 8, 2004, through the acquisition of PBS, we assumed a $6,000 unsecured
promissory note from an unrelated party. The Company was accruing interest at
the rate of 8% per annum with the intent to repay the obligation when funds were
available or through the issuance of RG common stock in exchange for the
retirement of the promissory note. In December 2005, the Company negotiated a
settlement for the retirement of this promissory note, which included a $5,000
principal payment, $1,000 in principal and all related interest forgiven,
leaving the outstanding principal balance of this note $0 as of December 31,
2005.

On August 8, 2004, through the acquisition of PBS, we assumed a $8,099 unsecured
promissory note from an unrelated party. We are accruing interest at the rate of
8% per annum with the intent to repay the obligation when funds are available or
through the issuance of RG common stock in exchange for the retirement of the
promissory note. The outstanding principal balance of this note was $8,099 as of
December 31, 2005.

In February 2005, the Company received $17,000 of proceeds in the form of a loan
from an unrelated third party. This loan is a non-interest bearing note and does
not have a defined repayment date. The outstanding principal balance of this
note was $17,000 as of December 31, 2005.

On August 9, 2005, the Company had received $5,000 of property and equipment
from an unrelated third party and in the form of a 10% per annum interest
bearing note and is due January 2006. The outstanding principal balance of this
note was $5,000 as of December 31, 2005.


Effective October 31, 2005, the Company entered into a Security Agreement with
Laurus Master Fund, Ltd. ("Laurus") for the sale by the Company to Laurus of a
$1,400,000 secured convertible minimum borrowing note ("Minimum Borrowing Note")
and a secured revolving note up to a maximum of $10,000,000 ("Revolving Note").
In connection with the Minimum Borrowing Note and the Revolving Note, the
Company issued to Laurus a common stock purchase warrant ("Warrant") to purchase
up to 2,962,963 shares of the Company's $0.001 par value per share common stock
("Common Stock") at $0.78 per share with a seven year term. The Company
evaluated the warrant issuance in accordance with FAS 123 and utilized the Black
Scholes method to determine valuation. As a result of its evaluation, the
Company determined that the warrant valuation was $1,155,230 and recorded this
amount to debt discount and common stock warrants. The Company amortized $64,179
of the debt discount in 2005 and recorded this cost to interest expense,
resulting in $1,091,051 in un-amortized debt discount on December 31, 2005.
Additionally, the Company and Laurus entered into a registration rights
agreement ("Registration Rights Agreement") covering the registration Common
Stock underlying the Minimum Borrowing Note and the Warrant.


                                       21
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


The Minimum Borrowing Note has an interest rate of Prime plus two percent (2.0%)
and shall not be any time less than six percent (6.0%). The Minimum Borrowing
Note is due together with any unpaid and accrued interest hereon, on October 31,
2008 ("Maturity Date"). Laurus shall have the option, but not the obligation, at
any time until the Maturity Date to convert all or any portion of the Minimum
Borrowing Note and accrued interest into Common Stock at an exercise price of
$0.71 per share. Additionally, the Company has the option, but not the
obligation, to prepay the Minimum Borrowing Note by paying Laurus one hundred
thirty percent (130%) of the principal amount of the Minimum Borrowing Note plus
accrued and unpaid interest. As a result of the Minimum Borrowing Note, the
Company obtained $4,907,805 of proceeds, net of $841,195 of expenses. Of the
$841,195 of expenses, $396,195 was paid to the Company's financial agent,
Spencer Clarke, LLC for financial agent fees, $418,000 was paid to Laurus
Capital Management, LLC for management, due-diligence and documentation fees,
$25,000 was paid to Synergy Structures, for financial agent fees; and $2,000 was
paid to Loeb & Loeb LLP for escrow fees. This debt is classified in accordance
with EITF 95-22. Balance sheet classification of borrowings outstanding under
revolving credit agreements that include both a subjective acceleration clause
and a lock-box agreement.

The Revolving Note has an interest rate of Prime plus two percent (2.0%) and
shall not be any time less than six percent (6.0%). The interest rate was 9.25%
at December 31, 2005. The Revolving Note is due together with any unpaid and
accrued interest hereon, on the Maturity Date. Laurus shall have the option, but
not the obligation, at any time until the Maturity Date to convert all or any
portion of the Revolving Note and accrued interest into Common Stock at an
exercise price of $0.71 per share.

The Security Agreement includes among other things, a stock pledge agreement, a
guaranty from the Company and all of its subsidiaries and certain covenants and
obligations in order to secure the funds obtained from the above mentioned
items. The Security Agreement also includes a funding formula that determines a
maximum amount of funds that the Company can be advanced at any point in time
and an allowance for Laurus to override the formula and advance registrant funds
over the funding formula. Laurus elected the option to override the formula and
advanced the Company $250,000 on October 31, 2005 and cash was received January
12, 2006. The advance has an interest rate of Prime plus five percent (5.0%) and
is due and payable with accrued interest on May 1, 2006. The interest rate was
12.25% at December 31, 2005. At December 31, 2005, $4,501,000 was available for
additional borrowing under the Revolving Note. (See Subsequent Events Note 15)

Convertible Debenture Note

In February 2005, the Company signed a definitive agreement with Spencer Clarke
LLC ("Spencer Clarke") in which Spencer Clarke was engaged as the Company's
financial advisor for up to $1,000,000 of senior subordinated convertible
debentures. From January through March 2005, we issued $400,000 of senior
subordinated convertible debentures and received $323,000 of cash proceeds, net
of $77,000 of expenses. The Company had used the proceeds of the debenture
transaction to retire selected debt, finance the growth of several restoration
projects in areas severely damaged by recent hurricanes and for other strategic
corporate initiatives.

In accordance with EITF Issue 98-5 (Accounting for Convertible Securities with
Beneficial Conversion Features or Contingently Adjustable Conversion Ratios) as
amended by EITF Issue 00-27 (Application of Issue No. 98-5 to Certain
Convertible Instruments), the Company has evaluated that the $400,000 of senior
subordinated convertible notes discussed above have a beneficial conversion
feature as the exercise price is less than the fair value of the Company's
common stock on the measurement date. However, the beneficial conversion feature
was determined to be immaterial and the Company recorded no entry.


