<PAGE>
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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 September 30, 1995 Commission File No. 0-9519
REGENT TECHNOLOGIES, INC.
(formerly Regent Petroleum Corporation)
(Exact Name of Registrant as Specified in its Charter)
Colorado 84-0807913
(State of Incorporation) (I.R.S. Employer Identification No.)
8080 N. Central, Suite 400, Dallas, Texas 75206
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 369-9055
Indicate by a 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 subjected to
such filing requirements for the past 90 days. [X]
Number of shares outstanding of each class of the Registrant's Common Stock
at November 14, 1995:
8,869,203 shares of Common Stock, par value $.01 per share
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REGENT TECHNOLOGIES, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
------------------------------
INDEX
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PAGE
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ITEM 1. FINANCIAL STATEMENTS
--------------------
Balance Sheets - September 30, 1995
and December 31, 1994 3
Statement of Operations for the three months
ended September 30, 1995 and 1994 and for the
nine months ended September 30, 1995 and 1994 4
Statement of Cash Flow for the nine months
ended September 30, 1995 and 1994 5
Notes to Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
OF FINANCIAL CONDITION AND RESULTS OF
-------------------------------------
OPERATIONS 6
----------
PART II - OTHER INFORMATION
---------------------------
ITEM 1. LEGAL PROCEEDINGS 9
-----------------
ITEM 2. CHANGES IN SECURITIES 9
---------------------
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 9
-------------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
----------------------------------
SECURITY HOLDERS 9
----------------
ITEM 5. OTHER INFORMATION 9
-----------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 9
--------------------------------
2
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REGENT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1995 1994
------ ------------- ------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 36,566 $ 25,385
Accounts receivable - oil and gas sales - 2,895
Accounts receivable - reclamation sales 100,437 67,903
Cost and estimated earnings in excess of billings 14,534 -
Prepaid expenses 29,288 -
Oil and gas assets held for resale 29,771 66,806
State tax refund receivable - 2,130
Notes receivable - current portion 3,231 14,821
Other current assets 1,454 6,630
---------- ----------
Total current assets 215,281 186,570
PROPERTY AND EQUIPMENT, at cost
Oil and gas properties, using the full cost method
of accounting 10,660 10,660
Vehicles 28,955 28,955
Furniture and fixtures 4,064 4,064
---------- ----------
43,679 43,679
Less-Accumulated depreciation, depletion
and amortization 16,493 11,541
---------- ----------
27,186 32,138
OTHER ASSETS 102,471 110,237
$ 344,938 $ 328,945
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current Portion of long - term debt $ 6,798 $ 5,124
Billings in excess of costs and estimated earnings - 846
Accounts payable and accrued liabilities 117,847 77,819
Note payable to affiliates 10,237 11,596
---------- ----------
Total current liabilities 134,882 95,385
LONG-TERM DEBT, less current portion 10,106 15,585
NOTES PAYABLE TO AFFILIATE, less current portion 44,111 44,111
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; authorized
100,000,000 shares; issued and
outstanding 8,869,203 88,692 88,592
Additional paid-in capital 2,222,768 2,223,622
Accumulated deficit (2,155,621) (2,138,350)
----------- ----------
Total stockholder's equity 155,839 173,864
----------- ----------
Total liabilities and stockholders' equity $ 344,938 $ 328,945
=========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
3
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REGENT TECHNOLOGIES, INC. AND SUBSIDIARIES
STATEMENT OF OPERATIONS
-----------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
-----------------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE:
Environmental services $227,463 - $359,631 -
Oil and gas sales - 3,880 5,346 11,983
Miscellaneous income 727 500 1,208 500
Interest income 134 510 323 2,744
-------- -------- -------- --------
Total Revenues 228,274 4,890 366,508 15,227
EXPENSES:
Costs of environmental services 202,069 - 282,213 -
Production taxes - 268 360 844
General and administrative 26,336 20,290 86,387 77,599
Depreciation, depletion and
amortization 4,327 2,493 12,981 7,508
Interest expense 553 607 1,838 2,818
--------- --------- ---------- ---------
Total Expenses 233,285 23,658 383,779 88,769
NET GAIN (LOSS) $ (5,011) $ (18,768) $ (17,271) $ (73,542)
========= ========= ========== =========
LOSS PER COMMON SHARE $ (.001) $ (.002) $ (.002) $ (.009)
========= ========= ========== =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 8,869,000 8,390,000 8,869,000 8,390,000
========= ========= ========== =========
</TABLE>
The accompanying notes are an integral part of these statements.
