<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, 1998
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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 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, 1998 is 87,283,661.
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REGENCY EQUITIES CORP.
INDEX
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Page
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<S> <C>
Part I Financial information
Item 1. Financial statements
Balance sheets as of June 30, 1998
(Unaudited) and December 31, 1997 . . . . . . . . . . . . . . . 1
Statements of operations for the three
months and six months ended June 30, 1998
and 1997 (Unaudited). . . . . . . . . . . . . . . . . . . . . . 2
Statement of changes in shareholders' equity
for the six months ended June 30, 1998
(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of cash flows for the six months
ended June 30, 1998 and 1997 (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
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
REGENCY EQUITIES CORP.
BALANCE SHEETS
<TABLE>
JUNE, 30
1 9 9 8 DECEMBER 31,
(Unaudited) 1 9 9 7
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<S> <C> <C>
ASSETS
Cash $ 3,120,356 $ 3,137,924
Rent receivable 2,619 3,752
Rental property owned, net of write
down for possible loss of $215,000
and accumulated depreciation of
$368,010 in 1998 and $343,476 in
1997 888,431 912,965
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$ 4,011,406 $ 4,054,641
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LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 22,569 $ 22,366
Income taxes payable 1,510 1,420
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24,079 23,786
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SHAREHOLDERS' EQUITY
Preferred stock, par value $.01 per
share, authorized 5,000,000 shares;
none issued
Common stock, par value $.01 per
share, authorized 125,000,000 shares;
issued and outstanding 87,283,661
shares 872,836 872,836
Additional paid-in capital 47,660,331 47,660,331
Accumulated deficit (44,545,840) (44,502,312)
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3,987,327 4,030,855
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$ 4,011,406 $ 4,054,641
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</TABLE>
See accompanying notes to financial statements
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REGENCY EQUITIES CORP.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
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1 9 9 8 1 9 9 7 1 9 9 8 1 9 9 7
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<S> <C> <C> <C> <C>
REVENUES
Interest income $ 37,918 $ 36,601 $ 75,519 $ 71,533
Rental income 11,880 64,402 23,619 133,885
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Total revenues 49,798 101,003 99,138 205,418
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EXPENSES
Administrative expense 25,992 29,167 53,662 55,777
Professional fees 3,691 7,146 30,822 38,803
Rental expense 28,258 24,086 56,672 53,861
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Total expenses 57,941 60,399 141,156 148,441
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Income (loss) before income taxes (8,143) 40,604 (42,018) 56,977
PROVISION FOR INCOME TAXES 1,510 1,210
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Net income (loss) $ (8,143) $ 40,604 $ (43,528) $ 55,767
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WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 87,283,661 87,283,661 87,283,661 87,283,661
----------- ------------ ----------- ------------
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INCOME (LOSS) PER SHARE $ .000 $ .000 $ (.001) $ .001
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</TABLE>
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
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<S> <S> <C> <C> <C>
BALANCE AT
December 31, 1997 87,283,661 $872,836 $47,660,331 $(44,502,312)
Net (loss) for the
six months ended
June 30, 1998 (43,528)
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BALANCE AT
June 30, 1998 87,283,661 $872,836 $47,660,331 ($44,545,840)
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</TABLE>
See accompanying notes to financial statements
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<PAGE>
REGENCY EQUITIES CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
SIX MONTHS ENDED
JUNE 30,
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1 9 9 8 1 9 9 7
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<S> <C> <C>
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
Net income (loss) $ (43,528) $ 55,767
Adjustments to reconcile net
income (loss) to net cash provided
by (used in) operating
activities:
Depreciation 24,534 24,534
Change in operating assets and
liabilities:
Rent receivable 1,133 928
Accounts payable and accrued expenses 203 (3,325)
Income taxes payable 90 (210)
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NET CASH PROVIDED BY
(USED IN)OPERATING ACTIVITIES (17,568) 77,694
CASH - BEGINNING OF PERIOD 3,137,924 2,974,146
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CASH - END OF PERIOD $ 3,120,356 $ 3,051,840
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</TABLE>
See accompanying notes to financial statements
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<PAGE>
Regency Equities Corp.
Notes to Financial Statements
June 30, 1998
(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, 1997, together with certain procedural
disclosures.
2. Basis of reporting
The balance sheet as of June 30, 1998, the statements of operations for the
three month periods ended June 30, 1998 and 1997 and the six month periods
ended June 30, 1998 and 1997, the statement of changes in shareholders'
equity for the six months ended June 30, 1998 and the statements of cash
flows for the six month periods ended June 30, 1998 and 1997 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, 1998 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, 1997.
3. Rental property
Real estate owned consists of a shopping center (the "Center") located in
Grand Rapids, Michigan. Approximately 12.5% of the Center is leased to a
tenant on a month-to-month basis. Minimum rent in connection with this
tenant is $3,500 per month. The remaining 87.5% of the Center is vacant.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
During the second quarter of 1998, the Company recorded a net loss of $8,143
before income taxes compared to net income of $40,604 for the same period of
1997. The decrease resulted principally from the decrease in rental income of
$52,522 attributable to the termination of the Witmark, Inc. lease in September
1997.
During the six months ended June 30, 1998, the Company recorded a loss of
$42,018 before income taxes compared to income of $56,977 for the same period of
1997. The decrease resulted principally from the decrease in rental income of
$110,266 attributable to the termination of the Witmark, Inc. lease in September
1997.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable.
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<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.
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<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, 1998 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, 1998 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
<TABLE>
Exhibit
Number Description
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<S> <C>
27.1 Financial Data Schedule (included only in the electronic filing).
</TABLE>
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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 JUNE
30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 3,120,356
<SECURITIES> 0
<RECEIVABLES> 2,619
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,122,975
<PP&E> 1,256,441
<DEPRECIATION> 368,010
<TOTAL-ASSETS> 4,011,406
<CURRENT-LIABILITIES> 24,079
<BONDS> 0
0
0
<COMMON> 872,836
<OTHER-SE> 3,114,491
<TOTAL-LIABILITY-AND-EQUITY> 4,011,406
<SALES> 0
<TOTAL-REVENUES> 99,138
<CGS> 0
<TOTAL-COSTS> 56,672
<OTHER-EXPENSES> 84,484
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (42,018)
<INCOME-TAX> 1,510
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (43,528)
<EPS-PRIMARY> (.001)
<EPS-DILUTED> (.001)
</TABLE>