                                       22
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


Effective July 30, 2005, the Company's Convertible Debenture Note was amended
such that the maturity date was changed to October 31, 2005. The Holder waived
any and all defaults without further recourse until the amended maturity date of
October 31, 2005 was reached. In consideration of the waiver and extension of
the maturity date to October 31, 2005, the Company issued warrants to purchase
the Company's $0.001 par value common stock. For every $10,000 of principal
amount of debenture outstanding, the Holder received a warrant to purchase 1,000
of common stock at an exercise price of $0.38 per share. As a result of there
being $400,000 principal amount of debentures outstanding, the Company issued
40,000 warrants to Holder with the warrants expiring on July 30, 2008.
Additionally, the Company's Convertible Debenture Note was amended to provide
additional incentive to convert in the future by adding a "sweetener" by
lowering the conversion price from $0.60 per share to $0.45 per share. In
accordance with SFAS 84, the Company booked $116,881 of interest expense and
Additional paid in capital for such "sweetener" upon conversion, for the
additional shares issued due to the reduced conversion price.

In September 2005, the Company's $400,000 of Convertible Debenture Notes
converted into 888,896 shares of the Company's common stock at a price of $0.45
per share. The Convertible Debenture Note related accrued interest of $30,386
converted into 67,525 shares of the Company's common stock at a price of $0.45
per share. On November 15, 2005, additional Convertible Debenture Note related
accrued interest of $450 converted into 999 shares of the Company's common stock
at a price of $0.45 per share.

10. STOCKHOLDERS' EQUITY

Capital Structure

We are authorized to issue up to 300,000,000 shares of common stock, $.001 par
value per share, of which 26,373,861 were issued and outstanding at December 31,
2005. We are also authorized to issue up to 35,000,000 shares of preferred
stock, $.001 par value per share, of which none were issued and outstanding at
December 31, 2005. Additionally, we had 4,212,441 shares subscribed but not
issued at December 31, 2005 and these have been recorded as Common Stock
Subscribed.

Issuances of Common Stock

On February 9, 2005, the Company issued 4,167 shares of common stock at $0.60
per share in conversion of a note payable to a non-related party. The share
price of $0.60 was utilized as the fair market value on the issue date based
upon the price of common stock sold in a recent private placement offering.

In March 2005, the Company issued 72,500 shares of common stock in exchange for
rent payments owed an unrelated third party at $0.60 a share, and accrued
expenses on the Company's books were reduced $43,500. The share price of $0.60
was utilized as the fair market value on the grant date based upon the price of
common stock sold in a recent private placement offering.

On March 15, 2005, the Company issued 26,670 shares of RG's common stock at
approximately $0.30 per share related to an unrecorded 2004 stock transaction.
The share price of $0.30 was utilized as the fair market value on the grant date
based upon the price of common stock sold in a previous private placement
offering (2004 transaction that correlates to the first private placement).

On March 16, 2005, the 55,556 shares of RG's common stock shares at $2.10 per
share (post-split) held in escrow related to the acquisition of PBS were
cancelled. This transaction was recorded as a recovery of impairment of
$116,669.

On March 25, 2005, the 45,455 shares of RG's common stock shares for the
purchase of an insurance book of business at $0.66 per share. This transaction
was recorded as an addition of $30,000 to other non-current assets. The share
price of $0.66 was utilized as the fair market value based upon the closing
price of common stock on the issue date.

In June 2005, the Company issued 172,000 shares of common stock in exchange for
sales commissions owed an employee at approximately $0.23 a share, and accrued
expenses on the Company's books were reduced $40,333. The share price of $0.23
was utilized as the fair market value based upon the closing price of common
stock on the issue date.



                                       23
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


In June 2005, the Company issued 38,095 shares of common stock in exchange for
expense reimbursements owed a former officer at $0.21 a share, and accrued
expenses on the Company's books were reduced $8,000. The share price of $0.21
was utilized as the fair market value based upon the closing price of common
stock on the issue date.

In June 2005, the Company issued 70,000 shares of common stock in exchange for
consulting services owed a third party at approximately $0.18 a share, and
accounts payable on the Company's books were reduced $12,500. The share price of
$0.18 was utilized as the fair market value based upon the closing price of
common stock on the issue date.

In June 2005, the Company issued 3,200 shares of common stock in exchange for
consulting services owed a third party at $0.60 a share, and accounts payable on
the Company's books were reduced $1,920. The share price of $0.60 was utilized
based upon fair market value of the Company's common stock over several months
during negotiations between the consultant and the Company.

In June 2005, the Company issued 47,842 shares of common stock in exchange for
expense reimbursements owed an officer at $0.21 a share, and accounts payable on
the Company's books were reduced $10,047. The share price of $0.21 was utilized
as the fair market value based upon the closing price of common stock on the
grant date.

In August 2005, the Company issued 7,050 shares of common stock in exchange for
consulting services owed a third party at $0.60 a share, and accounts payable on
the Company's books were reduced $4,230. The share price of $0.60 was utilized
based upon fair market value of the Company's common stock over several months
during negotiations between the consultant and the Company.

In August 2005, the Company issued 48,000 shares of common stock in exchange for
salary owed an employee at $0.21 a share, and accrued salaries on the Company's
books were reduced $10,080.

In October 2005, the Company issued 90,000 shares of common stock at the price
of $0.45 per share raising $40,500.

On October 12, 2005 RGA, acquired all of the common stock of Total Professional
Restoration, Inc. (TPR). The aggregate purchase was $750,000.00 plus the balance
of The Company's outstanding debt to Seller. The terms included (1) purchase
price of $750,000.00 paid by the issuance of one million eight Hundred Seventy
Five Thousand (1,875,000) restricted shares of The Company's $0.0001 par value
Common Stock ("Common Stock"), based upon a share price of forty cents ($0.40)
per share, that will vest ratably to seller over five year's of employment with
RGA, and (2) At Seller's sole option , the option to convert the outstanding
debt owed by Registrant to Seller into restricted shares of The Company's Common
Stock based upon a share price of thirty cents ($0.30) per share. The option
period was for ninety (90) days subsequent to the Transaction Date and expired
without being exercised. However, since the fair market value of the Company's
stock was $0.45 per share as determined by recent private offerings of stock, we
recorded the purchase price at $843,750. When recording this transaction,
$843,750 was recorded as deferred compensation and will be amortized over the
seller's five year employment agreement with RGA.

On November 15, 2005, additional Convertible Debenture Note related accrued
interest of $450 converted into 999 shares of the Company's common stock at a
price of $0.45 per share. The share price of $0.45 was utilized as the fair
market value on the grant date based upon the price of common stock sold in a
recent private placement offering.

In January through December 2005, 4,158,049 shares of common stock were issued
from previously recorded Common Stock subscribed.

