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**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**




**Washington,
      D.C. 20549**





**FORM
      10-QSB**


(Mark
      One)


þ
            
            **QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934**


**For
      the quarterly period ended June 30, 2006**


o
            
            **TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                ACT**


**For
      the Transition Period from** **** **to** **** ****





**Commission
      file number 08-80429**





**RG
      AMERICA, INC.**


(Exact
      name of small business issuer as specified in its charter)


Nevada
              (State
                or other jurisdiction of
              incorporation
                or organization)
            
            75-2823489
              (I.R.S.
                Employer
              Identification
                No.)





1507
      Capital Avenue, Suite 101


Plano,
      TX
      75074


(Address
      of principal executive offices)





972-919-4774


(Issuer’s
      telephone number)





N/A


(Former
      name, former address and former fiscal year, if changed since last
      report)





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 þ No o





Indicate
      by check mark whether the registrant is a shell company (as defined in
      Rule 12b-2 of the Exchange Act): Yes o No þ





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: Common Stock, $.001 par value, 29,235,426
      shares outstanding as of August 8, 2006. Additionally, there are 3,350,000
      shares issuable but not outstanding as of August 8, 2006.





Transitional
      Small Business Disclosure Format (check one): Yes o No þ





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**RG
      AMERICA, INC.**


**FORM
      10-QSB**





**TABLE
      OF CONTENTS**


Page





PART
                I - FINANCIAL INFORMATION
            1Item
                1. Consolidated Financial Statements
                (Unaudited)
            2Item
                2. Management's Discussion and Analysis on Plan of
                Operations.
            17Item
                3. Controls and Procedures.
            27PART
                II - OTHER INFORMATION
            27Item
                1. Legal Proceedings
            27Item
                2. Unregistered Sales of Equity Securities and use of
                Proceeds
            28Item
                3. Defaults Upon Senior Securities
            29Item
                4. Submission of Matters to a Vote of Security
                Holders
            29Item
                5. Other Information
            29Item
                6. Exhibits
            29SIGNATURES
            30




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**PART
      I - FINANCIAL INFORMATION**





Item
      1.
      Consolidated Financial Statements (Unaudited)





Filed
      herewith are the following unaudited financial statements:





Consolidated
      Balance Sheet (Unaudited) at June 30, 2006





Consolidated
      Statements of Operations (Unaudited) for the three and six months ended June
      30,
      2006 and 2005





Consolidated
      Statements of Cash Flows (Unaudited) for the six months ended June 30, 2006
      and
      2005





Notes
      to
      Consolidated Financial Statements (Unaudited)


-1-
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**RG
                AMERICA, INC. AND SUBSIDIARIES****CONSOLIDATED
                BALANCE SHEET****(Unaudited)**




**ASSETS****June
                30,****2006****Current
                assets:**Investment
                in certificate of deposit
            
            $
            140,740Contracts
                receivable, net of allowance for doubtfulaccounts
                of $849,805
            
            
            17,141,583Unbilled
                revenue
            
            
            5,449,852Prepaid
                expenses - net of accumulated amortization of $220,901
            
            
            1,319,296Other
                receivables
            
            
            1,050,416Notes
                receivable
            
            
            351,000**Total
                current assets**
            
            
            25,452,887**Property
                and equipment, net of****accumulated
                depreciation of $305,352**
            
            
            1,056,227**Other
                non-current assets**
            
            
            99,450**Total
                assets**
            
            $
            26,608,564


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


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




**LIABILITIES
                AND STOCKHOLDERS' EQUITY****LIABILITIES****June
                30,****2006****Current
                liabilities:**Bank
                overdraft
            
            $
            24,314Accounts
                payable, trade
            
            
            6,597,209Accrued
                expenses
            
            
            2,695,656Withholding
                taxes payable
            
            
            96,557Deferred
                revenue
            
            
            588,993Bank
                line-of-credit
            
            
            140,000Notes
                payable - related parties
            
            
            52,368Notes
                payable, net of debt discount of $1,649,611
            
            
            9,439,229**Total
                current liabilities**
            
            
            19,634,326**Long-term
                debt - related party**
            
            
            3,973**Total
                liabilities**
            
            
            19,638,299**Commitments
                and contingencies**
            
            
            —**STOCKHOLDERS'
                EQUITY****Stockholders'
                equity**Preferred
                stock, $.001 par value, 35,000,000 sharesauthorized,
                none issued and outstanding
            
            
            —Common
                stock, $.001 par value, 300,000,000 sharesauthorized,
                29,193,540 issued and outstanding
            
            
            29,193Common
                stock subscribed, 3,350,000 shares
            
            
            (82,948
            )Additional
                paid in capital
            
            
            8,930,213Common
                stock warrants
            
            
            2,570,529Accumulated
                deficit
            
            
            (3,703,291
            )7,743,696Less:
                Deferred stock compensation
            
            
            (773,431
            )**Total
                stockholders' equity**
            
            
            6,970,265**Total
                liabilities and stockholders' equity**
            
            $
            26,608,564


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


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**RG
                AMERICA, INC. AND SUBSIDIARIES****CONSOLIDATED
                STATEMENTS OF OPERATIONS****(Unaudited)**




**Three
                Months Ended**
            
            **Six
                Months Ended****June
                30,**
            
            **June
                30,****2006**
            
            **2005**
            
            **2006**
            
            **2005****Revenues**
            
            $
            8,224,183
            
            $
            2,084,952
            
            $
            17,497,019
            
            $
            5,019,518**Cost
                of revenues**
            
            
            5,285,060
            
            
            1,332,079
            
            
            10,826,146
            
            
            2,845,968**Gross
                profit**
            
            
            2,939,123
            
            
            752,873
            
            
            6,670,873
            
            
            2,173,550**Operating
                expenses:**Selling,
                general and administrative
            
            
            707,744
            
            
            258,487
            
            
            1,319,483
            
            
            587,662Compensation,
                payroll taxes and benefits
            
            
            784,165
            
            
            174,847
            
            
            1,844,807
            
            
            754,789Stock
                compensation
            
            
            209,488
            
            
            3,250
            
            
            308,824
            
            
            314,838Consulting
                and contract labor
            
            
            244,759
            
            
            60,429
            
            
            451,244
            
            
            121,779Professional
            
            
            42,676
            
            
            91,275
            
            
            241,247
            
            
            131,305Recovery
                of impairment
            
            
            —
            
            
            —
            
            
            —
            
            
            (116,669
            )Rent
            
            
            150,512
            
            
            82,078
            
            
            310,498
            
            
            152,339Depreciation
            
            
            77,265
            
            
            23,524
            
            
            150,737
            
            
            40,443**Total
                operating expenses**
            
            
            2,216,609
            
            
            693,890
            
            
            4,626,840
            
            
            1,986,486**Income
                from operations**
            
            
            722,514
            
            
            58,983
            
            
            2,044,033
            
            
            187,064**Other
                expense:**Other
                income (expense), net
            
            
            70,940
            
            
            (9,248
            )
            
            70,940
            
            
            2,096Interest
                and financing cost, net
            
            
            (478,366
            )
            
            (13,349
            )
            
            (934,264
            )
            
            (131,389
            )**Total
                other expense**
            
            
            (407,426
            )
            
            (22,597
            )
            
            (863,324
            )
            
            (129,293
            )**Net
                income**
            
            $
            315,088
            
            $
            36,386
            
            $
            1,180,709
            
            $
            57,771**Net
                income per share - basic**
            
            $
            0.01
            
            $
            0.00
            
            $
            0.04
            
            $
            0.00**Net
                income per share - diluted**
            
            $
            0.01
            
            $
            0.00
            
            $
            0.03
            
            $
            0.00**Basic
                weighted average outstanding shares**
            
            
            31,873,661
            
            
            24,593,351
            
            
            31,240,934
            
            
            24,524,432**Diluted
                weighted average outstanding shares**
            
            
            49,293,576
            
            
            25,726,304
            
            
            44,496,913
            
            
            26,399,187


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


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




**Six
                Months Ended****June
                30,****2006**
            
            **2005****Operating
                Activities:**Net
                income
            
            $
            1,180,709
            
            $
            57,771Adjustments
                to reconcile net income to net cash provided by (used in)operating
                activities:Depreciation
            
            
            150,737
            
            
            40,443Write
                off of investment in limited partnershipProvision
                for doubtful accounts
            
            
            424,219
            
            
            —Amortization
                of deferred compensation
            
            
            100,400
            
            
            5,487Non-cash
                interest expense
            
            
            493,202
            
            
            —Stock
                options issued for consulting services
            
            
            —
            
            
            309,351Stock
                warrants issued for consulting services
            
            
            82,604
            
            
            —Stock
                options issued for employee services
            
            
            106,320
            
            
            —Stock
                issued for professional services
            
            
            18,250
            
            
            —Stock
                issued for employee compensation
            
            
            1,250
            
            
            —Stock
                cancelled related to acquisition
            
            
            (50,000
            )
            
