SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to ________________
Commission file number 0-10695
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REGENCY EQUITIES CORP.
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(Exact name of registrant as specified in its charter)
Delaware 23-2298894
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(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
3660 WILSHIRE BOULEVARD, SUITE 336 LOS ANGELES, CA 90010
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 310-827-9604
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Former name, former address and former fiscal year,
if changed since last report.
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 X
No -----
-----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date. Number of
Shares of Common Stock outstanding as of October 25, 1995 is 87,283,661.<PAGE>
<PAGE>
REGENCY EQUITIES CORP.
INDEX
Page
----
Part I Financial information
Item 1. Financial statements
Balance sheets as of September 30, 1995
(unaudited) and December 31, 1994. . . . . . . . . . . . . . . 1
Statements of operations for the three
months and nine months ended September 30, 1995
and 1994 (unaudited) . . . . . . . . . . . . . . . . . . . . . 2
Statement of changes in shareholders' equity
for the nine months ended September 30, 1995
(unaudited). . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of cash flows for the nine months
ended September 30, 1995 and 1994 (unaudited). . . . . . . . . 4
Notes to financial statements (unaudited) . . . . . . . . . . . 5
Item 2. Management's discussion and analysis
of financial condition and results
of operations. . . . . . . . . . . . . . . . . . . . . . . . . 6
Part II Other information
Item 6. Exhibits and reports on Form 8-K. . . . . . . . . . . . . . . . 7
Signature page. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
REGENCY EQUITIES CORP.
BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
1 9 9 5 1 9 9 4
(unaudited)
------------- -----------
ASSETS
Cash and cash equivalents $ 2,057,562 $15,298,990
Interest receivable, net of reserve
for collectibility of $187,937 in
1995 and 1994 - -
Rent receivable 97,251 105,441
Rental property owned, net of write
down for possible loss of $215,000 and
accumulated depreciation of $233,073
in 1995 and $196,272 in 1994 1,023,368 1,060,169
Deferred income taxes 28,671 28,670
Mortgage receivable, net of reserve
for collectibility of $450,000 in
1995 and 1994 400,000 400,000
----------- -----------
$ 3,606,852 $16,893,270
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 205,786 $ 60,660
Income taxes payable 1,320 5,720
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207,106 66,380
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SHAREHOLDERS' EQUITY
Preferred stock, par value $.01 per
share, authorized 5,000,000 shares;
none issued
Common stock, par value $.01 per
share, authorized 125,000,000 shares;
issued and outstanding 87,283,661
shares 872,836 872,836
Additional paid-in capital 47,660,331 47,660,331
Accumulated (deficit) ( 45,133,421) ( 31,706,277)
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3,399,746 16,826,890
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$ 3,606,852 $16,893,270
=========== ===========
See accompanying notes to financial statements
<PAGE>
<PAGE>
<TABLE>
REGENCY EQUITIES CORP.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- ----------------------------
1 9 9 5 1 9 9 4 1 9 9 5 1 9 9 4
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES
Interest income $ 22,461$ 130,371 $ 129,984$ 348,668
Rental income 70,504 68,725 201,018 195,041
---------------------- ----------------------
Total revenues 92,965 199,096 331,002 543,709
---------------------- ----------------------
EXPENSES
Administrative expense 26,262 26,661 190,824 93,208
Professional fees 15,547 24,587 393,107 122,355
Rental expense 30,186 28,419 79,945 78,726
---------------------- ----------------------
Total expenses 71,995 79,667 663,876 294,289
---------------------- ----------------------
Income (loss) before income taxes 20,970 119,429 ( 332,874) 249,420
PROVISION (BENEFIT) FOR INCOME TAXES 259 47,975 1,721 99,179
---------------------- ----------------------
Net income (loss) $ 20,711$ 71,454 ($ 334,595)$ 150,241
====================== ======================
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 87,283,661 87,283,661 87,283,661 87,283,661