In January 2004, 50,000 shares of common stock were issued for professional
services at $0.30 per share, and $15,000 was recorded as consulting expense. In
March 2004, 63,255 shares of common stock were issued for legal services at
$0.30 per share, and $18,977 was recorded as professional expense. The valuation
of the shares issued was based upon recent sales of common stock through a
private placement offering. The issuance of these shares was exempt from the
registration requirements of the Act pursuant to Section 4(2) of the Act. As a
result of these issuances, the Company issued a total of 113,255 shares and
recorded a total of $33,977 for consulting expense.

In March 2004, 33,333 shares of common stock were issued to two individuals for
directors' services at $0.30 per share, and $10,000 was recorded as directors'
fees expense. The valuation of the shares issued was based upon recent sales of
common stock through our private placement discussed above.

As of March 30, 2004, we concluded a private placement offering under Rule 506
of Regulation D promulgated under the Act. In conjunction with that offering, we
received $484,575 of cash proceeds and issued 1,617,953 shares of our common
stock at an average price of $0.30 per share to accredited and non-accredited
investors.

In January 2004, we issued 43,333 shares of common stock at $0.30 per share in
exchange for a note receivable from an unrelated third party. The valuation of
the shares issued was based upon recent sales of our common stock through our
concurrent private placement discussed above. The issuance of these shares was
exempt from the registration requirements of the Act pursuant to Section 4(2) of
the Act.

In January 2004, we issued 1,109,308 shares of common stock for the conversion
and settlement of notes payable to related parties. The valuation of the shares
was based on the amount of debt forgiven. The issuance of these shares was
exempt from the registration requirements of the Act pursuant to Section 4(2) of
the Act.

In January 2004, we issued 737,328 shares of common stock for the conversion and
settlement of accounts payable to related and unrelated parties in the total
amount of $406,833. The valuation of the shares was based on the amount of
accounts payable forgiven. The issuances of these shares were exempt from the
registration requirements of the Act pursuant to Section 4(2) of the Act.

In January 2004, we issued 1,667 shares of common stock at $0.30 per share and
the transfer agent is holding the shares pending instructions from RG on how the
shares should be named. The valuation of the shares issued was based upon recent
sales of common stock through our private placement discussed above. The
issuance of these shares was exempt from the registration requirements of the
Act pursuant to Section 4(2) of the Act.

In January 2004, we issued 69,114 shares of common stock at $0.30 per share for
an investment in a real estate limited partnership. The valuation of the shares
issued was based upon recent sales of common stock through our private placement
discussed above. The issuances of these shares were exempt from the registration
requirements of the Act pursuant to Section 4(2) of the Act.

In January 2004, we issued 15,000 shares of common stock at $0.60 per share for
the purchase of property and equipment. The valuation of the shares issued was
based upon recent sales of common stock through our private placement discussed
above. The issuance of these shares was exempt from the registration
requirements of the Act pursuant to Section 4(2) of the Act.

In April 2004, 41,194 shares of common stock were issued for professional
services at an agreed to price of $0.30 per share, and $12,357 was recorded as
consulting expense. The valuation of the shares issued was based upon recent
sales of common stock through a private placement offering. In June 2004, 25,000
shares of common stock were issued for professional services at $0.60 per share,
and $15,000 was recorded as consulting expense. The valuation of the shares
issued was based upon recent sales of common stock through a private placement
offering. In June 2004, 8,333 shares of common stock were issued for
professional services at $2.70 per share and $22,500 was recorded as consulting
expense. The valuation of the shares issued was based upon the current trading
market price of the common stock. In June 2004, 8,333 shares of common stock
were issued at $1.98 per share, and $16,500 was recorded as consulting expense.

In January 2004, we issued 69,114 shares of common stock at $0.30 per share for
an investment in a real estate limited partnership. In June 2004, we determined
that the joint venture would not proceed and the 69,114 previously issued shares
representing $36,402 were reclassed to professional services as consulting
expense. The issuance of all these shares was exempt from the registration
requirements of the Act pursuant to Section 4(2) of the Act. As a result of
these issuances, during the three months ended June 30, 2004, the Company issued
a total of 151,975 shares and recorded a total of $102,760 for consulting
expense.

In April 2004, we issued 36,667 shares of common stock at an agreed to price of
$0.30 per share as compensation to employees and recorded $11,000 as
compensation expense. The valuation of the shares issued was based upon recent
sales of our common stock through our concurrent private placement discussed
above. The issuance of these shares was exempt from the registration
requirements of the Act pursuant to Section 4(2) of the Act.

In April 2004, in accordance to the terms of the Acquisition Agreement between
RG and RGA 2003, we issued 13,333,333 shares of our common stock at the agreed
upon $0.114 per share to the shareholders of RGA 2003 as follows: 10,000,000
shares once the Amended and Restated Articles of Incorporation were declared
effective and 3,333,333 shares upon the satisfaction of certain conditions. As a
result of this issuance, 3,333,333 shares remain unissued subject to the
satisfaction of certain additional conditions. As of September 30, 2004, the
required conditions had been met and the Company recorded the 3,333,333 shares
as Common Stock Subscribed. (See History and Nature of Business Note 1, Common
Stock Subscribed below).

In May 2004, 16,667 shares of common stock were issued to an individual for
directors' services at $0.60 per share, and $10,000 was recorded as directors'
fees expense. The valuation of the shares issued was based upon recent sales of
common stock through our private placement discussed above.

In June 2004, we concluded a private placement offering under Rule 506 of
Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act"). In conjunction with that offering, we received $387,501 of proceeds,
representing 645,958 shares of our common stock at an average price of $0.60 per
share to accredited and non-accredited investors. We issued 230,958 of these
shares and at September 30, 2004, 415,000 shares had not been issued by the
transfer agent and we have recorded the 415,000 shares as Common Stock
Subscribed (see Common Stock Subscribed below).

In June 2004, we issued 404,833 shares of common stock at $0.60 per share in
exchange for a note receivable from an unrelated third party. The valuation of
the shares issued was based upon recent sales of our common stock through our
concurrent private placement discussed above. The issuance of these shares was
exempt from the registration requirements of the Act pursuant to Section 4(2) of
the Act.

In June 2004, we issued 66,667 shares of common stock at an agreed to price of
$0.30 per share for the purchase of property and equipment from a related party
(See Related Party Transaction - Note 10). The valuation of the shares issued
was based upon recent sales of common stock through our private placement at
$0.30 discussed above. The issuance of these shares was exempt from the
registration requirements of the Act pursuant to Section 4(2) of the Act.