            (116,669
            )Stock
                warrant issued for debt services
            
            
            —
            
            
            27,357Changes
                in operating assets and liabilities:Contracts
                receivable
            
            
            (8,136,312
            )
            
            (228,956
            )Unbilled
                revenue and deferred revenue, net
            
            
            (2,317,738
            )
            
            420,775Prepaid
                expenses
            
            
            (187,375
            )
            
            (58,822
            )Other
                receivables
            
            
            (99,300
            )
            
            (116,395
            )Increase
                in note receivables
            
            
            —Other
                non current assets
            
            
            (40,600
            )
            
            —Bank
                overdraft
            
            
            24,314
            
            
            13,610Accounts
                payable - trade
            
            
            1,473,880
            
            
            106,733Accrued
                expenses
            
            
            763,773
            
            
            (544,133
            )Withholding
                taxes payable
            
            
            4,837
            
            
            (38,554
            )**Net
                cash used in operating activities**
            
            
            (6,006,830
            )
            
            (122,002
            )**Investing
                Activities:**Investment
                in certificate of deposit
            
            
            (740
            )
            
            (179,728
            )Purchases
                of property and equipment
            
            
            (135,449
            )
            
            (211,603
            )**Net
                cash used in investing activities**
            
            
            (136,189
            )
            
            (391,331
            )**Financing
                Activities:**Repayments
                of notes payable - related party
            
            
            (3,862
            )
            
            —Repayments
                of notes payable
            
            
            (6,874,220
            )
            
            (19,529
            )Repayments
                of bank line of credit
            
            
            —
            
            
            (195,015
            )Proceeds
                from issuance of notes payable
            
            
            12,337,755
            
            
            17,000Proceeds
                from issuance of convertible debenture notes
            
            
            —
            
            
            400,000Proceeds
                from bank line of credit
            
            
            —
            
            
            209,582**Net
                cash provided by financing activities**
            
            
            5,459,673
            
            
            412,038**Net
                decrease in cash and cash equivalents**
            
            
            (683,346
            )
            
            (101,295
            )**Cash
                and cash equivalents at beginning of period**
            
            
            683,346
            
            
            111,345**Cash
                and cash equivalents at end of period**
            
            $
            —
            
            $
            10,050Cash
                paid during the period for interest
            
            $
            895,331
            
            $
            9,264**Supplemental
                Disclosure of Non-cash Transactions:**Stock
                issued for conversion of accounts payable
            
            $
            —
            
            $
            24,467Stock
                issued for conversion of accrued expense
            
            $
            283,833
            
            $
            111,834Note
                payable related party issued for conversion of accrued
                expense
            
            $
            —
            
            $
            11,666Note
                payable issued for purchase of property and equipment
            
            $
            29,000
            
            $
            —Stock
                issued for conversion of notes payable
            
            $
            535,413
            
            $
            2,500Receivable
                for deferred revenue
            
            $
            437,500
            
            $
            —Stock
                issued for other non current asset
            
            $
            —
            
            $
            30,000Warrant
                issued for credit facility
            
            $
            877,596
            
            $
            —


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


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          to Table of Contents**




**RG
      America, Inc. and Subsidiaries**


**Notes
        to Consolidated Financial Statements**
 **June
        30, 2006**
 **(Unaudited)**


**1.**  **BASIS
      OF PRESENTATION**





The
      accompanying unaudited financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      for interim financial information and with the instructions to Form 10-QSB
      of
      Regulation S-B. They do not include all information and footnotes required
      by
      accounting principles generally accepted in the United States of America for
      complete financial statements. However, except as disclosed herein, there has
      been no material change in the information disclosed in the notes to the
      consolidated financial statements for the year ended December 31, 2005 included
      in the Company's Annual Report on Form 10-KSB filed with the Securities and
      Exchange Commission. The interim consolidated unaudited financial statements
      should be read in conjunction with those consolidated financial statements
      included in the Form 10-KSB. In the opinion of Management, all adjustments
      considered necessary for a fair presentation, consisting solely of normal
      recurring adjustments, have been made. Operating results for the three months
      and six months ended June 30, 2006 are not necessarily indicative of the results
      that may be expected for the year ending December 31, 2006.




**2.**  **GOING
      CONCERN**





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. The Company has previously
      incurred net losses, which have resulted in a significant accumulated deficit
      at
      June 30, 2006. However, the Company had net income of $1,180,709
      for the six months ended June 30, 2006, compared to net income of $57,771 for
      the six months ended June 30, 2005. At June 30, 2006, current assets exceeded
      current liabilities by $5,818,561, and through recent periods of net income,
      the
      Company had reduced its accumulated deficit to $3,703,291.





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 consolidated financial
      statements do not include any adjustments that might be necessary if the Company
      is unable to continue as a going concern.





Although
      RG has become profitable in recent quarters, and the Company gives no assurance
      that it will continue 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.





As
      of
      June 30, 2006, the Company has a cash position of zero which is directly related
      to the Company’s existing credit facility with Laurus. As of June 30, 2006, the
      Company has drawn approximately $9,400,000 of its $10,000,000 credit facility
      with Laurus. Additionally, the maximum advance rate allowed under the credit
      facility is 50% of allowable contract receivables. As a result of these
      constraints, the Company has been both financially and operationally challenged
      in relation to providing sufficient capital to fund projects and provide working
      capital for overhead requirements. As a result, the Company has been challenged
      to complete existing projects with limited capital available, primarily because
      of the 50% advance rate and this has directly impacted the aging of the
      Company’s accounts receivable. Typically, the Company’s contracts are based upon
      insurance proceeds and because of the challenge of finishing the projects,
      the
      collection of the insurance proceeds timing has been extended. Additionally,
      the
      ability of the Company to commence new projects has been impacted by the
      above.





The
      Company is nearing the completion of several projects and anticipates that
      the
      insurance proceeds will be received in the near future to help alleviate the
      existing cash issue. Additionally, with the collection of these proceeds,
      additional capacity under the Laurus credit facility will be provided for not
      only existing projects, but new projects in the Company’s pipeline and
      backlog.


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**RG
        America, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **June
          30, 2006**
 **(Unaudited)**


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





**3.**
            **NATURE
                OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
                POLICIES**





**Net
      Income Per Share**




Basic
      net
      income per common share (Basic EPS) excludes dilution and is computed by
      dividing net income by the weighted average number of common shares outstanding
      or subscribed during the period. Diluted net income 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.




**Three
                Months Ended**
              **June
                30,**
            
            **Six
                Months Ended**
              **June
                30,****2006**
            
            **2005**
            
            **2006**
            
            **2005**Net
                income, as reported (numerator)
            
            $
            315,088
            
            $
            36,386
            
            $
            1,180,709
            
            $
            57,771Net
                income, for diluted earnings per share - income available to shareholders
                after assumed conversion as reported (numerator)
            
            $
            389,883
            
            $
            55,364
            
            $
            1,302,254
            
            $
            83,760Weighted
                average number of common shares outstanding (denominator) -
                basic
            
            
            31,873,661
            
            
            24,593,351
            
            
            31,240,934
            
            
            24,524,432Effect
                of dilutive securities:Employee
                stock options
            
            
            2,195,905
            
            
            466,286
            
            
            1,465,797
            
            
            1,289,490Warrants
            
            
            3,028,888
            
            
            —
            
            
            1,518,156
            
            
            55,265Convertible
                debt
            
            
            12,195,122
            
            
            666,667
            
            
            9,639,299
            
            
            530,000Weighted
                average number of common shares outstanding (denominator) -
                dilutive
            
            
            49,293,576
            
            
            25,726,304
            
            
            43,864,186
            
            
            26,399,187Net
                income per share - basic
            
            $
            0.01
            
            $
            0.00
            
            $
            0.04
            
            $
            0.00Net
                income per share - diluted
            
            $
            0.01
            
            $
            0.00
            
            $
            0.03
            
            $
            0.00





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: 939,393 for the three months ended June 30, 2006
      and
      4,888,062 for the six months ended June 30, 2006.


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          to Table of Contents**




**RG
        America, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **June
          30, 2006**
 **(Unaudited)**


**Reclassifications**





Certain
      amounts in the three months and six months ended June 30, 2005 financial
      statements have been reclassified to conform to the 2006
      presentation.





**Stock
      Based Compensation**





Effective
      January 1, 2006, the Company adopted the fair value recognition provisions
      of
      SFAS No. 123(R), *“Share-Based
      Payments* , *”* using
      the modified prospective application method. Under this transition method,
      compensation cost recognized for the three months and six months ended June
      30,
      2006, includes the applicable amounts of: (a) compensation cost of all
      stock-based payments granted prior to, but not yet vested as of January 1,
      2006
      (based on the grant-date fair value estimated in accordance with the original
      provisions of SFAS No. 123 and previously presented in pro forma footnote
      disclosures), and (b) compensation cost for all stock-based payments granted
      subsequent to January 1, 2006 (based on the grant-date fair value estimated
      in
      accordance with the new provisions of SFAS No. 123(R)). Results for periods
      prior to January 1, 2006, have not been restated. The compensation cost
      recognized for the three months and six months ended June 30, 2006 was $57,184
      and $106,320 as a result of implementing SFAS No. 123(R).





