<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 June 30, 1997
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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.)
11845 WEST OLYMPIC BOULEVARD, SUITE 900 LOS ANGELES, CA 90064
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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
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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 August 10, 1997 is 87,283,661.
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REGENCY EQUITIES CORP.
INDEX
PAGE
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Part I Financial information
Item 1. Financial statements
Balance sheets as of June 30, 1997
(Unaudited) and December 31, 1996. . . . . . . . . . . . . . . . . 1
Statements of operations for the three
months and six months ended June 30, 1997
and 1996 (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . 2
Statement of changes in shareholders' equity
for the six months ended June 30, 1997
(Unaudited). . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of cash flows for the six months
ended June 30, 1997 and 1996 (Unaudited) . . . . . . . . . . . . . 4
Notes to financial statements (Unaudited) . . . . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis
of financial condition and results
of operations. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 3. Quantitative and Qualitative
Disclosures about Market Risk. . . . . . . . . . . . . . . . . . . 6
Part II Other information
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . 7
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
REGENCY EQUITIES CORP.
BALANCE SHEETS
JUNE, 30
1 9 9 7 DECEMBER 31,
(Unaudited) 1 9 9 6
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ASSETS
Cash $ 3,051,840 $ 2,974,146
Rent receivable 97,220 98,148
Rental property owned, net of write
down for possible loss of $215,000
and accumulated depreciation of
$318,942 in 1997 and $294,408 in
1996 937,499 962,033
Deferred income taxes, net 421,164 421,164
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$ 4,507,723 $ 4,455,491
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LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 25,214 $ 27,739
Income taxes payable 710 1,720
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25,924 29,459
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SHAREHOLDERS' EQUITY
Preferred stock, par value $.01 per
share, authorized 5,000,000 shares;
none issued
Common stock, par value $.01 per
share, authorized 125,000,000 shares;
issued and outstanding 87,283,661
shares 872,836 872,836
Additional paid-in capital 47,660,331 47,660,331
Accumulated deficit ( 44,051,368) ( 44,107,135)
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4,481,799 4,426,032
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$ 4,507,723 $ 4,455,491
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See accompanying notes to financial statements
1
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REGENCY EQUITIES CORP.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- --------------------------
1 9 9 7 1 9 9 6 1 9 9 7 1 9 9 6
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES
Interest income $ 36,601 $ 29,379 $ 71,533 $ 62,669
Rental income 64,402 67,194 133,885 134,706
----------- ----------- ----------- -----------
Total revenues 101,003 96,573 205,418 197,375
----------- ----------- ----------- -----------
EXPENSES
Administrative expense 29,167 25,177 55,777 50,819
Professional fees 7,146 ( 3,046) 38,803 41,349
Rental expense 24,086 26,837 53,861 53,863
----------- ----------- ----------- -----------
Total expenses 60,399 48,968 148,441 146,031
----------- ----------- ----------- -----------
Income (loss) before income taxes 40,604 47,605 56,977 51,344
PROVISION (BENEFIT) FOR INCOME TAXES 15,455 1,210 17,586
----------- ----------- ----------- -----------
Net income (loss) $ 40,604 $ 32,150 $ 55,767 $ 33,758
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 87,283,661 87,283,661 87,283,661 87,283,661
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
INCOME (LOSS) PER SHARE $ .000 $ .000 $ .001 ($ .000)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
See accompanying notes to financial statements
2
<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, 1996 87,283,661 $872,836 $47,660,331 ($44,107,135)
Net income for the
six months ended
June 30, 1997 55,767
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BALANCE AT
June 30, 1997 87,283,661 $872,836 $47,660,331 ($44,051,368)
---------- -------- ----------- -------------
---------- -------- ----------- -------------
See accompanying notes to financial statements
3
<PAGE>
REGENCY EQUITIES CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
SIX MONTHS ENDED
JUNE 30,
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1 9 9 7 1 9 9 6
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CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
Net income $ 55,767 $ 33,758
Adjustments to reconcile net
income to net cash provided
by (used in) operating
activities:
Depreciation 24,534 24,534
Change in operating assets and
liabilities:
Rent receivable 928 631
Deferred income taxes 15,526
Accounts payable and accrued expenses ( 3,325) ( 184,029)
Income taxes payable ( 210) ( 460)
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NET CASH PROVIDED BY
(USED IN)OPERATING ACTIVITIES 77,694 (110,040)
CASH - BEGINNING OF PERIOD 2,974,146 2,975,808
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CASH - END OF PERIOD $ 3,051,840 $ 2,865,768
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See accompanying notes to financial statements
4
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Regency Equities Corp.