4
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REGENT TECHNOLOGIES, INC. AND SUBSIDIARIES
STATEMENT OF CASH FLOWS
-----------------------
FOR THE NINE MONTHS ENDED SEPTEMBER, 1995 AND 1994
--------------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $(17,271) $(73,542)
Adjustments to reconcile net income (loss)
to net cash used by operating activities -
Depreciation, depletion and amortization 12,981 7,508
(Increase) decrease in accounts receivable (27,509) 13,208
Increase (decrease) in accounts payable
and accrued liabilities 39,182 669
(Increase) decrease in other assets (33,888) 2,941
-------- --------
Net cash used from operating activities (26,505) (49,216)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposition of oil & gas
properties 37,035 -
Capital expenditures - (1,150)
(Increase) decrease in investments 11,050 30,665
-------- --------
Cash provided from investing activities 48,085 29,515
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on long-term debt (3,804) (2,326)
Payment on note payable to stockholder (6,595) (10,929)
New borrowings - -
-------- --------
Cash provided (used) by financing activities (10,399) (13,255)
-------- --------
INCREASE (DECREASE) IN CASH 11,181 (32,956)
-------- --------
CASH, beginning of period 25,385 72,226
-------- --------
CASH, end of period $ 36,566 $ 39,270
======== ========
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for interest $ 1,838 $ 2,818
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
REGENT TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
-----------------------------
September 30, 1995 (unaudited) and December 31, 1994
The amounts presented in the balance sheet as of December 31, 1994 were
derived from Regent Technologies, Inc. audited financial statements included in
its Form 10-KSB filed for the year ended December 31, 1994, the notes of which
are hereby incorporated by reference with the accompanying financial statements.
1. MANAGEMENT'S REPRESENTATION
In the opinion of management, the accompanying financial statements
contain all adjustments necessary to present fairly the financial
position of Regent Technologies, Inc. (the "Company") as of September
30, 1995 and December 31, 1994, and the results of its operations and
changes in its cash flows for the periods ended September 30, 1995 and
1994. The adjustments made for the periods presented are of a normal and
recurring nature.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS.
Financial Condition.
Liquidity and Capital Resources. At September 30, 1995, the Company had
a working capital surplus of $80,399. On May 4, 1995, the Company sold its
proved producing oil and gas properties for net proceeds of $37,035. The
effective date of the sale is June 1, 1995. The Company continues to own proved
undeveloped oil and gas properties which are held for resale. The Company
receives $400 per month through May, 1996 from the financing note receivable for
the water distillation technology unit manufactured under a 1993 joint venture.
During the nine months ended September 30, 1995, cash used by operations
was $26,505, due to the net loss for the period and the increase of prepaid
insurance related to the Town of Hague reclamation project by the Company's
wholly owned subsidiary, SSB Environmental, Inc ("SSBE"). The Company has
amortization requirements under its term loan facilities of approximately
$16,904 of which approximately $10,106 is due over the next three years. The
vehicle loan payable to a bank, bears interest at 8.95% and is payable in
monthly installments of $565, including interest through June, 1998. All
required payments on indebtedness and accounts payable were made on a timely
basis. The Company believes that it has adequate liquidity from cash on hand
and potential lending and investing sources to meet its requirements for cash
for the foreseeable future. The Company has no financing commitments or
material capital requirements regarding the operations of SSBE and the $44,111
note payable to affiliates is the sole obligation of SSB Environmental, Inc.
6
<PAGE>
Results of Operations
The Company's net loss for the third quarter was $5,011, or $.001 cents
per common share, compared with a net loss of $18,768, or $.002 cents per common
share in the third quarter of 1994. The Company's net loss for the nine months
ended September 30, 1995 was $17,271 compared with a net loss of $73,542 for the
same period in 1994. The improvement in operations was due primarily to the
acquisition of SSBE effective October 1, 1994.
Comparison of Three Months Ended September 30, 1995 to Three Months
Ended September 30, 1994.
Environmental services -- For the three months ended September 30, 1995,
the Company had revenue from environmental services of $227,463 compared to
none in 1994. This increase was attributable to the SSBE $1.3 million
management contract for the complete removal of a 7-acre landfill in the Town
of Hague near Lake George, New York (the "Hague project"). The contract was
suspended in November, 1994 due to weather with work scheduled to resume on
June 1, 1995. The backlog balance at September 30, 1995 was $177,800 which
represents the amount of revenue SSBE expects to realize from work to be
performed on uncompleted contracts. SSBE has not entered into any additional
contracts, as of November 14, 1995.
Oil and Gas Sales -- For the three months ended September 30, 1995, the
Company had no oil and gas sales compared to $3,880 for the same period in 1994
due to the aforementioned sale of oil and gas production.