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:




For
                the three months
            
            For
                the six monthsended
                June 30, 2005
            
            ended
                June 30, 2005Net
                income from continuing operations, as reported
            
            $
            36,386
            
            $
            57,771Add
                stock-based compensation expensesIncluded
                in net income
            
            
            3,250
            
            
            314,838Less
                total stock-based employee compensation expense determined under
                the fair
                value based method for all awards
            
            
            (27,677
            )
            
            (374,361
            )Pro
                forma net income (loss)
            
            $
            11,959
            
            $
            (1,752
            )Earnings
                (loss) per share:Basic
                and diluted - as reported
            
            $
            0.00
            
            $
            0.00Basic
                and diluted - pro forma
            
            $
            0.00
            
            $
            0.00




-8-
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          to Table of Contents**




**RG
        America, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **June
          30, 2006**
 **(Unaudited)**


**4.**
            **CONTRACTS**




**A)
      CONSTRUCTION CONTRACTS**




Construction
      contracts receivable were comprised of the following at June 30,
      2006:


Contract
                receivables billed:Completed
                contracts
            
            $
            5,332,392Contracts
                in progress
            
            
            12,032,447Retainage
            
            
            391,679Less:
                Allowance for doubtful accounts
            
            
            (
                849,805
            )$
            16,906,713




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 June 30, 2006 were comprised of the following:


Costs
                incurred on uncompleted contracts
            
            $
            16,498,393Estimated
                earnings
            
            
            8,663,22625,161,619Less:
                Billings to date
            
            
            (
                19,925,718
            )$
            5,235,901Balance
                sheet presentation:Unbilled
                revenue
            
            $
            5,449,852Deferred
                revenue
            
            
            (
                213,951
            )$
            5,235,901





**B)
                INSURANCE CONTRACTS**Balance
                sheet presentation:Unbilled
            
            $
            —Deferred
                revenue
            
            
            (10,459
            )$
            (
                10,459
            )





**C)********OTHER
                CONTRACTS**Balance
                sheet presentation:Unbilled
            
            $
            —Deferred
                revenue
            
            
            (364,583
            )$
            (
                364,583
            )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 for both construction
                and insurance contracts.




**5.**
            **DEBT**




**SHORT-TERM
      DEBT**





Significant
      current period changes in short-term debt at June 30, 2006 consisted of the
      following:


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**RG
        America, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **June
          30, 2006**
 **(Unaudited)**


***Notes
      payable - Related Parties***




In
      January, 2006, the Company received $17,000 of property from a related party
      in
      return for a non-interest bearing note with monthly principal payments of $500.
      The outstanding principal balance of this note was $15,500 as of June 30,
      2006.




In
      April,
      2006, the Company received $12,000 of property from a related party in return
      for a 10% interest bearing note with monthly principal payments of $550. The
      outstanding principal balance of this note was $10,639 as of June 30,
      2006.




***Notes
      payable***




On
      August
      8, 2004, through a previous acquisition, we assumed a $8,099 unsecured
      promissory note from an unrelated party. The Company was accruing interest
      at
      the rate of 8% per annum. In March 2006, the Company repaid the obligation
      through the issuance of 22,028 shares of RG common stock in exchange for the
      retirement of the promissory note plus accrued interest of $1,814.




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
      RG’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. As a result
      of the Minimum Borrowing Note amendment, the Company obtained an additional
      $5,539,479 of proceeds, net of $203,805 of expenses which was paid to the
      Company’s financial advisor, Spencer Clarke. The indebtedness is classified as
      current 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
      Minimum Borrowing Note was amended and restated as a Secured Convertible Note
      ("Secured Convertible Note") and was increased from $1,400,000 to $5,000,000.
      Laurus has the option, but not the obligation, to convert all or any portion
      of
      the Secured Convertible Note and accrued interest into Common Stock at $0.41
      per
      share, as amended from the previous $0.71 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, RG 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 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 Registrant 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.


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**RG
        America, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **June
          30, 2006**
 **(Unaudited)**


The
      amended and restated documents comprising the above items were previously filed
      on Form 8-K.





In
      January through March, 2006, the Company borrowed an additional $5,743,284
      and
      repaid back $2,535,919 to Laurus in accordance with terms of the secured
      revolving note acquired effective October 31, 2005.





In
      May
      2006, Laurus converted $525,000 of the Minimum Borrowing Note balance into
      1,281,707 shares of the Company’s common stock, at the amended agreement rate of
      $0.41 per share.





In
      May
      2006, the Company commenced a bridge loan transaction in the amount of
      $2,000,000 through the private placement of Promissory Notes (“Notes”) to
      several “accredited investors” as defined in Rule 501(a) of Regulation D
      promulgated under the Securities Act of 1933, as amended (the “Securities Act”)
      (“Holders”). This private placement was arranged by our financial advisor on the
      transaction, Spencer Clarke, LLC (“Spencer Clarke”). Effective June 30, 2006,
      the Company terminated the transaction and in total, issued $1,600,000 of Notes
      and received $1,424,000 of proceeds, net of $176,000 of expenses paid to Spencer
      Clarke. The terms of the Notes include the payment of interest at a rate of
      12%
      per annum with a maturity date equal to the earlier of: (i) August 30, 2006,
      or
      (ii) closing and partial funding of a subordinated debt facility up to
      $25,000,000 or at least $3,000,000 of our equity or equity-linked securities,
      or
      (iii) upon or after the occurrence of an Event of Default as defined in the
      Notes. The Notes are subordinated existing Senior Indebtedness of the Company
      to
      Laurus Master Fund, Ltd. In consideration of this Note, the Company issued
      50%
      warrant coverage on the Notes or 606,060 warrants exercisable at $1.32 per
      share
      with the warrants expiring on June 30, 2008, to Holders. The warrants are
      exercisable on a cash basis only and have “piggy-back” registration rights. None
      of the warrants have been exercised as June 30, 2006 and no fees or commissions
      were paid in connection with the issuance of the warrants to Spencer Clarke.
      The
      issuance of the warrants was made in reliance of the Section Act, which provide
      for exemptions form the registration requirements of the Securities Act for
      transactions not involving a public offering. The
      Company valued the warrant utilizing the Black Scholes method to determine
      valuation. As a result of its evaluation, the Company determined that the
      warrant valuation was $308,358 and recorded this amount to debt discount and
      common stock warrants. The debt discount will be amortized over the life of
      the
      loan through August 30, 2006 and recorded as interest expense.  The
      $1.32 per share was based upon a premium equal to 125% of the fair market value
      price of common stock when the agreement was made as indicated on the over
      the
      counter stock exchange. All
      of
      the Holders are “accredited investors” as defined in the Securities Act and are
      now existing creditors of the Company. The underlying common stock from the
      exercise of the warrants shall not be offered, sold or transferred other than
      pursuant to an effective registration statement under the Securities Act or
      an
      exemption from such registration requirements.




**7.**
            **STOCKHOLDERS’
                EQUITY**





**Issuances
      of Common Stock**





On
      March
      10, 2006, the Company issued 33,333 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 issuance date based upon
      the price of common stock sold in a previous private placement offering in
      2004.





In
      May
      2006, Laurus converted $525,000 of the Minimum Borrowing Note balance into
      1,281,707 shares of the Company’s common stock, at the amended agreement rate of
      $0.41 per share.





In
      May
      2006, the Company issued 33,333 shares of common stock in exchange for
      outstanding compensation owed an officer at $0.45 a share and accrued
      compensation on the Company’s books was reduced $15,000. The share price of
      $0.45 was utilized as the fair market value on the issuance date based upon
      the
      price of common stock sold in a recent private placement offering at the time
      the salary was earned.


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**RG
        America, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **June
          30, 2006**
 **(Unaudited)**


In
      May
      and June 2006, the Company issued 68,083 shares of RG’s common stock to several
      individuals as a correction for unrecorded issuances. The average share price
      was approximately $0.30 and was determined by a combination of contracted stock
      price and fair market value, based at the time that the issuances should have
      been made and was
      recorded as a debit to paid in capital and stock compensation .





In
      June
      2006, the Company issued 15,316 shares of common stock in exchange for
      outstanding compensation owed an employee at $0.45 a share and accrued
      compensation on the Company’s books was reduced $6,892. The share price of $0.45
      was utilized as the fair market value on the issuance date based upon the price
      of common stock sold in a recent private placement offering at the time the
      salary was earned, based at the time that the issuance should have been
      made.





**Common
      Stock Subscribed**





On
      March
      31, 2006, the Company subscribed 11,334 shares of RG’s common stock in order to
      correct an error in the amount of common stock issued related to a 2005 stock
      transaction. There was no effective share price for the issuance as it reflected
      a correction of a transfer agent error and was recorded as a reclass between
      paid in capital and common stock subscribed.





