SOURCE: Rapid Link, Inc.

January 23, 2008 09:30 ET

Rapid Link Announces Fiscal Year 2007 Financial Highlights

Revenues of Over $17 Million, Positive Cash Flow From Operations of Over $650 Thousand, and Gross Profit of $4.7 Million; Rapid Link Reaches Profitability Goals in Line With Management's Expectations

OMAHA, NE--(Marketwire - January 23, 2008) - Rapid Link, Inc. (OTCBB: RPID), one of the leading providers of diversified communications services to certain niche markets, announced financial results for its fiscal year ended October 31, 2007.

FISCAL YEAR 2007 HIGHLIGHTS

--  Revenues increased $4 million to $17,326,035, or 30%, as compared to
    fiscal 2006.
    
--  Gross profit increased to over $4.7 million, or 29%, as compared to
    fiscal 2006; general and administrative expenses decreased $192,000, or 5%,
    as compared to fiscal 2006.
    
--  $659,000 of positive operating cash flow generated and net income
    positive in 4th quarter.
    

                                           Year Ended October 31,
                                    ----------------------------------
                                         2007                2006
                                    --------------      --------------

Total Revenue                       $   17,326,035      $   13,351,030
Gross Profit                        $    4,766,130      $    3,706,795
Operating Cash Flow                 $      659,136      $   (1,035,323)
Net loss excluding non-cash items   $      (13,031)     $   (1,023,963)

With over 15,000 customers worldwide and approximately $20 million in run-rate revenues, Rapid Link is poised to grow with technologies, further serve our customer base of customers and expand into new markets. We have fully integrated Telenational Communications into our operations, and recently completed the asset purchase of Web-Breeze Networks and Communications Advantage, which include a wireless broadband network.

"Our goal is to provide the best overall communications experience, to both business and residential customers at affordable prices. Whether it's a digital phone call, or merely surfing the internet, we strive to provide the best service available," said John Jenkins, Rapid Link's Chairman and Chief Executive Officer. Mr. Jenkins further stated, "Rapid Link continues to improve its fundamentals and remains focused on maintaining profitability, increasing revenues and expanding Rapid Link's bundle of service offerings." "Rapid Link revenues have shown tremendous growth over the past fiscal year, while also meeting management's profitability goals as a result of acquisition integrations and cost reductions," stated Chris Canfield, Rapid Link's President and Chief Financial Officer.

Excluding non-cash items, net loss to common stockholders for the year ended October 31, 2007 was $13,031 vs. a net loss to common stockholders of $1,023,963 for the previous year ended October 31, 2006, representing over a $1 million improvement. For fiscal year 2007, Rapid Link incurred $1,076,350 in non-cash interest expense. Additional non-cash items incurred during the year include depreciation and amortization expense, share-based compensation expense, bad debt expense, partially offset by a gain on legal settlements.

Net loss before non-cash items is not a term defined by generally accepted accounting principles (GAAP) and may not be comparable to other similarly titled measurements used by other companies. Such non-GAAP measures should be considered in addition to, and not as a substitute for, performance measures calculated in accordance with GAAP. The accompanying table includes a detailed reconciliation of net loss reported in accordance with GAAP to net loss before non-cash items.

              RAPID LINK, INCORPORATED AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS
                            (Unaudited)

                                                 Year Ended October 31,
                                                   2007           2006
                                              -------------  -------------

Revenues                                      $  17,326,035  $  13,351,030

Costs and expenses:
  Costs of revenues                              12,559,905      9,644,235
  Sales and marketing                             1,212,355        856,037
  General and administrative                      3,403,674      3,596,171
  Depreciation and amortization                     928,427        747,562
  Loss on disposal of property and equip.            10,061         56,771
  Net reductions of liabilities                           -     (2,300,929)
  Gain on legal settlements                        (415,213)             -

                                              -------------  -------------
  Total costs and expenses                       17,699,209     12,599,847
                                              -------------  -------------