====================== ======================
INCOME (LOSS) PER SHARE $ .000$ .001 ($ .004)$ .002
====================== ====================
</TABLE>
See accompanying notes to financial statements
<PAGE>
<PAGE>
REGENCY EQUITIES CORP.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
COMMON STOCK
------------------------ ADDITIONAL
NUMBER OF PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT
---------- ---------- ----------- -------------
BALANCE AT
December 31, 1994 87,283,661 $ 872,836 $47,660,331 ($31,706,277)
Dividends paid (13,092,549)
Net loss for the
nine months ended
September 30, 1995 ( 334,595)
---------- ---------- ----------- -----------
BALANCE AT
September 30, 1995 87,283,661 $ 872,836 $47,660,331 ($45,133,421)
========== ========== =========== ===========
See accompanying notes to financial statements
<PAGE>
<PAGE>
REGENCY EQUITIES CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------------
1 9 9 5 1 9 9 4
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CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
Net (loss) income ($ 334,595) $ 150,241
Adjustments to reconcile net
(loss) income to net cash provided
by (used in) operating activities:
Depreciation 36,801 36,802
Change in operating assets and
liabilities:
Rent receivable, net 8,190 14,680
Interest receivable, net 40,228
Deferred costs ( 14,164)
Deferred income taxes ( 1) 92,509
Accounts payable and accrued expenses 145,126 ( 977)
Income taxes payable ( 4,400) 4,460
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NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES: ( 148,879) 323,779
CASH FLOW FROM FINANCING
ACTIVITIES:
Dividends paid ( 13,092,549)
----------- -----------
NET (DECREASE) INCREASE IN CASH ( 13,241,428) 323,779
CASH - BEGINNING OF PERIOD 15,298,990 14,930,811
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CASH - END OF PERIOD $ 2,057,562 $15,254,590
=========== ===========
See accompanying notes to financial statements<PAGE>
<PAGE>
Regency Equities Corp.
Notes to Financial Statements
September 30, 1995
(Unaudited)
1. Significant accounting policies
Significant accounting policies of Regency Equities Corp. (the
Company) are set forth in its Annual Report on Form 10-K as filed by
the Company for the year ended December 31, 1994, together with
certain procedural disclosures.
2. Basis of reporting
The balance sheet as of September 30, 1995, the statements of
operations for the three month periods ended September 30, 1995 and
1994 and the nine month periods ended September 30, 1995 and 1994, the
statement of changes in shareholders' equity for the nine months ended
September 30, 1995 and the statements of cash flows for the nine month
periods ended September 30, 1995 and 1994 have been prepared by the
Company without audit. The accompanying unaudited financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statement presentation. In the opinion of management, such
statements include all adjustments (consisting only of normal
recurring items) which are considered necessary for a fair
presentation of the financial position of the Company at September 30,
1995 and the results of its operations and cash flow for the three
month and nine month periods then ended. It is suggested that these
financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1994.
3. Rental property
Real estate owned consists of a shopping center in Grand Rapids,
Michigan. Two tenants lease space in the shopping center. The leases
expire on July 10, 1997 and August 31, 1999.
<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
---------------------------------------------------------------
Material changes in financial condition
- ---------------------------------------
There was a material change in the Company's financial condition during the
quarter ended March 31, 1995 arising from the payment of a cash dividend of
$13,092,549 (see "Dividend" below).
Results of Operations
- ---------------------
During the third quarter of 1995, the Company recorded income before income
taxes of $20,970 compared to income of $119,429 for the same period of
1994. The decrease resulted principally from a decrease in interest
income of $107,910 caused by the decrease in the amount of cash earning
interest attributable to the $13,092,549 dividend (offset in part by an
increase in interest rates of approximately 1.1%).
