<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 MARCH 31, 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
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Commission file number O-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 W. OLYMPIC BOULEVARD, SUITE 900 LOS ANGELES, CA 90064-5023
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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 May 2, 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 March 31, 1997
(Unaudited) and December 31, 1996 . . . . . . . . . . . . . . . 1
Statements of operations for the three
months ended March 31, 1997 and 1996
(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Statement of changes in shareholders' equity
for the three months ended March 31, 1997
(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of cash flows for the three months
ended March 31, 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
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
March 31,
1997 December 31,
(Unaudited) 1996
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ASSETS
Cash $ 3,029,694 $ 2,974,146
Rent receivable 77,946 98,148
Rental property owned, net of write
down for possible loss of $215,000
and accumulated depreciation of
$306,675 in 1997 and $294,408 in
1996 949,766 962,033
Deferred income taxes 421,164 421,164
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$ 4,478,570 $ 4,455,491
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LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued
expenses $ 35,865 $ 27,739
Income taxes payable 1,510 1,720
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37,375 29,459
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CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, par value $.01
per share, authorized 5,000,000
shares; none issued
Common stock, par value $.01
per share, authorized
125,000,000 shares; issued and
outstanding 87,283,661 shares 872,836 872,836
Additional paid-in capital 47,660,331 47,660,331
Accumulated deficit ( 44,091,972) ( 44,107,135)
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4,441,195 4,426,032
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$ 4,478,570 $ 4,455,491
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See accompanying notes to financial statements
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REGENCY EQUITIES CORP.
STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
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1 9 9 7 1 9 9 6
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REVENUES:
Interest income $ 34,932 $ 33,290
Rental income 69,483 67,512
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TOTAL REVENUES 104,415 100,802
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EXPENSES:
Administrative expense 26,610 25,642
Professional fees 31,657 44,395
Rental expense 29,775 27,028
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TOTAL EXPENSES 88,042 97,065
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INCOME (LOSS) BEFORE INCOME TAXES 16,373 3,737
PROVISION FOR INCOME TAXES 1,210 2,131
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NET INCOME (LOSS) $ 15,163 $ 1,606
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WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 87,283,661 87,283,661
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INCOME (LOSS) PER SHARE $ .000 $ .000
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See accompanying notes to financial statements
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<PAGE>
REGENCY EQUITIES CORP.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock
------------------------- Additional
Number of Paid-In Accumulated
Shares Amount Capital Deficit
---------- ---------- ----------- -------------
<S> <C> <C> <C> <C>
Balance at
December 31, 1996 87,283,661 $ 872,836 $47,660,331 ($44,107,135)
Net income for the
three months ended
March 31, 1997 15,163
---------- ---------- ----------- -------------
Balance at
March 31, 1997 87,283,661 $ 872,836 $47,660,331 ($44,091,972)
---------- ---------- ----------- -------------
---------- ---------- ----------- -------------
</TABLE>
See accompanying notes to financial statements
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<PAGE>
STATEMENTS OF CASH FLOWS
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
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1 9 9 7 1 9 9 6
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CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) $ 15,163 $ 1,606
Adjustments to reconcile net
income (loss) to net cash provided
by (used in) operating activities:
Depreciation 12,267 12,267
Changes in operating assets and
liabilities:
Rent receivable 20,202 8,734
Accounts payable and accrued expenses 8,126 (16,866)
Deferred income taxes 71
Income taxes payable (210) 340
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NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 55,548 6,152
CASH BEGINNING OF PERIOD 2,974,146 2,975,808
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CASH END OF PERIOD $ 3,029,694 $ 2,981,960
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See accompanying notes to financial statements
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<PAGE>
Regency Equities Corp.
Notes to Financial Statements
March 31, 1997
(Unaudited)
1. Significant accounting policies
Significant accounting policies of Regency Equities Corp. 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 March 31, 1997, the statements of operations for
the three month periods ended March 31, 1997 and 1996, the statement of
changes in shareholders' equity for the three months ended March 31, 1997,
and the statements of cash flows for the three month periods ended March
31, 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 pursuant to 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 statements. 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 March 31, 1997 and
the results of its operations and cash flow for the three month period 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 learned that Witmark, Inc. has initiated liquidation proceedings
for part or all of its business, and that it may be interested in
negotiating an early termination of the lease. The Company intends to
enforce the lease for its full term.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of operations
During the first quarter of 1997, the Company recorded net income of $15,163,
before income taxes, compared to net income of $3,737 before income taxes for
the same period in 1996. The increase in net income resulted primarily to a
decrease in professional fees of $12,738.
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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.
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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: May 14, 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: May 14, 1997 By /s/ MORRIS ENGEL
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Morris Engel
Chief Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)
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<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)
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<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 MARCH 31,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,029,694
<SECURITIES> 0
<RECEIVABLES> 77,946
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,107,640
<PP&E> 1,256,441
<DEPRECIATION> 306,675
<TOTAL-ASSETS> 4,478,570
<CURRENT-LIABILITIES> 37,375
<BONDS> 0
0
0
<COMMON> 872,836
<OTHER-SE> 3,568,359
<TOTAL-LIABILITY-AND-EQUITY> 4,478,570
<SALES> 0
<TOTAL-REVENUES> 104,415
<CGS> 0
<TOTAL-COSTS> 29,775
<OTHER-EXPENSES> 58,267
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 16,373
<INCOME-TAX> 1,210
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,163
<EPS-PRIMARY> .000
<EPS-DILUTED> .000
</TABLE>