In June 2004, we issued 48,373 shares of common stock at $0.60 per share in
exchange for a subscription receivable from an unrelated third party. The
valuation of the shares issued was based upon recent sales of our common stock
through our concurrent private placement discussed above. The issuance of these
shares was exempt from the registration requirements of the Act pursuant to
Section 4(2) of the Act. In January 2004, we issued 43,333 shares of common
stock at $0.30 per share in exchange for a note receivable from an unrelated
third party. In June 2004, we reclassed the 43,333 shares from a note receivable
to a subscription receivable. In total 91,706 shares of common stock were issued
in exchange for a subscription receivable from two unrelated third parties.

In July 2004, in accordance to the terms of the Acquisition Agreement between RG
and PBS, we issued 166,667 shares of our common stock at the agreed upon $2.10
per share to the stockholders of PBS.

In July 2004, 66,667 shares of common stock were issued for professional
services at $1.74 per share, and $116,000 was recorded as consulting expense.
The valuation of the shares issued was based upon the current trading market
price of the common stock. In July 2004, 11,111 shares of common stock were
issued for professional services at $0.90 per share, and $10,000 was recorded as
consulting expense. The valuation of the shares issued was based upon the
current trading market price of the common stock. The issuance of these shares
was exempt from the registration requirements of the Act pursuant to Section
4(2) of the Act. As a result of these issuances, during the three months ended
September 30, 2004, the Company issued a total of 77,778 shares and recorded a
total of $126,000 for consulting expense.

In July and August 2004, 159,167 shares of common stock were issued from
previously recorded Common Stock subscribed.


                                       24
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


Common Stock Subscribed

In June 2005, the Company subscribed 95,238 shares of common stock in exchange
for consulting services owed two officers at $0.21 a share, and accrued expenses
on the Company's books were reduced $20,000. The share price of $0.21 was
utilized as the fair market value based upon the closing price of common stock
on the subscription date.

In September 2005, the Company's $400,000 of Convertible Debenture Notes
converted into 888,896 shares of the Company's common stock at a price of $0.45
per share. In addition, the Convertible Debenture Note related accrued interest
of $30,386 converted into 67,525 shares of the Company's common stock at a price
of $0.45 per share. The share price of $0.45 was utilized as a negotiated
discount to the fair market value based upon the closing price of common stock
on the subscription date.

In September 2005, the Company subscribed 2,655,556 shares of common stock at
the price of $0.45 per share raising $1,195,000. The Company paid two third
parties at total of $180,350 out of the stock issuance proceeds for equity
consulting services and this cost was recorded as a reduction of additional paid
in capital. In addition to this cash payment, the Company issued 26,556 shares
of company stock priced at $0.45 per share valued at $11,950 to a third party
and the cost was recorded as a reduction of additional paid in capital. Finally,
the Company issued a three year warrant to a third party to purchase 252,910
shares of the Company's common stock at an exercise price of $0.4725 per share.
The Black Scholes valuation of this warrant is $80,781 and was recorded as a
reduction of additional paid in capital. The share price of $0.4725 was utilized
as a negotiated discount to the fair market value based upon the closing price
of common stock on the subscription date.

In October 2005, the Company subscribed for the cancellation of 34,091 of the
45,455 shares of RG's common related to the purchase of an insurance book of
business on March 25, 2005 because certain conditions regarding this transaction
were not met.

In December 2005, the Company subscribed 8,889 shares of common stock at the
price of $0.45 per share as compensation to a third party valued at $4,000. The
subscribed stock was granted for equity consulting services and the related cost
was recorded as a reduction of additional paid in capital. The share price of
$0.45 was utilized as the fair market value on the grant date based upon the
price of common stock sold in a recent private placement offering.

In January through December 2005, 4,158,049 shares of common stock were issued
from previously recorded Common Stock subscribed.

In April 2004, in accordance to the terms of the Acquisition Agreement between
RG and RGA 2003, we issued 13,333,333 shares of our common stock at the agreed
upon $0.114 per share to the shareholders of RGA 2003 as follows: 10,000,000
shares once our Amended and Restated Articles of Incorporation were declared
effective and 3,333,333 shares upon the satisfaction of certain conditions. As a
result of this issuance, 3,333,333 shares remain unissued subject to the
satisfaction of certain additional conditions. In June 30, 2004, the required
conditions were met and the Company recorded the 3,333,333 shares as Common
Stock Subscribed.

In June 2004, we concluded a private placement offering under Rule 506 of
Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act"). In conjunction with that offering, we received $387,501 of proceeds,
representing 645,958 shares of our common stock at an average price of $0.60 per
share to accredited and non-accredited investors. We issued 230,958 of these
shares and at September 30, 2004, 415,000 shares had not been issued by the
transfer agent and we have recorded the 415,000 shares as Common Stock
Subscribed.

In June 2004, we agreed to issue 16,667 shares of common stock at $0.30 per
share in exchange for a subscription receivable from an unrelated third party.
The valuation of the shares issued was based upon recent sales of our common
stock through our concurrent private placement discussed above. In June 2004, we
agreed to issue 1,667 shares of common stock at $0.60 per share in exchange for
a subscription receivable from an unrelated third party. The valuation of the
shares issued was based upon recent sales of our common stock through our
concurrent private placement discussed above. In total 18,333 shares were agreed
to be issued and the Company has recorded the 18,333 shares as Common Stock
Subscribed.

In August 2004, we concluded a private placement offering under the Act. In
conjunction with that offering, we received $95,000 of proceeds, representing
158,333 shares of our common stock at an average price of $0.60 per share to
accredited and non-accredited investors. We have not issued any of these shares
and at September 30, 2004, 158,333 shares had not been issued by the transfer
agent and we have recorded the 158,333 shares as Common Stock Subscribed.

In September 2004, we agreed to issue 16,667 shares of common stock at $0.60 per
share as compensation to an employee and recorded $10,000 as compensation
expense. The valuation of the shares issued was based upon recent sales of our
common stock through our concurrent private placement discussed above. We have
not issued any of these shares and at September 30, 2004, 16,667 shares had not
been issued by the transfer agent and we have recorded the 16,667 shares as
Common Stock Subscribed.

In September 2004, we agreed to issue 704,420 shares of common stock for the
conversion and settlement of notes payable to a related party. The valuation of
the shares was based on the amount of debt forgiven. At December 31, 2004,
704,420 shares had not been issued by the transfer agent and we have recorded
the 704,420 shares as Common Stock Subscribed.

In July through September 2004, we agreed to issue 33,333 shares of common stock
for professional services at $1.56 per share, and $52,000 was recorded as
consulting expense. The valuation of the shares was based upon the current
trading market price of the common stock.

