UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the quarter ended March 31, 2000 Commission file number 000-26687
THE REGENCY GROUP LIMITED, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0429812
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7373 E. Doubletree Ranch Rd., Suite 200
Scottsdale, Arizona 85258
(Address of principal executive offices) (Zip Code)
(480) 778-9101
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 No X
As of May 11, 2000, there were 23,306,500 shares of common stock outstanding.
<PAGE>
THE REGENCY GROUP LIMITED, INC.
FOR THE QUARTER ENDED
MARCH 31, 2000
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Balance Sheet as of March 31, 2000 3
Income Statement for the three months
ending March 31, 2000 and March 31, 1999 4
Statement of Cash Flow for the three months 5
ending March 31, 2000 and March 31, 1999
Note to Financial Statements 6-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 9-10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults by the Company upon its
Senior Securities 11
Item 4. Submission of Matter to a Vote of
Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports of Form 8-K 11
SIGNATURES 12
<PAGE>
G. BRAD BECKSTEAD
Certified Public Accountant
330 E. Warm Springs
Las Vegas, NV 89119
702.528.1984
425.928.2877 (efax)
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
Board of Directors
Regency Group Limited, Inc.
Las Vegas, NV
I have reviewed the accompanying balance sheet of Regency Group Limited, Inc.
(a development stage company) as of March 31, 2000 and the related statements
of income and cash flows for the three-months ended March 31, 2000, and
February 1, 1999 (Date of Inception) to March 31, 2000. These financial
statements are the responsibility of the Company's management.
I conducted my reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly, I
do not express such an opinion.
Based on my reviews, I am not aware of any material modifications that should
be made to the accompanying financial statements referred to above for them
to be in conformity with accounting principles generally accepted in the
United States.
/s/G. Brad Beckstead, CPA
May 10, 2000
Las Vegas, Nevada
License #2701
<PAGE>
<TABLE>
THE REGENCY GROUP LIMITED, INC.
BALANCE SHEET AS OF
MARCH 31, 2000 and DECEMBER 31, 1999
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
UNAUDITED AUDITED
For the For the Year
Quarter Ended
Ended March December 31,
31, 2000 1999
<S> <C> <C>
Cash $788,924 $ 1,738
Note receivable 5,000 -0-
Website development, net of amortization 8,308 8,752
Computer equipment, net of depreciation 2,917 3,092
Investments 775,000 -0-
------------- ------------
Total Assets 1,580,149 $13,582
============= ============
</TABLE>
<TABLE>
Liabilities and Stockholders' Equity
<S> <C> <C>
Note payable $ 22,000 $22,000
------------- ------------
Total Liabilities 22,000 22,000
------------- ------------
Common stock, $0.001 par value,
50,000,000 shares authorized; 47,806,500 and
4,618,750 shares issued and outstanding at
3/31/00 and 12/31/99, respectively 47,807 4,619
Preferred stock, $0.001 par value,
5,000,000 shares authorized, no shares issued
and outstanding at 3/31/00 and 12/31/99 -0- -0-
Additional paid in capital 1,698,943 123,131
Deficit accumulated during
development stage (188,601) (136,168)
------------- -----------
Total Stockholders' Equity (Deficit) 1,558,149 (8,418)
------------- ------------
Total Liabilities and Stockholders' Equity $1,580,149 $ 13,582
============= ============
</TABLE>
See accompanying "Accountant's Review Report" and notes to financial
statements.
<PAGE>
<TABLE>
THE REGENCY GROUP LIMITED, INC.
INCOME STATEMENT
FOR THE THREE MONTHS ENDING MARCH 31, 2000 AND THE PERIOD
FEBRUARY 1, 1999 (Date of Inception) TO MARCH 31, 1999
Period February
1, 1999
Quarter Ended (Inception) to
March 31, 2000 March 31, 2000
<S> <C> <C>
Revenue $ -0- $ 2,666
Sales and marketing 149 149
General and administrative expenses 26,665 164,943
Depreciation & amortization 619 1,175
Loss on investment 25,000 25,000
--------------- ---------------
Net income or (loss) $(52,433) $ (188,601)
=============== ===============
Weighted average number of 47,806,500 47,806,500
Net income per share $ -0- $ -0-
============== ===============
</TABLE>
See accompanying "Accountant's Review Report" and notes to financial
statements.