On
      March
      31, 2006, the Company subscribed 11,538 shares of common stock in exchange
      for
      accrued vacation owed an employee through December 31, 2005 at $0.32 a share,
      and accrued expenses on the Company’s books were reduced $3,692. The share price
      of $0.32 was utilized as the fair market value based upon the closing price
      of
      common stock on the issuance date of January 1, 2006.





On
      March
      31, 2006, the Company subscribed 22,028 shares of common stock at $0.45 per
      share in conversion of a note payable to a non-related party. 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 at the time
      of
      the note payable.





On
      March
      31, 2006, the Company subscribed 573,889 shares of common stock in exchange
      for
      director fees for the Company’s directors at $0.45 a share, and accrued expenses
      on the Company’s books were reduced $258,250. 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 at the time the
      services were performed.





In
      April
      2006, the Company determined that a September 2004 financing transaction, which
      resulted in the subscription of 83,333 shares of RG’s common stock valued at
      $50,000, was cancellable because
      certain conditions regarding this transaction were not met .
      The
      Company cancelled the stock subscription and recorded $50,000 to other income.





In
      May
      2006, the Company cancelled a stock subscription for 8,333 shares of RG’s common
      stock to an investor as a correction for an unrecorded issuance.





**Common
      Stock Warrants**





Effective
      February 15, 2006, 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") and a secured revolving note up to a maximum of
      $10,000,000 ("Revolving Note"). 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


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**RG
        America, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **June
          30, 2006**
 **(Unaudited)**


other
      provisions of the Original Warrant remain the same. As
      a
      result of its evaluation, the Company determined that the warrant modification
      valuation was $25,729 and recorded this amount to debt discount and common
      stock
      warrants. The debt discount will be amortized as interest expense over the
      three
      year duration of the Revolving Note.  The
      $0.55 per share was based upon the 122% of the price of common stock sold in
      a
      recent private placement offering at the time this Security Agreement was
      amended. Additionally, a new warrant to purchase up to 1,363,636 shares of
      Common Stock was granted to Laurus at an exercise price of $0.55 per share
      and
      has an expiration term date of February 15, 2013. As a result of its evaluation,
      the Company determined that the warrant valuation was $543,509 and recorded
      this
      amount to debt discount and common stock warrants. The debt discount will be
      amortized as interest expense over the three year duration of the Revolving
      Note.  The
      $0.55 per share was based upon the 122% of the price of common stock sold in
      a
      recent private placement offering at the time this Security Agreement was
      amended.





In
      May
      2006, the Company commenced a bridge loan transaction in the amount of
      $2,000,000 through the private placement of Promissory Notes (“Notes”) to
      several “accredited investors” as defined in Rule 501(a) of Regulation D
      promulgated under the Securities Act of 1933, as amended (the “Securities Act”)
      (“Holders”). This private placement was arranged by our financial advisor on the
      transaction, Spencer Clarke, LLC (“Spencer Clarke”). Effective June 30, 2006,
      the Company terminated the transaction and in total, issued $1,600,000 of Notes
      and received $1,424,000 of proceeds, net of $176,000 of expenses paid to Spencer
      Clarke. The terms of the Notes include the payment of interest at a rate of
      12%
      per annum with a maturity date equal to the earlier of: (i) August 30, 2006,
      or
      (ii) closing and partial funding of a subordinated debt facility up to
      $25,000,000 or at least $3,000,000 of our equity or equity-linked securities,
      or
      (iii) upon or after the occurrence of an Event of Default as defined in the
      Notes. The Notes are subordinated existing Senior Indebtedness of the Company
      to
      Laurus Master Fund, Ltd. In consideration of this Note, the Company issued
      50%
      warrant coverage on the Notes or 606,060 warrants exercisable at $1.32 per
      share
      with the warrants expiring on June 30, 2008, to Holders. The warrants are
      exercisable on a cash basis only and have “piggy-back” registration rights. None
      of the warrants have been exercised as of the date of this Current Report and
      no
      fees or commissions were paid in connection with the issuance of the warrants
      to
      the promissory note holders. The issuance of the warrants was made in reliance
      of the Section Act, which provide for exemptions form the registration
      requirements of the Securities Act for transactions not involving a public
      offering. The
      Company valued the warrant utilizing the Black Scholes method to determine
      valuation. As a result of its evaluation, the Company determined that the
      warrant valuation was $308,358 and recorded this amount to debt discount and
      common stock warrants. The debt discount will be amortized over the life of
      the
      loan through August 30, 2006 and recorded as interest expense.  The
      $1.32 per share was based upon the 125% of the fair market value price of common
      stock when the agreement was made as indicated on the over the counter stock
      exchange. All
      of
      the Holders are “accredited investors” as defined in the Securities Act and are
      now existing creditors of the Company. The underlying common stock from the
      exercise of the warrants shall not be offered, sold or transferred other than
      pursuant to an effective registration statement under the Securities Act or
      an
      exemption from such registration requirements.





In
      June
      2006, in return for investor relations consulting, the Company issued three
      five
      year stock warrants to third parties to purchase a total of 100,000 shares
      of
      the Company’s common stock at an exercise price of $0.45 per share. The Company
      valued the warrant utilizing the Black Scholes method to determine valuation.
      As
      a result of its evaluation, the Company determined that the warrant valuation
      was $82,604 and recorded this amount to stock compensation and common stock
      warrants. 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 at the time consulting agreement was negotiated.




**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


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**RG
        America, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **June
          30, 2006**
 **(Unaudited)**


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, 2005
            
            
            4,468,336
            
            $
            0.37Granted
            
            
            83,333
            
            
            0.67Exercised
            
            
            —
            
            
            —Forfeited
            
            
            —
            
            
            —Balance
                at June 30, 2006
            
            
            4,551,669
            
            $
            0.38





The
      Company’s computations for employee grants in 2006 were made using a
      Black-Scholes model using the following weighted average assumptions: expected
      life of 4.9 years; risk free rate of 4.87%; no dividends during the expected
      life; and a volatility of 178.42%. The weighted average fair value of options
      granted in 2006 was $0.64.




All
      but
      241,666 options to purchase our common stock at June 30, 2006 have been issued
      with exercise prices equal to or greater than fair market value on the date
      of
      issuance. The Company recorded stock compensation expense of $106,320 related
      to
      options for the six months ended June 30, 2006. There is $287,031 of stock
      compensation expense to be expensed over a weighted average time of 2.06 years
      for the six months ended June 30, 2006. Expense for options that vest on a
      pro
      rata basis are recorded on a straight line basis.





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




**Options
                Outstanding**
            
            **Options
                Exercisable**Range
                of Exercise Prices
            
            Number
              Outstanding
                at
              June
                30, 2006
            
            Weighted
                Average Remaining Contractual Life
            
            Weighted
                Average Exercise Price
            
            Number
                Exercisable at June 30, 2006
            
            Weighted
                Average Exercise Price$0.30
                - $0.9120
            
            
            4,551,669
            
            
            7.8
                Years
            
            $
            0.38
            
            
            2,613,745
            
            $
            0.37




In
      April
      2006, 83,333 employee stock options were granted to an employee who is an
      officer at a strike price of $0.67 per share These stock options per share
      price
      was based upon a five day trailing average of the fair market value as indicated
      on the stock market.




**8.**
            **COMMITMENTS
                AND CONTINGENCIES**





From
      time
      to time the Company 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, the Company has included all amounts in accounts payable as of June
      30, 2006.


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**RG
        America, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **June
          30, 2006**
 **(Unaudited)**


The
      Company has included $96,557 of unpaid Federal payroll taxes and employee
      withholdings and
      related penalties and interest in the account classified withholding taxes
      payable as of June 30, 2006. Of this liability, $31,828 is for RGA and the
      Company has structured an agreement with the Internal Revenue Service to pay
      the
      entire amount. In addition, with a previous acquisition, the Company assumed
      $64,729 of unpaid Federal payroll taxes and employee withholdings and related
      penalties and interest.





**9.**
            **RELATED
                PARTY TRANSACTIONS**




In
      January, 2006, the Company received $17,000 of property from a related party
      in
      return for a non-interest bearing note with monthly principal payments of $500.
      The outstanding principal balance of this note was $17,000 as of June 30,
      2006.




The
      Chairman of the Board earns $10,000 per month for consulting services. In
      addition, the Chairman of the Board earns a commission based upon % of revenue.
      For January thru March 2006, $39,712 in consulting services and $28,981 in
      commissions was paid to the Chairman resulting in a consulting services balance
      due of $9,231 and a commission balance due of $70,788 outstanding at March
      31,
      2006. For April thru June 2006, $32,308 in consulting services and $23,077
      in
      commission was paid to the Chairman resulting in a consulting services balance
      due of $9,231 and a commissions balance due of $47,999 outstanding at June
      30,
      2006.