In July through September 2004, we agreed to issue 63,888 shares of common stock
for professional services at $1.20 per share, and $76,666 was recorded as
consulting expense. The valuation of the shares was based upon the current
trading market price of the common stock.

In July through September 2004, we agreed to issue 16,667 shares of common stock
for professional services at $0.90 per share, and $15,000 was recorded as
consulting expense. The valuation of the shares was based upon the current
trading market price of the common stock.

In July through September 2004, we agreed to issue 1,667 shares of common stock
for professional services at $0.60 per share, and $1,000 was recorded as
consulting expense. The valuation of the shares was based upon the current
trading market price of the common stock.

We have not issued any of these shares and at September 30, 2004, 115,555 shares
had not been issued by the transfer agent and we have recorded the 115,555
shares as Common Stock Subscribed.

In July and August 2004, 159,167 shares of common stock were issued from
previously recorded Common Stock subscribed.

In December 2004, we agreed to issue 33,334 shares and 27,778 sharers of common
stock for professional services at $1.02 per share and $1.20 per share,
respectively, and $34,000 and $33,335, respectively, were recorded as consulting
expense. The valuation of the shares was based upon the current trading market
price of the common stock.

Common Stock Warrants

In March 2005, the Company granted warrants to purchase 66,667 shares of our
common stock at an exercise price of $0.63 per share, to an unrelated third
party. The warrants were issued in exchange for financial advisor services from
Spencer Clarke LLC ("Spencer Clarke") in which Spencer Clarke assisted with the
issuance of $400,000 of senior subordinated convertible debentures for the
Company. The share price of $0.63 was utilized based upon the terms described in
the Financial Advisory Agreement between the Company and Spencer Clarke.
Specifically, the $0.63 per share was determined at 105% of common stock that
would be issued upon conversion of the subordinated convertible debentures at
$0.60 per share. The $0.60 per share was based upon the price of common stock
sold in a recent private placement offering.

The Company evaluated the warrant issuance in accordance with FAS 123 and
utilized the Black Scholes method to determine valuation. As a result of its
evaluation, the Company determined that the warrant valuation was $27,357 and
recorded this amount to interest expense and additional paid in capital.

In the event holders of the senior subordinated convertible debentures elect
their option to convert such debt to common stock, they will be issued common
stock warrants equal to 105% of the common stock issued upon conversion at an
exercise price of $0.60 per warrant. Based upon the issuance of $400,000 of
senior subordinated convertible debentures, if all $400,000 was converted, the
Company would issue 700,000 warrants to the senior subordinated convertible
debenture holders and the Company would evaluate the warrant issuance in
accordance with FAS 123 utilizing the Black Scholes method to determine
valuation.


                                       25
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


Effective July 30, 2005, the Company's Convertible Debenture Note was amended
such that the maturity date was changed to October 31, 2005 or the Company
having completed an offering of either debt or equity or both in excess of
$2,000,000. The Holder waived any and all defaults without further recourse
until the amended maturity date of October 31, 2005 was reached. In
consideration of the waiver and extension of the maturity date to October 31,
2005, the Company issued warrants to purchase the Company's $0.001 par value
common stock. For every $10,000 of principal amount of debenture outstanding,
the Holder received a warrant to purchase 1,000 of common stock at an exercise
price of $0.38 per share. As a result of there being $400,000 principal amount
of debentures outstanding, the Company issued 40,000 warrants to Holder with the
warrants expiring on July 30, 2008. The Company evaluated the warrant issuance
in accordance with FAS 123 and utilized the Black Scholes method to determine
valuation. As a result of its evaluation, the Company determined that the
warrant valuation was $6,007 and recorded this amount to interest expense and
common stock warrants.

In September 2005, the Company modified an existing warrant issued to a Spencer
Clarke related to the issuance of the Company's senior subordinated convertible
debentures based upon the terms described in the Financial Advisory Agreement
between the Company and Spencer Clarke. The modification included increasing the
number of common stock shares to be purchased from 66,666 shares to 88,888
shares. In addition, the strike price decreased from $0.63 per share to $0.4725.
The Company evaluated the warrant issuance modification in accordance with FAS
123 and utilized the Black Scholes method to determine modification valuation.
As a result of its evaluation, the Company determined that the warrant
modification valuation was $1,035 and recorded this amount to interest expense
and common stock warrants.

Related to September 2005 equity consulting, the Company issued a three year
warrant to a third party to purchase 252,910 shares of the Company's common
stock at an exercise price of $0.4725 per share. The Company evaluated the
warrant issuance in accordance with FAS 123 and utilized the Black Scholes
method to determine valuation. As a result of its evaluation, the Company
determined that the warrant valuation was $80,781 and recorded this amount to
additional paid in capital and common stock warrants. The $0.4725 per share was
based upon the 105% of the price of common stock sold in a recent private
placement offering.

The Company issued a three year warrant to the Company's Convertible Debenture
Note holders to purchase 700,000 shares of the Company's common stock at an
exercise price of $0.63 per share. The warrant issuance was triggered by the
September 2005 conversion of the Company's Convertible Debenture Notes into the
Company's common stock per the original Convertible Debenture Note agreements.
The Company evaluated the warrant issuance in accordance with FAS 123 and
utilized the Black Scholes method to determine valuation. As a result of its
evaluation, the Company determined that the warrant valuation was $209,919 and
recorded this amount to additional paid in capital and common stock warrants.
The $0.63 per share was based upon the 105% of the price of common stock sold in
a recent private placement offering at the time the Company's Convertible
Debenture Notes were issued.


                                       26
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


Effective October 31, 2005, the Company entered into a Security Agreement with
Laurus Master Fund, Ltd. ("Laurus") for the sale by the Company to Laurus of a
$1,400,000 secured convertible minimum borrowing note ("Minimum Borrowing Note")
and a secured revolving note up to a maximum of $10,000,000 ("Revolving Note").
In connection with the Minimum Borrowing Note and the Revolving Note, the
Company issued to Laurus a common stock purchase warrant ("Warrant") to purchase
up to 2,962,963 shares of the Company's $0.001 par value per share common stock
("Common Stock") at $0.78 per share with a seven year term. Additionally, the
Company and Laurus entered into a registration rights agreement ("Registration
Rights Agreement") covering the registration Common Stock underlying the Minimum
Borrowing Note and the Warrant. The Company evaluated the warrant issuance in
accordance with FAS 123 and utilized the Black Scholes method to determine
valuation. As a result of its evaluation, the Company determined that the
warrant valuation was $1,155,230 and recorded this amount to debt discount and
common stock warrants. The debt discount will be amortized over the three year
duration of the Revolving Note. The Company amortized $64,179 of the debt
discount in 2005 and recorded this cost to interest expense, resulting in
$1,091,051 in un-amortized debt discount on December 31, 2005. The $0.78 per
share was based upon the 120% of the fair market value price of common stock on
October 31, 2005 as indicated on the over the counter stock exchange.