<PAGE>
<TABLE>
THE REGENCY GROUP LIMITED, INC.
STATEMENT OF CASH FLOW
FOR THE THREE MONTHS ENDING MARCH 31, 2000 AND THE PERIOD
FEBRUARY 1, 1999 (Date of Inception) TO MARCH 31, 2000
For the period
Quarter Ended February 1, 1999
March 31, 2000 (Inception) to
March 31, 2000
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (52,433) (188,601)
Depreciation and amortization 619 1,175
Loss on investments 25,000 25,000
(Increase) in notes receivable (5,000) (5,000)
Increase in other assets -0- (8,900)
Increase in fixed assets -0- (3,500)
Increase in note payable -0- 22,000
--------------- -----------------
Net cash used by operating activities (31,814) (157,826)
--------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Investments 800,000 800,000
--------------- -----------------
Net cash used by investing activities (800,000) (800,000)
--------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 43,188 47,807
Additional paid in capital 1,575,812 1,698,943
--------------- -----------------
Net cash provided by financing
activities 1,619,000 1,746,750
Beginning cash 1,738 -0-
--------------- -----------------
Ending cash $788,924 $788,924
============== =================
NON-CASH TRANSACTIONS
Interest expense -0- -0-
Income taxes -0- -0-
</TABLE>
See accompanying "Accountant's Review Report" and notes to financial statements.
<PAGE>
The Regency Group Limited, Inc.
(A Development Stage Company)
Footnotes
Note 1 - History and organization of the company
The Company was organized February 1, 1999 (Date of Inception) under the laws
of the State of Nevada, as The Regency Group Limited, Inc. The Company has
limited operations and in accordance with SFAS #7, the Company is considered
a development stage company.
Note 2 - Accounting policies and procedures
Accounting policies and procedures have not been determined except as
follows:
Accounting method
The Company reports income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principals requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing account that
currently does not exceed federally insured limits. For the purpose of
the statements of cash flows, all highly liquid investments with the
maturity of three months or less are considered to be cash equivalents.
There are no cash equivalents as of December 31, 1999.
Reporting in the costs of start-up activities
Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs of Start-Up
Activities," which provides guidance on the financial reporting of start-
up costs and organizational costs, requires most costs of start-up
activities and organizational costs to be expensed as incurred. SOP 98-
5 is effective for fiscal years beginning after December 15, 1998. With
the adoption of SOP 98-5, there has been little or no effect on the
Company's financial statements.
Loss per share
Net loss per share is provided in accordance with Statement of Financial
Accounting Standards No. 128 (SFAS #128) "Earnings Per Share". Basic
loss per share is computed by dividing losses available to common
stockholders by the weighted average number of common shares outstanding
during the period. Diluted loss per share reflects per share amounts
that would have resulted if dilutive common stock equivalents had been
converted to common stock. As of March 31, 2000 and December 31, 1999,
the Company had no dilutive common stock equivalents such as stock
options or warrants.
Dividends
The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
Website development
Website development costs totaling $8,900 are capitalized and amortized
over a period of 60 months from December 1, 1999 through November 30,
2004. Total amortization for the periods ended 3/31/00 and 12/31/99 is
$444 and $148, respectively.
<PAGE>
The Regency Group Limited, Inc.
(A Development Stage Company)
Footnotes
Note 2 - Accounting policies and procedures (continued)
Equipment
The cost of equipment is depreciated over the estimated useful life of
the equipment utilizing the straight-line method of depreciation.
Computer equipment costs totaling $3,500 are capitalized and depreciated
over a period of 60 months from June 1, 1999 through May 31, 2004.