In
      January through March 2006, one of the Company's construction crews made $50,755
      of personal repairs in the home of the Company's Chief Operating Officer in
      exchange for a reduction of monies previously owed this officer. In April
      through June 2006, one of the Company's construction crews made $8,211 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 leasing three vehicles from Rea Brothers for general business
      purposes. In January through March 2006, the Company paid Rea Brothers $4,266
      in
      lease payments. In April through June 2006, the Company paid Rea Brothers $8,532
      in lease payments.




In
      April,
      2006, the Company received $12,000 of property from a related party and in
      return for a 10% interest bearing note with monthly principal payments of $550.
      The outstanding principal balance of this note was $10,639 as of June 30,
      2006.




In
      June
      2006, the Company’s Chief Operating Officer and who is also a Director, forgave
      $99,955 of commissions due and payable in relation to storm related business.
      In
      June 2006, the Company’s former Chief Executive Officer and former Director,
      forgave $57,405 of commissions due and payable in relation to storm related
      business. In June 2006, the Company’s Chairman of the Board, who is also the
      father of the Company’s former Chief Executive Officer and Chief Operating
      Officer, forgave $16,401 of commissions due and payable in relation to storm
      related business. As a result of the above items, the Company’s directors and
      officers forgave a total of $173,761 of commissions.


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**RG
        America, Inc. and Subsidiaries**
 **Notes
          to Consolidated Financial Statements**
 **June
          30, 2006**
 **(Unaudited)**


**10.**
            **SUBSEQUENT
                EVENTS**





In
      May
      2006, the Company commenced an evaluation for the impact of accelerating the
      vesting of the Company’s employee stock options to simplify the accounting
      requirements related to SFAS No. 123(R). As of the date of these financial
      statements, the evaluation has not been completed.





Effective
      July 1, 2006, John E. Rea resigned his position as Chief Executive Officer
      and a
      director of the Company and Bruce A. Hall was appointed Chief Executive Officer
      and a director of the Company. Mr. Hall will continue in his existing role
      as
      the Company’s Chief Financial Officer and Mr. Rea will be an advisor for the
      Company.





Effective
      July 1, 2006, the Company retained Southwest Securities, Inc. ("Southwest
      Securities") as its investment banker, to assist and advise the Company on
      financial matters. Southwest Securities, a NYSE member firm, is the primary
      broker/dealer subsidiary of SWS Group, Inc., a Dallas-based diversified holding
      company that delivers a broad range of investment, commercial banking and
      related financial services to individuals, corporations, governmental entities
      and financial intermediaries.


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Item
      2.
      Management's Discussion and Analysis or Plan of Operations.





**SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS**




The
      following is a discussion of our financial condition, results of operations,
      liquidity and capital resources. This discussion should be read in conjunction
      with our unaudited financial statements and the notes thereto included elsewhere
      in this Form 10-QSB and with our annual report on Form 10-KSB for the year
      ended
      December 31, 2005.




Some
      of
      the statements under “Description of Business,” “Risk Factors,” “Management's
      Discussion and Analysis or Plan of Operation,” and elsewhere in this Report and
      in our periodic filings with the Securities and Exchange Commission constitute
      forward-looking statements. These statements involve known and unknown risks,
      significant uncertainties and other factors what may cause actual results,
      levels of activity, performance or achievements to be materially different
      from
      any future results, levels of activity, performance or achievements expressed
      or
      implied by such forward- looking statements. Such factors include, among other
      things, those listed under “Risk Factors” and elsewhere in this Report.





In
      some
      cases, you can identify forward-looking statements by terminology such as “may,”
“will,” “should,” “could,” “intends,” “expects,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “potential” or “continue” or the negative
      of such terms or other comparable terminology.





The
      forward-looking statements herein are based on current expectations that involve
      a number of risks and uncertainties. Such forward-looking statements are based
      on assumptions that we will obtain or have access to adequate financing for
      each
      successive phase of its growth, that there will be no material adverse
      competitive or technological change in condition of our business, that our
      CEO,
      President and other significant employees will remain employed as such by us,
      and that there will be no material adverse change in the Company's operations,
      business or governmental regulation affecting us. The foregoing assumptions
      are
      based on judgments with respect to, among other things, further economic,
      competitive and market conditions, and future business decisions, all of which
      are difficult or impossible to predict accurately and many of which are beyond
      our control.





Although
      our management believes that the expectations reflected in the forward-looking
      statements are reasonable, management cannot guarantee future results, levels
      of
      activity, performance or achievements. Moreover, neither management nor any
      other persons assumes responsibility for the accuracy and completeness of such
      statements.





**GENERAL**





RG
      America, Inc. (“RG” or the “Company”), formerly known as Invvision Capital, Inc.
      (“Invvision”) is a reporting company pursuant to Section 12 (g) of the
      Securities Exchange Act of 1934, as amended, and its shares of common stock
      are
      publicly traded on the NASD Over The Counter Electronic Bulletin Board (“OTCBB”)
      under the symbol “RGMI”. We provide a broad array of synergistic products and
      services that address several key financial aspects of the commercial real
      estate market.


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**RECENT
      DEVELOPMENTS**





In
      May
      2006, the Company commenced an evaluation for the impact of accelerating the
      vesting of the Company’s employee stock options to simplify the accounting
      requirements related to SFAS No. 123(R). As of the date of these financial
      statements, the evaluation has not been completed.





Effective
      July 1, 2006, John E. Rea resigned his position as Chief Executive Officer
      and a
      director of the Company and Bruce A. Hall was appointed Chief Executive Officer
      and a director of the Company. Mr. Hall will continue in his existing role
      as
      the Company’s Chief Financial Officer and Mr. Rea will be an advisor for the
      Company.





Effective
      July 1, 2006, the Company retained Southwest Securities, Inc. ("Southwest
      Securities") as its investment banker, to assist and advise the Company on
      financial matters. Southwest Securities, a NYSE member firm, is the primary
      broker/dealer subsidiary of SWS Group, Inc., a Dallas-based diversified holding
      company that delivers a broad range of investment, commercial banking and
      related financial services to individuals, corporations, governmental entities
      and financial intermediaries.


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**RESULTS
      OF OPERATIONS**




***Three
      months and six months ended June 30, 2006 compared to the three months and
      six
      months ended June 30, 2005*** ****




**RG
                AMERICA, INC. AND SUBSIDIARIES****CONSOLIDATED
                STATEMENTS OF OPERATIONS****(Unaudited)**




**Three
                Months Ended**
            
            **Six
                Months Ended****June
                30,**
            
            **June
                30,****2006**
            
            **2005**
            
            **2006**
            
            **2005****Revenues**
            
            $
            8,224,183
            
            $
            2,084,952
            
            $
            17,497,019
            
            $
            5,019,518**Cost
                of revenues**
            
            
            5,285,060
            
            
            1,332,079
            
            
            10,826,146
            
            
            2,845,968**Gross
                profit**
            
            
            2,939,123
            
            
            752,873
            
            
            6,670,873
            
            
            2,173,550**Operating
                expenses:**Selling,
                general and administrative
            
            
            707,744
            
            
            258,487
            
            
            1,319,483
            
            
            587,662Compensation,
                payroll taxes and benefits
            
            
            784,165
            
            
            174,847
            
            
            1,844,807
            
            
            754,789Stock
                compensation
            
            
            209,488
            
            
            3,250
            
            
            308,824
            
            
            314,838Consulting
                and contract labor
            
            
            244,759
            
            
            60,429
            
            
            451,244
            
            
            121,779Professional
            
            
            42,676
            
            
            91,275
            
            
            241,247
            
            
            131,305Recovery
                of impairment
            
            
            —
            
            
            —
            
            
            —
            
            
            (116,669
            )Rent
            
            
            150,512
            
            
            82,078
            
            
            310,498
            
            
            152,339Depreciation
            
            
            77,265
            
            
            23,524
            
            
            150,737
            
            
            40,443**Total
                operating expenses**
            
            
            2,216,609
            
            
            693,890
            
            
            4,626,840
            
            
            1,986,486**Income
                from operations**
            
            
            722,514
            
            
            58,983
            
            
            2,044,033
            
            
            187,064**Other
                expense:**Other
                income (expense), net
            
            
            70,940
            
            
            (9,248
            )
            
            70,940
            
            
            2,096Interest
                and financing cost, net
            
            
            (478,366
            )
            
            (13,349
            )
            
            (934,264
            )
            
            (131,389
            )**Total
                other expense**
            
            
            (407,426
            )
            
            (22,597
            )
            
            (863,324
            )
            
            (129,293
            )**Net
                income**
            
            $
            315,088
            
            $
            36,386
            
            $
            1,180,709
            
            $
            57,771




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**Three
      Months Ended June 30, 2006 Compared To The Three Months Ended June 30,
      2005**





*Revenue* *:*


Operating
      revenue increased $6,139,231, or 295%, to $8,224,183 for the three months ended
      June 30, 2006, from $2,084,952 for the three months ended June 30, 2005. The
      increase was primarily the result of RGA’s continued growth in storm related
      construction work in Florida, Louisiana and Mississippi.