Notes to Financial Statements
June 30, 1997
(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, 1996, together with certain procedural
disclosures.
2. Basis of reporting
The balance sheet as of June 30, 1997, the statements of operations for
the three month periods ended June 30, 1997 and 1996 and the six month
periods ended June 30, 1997 and 1996, the statement of changes in
shareholders' equity for the six months ended June 30, 1997 and the
statements of cash flows for the six month periods ended June 30, 1997
and 1996 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 June 30, 1997 and the results of its operations and cash
flows for the three month and six 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, 1996.
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. Witmark, Inc., the primary
tenant at the shopping center, holds the lease which expires in 1999.
In April 1997, the Company was advised that Witmark, Inc. had initiated
liquidating proceedings for all of its business and would be interested
in negotiating an early termination of the lease. The Company was
subsequently advised that Witmark, Inc. would hold a "going out of
business sale" in June 1997. On June 9, 1997 the Company filed an action
against Witmark, Inc. to enforce the lease for its full term. Included
in the balance sheet at June 30, 1997 is $94,786 of rent receivable due
from Witmark. At this time Management has not been able to determine
the ultimate outcome of the action filed against Witmark. However, in
the opinion of Management, the outcome will not have a material impact
on the Company's financial position.
5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
During the second quarter of 1997, the Company recorded a net income of
$40,604 before income taxes compared to net income of $47,607 for the
same period of 1996. The decrease resulted principally from an increase
in professional fees of $10,192.
During the six months ended June 30, 1997, the Company recorded net
income of $56,977 before income taxes compared to a net income of
$51,344 for the same period of 1996. The increase in net income
resulted principally from (i) an increase in interest income of $8,864;
and (ii) a decrease in professional fees of $2,546. This increase in
income was offset in part by an increase in administrative expenses of
$4,958.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not Applicable.
6
<PAGE>
PART II - Other Information
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.
7
<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.
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(Registrant)
DATE: August 13, 1997 By /s/ ALLAN L. CHAPMAN
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Allan L. Chapman
Chairman of the Board, Chief
Executive Officer and President
(Principal Executive Officer)
DATE: August 13, 1997 By /s/ MORRIS ENGEL
-----------------------------------
Morris Engel
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
8
<PAGE>
REGENCY EQUITIES CORP.
QUARTERLY REPORT ON FORM 10-Q
INDEX TO EXHIBITS
Exhibit
Number Description
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27.1 Financial Data Schedule (included only in the electronic
filing).
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF REGENCY EQUITIES CORP. FOR THE PERIOD ENDED JUNE 30,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 3,051,840
<SECURITIES> 0
<RECEIVABLES> 97,220
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,149,060
<PP&E> 1,256,441
<DEPRECIATION> 318,942
<TOTAL-ASSETS> 4,507,723
<CURRENT-LIABILITIES> 25,924
<BONDS> 0
0
0
<COMMON> 872,836
<OTHER-SE> 3,608,963
<TOTAL-LIABILITY-AND-EQUITY> 4,507,723
<SALES> 0
<TOTAL-REVENUES> 205,418
<CGS> 0
<TOTAL-COSTS> 53,861
<OTHER-EXPENSES> 94,580
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 56,977
<INCOME-TAX> 1,210
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 55,767
<EPS-PRIMARY> .001
<EPS-DILUTED> .001
</TABLE>