Total depreciation for the periods ended 3/31/00 and 12/31/99 is $408
and $175, respectively.
Year end
The Company has adopted December 31 as its fiscal year end.
Note 3 - Income Taxes
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109 (SFAS
#109) "Accounting for Income Taxes". A deferred tax asset or liability is
recorded for all temporary differences between financial and tax reporting.
Deferred tax expense (benefit) results from the net change during the year of
deferred tax assets and liabilities. There is no provision for income taxes
for the periods ended March 31, 2000 and December 31, 1999 due to the net
loss and no state income tax in Nevada, the state of the Company's domicile
and operations.
Note 4 - Stockholders' Equity
The Company is authorized to issue 20,000,000 shares of $0.001 par value
common stock and 5,000,000 shares of its $0.001 par value preferred stock.
On February 3, 1999, the Company issued 4,000,000 shares of its $0.001 par
value common stock to shareholders in exchange for cash of $4,000 that was
deposited into the corporate account in February 1999.
On April 7, 1999, the Company issued 618,750 shares of its $0.001 par value
common stock to shareholders in exchange for cash of $96,250 and to
extinguish a liability of $27,500 for a total of $123,750. Of the total
amount, $619 is considered common stock and $123,131 is additional paid in
capital.
On February 28, 2000, the Board of Directors approved a forward split of the
common shares of stock of the Company on a 10 for 1 basis.
On March 10, 2000, the Company completed a private placement offering of it
$0.001 par value common stock, whereby it sold 1,619,000 shares at $1 per
share to approximately 60 accredited investors pursuant to Regulation D, Rule
506 of the Securities Act of 1933. The total amount raised was $1,619,000,
of which $1,619 is common stock and $1,617,381 is additional paid in capital.
There have been no other issuances of common stock or preferred stock.
Note 5 - Going concern
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. Without realization of additional capital, it would be unlikely for
the Company to continue as a going concern. However, the Company has not
commenced its planned principal operations. Additionally the Company does
not have significant cash or other material assets nor does it an established
source of revenue sufficient to cover its operating costs to allow it to
continue as a going concern indefinitely. Until that time, the officers have
committed to advance the operating costs the company interest free.
<PAGE>
The Regency Group Limited, Inc.
(A Development Stage Company)
Footnotes
Note 6 - Related party transactions
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the
resolution of such conflicts.
Note 7 - Warrants and options
There are no warrants or options outstanding to acquire any additional shares
of common stock.
Note 8 - Year 2000 issue
The Company uses a significant number of computer software programs and
operating systems in its internal operations, including applications used in
financial business systems and various administrative functions. Although
the Company's software applications contain source code that appropriately
interpreted the calendar year 2000, failure by the Company to make any future
modifications resulting from "Year 2000" could result in systems
interruptions or failures that could have a material adverse effect on the
Company's business. The Company has not incurred, nor anticipates that it
will incur material expenses to make its computer software programs and
operating systems "Year 2000" compliant. However, there can be no assurance
that unanticipated costs necessary to update software, or potential systems
interruptions, will not exceed the Company's expectations and have a material
adverse effect on the Company's business, financial condition and results of
operations.
Note 9 - Acquisitions
On February 19, 2000, the Company entered into an agreement with
ClickIncomes.com of San Diego, California, whereby the Company will acquire a
25% ownership interest in ClickIncomes.com for a total purchase price of
$500,000. As of March 31, 2000, the Company has paid a total of $375,000 to
ClickIncomes.com per the terms of the agreement.
On February 29, 2000, the Company entered into an agreement with
WebAdNet.com, a New York corporation, to acquire 15% of the issued and
outstanding stock of WebAdNet.com. The purchase price of the acquisition
will total $1,000,000. The source of funds Regency will use to complete the
transaction is the working capital of the Company. The agreement also calls
for WebAdNet.com to expand its Board of Directors to 5 members, with The
Regency Group designating 2 of those members.