*Cost
      of Sales* *:*


Cost
      of
      sales increased $3,952,981, or 297%, to $5,285,060 for the three months ended
      June 30, 2006, from $1,332,079 for the three months ended June 30, 2005. The
      increase was primarily the result of RGA’s continued growth in storm related
      construction work in Florida, Louisiana and Mississippi.





*Operating
      Expenses* *:*


Operating
      expenses increased $1,522,719 or 219%, to $2,216,609 for the three months ended
      June 30, 2006 from $693,890 for the three months ended June 30, 2005. The
      increase was primarily the result of $449,257 of increased SGA, $609,318 of
      increased compensation, $206,238 of increased stock compensation, $184,330
      of
      increased consulting and contract labor, $68,434 of increased rent, and $53,741
      of increased depreciation as result of RGA’s increased storm related
      construction work in Florida, Louisiana and Mississippi. These increases were
      offset by a decrease of $48,599 related to less professional
      expenses.





*Other
      Income (Expense)* *:*


Other
      expense increased $384,829, or 1,703% to $407,426 of expense for the three
      months ended June 30, 2006 from $22,597 of expense for the three months ended
      June 30, 2005. The increase was primarily the result of interest expense related
      to the Secured Convertible Note.








**Six
      Months Ended June 30, 2006 Compared To The Six Months Ended June 30,
      2005**





*Revenue* *:*


Operating
      revenue increased $12,477,501, or 249%, to $17,497,019 for the six months ended
      June 30, 2006, from $5,019,518 for the six months ended June 30, 2005. The
      increase was primarily the result of RGA’s continued growth in storm related
      construction work in Florida, Louisiana and Mississippi.




*Cost
      of Sales* *:*


Cost
      of
      sales increased $7,980,178, or 280%, to $10,826,146 for the six months ended
      June 30, 2006, from $2,845,968 for the six months ended June 30, 2005. The
      increase was primarily the result of RGA’s continued growth in storm related
      construction work in Florida, Louisiana and Mississippi.





*Operating
      Expenses* *:*


Operating
      expenses increased $2,640,354 or 133%, to $4,626,840 for the six months ended
      June 30, 2006 from $1,986,486 for the six months ended June 30, 2005. The
      increase was primarily the result of $731,821 of increased SGA, $1,090,018
      of
      increased compensation, $329,465 of increased consulting and contract labor,
      $109,942 of increased professional expense, $158,159 of increased rent, and
      $110,294 of increased depreciation as result of RGA’s increased storm related
      construction work in Florida, Louisiana and Mississippi. In addition, the
      increase was offset by the result of no recovery of impairment in the six months
      ended June 30, 2006 as compared to the $116,669 recovery of impairment recorded
      in the six months ended June 30, 2005.





*Other
      Income (Expense)* *:*


Other
      expense increased $734,031, or 568% to $863,324 of expense for the six months
      ended June 30, 2006 from $129,293 of expense for the six months ended June
      30,
      2005. The increase was primarily the result of interest expense related to
      the
      Secured Convertible Note.


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**Liquidity
      and Capital Resources**





Cash
      and
      cash equivalents were zero at June 30, 2006 as compared to $683,346 at December
      31, 2005 and working capital was $5,818,561 at June 30, 2006 as compared to
      $2,554,610 at December 31, 2005. The increase in the working capital is
      primarily due to a $7,712,093 increase in contracts receivable, offset by a
      $1,473,880 increase in accounts payable, a $1,649,187 increase in unbilled
      revenue, and a $4,568,581 increase in notes payable.





The
      decrease in cash to a zero balance as of June 30, 2006 is directly related
      to
      the Company’s existing credit facility with Laurus. As of June 30, 2006, the
      Company has drawn approximately $9,400,000 of its $10,000,000 credit facility
      with Laurus. Additionally, the maximum advance rate allowed under the credit
      facility is 50% of allowable contract receivables. As a result of these
      constraints, the Company has been both financially and operationally challenged
      in relation to providing sufficient capital to fund projects and provide working
      capital for overhead requirements. As a result, the Company has been challenged
      to complete existing projects with limited capital available, primarily because
      of the 50% advance rate and this has directly impacted the aging of the
      Company’s accounts receivable. Typically, the Company’s contracts are based upon
      insurance proceeds and because of the challenge of finishing the projects,
      the
      collection of the insurance proceeds timing has been extended. Additionally,
      the
      ability of the Company to commence new projects has been impacted by the
      above.





The
      Company is nearing the completion of several projects and anticipates that
      the
      insurance proceeds will be received in the near future to help alleviate the
      existing cash issue. Additionally, with the collection of these proceeds,
      additional capacity under the Laurus credit facility will be provided for not
      only existing projects, but new projects in the Company’s pipeline and
      backlog.





*Operating
      Activities:* Net cash
      used by operating activities was $6,006,830 for the six months ended June 30,
      2006 compared to $122,002 net cash used in operating activities for the six
      months ended June 30, 2005. The decrease in cash provided by operations resulted
      primarily from the Company’s continued storm related construction work in
      Florida, Louisiana and Mississippi.





*Investing
      Activities:* Net cash
      used in investing activities was $136,189 for the six months ended June 30,
      2006
      compared to $391,331 for the six months ended June 30, 2005. The decrease was
      the result of $740 investment in certificate of deposit in the six months ended
      June 30, 2006 as compared to the $179,728 investment in certificate of deposit
      recorded in the six months ended June 30, 2005. In addition, the decrease was
      the result of $135,449 investment in property and equipment in the six months
      ended June 30, 2006 as compared to the $179,728 investment in property and
      equipment recorded in the six months ended June 30, 2005.





*Financing
      Activities:* Net cash
      provided by financing activities was $5,459,673 for the six months ended June
      30, 2006 compared to $412,038 for the six months ended June 30, 2005. The
      increase of net cash provided by financing activities of $5,047,635 is primarily
      result of $12,337,755 proceeds from issuance of a secured revolving note offset
      by the repayment of $6,874,220 on the secured revolving note.





**SHORT-TERM
      DEBT**





Signficant
      current period changes in short-term debt at June 30, 2006 consisted of the
      following:





***Notes
      payable - Related Parties***




In
      January, 2006, the Company received $17,000 of property from a related party
      in
      return for a non-interest bearing note with monthly principal payments of $500.
      The outstanding principal balance of this note was $15,500 as of June 30,
      2006.


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In
      April,
      2006, the Company received $12,000 of property from a related party in return
      for a 10% interest bearing note with monthly principal payments of $550. The
      outstanding principal balance of this note was $10,639 as of June 30,
      2006.




***Notes
      payable***




On
      August
      8, 2004, through a previous acquisition, we assumed a $8,099 unsecured
      promissory note from an unrelated party. The Company was accruing interest
      at
      the rate of 8% per annum. In March 2006, the Company repaid the obligation
      through the issuance of 22,028 shares of RG common stock in exchange for the
      retirement of the promissory note plus accrued interest of $1,814.




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
      RG’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. As a result
      of the Minimum Borrowing Note amendment, the Company obtained an additional
      $5,539,479 of proceeds, net of $203,805 of expenses which was paid to the
      Company’s financial advisor, Spencer Clarke. The indebtedness is classified as
      current 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
      Minimum Borrowing Note was amended and restated as a Secured Convertible Note
      ("Secured Convertible Note") and was increased from $1,400,000 to $5,000,000.
      Laurus has the option, but not the obligation, to convert all or any portion
      of
      the Secured Convertible Note and accrued interest into Common Stock at $0.41
      per
      share, as amended from the previous $0.71 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, RG 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 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 Registrant 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 previously filed
      on Form 8-K.





In
      January through March, 2006, the Company borrowed an additional $5,743,284
      and
      repaid back $2,535,919 to Laurus in accordance with terms of the secured
      revolving note acquired effective October 31, 2005.





In
      May
      2006, Laurus converted $525,000 of the Minimum Borrowing Note balance into
      1,281,707 shares of the Company’s common stock, at the amended agreement rate of
      $0.41 per share.