In May 2001, we granted a corporation, which is a stockholder of RG, a warrant
to purchase 166,667 shares of our common stock at a price of $6.00 per share in
exchange for $100,000 cash. The warrant exercise period was to commence upon the
granting of free trading shares in an Arkansas corporation, which had filed for
federal bankruptcy protection under Chapter 11 of the federal bankruptcy laws.
We were under contract to purchase this corporation from the federal bankruptcy
trustee at the time the warrant was issued. The contract to purchase this
corporation was subsequently terminated. As a result, in February 2002, we
amended the warrant agreement to grant an option to purchase 333,333 shares of
RG's $.001 par value common stock at a price of $3.00 per share. The warrants
expire February 28, 2005. The Company is in the process of extending this
warrant.

In May 2004, we granted a corporation, which is a stockholder of RG, a warrant
to purchase 1,000,000 shares of our common stock at a price of $0.60 per share
in exchange for previous and ongoing financial advisory services to assist the
Company. We determined that the fair market value of the services provided was
$30,000 based upon comparable services in the marketplace and the entire $30,000
has been recorded against additional paid-in-capital. This warrant has an
anti-dilutive clause, therefore no adjustment has been made for the Company's
reverse stock split.

In June 2004, we granted RS Group of Companies, which is a strategic partner of
RG, a warrant to purchase 333,333 shares of our common stock through June 2009
at a price of $6.00 per share in exchange for current and ongoing strategic
financial services between the companies (See Note 5, Marketable Securities and
Notes Receivable). The exercise price for the warrant was set at a premium to
provide an incentive for both companies to perform currently and in the future,
and as a result, no value was assigned to the warrant based upon the Company's
valuation.

Stock Options

In August 2004, the Company adopted the 2004 Omnibus Stock Option Plan (the
"2004 Plan"). The purpose of the 2004 Plan is to advance the business and
development of the Company and its shareholders by affording to the employees,
directors and officers of the Company the opportunity to acquire a proprietary
interest in the Company by the grant of Options to such persons under the 2004
Plan's terms. The 2004 Plan reserved 5,000,000 shares for grant or issuance upon
the exercise of options granted under the plan. Stock Options under the Plan may
be granted by the Board of Directors or a Compensation Committee of the Board of
Directors. The exercise prices for Options granted will be at the fair market
value of the common stock at the time of the grant if a public market develops
for the common stock or not less than the most recent price at which the Company
had sold its common stock.

The following table summarizes activity related to options:

                              Number of Shares   Weighted Average
                                                 Exercise Price
                               ---------------   ---------------
Balance at December 31, 2004         4,258,333   $          0.30
  Granted                            1,793,334              0.48
  Exercised                                 --                --
  Forfeited                          1,583,331   $          0.30
                               ---------------   ---------------
Balance at December 31, 2005         4,468,336   $          0.37
                               ===============   ===============

      All but 241,666 options to purchase our common stock at December 31, 2005
have been issued with exercise prices equal to or greater than fair market value
on the date of issuance. The Company recorded compensation expense of $332,395
related to options in 2005.

The terms of options to purchase our common stock are summarized below:

<TABLE>
<CAPTION>
----------------------------Options Outstanding------------------------Options Exercisable------
                                                 Weighted
                                                 Average                                                  Weighted
                                Number          Remaining                                   Number         Average
                            Outstanding at     Contractual       Weighted Average       Exercisable at    Exercise
Range of Exercise Prices     Dec. 31, 2005         Life           Exercise Price         Dec 31, 2005       Price
------------------------- ------------------- --------------- ------------------------ ----------------- ------------
<S>  <C>                  <C>                 <C>             <C>                      <C>                <C>
     $0.30 - $0.9120          4,468,336         8.3 Years              $0.37              2,418,124         $0.37
     ===============          =========         =========              =====              =========         =====
</TABLE>

From January thru March 2005, 233,333 employee stock options were granted to
three employees at a strike price of $0.30 per share and 833,334 stock options
were granted to two consultants at a strike price of $0.50 per share. The stock
options to employees at $0.30 per share were based upon a previous private
placement offering. The stock options to the consultants at $0.50 per share was
based upon a previous private placement offering and adjusted higher to reflect
a premium of 67% in exchange for immediate vesting of the stock options. In
addition, in February 2005, 833,334 employee stock options were cancelled for
two employees at a strike price of $0.30 per share.


                                       27
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


From April thru June 2005, 426,667 employee stock options were granted to three
employees at a strike price of $0.30 per share. The stock options to employees
at $0.30 per share were based upon a previous private placement offering. In
addition, in June 2005, 416,664 employee stock options were cancelled for a
former officer at a strike price of $0.30 per share.

In August 2005, 50,000 employee stock options were granted to one employee at a
strike price of $0.30 per share. The stock options to employees at $0.30 per
share were based upon a previous private placement offering.

In October 2005, 250,000 employee stock options were granted to one employee at
a strike price of $0.9120 per share. The stock options to employee at $0.9120
per share were based upon fair market value at the time of grant. In addition,
in October 2005, 333,333 employee stock options were cancelled for a former
officer at a strike price of $0.30 per share.

11. INCOME TAXES

There was no income tax during 2005 and 2004 due to the Company's net loss and
valuation allowance position.

The Company's tax expense differs from the "expected" tax expense (benefit) for
the years ended December 31, (computed by applying the Federal Corporate tax
rate of 34% to loss before taxes), as follows:

                                               2005         2004
                                            ---------    ---------
Computed "expected" tax expense (benefit)   $ 703,307    $(776,373)
Change in valuation allowance                (703,307)     776,373
                                            ---------    ---------
                                            $      --    $      --
                                            =========    =========

The tax effects of temporary differences that gave rise to significant portions
of deferred tax assets and liabilities at December 31, 2005 are as follows:

Deferred tax assets:
Deferred revenue                    250,391
Allowance for doubtful accounts     216,200
                                  ---------
                                    466,591
Deferred tax liabilities:
Depreciation expense                (18,500)
                                  ---------
Net deferred tax asset              488,091
Valuation allowance                (488,091)
                                  ---------
Net deferred taxes                $      --
                                  =========

In assessing the recoverability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will be realized in the future. The valuation allowance has been
decreased by $703,307 during fiscal year 2005 as a result of net operating
income.