During the nine months ended September 30, 1995, the Company recorded a
loss of $332,874 before income taxes compared to income of $249,420 for the
same period of 1994. The decrease resulted principally from (i) a decrease
in interest income of $218,684 caused by the decrease in cash earning
interest attributable to the $13,092,549 dividend (offset in part by an
increase in interest rates of approximately 1.3%); (ii) an increase in
administrative expenses of $97,616 primarily due to increases in
shareholders' meeting costs and directors' fees attributable to a proxy
contest between the Company and the Regency Shareholders Committee; and
(iii) an increase in professional fees of $270,752 primarily attributable
to legal fees incurred in connection with the proxy contest. Reference is
made to the Company's Annual Report on Form 10-K for the year ended
December 31, 1994 for a more detailed discussion of the proxy contest.
Dividend
The Company paid a cash dividend on February 7, 1995 of $13,092,549 ($.15
per share) to shareholders which represented approximately 77.5% and 77.8%
of the Company's assets and shareholders' equity, respectively, as of
December 31, 1994.
<PAGE>
<PAGE>
PART II - Other Information
Item 1. Legal Proceedings
-----------------
Reference is made to Item 3 of the Company's Annual Report on Form
10-K for the year ended December 31, 1994 for a description of the
Company's collection action on an $850,000 promissory note against Earl
Reiss (the note's obligor) and Richard Siegal (the note's guarantor). The
note is secured by a second mortgage on a commercial building in
Westchester County, New York. In November 1994, the court awarded summary
judgment against Reiss in the amount of $1,341,093.
In July 1995, the court awarded summary judgment against Siegal in the
amount of $1,564,753. On October 3, 1995, the Company signed a settlement
agreement regarding its judgment against Siegal in exchange for Siegal's
agreement to pay the Company the amount of $900,000. Siegal has paid
$500,000 of such amount to the Company. An additional $250,000 is due on
January 15, 1996, and the final $150,000 is due on January 15, 1997.
The agreement with Siegal contains various provisions that secure the
Company's rights under its judgment against Siegal until such time as the
remaining amount owed by Siegal under the settlement agreement is paid.
Assuming that Siegal pays the remaining $400,000 due under the settlement
agreement, the agreement provides that the Company will assign to Siegal
the rights under its judgment against Reiss and its mortgage on the New
York building.
The Company's Board of Directors has not yet ratified the settlement
agreement. In addition to considering whether to ratify the settlement
agreement, the Board of Directors is considering the enforceability of the
agreement.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
Exhibit 27.1 Financial Data Schedule (included only in the
electronic filing).
(b) Reports on Form 8-K
None.
<PAGE>
<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.
REGENCY EQUITIES CORP.
-------------------------------------
(Registrant)
DATE: November 8, 1995 By /s/ ALLAN L. CHAPMAN
-----------------------------------
Allan L. Chapman,
Chairman of the Board, Chief
Executive Officer and President
(Principal Executive Officer)
DATE: November 8, 1995 By /s/ MORRIS ENGEL
-----------------------------------
Morris Engel
Chief Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)
<PAGE>
<PAGE>
REGENCY EQUITIES CORP.
QUARTERLY REPORT ON FORM 10-Q
INDEX TO EXHIBITS
Exhibit
Number
- -------
27.1 Financial Data Schedule (included only in the electronic filing)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF REGENCY EQUITIES CORP. FOR THE PERIOD ENDED
SEPTEMBER 30, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<CASH> 2,057,562
<SECURITIES> 0
<RECEIVABLES> 1,135,188
<ALLOWANCES> (637,937)
<INVENTORY> 0
<CURRENT-ASSETS> 2,154,813
<PP&E> 1,256,441
<DEPRECIATION> (233,073)
<TOTAL-ASSETS> 3,606,852
<CURRENT-LIABILITIES> 207,106
<BONDS> 0
<COMMON> 872,836
0
0
<OTHER-SE> 2,526,910
<TOTAL-LIABILITY-AND-EQUITY> 3,606,852
<SALES> 0
<TOTAL-REVENUES> 331,002
<CGS> 0
<TOTAL-COSTS> 79,945
<OTHER-EXPENSES> 583,931
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (332,874)
<INCOME-TAX> 1,721
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (334,595)
<EPS-PRIMARY> (.004)
<EPS-DILUTED> (.004)
</TABLE>