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In
      May
      2006, the Company commenced a bridge loan transaction in the amount of
      $2,000,000 through the private placement of Promissory Notes (“Notes”) to
      several “accredited investors” as defined in Rule 501(a) of Regulation D
      promulgated under the Securities Act of 1933, as amended (the “Securities Act”)
      (“Holders”). This private placement was arranged by our financial advisor on the
      transaction, Spencer Clarke, LLC (“Spencer Clarke”). Effective June 30, 2006,
      the Company terminated the transaction and in total, issued $1,600,000 of Notes
      and received $1,424,000 of proceeds, net of $176,000 of expenses paid to Spencer
      Clarke. The terms of the Notes include the payment of interest at a rate of
      12%
      per annum with a maturity date equal to the earlier of: (i) August 30, 2006,
      or
      (ii) closing and partial funding of a subordinated debt facility up to
      $25,000,000 or at least $3,000,000 of our equity or equity-linked securities,
      or
      (iii) upon or after the occurrence of an Event of Default as defined in the
      Notes. The Notes are subordinated existing Senior Indebtedness of the Company
      to
      Laurus Master Fund, Ltd. In consideration of this Note, the Company issued
      50%
      warrant coverage on the Notes or 606,060 warrants exercisable at $1.32 per
      share
      with the warrants expiring on June 30, 2008, to Holders. The warrants are
      exercisable on a cash basis only and have “piggy-back” registration rights. None
      of the warrants have been exercised as June 30, 2006 and no fees or commissions
      were paid in connection with the issuance of the warrants to Spencer Clarke.
      The
      issuance of the warrants was made in reliance of the Section Act, which provide
      for exemptions form the registration requirements of the Securities Act for
      transactions not involving a public offering. The
      Company valued the warrant utilizing the Black Scholes method to determine
      valuation. As a result of its evaluation, the Company determined that the
      warrant valuation was $308,358 and recorded this amount to debt discount and
      common stock warrants. The debt discount will be amortized over the life of
      the
      loan through August 30, 2006 and recorded as interest expense.  The
      $1.32 per share was based upon a premium equal to 125% of the fair market value
      price of common stock when the agreement was made as indicated on the over
      the
      counter stock exchange. All
      of
      the Holders are “accredited investors” as defined in the Securities Act and are
      now existing creditors of the Company. The underlying common stock from the
      exercise of the warrants shall not be offered, sold or transferred other than
      pursuant to an effective registration statement under the Securities Act or
      an
      exemption from such registration requirements.




**STOCKHOLDERS’
      EQUITY**





**Issuances
      of Common Stock**





On
      March
      10, 2006, the Company issued 33,333 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 issuance date based upon
      the price of common stock sold in a previous private placement offering in
      2004.





In
      May
      2006, Laurus converted $525,000 of the Minimum Borrowing Note balance into
      1,281,707 shares of the Company’s common stock, at the amended agreement rate of
      $0.41 per share.





In
      May
      2006, the Company issued 33,333 shares of common stock in exchange for
      outstanding compensation owed an officer at $0.45 a share and accrued
      compensation on the Company’s books was reduced $15,000. The share price of
      $0.45 was utilized as the fair market value on the issuance date based upon
      the
      price of common stock sold in a recent private placement offering at the time
      the salary was earned.





In
      May
      and June 2006, the Company issued 68,083 shares of RG’s common stock to several
      individuals as a correction for unrecorded issuances. The average share price
      was approximately $0.30 and was determined by a combination of contracted stock
      price and fair market value, based at the time that the issuances should have
      been made and was
      recorded as a debit to paid in capital and stock compensation .





In
      June
      2006, the Company issued 15,316 shares of common stock in exchange for
      outstanding compensation owed an employee at $0.45 a share and accrued
      compensation on the Company’s books was reduced $6,892. The share price of $0.45
      was utilized as the fair market value on the issuance date based upon the price
      of common stock sold in a recent private placement offering at the time the
      salary was earned, based at the time that the issuance should have been
      made.


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**Common
      Stock Subscribed**





On
      March
      31, 2006, the Company subscribed 11,334 shares of RG’s common stock in order to
      correct an error in the amount of common stock issued related to a 2005 stock
      transaction. There was no effective share price for the issuance as it reflected
      a correction of a transfer agent error and was recorded as a reclass between
      paid in capital and common stock subscribed.





On
      March
      31, 2006, the Company subscribed 11,538 shares of common stock in exchange
      for
      accrued vacation owed an employee through December 31, 2005 at $0.32 a share,
      and accrued expenses on the Company’s books were reduced $3,692. The share price
      of $0.32 was utilized as the fair market value based upon the closing price
      of
      common stock on the issuance date of January 1, 2006.





On
      March
      31, 2006, the Company subscribed 22,028 shares of common stock at $0.45 per
      share in conversion of a note payable to a non-related party. 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 at the time
      of
      the note payable.





On
      March
      31, 2006, the Company subscribed 573,889 shares of common stock in exchange
      for
      director fees for the Company’s directors at $0.45 a share, and accrued expenses
      on the Company’s books were reduced $258,250. 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 at the time the
      services were performed.





In
      April
      2006, the Company determined that a September 2004 financing transaction, which
      resulted in the subscription of 83,333 shares of RG’s common stock valued at
      $50,000, was cancellable because
      certain conditions regarding this transaction were not met .
      The
      Company cancelled the stock subscription and recorded $50,000 to other income.





In
      May
      2006, the Company cancelled a stock subscription for 8,333 shares of RG’s common
      stock to an investor as a correction for an unrecorded issuance.





**Common
      Stock Warrants**





Effective
      February 15, 2006, 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") and a secured revolving note up to a maximum of
      $10,000,000 ("Revolving Note"). 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. As
      a
      result of its evaluation, the Company determined that the warrant modification
      valuation was $25,729 and recorded this amount to debt discount and common
      stock
      warrants. The debt discount will be amortized as interest expense over the
      three
      year duration of the Revolving Note.  The
      $0.55 per share was based upon the 122% of the price of common stock sold in
      a
      recent private placement offering at the time this Security Agreement was
      amended. Additionally, a new warrant to purchase up to 1,363,636 shares of
      Common Stock was granted to Laurus at an exercise price of $0.55 per share
      and
      has an expiration term date of February 15, 2013. As a result of its evaluation,
      the Company determined that the warrant valuation was $543,509 and recorded
      this
      amount to debt discount and common stock warrants. The debt discount will be
      amortized as interest expense over the three year duration of the Revolving
      Note.  The
      $0.55 per share was based upon the 122% of the price of common stock sold in
      a
      recent private placement offering at the time this Security Agreement was
      amended.





In
      May
      2006, the Company commenced a bridge loan transaction in the amount of
      $2,000,000 through the private placement of Promissory Notes (“Notes”) to
      several “accredited investors” as defined in Rule 501(a) of Regulation D
      promulgated under the Securities Act of 1933, as amended (the “Securities Act”)
      (“Holders”).


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This
      private placement was arranged by our financial advisor on the transaction,
      Spencer Clarke, LLC (“Spencer Clarke”). Effective June 30, 2006, the Company
      terminated the transaction and in total, issued $1,600,000 of Notes and received
      $1,424,000 of proceeds, net of $176,000 of expenses paid to Spencer Clarke.
      The
      terms of the Notes include the payment of interest at a rate of 12% per annum
      with a maturity date equal to the earlier of: (i) August 30, 2006, or (ii)
      closing and partial funding of a subordinated debt facility up to $25,000,000
      or
      at least $3,000,000 of our equity or equity-linked securities, or (iii) upon
      or
      after the occurrence of an Event of Default as defined in the Notes. The Notes
      are subordinated existing Senior Indebtedness of the Company to Laurus Master
      Fund, Ltd. In consideration of this Note, the Company issued 50% warrant
      coverage on the Notes or 606,060 warrants exercisable at $1.32 per share with
      the warrants expiring on June 30, 2008, to Holders. The warrants are exercisable
      on a cash basis only and have “piggy-back” registration rights. None of the
      warrants have been exercised as of the date of this Current Report and no fees
      or commissions were paid in connection with the issuance of the warrants to
      the
      promissory note holders. The issuance of the warrants was made in reliance
      of
      the Section Act, which provide for exemptions form the registration requirements
      of the Securities Act for transactions not involving a public offering. The
      Company valued the warrant utilizing the Black Scholes method to determine
      valuation. As a result of its evaluation, the Company determined that the
      warrant valuation was $308,358 and recorded this amount to debt discount and
      common stock warrants. The debt discount will be amortized over the life of
      the
      loan through August 30, 2006 and recorded as interest expense.  The
      $1.32 per share was based upon the 125% of the fair market value price of common
      stock when the agreement was made as indicated on the over the counter stock
      exchange. All
      of
      the Holders are “accredited investors” as defined in the Securities Act and are
      now existing creditors of the Company. The underlying common stock from the
      exercise of the warrants shall not be offered, sold or transferred other than
      pursuant to an effective registration statement under the Securities Act or
      an
      exemption from such registration requirements.





In
      June
      2006, in return for investor relations consulting, the Company issued three
      five
      year stock warrants to third parties to purchase a total of 100,000 shares
      of
      the Company’s common stock at an exercise price of $0.45 per share. The Company
      valued the warrant utilizing the Black Scholes method to determine valuation.
      As
      a result of its evaluation, the Company determined that the warrant valuation
      was $82,604 and recorded this amount to stock compensation and common stock
      warrants. 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 at the time consulting agreement was negotiated.




**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, 2005
            
            4,468,336
            
            $0.37Granted
            
            
            83,333
            
            
            0.67Exercised
            
            
            —
            
            
            —Forfeited
            
            
            —
            
            
            —Balance
                at June 30, 2006
            
            
            4,551,669
            
            $
            0.38




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The
      Company’s computations for employee grants in 2006 were made using a
      Black-Scholes model using the following weighted average assumptions: expected
      life of 4.9 years; risk free rate of 4.87%; no dividends during the expected
      life; and a volatility of 178.42%. The weighted average fair value of options
      granted in 2006 was $0.64.