12. LEASE COMMITMENTS

Effective September 1, 2005, the Company signed a 26 month lease and relocated
the corporate headquarters to 1507 Capital Avenue #101, Plano, TX 75074. The
premises consist of approximately 6,636 square feet of office and warehouse
space. Base rent of $4,000 per month with two months fee estimate will start
November 1, 2005, with a total of $96,000 paid over the life of the lease.

Additionally, the Company has a non-cancelable equipment lease that is treated
as an operating lease for financial statement purposes.


                                       28
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


The Company has various building leases associated with the storm business in
Florida and Mississippi that are treated as operating leases for financial
statement purposes.

In addition, the Company has several auto leases that are treated as operating
leases for financial statement purposes. The Company is leasing three vehicles
from Rea Brothers, related party, for general business purposes. In 2005, the
Company paid Rea Brothers $10,683 in lease payments.

Rental expense charged to operations under operating leases for the years ended
December 31, 2005 and 2004 was $128,994 excluding sublease income of $11,674 and
$166,920 excluding sublease income of $23,348, respectively.

The future minimum lease payments for the non-cancelable operating lease are as
follows:

Year ended December 31:           Amount
------------------------------   --------
2006                             $215,371
2007                               67,523
2008                               20,780
2009                                  518
                                 --------
Total                            $304,192
                                 ========

13. COMMITMENTS AND CONTINGENCIES

From time to time we may become subject to proceedings, lawsuits and other
claims in the ordinary course of business including proceedings related to
environmental and other matters. Such matters are subject to many uncertainties,
and outcomes are not predictable with assurance.

The Company is subject to various unasserted claims from vendors for non-payment
of accounts payable plus related legal fees. Excluding legal fees, which cannot
be estimated, we have included all amounts in accounts payable as of December
31, 2005.

The Company has included $91,351 of unpaid Federal payroll taxes and employee
withholdings and related penalties and interest in the account classified
withholding taxes payable as of December 31, 2005. Of this liability, $33,431 is
for RGA and the Company has structured an agreement with the Internal Revenue
Service to pay the entire amount. In addition, with the acquisition of PBS, the
Company assumed PBS's $57,920 of unpaid Federal payroll taxes and employee
withholdings and related penalties and interest.

The Company has included $150,000 of Other expense related to the anticipated
settlement of a lawsuit with a shareholder from Invvision Capital, Inc., which
is in accrued expenses at December 31, 2005.

Through the Company's subsidiary, RGA, the Company leased their corporate
headquarters under a short-term lease that expired in December 2003 and that was
continued on a month-to-month basis at a monthly rental rate of $12,971 thru
August 31, 2005. Effective September 1, 2005, the Company signed a 26 month
lease and relocated the corporate headquarters to 1507 Capital Avenue #101,
Plano, TX 75074. The premises consist of approximately 6,636 square feet of
office and warehouse space. Base rent of $4,000 with two months free rent per
month will start November 1, 2005, with a total of $96,000 paid over the life of
the lease.

We have an employment agreement with our Chief Executive Officer, John E. Rea
(the "John E. Rea Agreement"). The John E. Rea Agreement provides for an annual
base salary of $120,000, a transportation allowance of $1,000 per month, a
health insurance allowance of up to $750 per month, a sales commission equal to
1.75% of our consolidated gross revenue, participation in any savings and
retirement plan and welfare benefit plans adopted by us and other standard
provisions. Additionally, the John E. Rea Agreement provides for an annual
$10,000 dues allowance for the Young Presidents Organization. The John E. Rea
Agreement also provides for a one-time net termination fee of $1,000,000 upon
any early termination by us.


                                       29
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


We have an employment agreement with our President and Chief Operating Officer,
James A. Rea (the "James A. Rea Agreement"). The James A. Rea Agreement provides
for an annual base salary of $120,000, a transportation allowance of $1,000 per
month, a health insurance allowance of up to $750 per month, a sales commission
equal to 1.75% of the Company's consolidated gross revenue, participation in any
savings and retirement plan and welfare benefit plans adopted by us and other
standard provisions. The James A. Rea Agreement also provides for a one-time net
termination fee of $1,000,000 upon any early termination by us.

We have an employment agreement with our Executive Vice President, Vice
President - Investor Relations and Secretary, Kevin L. Dahlberg (the "Dahlberg
Agreement"). The Dahlberg Agreement provides for an annual base salary of
$120,000, a transportation allowance of $500 per month, a health insurance
allowance of up to $500 per month, participation in certain commission programs,
savings and retirement plan and welfare benefit plans adopted by us and other
standard provisions. In addition, the Dahlberg Agreement provides that Mr.
Dahlberg's annual base salary will increase to $150,000 upon our raising a total
of $4,000,000 in new equity or upon our obtaining either of 50,000 or more
apartment units placed into our PropertySMART(R) program or $8,000,000 in annual
PropertySMART(R) gross revenues, and will increase to $180,000 upon our becoming
cash flow positive with a net operating income equal to 5% of sales.

Currently the Company's Chief Financial Officer and Corporate Controller are
consultants and not employees of the Company. It is anticipated as the Company
successfully implements its business strategy in the near future, a full time
Chief Financial Officer and Corporate Controller will be hired by the Company.
However, the Company believes the financial services provided by the Chief
Financial Officer and Corporate Controller meet its requirements at this point
in time.

The Company is obligated under a five year consulting service agreement with the
Company's chairman of the board that provides for monthly payment of $10,000 per
month. (See Related Party Transaction Note 14)

14.......CONCENTRATIONS OF RISK

The Company sells its products to customers in the United States. The Company
performs ongoing credit evaluations of its customers' financial condition and
generally requires no collateral.

Our financial instruments that are potentially exposed to credit risk consist
primarily of cash and cash equivalents, contracts receivable, other receivables
and notes receivable, for which the carrying amounts approximate fair value. At
certain times during the year, our demand deposits held in banks exceeded the
federally insured limit of $100,000. At December 31,2005, the uninsured deposits
totaled $774,979.

      Suppliers representing over 10% of purchases were as follows:

                                                     2005         2004
                                                     ----         ----
Doubletree Construction                                0%          32%
Texano Construction                                   18%           0%

      Customers representing over 10% of revenues were as follows:

                                                     2005         2004
                                                     ----         ----
Office In The Park                                     0%          29%
Chateau Le Grande                                     12%          13%
Santa Rosa Towers                                      0%          12%
Pinnacle Entertainment                                27%           0%

The majority of our revenue for 2005 was derived from services provided in
Escambia County, Florida and Harrison, Hancock, and Jackson Counties in
Mississippi.