Note 10 - Subsequent Event
In April 2000 the investment group led by Mr. Terry Neild completed the
purchase of 39,000,000 shares of common stock from H. Steven Bonenberger and
Merrill Moses, controlling stockholders of the Company. Pursuant to the
agreement the investment group returned 24,500,000 of the 39,000,000 shares
of common stock to the Company for cancellation, in return for 15,000 shares
of convertible preferred stock.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion and analysis should be read in conjunction with
the Company's financial statements and the notes thereto contained elsewhere
in this filing.
Overview
We are a Nevada corporation incorporated on February 1, 1999, and are a
developmental stage company with a principal business objective to become a
leading online information and marketing services firm. We seek to offer our
corporate clients the ability to gain maximum exposure via the Internet. As
an online corporate marketing services firm, we believe we can assist
corporations in enhancing product exposure and improving profitability for
their online sales division. Our activities to date have been limited
primarily to organization, initial capitalization, finding and securing an
appropriate, experienced management team and board of directors, development
of a business plan, purchase and installation of computer servers, and
initial web site development.
At the time of this filing, we have two products that we plan to offer
to our customers once the development and testing of our web site is
completed:
* Market Find-R - A software package that integrates database development
tools with automated Internet research capabilities. This package would allow
users to identify Internet search engines most relevant to their interests,
and to submit reference information to such engines automatically.
* Market Mine-R - An e-commerce / shopping cart technology package.
In addition to our products, we will offer clients the following
services: web site hosting and maintenance, database development and
maintenance, and operation of web-based "store fronts" (selling of
merchandise and collection of payments). Since our designated promotion and
advertising tool is our future web site, we are delaying the offering of
these services until our web site is fully functional.
We intend to use technology to deliver an outstanding service offering
and to achieve the significant economies inherent in the online store model.
Our strategy is to pursue strategic acquisitions and alliances, exploit
international opportunities, promote repeat purchases, attract, train and
retain employees, build strong brand recognition, customer loyalty and
supplier relationships, while creating an economic model that is superior to
that of the capital and personnel-intensive direct response marketing
industry.
We intend on providing a new category of professional services called
eBusiness systems innovation. eBusinesses are businesses that employ the
reach and efficiency of the Internet to enable companies strengthen
relationships with customers and business partners, create new revenue
opportunities, reduce costs, improve operating efficiencies, shorten cycle
times and improve communications. As an eBusiness systems innovator, we will
provide integrated eBusiness strategy and technology implementation services
to clients who are creating eBusinesses or are rethinking or expanding their
existing businesses to integrate eBusiness capabilities. These services will
include strategy consulting, customer experience design, systems
architecture, and application and technology infrastructure development. We
intend to provide a framework for each stage of a client's Internet strategy
from helping the client conceives its strategy to designing, engineering and
extending its eBusiness. We believe that our approach will allow us to
deliver reliable, robust, secure, scalable and extensible eBusiness systems
solutions and innovation in rapid time.
<PAGE>
We believe that most companies seeking to build or enhance their
eBusiness capabilities require a professional services provider - eBusiness
systems innovator -- with a broad range of integrated capabilities. Such a
service provider must provide strategic industry insights combined with
extensive technological skills to create applications, technology
infrastructure and business systems that are reliable, robust, secure,
scalable and extensible. Moreover, it must have a structured approach and the
skills necessary to achieve the rapid innovation and deployment of
eBusinesses demanded by today's competitive marketplace. Such a skill set
must include the ability to understand and integrate a wide spectrum of
technologies. Regency intends to use its resources and expertise to become
such an eBusiness systems innovator.
Regency will provide the integrated services required to rapidly design,
build and improve eBusinesses. We will provide strategy consulting that
combines expertise in eBusiness with market-specific knowledge in order to
produce a combined business and technology strategy for our clients. We will
also design and build applications and technology infrastructure that support
a wide variety of eBusiness functions. We believe that we have a set of
integrated skills that will enable our clients to create or enhance
competitive eBusinesses in rapid timeframes.