All
      but
      241,666 options to purchase our common stock at June 30, 2006 have been issued
      with exercise prices equal to or greater than fair market value on the date
      of
      issuance. The Company recorded stock compensation expense of $106,320 related
      to
      options for the six months ended June 30, 2006. There is $287,031 of stock
      compensation expense to be expensed over a weighted average time of 2.06 years
      for the six months ended June 30, 2006. Expense for options that vest on a
      pro
      rata basis are recorded on a straight line basis.





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





**Options
                Outstanding**
            
            **Options
                Exercisable**Range
                of Exercise Prices
            
            Number
              Outstanding
                at
              June
                30, 2006
            
            Weighted
                Average Remaining Contractual Life
            
            Weighted
                Average Exercise Price
            
            Number
                Exercisable at June 30, 2006
            
            Weighted
                Average Exercise Price$0.30
                - $0.9120
            
            
            4,551,669
            
            
            7.8
                Years
            
            $
            0.38
            
            
            2,613,745
            
            $
            0.37




In
      April
      2006, 83,333 employee stock options were granted to an employee who is an
      officer at a strike price of $0.67 per share These stock options per share
      price
      was based upon a five day trailing average of the fair market value as indicated
      on the stock market.




***Liquidity***





To
      continue with our business plan, we will require additional short-term working
      capital and we have not previously generated sufficient cash from operations
      to
      fund our operating activities for the next twelve months.





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





Although
      RG has become profitable in recent quarters, and the Company gives no assurance
      that it will continue 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
      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 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
      anticipate revenues will increase throughout the remainder of 2006 as a result
      of storm related work. We cannot be assured that the business will provide
      sufficient proceeds, if any, and borrowings under any interim financing we
      are
      able to secure will be sufficient to meet projected cash flow
      needs.


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The
      decrease in cash to a zero balance as of June 30, 2006 is directly related
      to
      the Company’s existing credit facility with Laurus. As of June 30, 2006, the
      Company has drawn approximately $9,400,000 of its $10,000,000 credit facility
      with Laurus. Additionally, the maximum advance rate allowed under the credit
      facility is 50% of allowable contract receivables. As a result of these
      constraints, the Company has been both financially and operationally challenged
      in relation to providing sufficient capital to fund projects and provide working
      capital for overhead requirements. As a result, the Company has been challenged
      to complete existing projects with limited capital available, primarily because
      of the 50% advance rate and this has directly impacted the aging of the
      Company’s accounts receivable. Typically, the Company’s contracts are based upon
      insurance proceeds and because of the challenge of finishing the projects,
      the
      collection of the insurance proceeds timing has been extended. Additionally,
      the
      ability of the Company to commence new projects has been impacted by the
      above.





The
      Company is nearing the completion of several projects and anticipates that
      the
      insurance proceeds will be received in the near future to help alleviate the
      existing cash issue. Additionally, with the collection of these proceeds,
      additional capacity under the Laurus credit facility will be provided for not
      only existing projects, but new projects in the Company’s pipeline and
      backlog.





The
      ability to obtain additional financing depends on many factors beyond the
      control of RG, including the state of the capital markets, the market price
      of
      our common stock and the prospects for business. 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. Failure
      to
      obtain commitments for financing would have a material adverse effect on
      business, results of operations and financial condition. If the financing we
      require to sustain anticipated working capital needs is unavailable or
      insufficient or we do not receive the necessary financing, we may be unable
      to
      continue as a going concern.





**Off-Balance
      Sheet Arrangements**




We
      have
      no off-balance sheet arrangements, other than commitments and contingencies
      as
      disclosed.




**2006
      OUTLOOK**




The
      ability to invest further will be heavily dependent on securing additional
      capital from investors or debt financing along with the successful
      implementation of the business strategy. There is no assurance that additional
      equity or debt financing will be available on terms acceptable to RG management.




If
      we are
      unable to obtain additional capital or successfully implement our business
      strategy, this will have a significant impact on our ability to continue as
      a
      going concern.




**Item
      3. Controls and Procedures.******





Bruce
      A.
      Hall, our Chief Executive Officer and our Chief Financial Officer, has concluded
      that our disclosure controls and procedures are appropriate and effective.
      He
      has evaluated these controls and procedures as of the date of this report on
      Form 10-QSB. There were no significant changes in our internal controls or
      in
      other factors that could significantly affect these controls subsequent to
      the
      date of their evaluation, including any corrective actions with regard to
      significant deficiencies and material weaknesses.





**PART
      II - OTHER INFORMATION**





**Item
      1. Legal Proceedings**





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.


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We
      are
      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 June 30,
      2006.




We
      have
      included $96,557 of unpaid Federal payroll taxes and employee withholdings
      and
      related penalties and interest in the account classified withholding taxes
      payable as of June 30, 2006. Of this liability, $31,828 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 $64,729 of unpaid Federal payroll taxes and employee withholdings and
      related penalties and interest.





**Item
      2.****Unregistered
      Sales of Equity Securities and Use of Proceeds**





**Issuances
      of Common Stock**





On
      March
      10, 2006, the Company issued 33,333 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 issuance date based upon
      the price of common stock sold in a previous private placement offering in
      2004.





In
      May
      2006, Laurus converted $525,000 of the Minimum Borrowing Note balance into
      1,281,707 shares of the Company’s common stock, at the amended agreement rate of
      $0.41 per share.





In
      May
      2006, the Company issued 33,333 shares of common stock in exchange for
      outstanding compensation owed an officer at $0.45 a share and accrued
      compensation on the Company’s books was reduced $15,000. The share price of
      $0.45 was utilized as the fair market value on the issuance date based upon
      the
      price of common stock sold in a recent private placement offering at the time
      the salary was earned.





In
      May
      and June 2006, the Company issued 68,083 shares of RG’s common stock to several
      individuals as a correction for unrecorded issuances. The average share price
      was approximately $0.30 and was determined by a combination of contracted stock
      price and fair market value, based at the time that the issuances should have
      been made and was
      recorded as a debit to paid in capital and stock compensation .





In
      June
      2006, the Company issued 15,316 shares of common stock in exchange for
      outstanding compensation owed an employee at $0.45 a share and accrued
      compensation on the Company’s books was reduced $6,892. The share price of $0.45
      was utilized as the fair market value on the issuance date based upon the price
      of common stock sold in a recent private placement offering at the time the
      salary was earned, based at the time that the issuance should have been
      made.





**Common
      Stock Subscribed**





On
      March
      31, 2006, the Company subscribed 11,334 shares of RG’s common stock in order to
      correct an error in the amount of common stock issued related to a 2005 stock
      transaction. There was no effective share price for the issuance as it reflected
      a correction of a transfer agent error and was recorded as a reclass between
      paid in capital and common stock subscribed.





On
      March
      31, 2006, the Company subscribed 11,538 shares of common stock in exchange
      for
      accrued vacation owed an employee through December 31, 2005 at $0.32 a share,
      and accrued expenses on the Company’s books were reduced $3,692. The share price
      of $0.32 was utilized as the fair market value based upon the closing price
      of
      common stock on the issuance date of January 1, 2006.





On
      March
      31, 2006, the Company subscribed 22,028 shares of common stock at $0.45 per
      share in conversion of a note payable to a non-related party. 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 at the time
      of
      the note payable.


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On
      March
      31, 2006, the Company subscribed 573,889 shares of common stock in exchange
      for
      director fees for the Company’s directors at $0.45 a share, and accrued expenses
      on the Company’s books were reduced $258,250. 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 at the time the
      services were performed.





In
      April
      2006, the Company determined that a September 2004 financing transaction, which
      resulted in the subscription of 83,333 shares of RG’s common stock valued at
      $50,000, was cancellable because
      certain conditions regarding this transaction were not met .
      The
      Company cancelled the stock subscription and recorded $50,000 to other income.





In
      May
      2006, the Company cancelled a stock subscription for 8,333 shares of RG’s common
      stock to an investor as a correction for an unrecorded issuance.





**Item
      3. Defaults Upon Senior Securities**





None





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





None





**Item
      5. Other Information**




None





**Item
      6. Exhibits******




(a)  Exhibits





Exhibit
            
            Title
            
            Location31.1
            
            Certification
                by Principal Executive Officer
            
            Attached31.2
            
            Certification
                of Principal Financial Officer
            
            Attached32
            
            Certifications
                of Principal Executive and Financial Officer Pursuant to
                906
            
            Attached




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**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, this
      report has been signed by the following persons on behalf of RG America, Inc.,
      in the capacities and on the dates indicated.




NAME
                AND SIGNATURE
            
            TITLE
            
            DATE/s/
              Bruce A. Hall
            
            Principal
              Executive Officer
            
            August
              15, 2006Bruce
              A. Hall/s/
                Bruce A. Hall
            
            Principal
                Financial Officer
            
            August
                15, 2006Bruce
                A. Hall




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