MUNDELEIN, Ill., Nov. 17, 2003 (PRIMEZONE) -- Circle Group Holdings (OTCBB:CRGQ) http://crgq.com, through several operating subsidiaries, is pleased to announce final results for the third quarter ended Sept. 30, 2003. The quarter included several extraordinary accomplishments in product development and placement.
Successful improvements at the firm's FiberGel Technologies unit included completion of its Z-Trim pilot manufacturing plant development programs and placement of its products in testing labs at a number of major global food producers. The amount of requests for Z-Trim from the food industry has far exceeded the company's expectations. It is expected that Z-Trim will generate a dominant portion of the company's revenue base going forward.
Z-Trim (http://ztrim.com) is a line of all-natural, zero calorie fat substitutes originally developed by the United States Department of Agriculture (USDA). Z-Trim can be used by food manufacturers to decrease fat and calories and increase insoluble fiber in a variety of products, including cheeses, baked goods, meat products, dressings, confectionery products and a wide range of other prepared foods.
Circle Group Holdings also announced the creation of another wholly-owned subsidiary, Z-Amaize Technologies, to market ZBind, a new product that emerged from research performed by its FiberGel division product development group. Z-Bind is an adhesive extending component ideal for the plywood manufacturing industry, which uses 1.2 million metric tons of resin solids per year worth approximately $10 billion. Z-Bind products represent an affordable alternative to plywood manufacturers seeking superior and environmentally friendlier adhesives.
To complement FiberGel, Circle Group acquired and is developing the Nutritional Analysis Tools and System (NATS), http://nat.crgq.com/, website originally built by the University of Illinois, which provides an instant large consumer audience, attracting as many as two million visitors per month from more than 80 countries. With this audience, the company plans to increase awareness through cooperative advertising and marketing of healthy, calorie and fat reduced, Z-Trim products launched by future food industry partners.
The company, which was founded in 1994, believes that the long-term picture is what really drives the growth potential for its stock. On a year-to-date basis, Circle Group has seen losses decline by 49% to $1.34 million over the comparable period in 2002. Management attributes the majority of the current year's losses to non-recurring stock payments to consultants involved in investor relations and financial advisory services.
"The recent successful closings of our equity financings have substantially improved our cash position and strengthened our balance sheet," said Gregory J. Halpern, the firm's President and CEO. "These accomplishments, which raised $1.68 million in aggregate proceeds for Circle Group and its FiberGel subsidiary, will play a vital role in our company's aggressive vision for implementing the Z-Trim manufacturing, licensing and worldwide distribution program."
During the three-month period ended Sept. 30, 2003, total assets increased by 50% to $2,832,541 from $1,423,158 at June 30, 2003, and during the nine-months ended Sept. 30, total assets rose by 62% from $1,065,691 at Dec. 31, 2002. The increase is a result of additional funds raised by Circle Group and FiberGel, and of acquisitions of license rights in equity transactions. During the quarter ended Sept. 30, total equity ascended by $1,704,142 to $2,549,030 from $844,888 at June 30, 2003, and during the nine-months ended Sept. 30, total equity increased by $2,236,563 from $312,467 at Dec. 31, 2002. The increase in equity was primarily comprised of the sale of common stock by Circle Group and FiberGel that raised $1,678,831 during the third quarter 2003 and $2,287,907 during the nine-months ended Sept. 30, 2003.
Revenues of $530,872 for the nine-month period ending Sept. 30, represented an increase of 12% over the nine-month period results of $465,443 in 2002. Operating expenses consist of payroll, related costs, insurance, occupancy expenses, professional fees, and general operating expenses. Total operating expenses decreased year-over-year by 14% to $1,507,226 by Sept. 30 from $1,754,366 in the comparable nine-month period last year. Total other income for the nine-months ended Sept. 30, was $232,906 and included an asset sale gain of $155,554. Total other income was $131,395 for the comparable period in fiscal 2002. This included $134,925 in realized gains from securities. Circle Group reported a net loss of $1,342,465 for the nine-months ended Sept. 30, or $0.05 per share. It represents a 95% improvement from the $2,612,423 loss or $0.12 per share booked for the comparable period in 2002. Management attributes the reduction to improved expense management and additional income from shedding non-core assets.
Revenues for the three-months ended Sept. 30 of $130,783 was 28% lower than the $182,544 from the same period a year earlier. Operating expenses increased 75% to $915,146 for the three-months ended Sept. 30, from $524,247 in the comparative period last year. Expenses reflected an increase due to an investor-relation cost of $593,482. Total other income for the quarter ended Sept. 30 was $11,024 in deficit. It included a gain of $8,635 from the sale of a subsidiary, net of interest expense of $23,705. Total other income was $127,840 for the comparable period in fiscal 2002. This included $138,091 in realized gains on securities and a net loss from the sale of assets of $16,413. Circle Group reported a net loss for the third quarter 2003 of $957,513 or $0.03 per share, a 47% increase from the net loss of $508,601 or $0.02 per share for the same period last year. Increases in investor relations expenses of $593,482 in the quarter were a primary reason for the up tick.
At Sept. 30, the company had cash and cash equivalents of $1,688,581, compared to $129,008 at Sept. 2002 and $422,883 at June 30, 2003. Net cash used by operating activities was $844,496 for the nine-months ended Sept. 30, as compared to net cash used by operating activities of $1,642,637 for the comparable period in 2002. Net cash used by operating activities was $423,944 for the three-months ended Sept. 30, 2003 as compared to $496,686 for the same period a year earlier. Net cash provided by investing activities was $150,572 for the nine-months ended Sept. 30, as compared to $597,949 for the nine-months ended Sept. 30, 2002. Over the quarter, net cash for investing activities was $15,862, compared with $437,542 for the same period a year earlier. Net cash allotted to financing activities was $2,260,046 for the nine-months ended Sept. 30, as compared to $544,188 for the same period in 2002. Net cash provided financing activities was $1,673,780 for the quarter ended Sept. 30, as measured to $127,938 for the same period a year earlier. The company has primarily funded its operations through the sale of its common stock and generated nearly $1,229,220 during the first nine months of 2003, and $950,000 through sales of subsidiary common stock. In addition, we sold a trademark over the second quarter generating additional operating capital of $150,000.
About Circle Group Holdings, Inc.
Circle Group Holdings, Inc. (OTCBB:CRGQ), http://crgq.com, is a pioneer of emerging technology companies. The company provides small business infrastructure, funding and intellectual capital to bring important and timely life-changing technologies to market through all early phases of the commercialization process. This press release and prior releases are available on the Circle Group web site at www.crgq.com/HTML/breakingNews.html.
Interviews with Mr. Halpern, the firm's President & CEO can be arranged through Jeffrey Hirschkorn of Alpha Advisors.
Forward-Looking Statements
Statements made in this news release that relate to future plans, events or performances are forward-looking statements. Any statement containing words such as "believes" "anticipates" "plans" or "expects" and other statements which are not historical facts contained in this release are forward-looking, and these statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements. Reference is made to the Company's filings with the Securities and Exchange Commission for a more complete discussion of such risks and uncertainties.