                                       30
<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


15. RELATED PARTY TRANSACTIONS

In October 2003, the Company executed a $75,000 unsecured promissory note, of
which $19,336 is outstanding at December 31, 2005. The promissory note is with
an officer of RG, the interest rate is 10% per annum and the note is due on
demand.


In October 2003, the Company executed a $15,000 unsecured promissory note, of
which $6,867 is outstanding at December 31, 2005. The promissory note is with an
officer of RG. The interest rate is 9.2% per annum with monthly principal and
interest payments of $432 and is due March of 2007.


The Chairman of the Board earned $4,250 bi-weekly for consulting services from
January 1, 2005 thru September 30, 2005. For January thru March 2005, $1,050 was
paid resulting in a balance of $38,700 outstanding at March 31, 2005. For April
thru June 2005, $29,250 was paid resulting in a balance of $39,200 outstanding
at June 30, 2005. For July thru September 2005, $33,230 was paid resulting in a
balance of $35,750 outstanding at September 30, 2005. Effective October 1, 2005,
the Chairman of the Board's bi-weekly consulting services fee was increased to
$4,615. For October thru December 2005, $30,250 was paid resulting in a balance
of $33,190 outstanding at December 31, 2005.


In June 2005, the Company's Chief Operating Officer and who is also a Director,
forgave $179,369 of commissions due and payable in relation to Florida storm
related business. In June 2005, the father of our Senior Vice President forgave
$44,011 of commissions due and payable in relation to Florida storm related
business. In June 2005, the Company's Chief Executive Officer and who is also a
Director, forgave $10,000 of salary due and payable. In June 2005, the Company's
Senior Vice President forgave $10,000 of salary due and payable. In June 2005,
the Company's Chairman of the Board, who is also the father of the Company's
Chief Executive Officer and Chief Operating Officer, forgave $10,000 of
consulting fees due and payable. In June 2005, the Company's Chief Financial
Officer, who is a consultant of the Company, forgave $10,000 of consulting fees
due and payable. As a result of the above items, the Company's directors,
officers and consultants forgave a total of $263,380, comprised of $223,380 of
commissions, $20,000 of compensation and $20,000 of consulting. The Company
believes the remaining compensation received by such individuals reflects market
levels of compensation.

In June 2005, the Company issued 47,842 shares of common stock in exchange for
expense reimbursements owed an officer, the Company's Senior Vice President, at
$0.21 a share, and accounts payable on the Company's books were reduced $10,047.
The share price of $0.21 was utilized as the fair market value based upon the
closing price of common stock on the issue date.

In June 2005, the Company subscribed 95,238 shares of common stock in exchange
for consulting services owed two officers, the Chief Financial Officer and the
Corporate Controller, at $0.21 a share, and accrued expenses on the Company's
books were reduced $20,000. The share price of $0.21 was utilized as the fair
market value based upon the closing price of common stock on the issue date.


In December 2005, one of the Company's construction crews made $1,500 of
personal repairs in the home of the Company's Chief Operating Officer in
exchange for a reduction of monies previously owed this officer.

The Company is obligated under a five year consulting service agreement with the
Company's chairman of the board that provides for monthly payment of $10,000 per
month. This agreement was made effective January 1, 2005 by and between Schooner
Realty Inc. and the Company.

The Company is leasing three vehicles from Rea Brothers for general business
purposes. In 2005, the Company paid Rea Brothers $10,683 in lease payments.

16. SUBSEQUENT EVENTS

Effective February 15, 2006 ("Effective Date"), the Company amended and restated
a Security Agreement dated October 31, 2005 with Laurus Master Fund, Ltd.
("Laurus") for the sale by the Company to Laurus of a $1,400,000 secured
convertible minimum borrowing note ("Minimum Borrowing Note"), a secured
revolving note up to a maximum of $10,000,000 ("Revolving Note"), a common stock
purchase warrant ("Original Warrant") to purchase up to 2,962,963 shares of the
Company's $0.001 par value per share common stock ("Common Stock") and a
registration rights agreement ("Registration Rights Agreement") covering the
registration of Common Stock underlying the Minimum Borrowing Note and the
Warrant.



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<PAGE>

                        RG America, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2005


The Minimum Borrowing Note was amended and restated as a Secured Convertible
Note ("Secured Convertible Note") was increased from $1,400,000 to $5,000,000
and the Laurus option, but not the obligation to convert all or any portion of
the Secured Convertible Note and accrued interest into Common Stock was
decreased from $0.71 per share to $0.41 per share. The Secured Convertible Note
continues to have an interest rate of Prime plus two percent (2.0%), shall not
be any time less than six percent (6.0%) and is due together with any unpaid and
accrued interest hereon, on October 31, 2008 ("Maturity Date"). Additionally,
the Company continues to have the option, but not the obligation, to prepay the
Secured Convertible Note by paying Laurus one hundred thirty percent (130%) of
the principal amount of the Secured Convertible Note plus accrued and unpaid
interest.

The amended and restated Revolving Note was changed to be non-convertible
whereby Laurus no longer has an option to convert all or any portion of the
Revolving Note into Common Stock. The Revolving Note continues to have an
interest rate of Prime plus two percent (2.0%), shall not be any time less than
six percent (6.0%) and is due together with any unpaid and accrued interest
hereon, on the Maturity Date.

The amended and restated Original Warrant to purchase 2,962,963 shares of Common
Stock was changed whereby the exercise price was decreased from $0.78 per share
to $0.55 per share. The Warrant continues to have an expiration term date of
October 31, 2012 and all other provisions of the Original Warrant remain the
same.

Additionally, a Warrant ("New Warrant") to purchase up to 1,363,636 shares of
Common Stock was granted on the Effective date at an exercise price of $0.55 per
share and has an expiration term date of February 15, 2013.

The amended and restated Security Agreement continues to include among other
things, a stock pledge agreement, a guaranty from the Company and all of its
subsidiaries and certain covenants and obligations in order to secure the funds
obtained from the above mentioned items. The amended Security Agreement
continues to include a funding formula that determines a maximum amount of funds
that the Company can be advanced at any point in time and an allowance for
Laurus to override the formula and advance registrant funds over the funding
formula.

The amended and restated documents comprising the above items were filed as
Exhibit 99 to a Current Report on Form 8-K.


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