Results of Operations for the three months ended March 31, 2000 and the
period February 1, 1999 to March 31, 2000
Total operating expenses from continuing operations were $26,665 for the
three months ended March 31, 2000 compared to $164,193 for the period
February 1, 1999 to March 31, 2000. Utilizing an average daily calculation
of operating expenses of $293 for the period ending March 31, 2000, and an
average daily calculation of operating expenses of $388 for the period
February 1, 1999 to March 31, 200, this represented a 24% decrease in average
daily operating expenses.
Forward-Looking Statements and Associated Risks
This Quarterly Report on Form 10-QSB contains forward-looking statements
made pursuant to the safe harbor provisions of the Securities Litigation
Reform Act of 1995. These forward looking statements are based largely on
the Company's expectations and are subject to a number of risks and
uncertainties, many of which are beyond the Company's control, including, but
not limited to, economic, competitive and other factors affecting the
Company's operations, markets, products and services, expansion strategies
and other factors discussed elsewhere in this report and the documents filed
by the Company with the Securities and Exchange Commission. Actual results
could differ materially from these forward-looking statements. In light of
these risks and uncertainties, there can be no assurance that the forward-
looking information contained in this report will in fact prove accurate.
The Company does not undertake any obligation to revise these forward-looking
statements to reflect future events or circumstances.
Liquidity and Capital Reserves
As of March 31, 2000 and December 31, 1999
As of March 31, 2000, the Company's assets were $1,580,149 and its
liabilities were $22,000, resulting in an excess of assets of 1,558,149. Cash
was $788,924 at March 31, 2000 as compared to cash of $1,738 on December 31,
1999, an increase of $787,186. This represented an increase in available
cash.
The Company has continued to fund its deficit cash flow from private
placements of the Company's common stock. It is anticipated that loans and
the sale of the Company's stock will continue until such time as the Company
generates sufficient revenues from its operations to cover operating
expenses.
<PAGE>
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None.
Item 3. Defaults by the Company upon its Senior Securities.
None.
Item 4. Submission of Matter to a Vote of Security Holders.
None
Item 5. Other Information.
(a)(1) On February 19, 2000, the Company entered into an agreement with
ClickIncomes.com of San Diego, California, whereby the Company will acquire a
25% ownership interest in ClickIncomes.com for a total purchase price of
$500,000. As of March 21, 2000, the Company has paid a total of $200,000 to
ClickIncomes.com per the terms of the agreement.
(a)(2) On February 29, 2000, the Company entered into an agreement with
WebAdNet.com, a New York corporation, to acquire fifteen percent (15%) of
the issued and outstanding stock of WebAdNet.com. The purchase price of the
acquisition will total $1,000,000. The first payment of $200,000 was payable
upon the providing of due diligence information to Regency by WebAdNet.com.
The second payment of $200,000 was due on or before March 24, 2000. The
third payment of $300,000 is due on or before May 15, 2000. The final payment
of $300,000 is due on or before August 15, 2000. The source of the funds
Regency will use to complete the transaction is the working capital of the
Company. The agreement also calls for WebAdNet.com to expand its Board of
Directors to five (5) members, with Regency designating two (2) of those
members.
Subsequent Event
In April 2000 the investment group led by Mr. Terry Neild completed the
purchase of 39,000,000 shares of common stock from H. Steven Bonenberger and
Merrill Moses, controlling stockholders of the Company. Pursuant to the
agreement the investment group returned 24,500,000 of the 39,000,000 shares
of common stock to the Company for cancellation, in return for 15,000 shares
of convertible preferred stock.
Item 6. Exhibits and Reports of Form 8-K.
Form 8-K Filed March 29, 2000
Form 8-K Filed April 12, 2000
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE REGENCY GROUP LIMITED, INC.
(Registrant)
By:/s/ Roberto Filice
Roberto Filice
President
Date: May 11, 2000
<TABLE> <S> <C>
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