Miscellaneous and Interest Income -- Under an agreement with McCabe
Technologies, Inc. ("McCabe"), McCabe manufactured a laboratory water
distillation unit which the Company leased to a Houston laboratory. The lease
agreement provides for ownership by the laboratory at the end of thirty-six
months of monthly lease payments of $400 without any additional payment. The
Company has no plans for the manufacturing of the distillation unit in the
future. The Company's agreement resulted in interest income of $134 for the
period.
General and Administrative -- For the three months ended September 30,
1995, general and administrative expenses increased $6,046 over 1994 due
primarily to the additional expenses related to the Hague project.
Depreciation, Depletion and Amortization.-- Amortization expense for
goodwill and intangibles related to the SSBE acquisition was $475 and $1,418
respectively for the three months ended September 30, 1995. Depreciation for
equipment was $1,651 for the period.
Interest Expense -- Interest expense for the current quarter decreased
over the same quarter last year as a result of less interest-bearing debt.
Comparison of Nine Months Ended September 30, 1995 to Nine Months Ended
September 30, 1994.
Environmental services -- For the nine months ended September 30, 1995,
the Company had revenue from environmental services of $359,631 compared to none
in 1994. This increase was attributable to the Hague project and other
feasibility studies performed by SSBE. SSBE's sole business is the reclamation
of landfills and its revenues are derived from services related thereto. SSBE
performed a feasibility study for various customers during the period ended
September 30, 1995. The backlog balance at September 30, 1995 was $177,800
which represents the amount of revenue SSBE expects to realize from work to be
performed on uncompleted contracts. SSBE has not entered into any additional
contracts, as of November 14, 1995.
7
<PAGE>
Oil and Gas Sales -- For the nine months ended September 30, 1995, the
Company had oil and gas sales of $5,346, a decrease of $6,637 for the same
period in 1994 due to the aforementioned sale of oil and gas production.
Miscellaneous and Interest Income -- Under an agreement with McCabe
Technologies, Inc. ("McCabe"), McCabe manufactured a laboratory water
distillation unit which the Company leased to a Houston laboratory. The lease
agreement provides for ownership by the laboratory at the end of thirty-six
months of monthly lease payments of $400 without any additional payment. The
Company has no plans for the manufacturing of the distillation unit in the
future. The Company's agreement resulted in interest income of $323 for the
period. In addition, the Company recognized $481 as income for the refund of
franchise taxes from the State of Utah.
General and Administrative -- For the nine months ended September 30,
1995, general and administrative expenses increased $8,788 over 1994 due
primarily to the additional expenses related to the Hague project.
Depreciation, Depletion and Amortization.-- Amortization expense for
goodwill and intangibles related to the SSBE acquisition was $1,425 and $6,603
respectively for the nine months ended September 30, 1995. Depreciation for
equipment was $4,952 for the period.
Interest Expense -- Interest expense for the nine months decreased
over the same quarter last year as a result of less interest-bearing debt.
8
<PAGE>
PART II - OTHER INFORMATION
---------------------------
ITEM 1. LEGAL PROCEEDINGS
-----------------
None
ITEM 2. CHANGES IN SECURITIES
---------------------
None
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 AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits - None
(b) Reports on Form 8-K
During the second quarter of 1995 to the date hereof:
1. Current Report on Form 8-K dated June 9, 1995, for the purpose
of reporting the Company's negotiations to utilize the massive
proppant technology for oil recovery and plans to issue
securities to raise capital.
2. Current Report on Form 8-K dated July 20, 1995, for the
purpose of reporting the Company's execution of a joint
venture to utilize the massive proppant technology for oil
recovery and Board approval to issue a Series A Redeemable
Preferred Security to raise capital to fund the joint venture
participation.
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REGENT TECHNOLOGIES, INC.
(Registrant)
Date: November 14, 1995 /s/ DAVID A. NELSON
------------------------------
David A. Nelson, President and
Chief Accounting Officer
/s/ GORDON M. BOYD
------------------------------
Gordon M. Boyd, Vice President
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM REGENT
TECHNOLOGIES INC. ART 5 SX 3RD QTR 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 36,566
<SECURITIES> 0
<RECEIVABLES> 103,668
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 215,281
<PP&E> 43,679
<DEPRECIATION> 16,493
<TOTAL-ASSETS> 344,938
<CURRENT-LIABILITIES> 134,882
<BONDS> 0
<COMMON> 88,692
0
0
<OTHER-SE> 67,147
<TOTAL-LIABILITY-AND-EQUITY> 344,938
<SALES> 359,631
<TOTAL-REVENUES> 366,508
<CGS> 0
<TOTAL-COSTS> 282,213
<OTHER-EXPENSES> 360
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,838
<INCOME-PRETAX> (17,271)
<INCOME-TAX> 0
<INCOME-CONTINUING> (17,271)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17,271)
<EPS-PRIMARY> (.002)
<EPS-DILUTED> (.002)
</TABLE>