Operating income (loss)                            (373,174)       751,183

Other income (expense):
  Noncash interest expense                       (1,043,261)    (1,410,351)
  Related party non-cash interest expense           (33,089)       (33,089)
  Interest expense                                 (284,414)      (220,802)
  Related party interest expense                   (269,836)      (216,233)
  Foreign currency exchange gains                     4,389         18,134

                                              -------------  -------------
  Total other income (expense)                   (1,626,211)    (1,862,341)
                                              -------------  -------------

Net loss                                      $  (1,999,384) $  (1,111,158)
                                              =============  =============

Loss per share:
  Basic and diluted loss per share            $       (0.04) $       (0.03)
                                              =============  =============

Net loss                                         (1,999,384)    (1,111,158)

Excluding Non-Cash Items:
Add:
  Non-cash interest expense                   $   1,076,350  $   1,447,400
  Depreciation and amortization                     928,427        747,562
  Bad debt expense                                   88,812        136,391
  Loss on disposal of property and equip.            10,061         56,771
  Share-based compensation expense                   17,703              -
Less:
  Non-cash gain on legal settlements               (135,000)             -
  Net reduction of liabilities                            -     (2,300,929)
                                              -------------  -------------

Net loss excluding non-cash items             $     (13,031) $  (1,023,963)
                                              =============  =============

Net Loss before Non-Cash Items Financial Disclosure

Investors are cautioned that net loss before non-cash items contained in this press release and the aforementioned financial information is not a financial measure under generally accepted accounting principles. In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with generally accepted accounting principles, or as an indicator of Rapid Link's operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that it fails to address. Net loss before non-cash items is presented because Rapid Link believes that it is helpful to some investors as one measure of Rapid Link's operations. Rapid Link cautions investors that non-GAAP financial information such as net loss before non-cash items, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare Rapid Link's results with the results from other reporting periods and with the results of other companies.

The information in this news release and other materials released by Rapid Link from time to time include certain forward-looking statements that are based upon management's expectations and assumptions about certain risks and uncertainties that can affect future events. When used in the materials the words "anticipate," "believe," "estimate," "expect," "future," "intend," "plan" or the negative of these terms and similar expressions as they relate to Rapid Link or Rapid Link's management identify forward looking statements. Such statements reflect the current view of Rapid Link with respect to future events and are subject to risks, uncertainties, assumptions and other factors (including the risks contained in the sections of Rapid Link's reports filed with the Securities and Exchange Commission entitled "Risk Factors") relating to our industry, our operations and results of operations, our ability to continue as a going concern, our pledge of substantially all of our assets to creditors, competition in our industry, changes in technology relating to broadband wireless Internet, potential for dilution, compliance with the Section 404 of the Sarbanes-Oxley Act of 2002, volatility and uncertainty related to trading on the OTC Bulletin Board, penny stock rules, availability and cost of our present vendors and suppliers, change in government regulations and costs associated with data transmission over the Internet or termination of transmissions in foreign countries. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned. Although Rapid Link believes that the expectations reflected in the forward looking statements are reasonable, Rapid Link cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, Rapid Link does not intend to update any of the forward-looking statements to conform these statements to actual results. The following discussion should be read in conjunction with Rapid Link's reports filed with the Securities and Exchange Commission.

About Rapid Link, Inc.

Rapid Link is a "Communications Services" company providing various forms of voice and data transport service to wholesale and retail customers around the world. Rapid Link's retail product focus involves supplying bundled broadband wireless internet services, with an emphasis on key niche markets. These niche markets include targeted rural and underserved geographic locations as well as specific ethnic demographics. Rapid Link's strategy involves offering broadband access via its own facilities to ensure reliable delivery of its content without compromise from incumbent regional cable monopolies. Rapid Link strives to serve its customers unique communications needs with a focus on cost efficiency and quality of service. Through Rapid Link's operating headquarters in Omaha, NE, Rapid Link supports customers with in-house multi lingual customer service, proprietary scalable billing systems, and experienced communications professionals.

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