<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, 1999
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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
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, 1999 is 87,283,661.
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REGENCY EQUITIES CORP.
INDEX
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
Part I Financial information
Item 1. Financial statements
Balance sheets as of June 30, 1999
(Unaudited) and December 31, 1998.......................................1
Statements of operations for the three
months and six months ended June 30, 1999
and 1998 (Unaudited)................................................... 2
Statement of changes in shareholders' equity
for the six months ended June 30, 1999
(Unaudited).............................................................3
Statements of cash flows for the six months
ended June 30, 1999 and 1998 (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
Index to exhibits....................................................................9
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
REGENCY EQUITIES CORP.
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE, 30
1 9 9 9 DECEMBER 31,
(UNAUDITED) 1 9 9 8
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<S> <C> <C>
ASSETS
Cash $ 3,063,537 $ 3,113,031
Rent receivable 3,769 3,412
Rental property owned, net of write
down for possible loss of $215,000
and accumulated depreciation of
$417,078 in 1999 and $392,544 in
1998 839,363 863,897
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$ 3,906,669 $ 3,980,340
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LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 19,728 $ 30,549
Income taxes payable 610 3,020
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20,338 33,569
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SHAREHOLDERS' EQUITY
Preferred stock, par value $.01 per
share, authorized 5,000,000 shares;
none issued
Common stock, par value $.01 per
share, authorized 125,000,000 shares;
issued and outstanding 87,283,661
shares 872,836 872,836
Additional paid-in capital 47,660,331 47,660,331
Accumulated deficit (44,646,836) (44,586,396)
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3,886,331 3,946,771
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$ 3,906,669 $ 3,980,340
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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 9 1 9 9 8 1 9 9 9 1 9 9 8
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES
Interest income $ 34,211 $ 37,918 $ 68,407 $ 75,519
Rental income 12,034 11,880 24,079 23,619
------------ ------------ ------------ ------------
Total revenues 46,245 49,798 92,486 99,138
------------ ------------ ------------ ------------
EXPENSES
Administrative expense 24,339 25,992 56,929 53,662
Professional fees 7,697 3,691 36,086 30,822
Rental expense 27,390 28,258 58,701 56,672
------------ ------------ ------------ ------------
Total expenses 59,426 57,941 151,716 141,156
------------ ------------ ------------ ------------
Loss before income taxes ( 13,181) ( 8,143) ( 59,230) ( 42,018)
PROVISION FOR INCOME TAXES -- -- 1,210 1,510
------------ ------------ ------------ ------------
Net loss ($ 13,181) ($ 8,143) ($ 60,440) ($ 43,528)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 87,283,661 87,283,661 87,283,661 87,283,661
============ ============ ============ ============
INCOME (LOSS) PER SHARE $ .001 $ .000 ($ .001) $ .001
============ ============ ============ ============
</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
---------- -------- ----------- ------------
<S> <C> <C> <C> <C>
BALANCE AT
December 31, 1998 87,283,661 $872,836 $47,660,331 ($44,586,396)
Net loss for the
six months ended
June 30, 1999 ( 60,440)
---------- -------- ----------- -----------
BALANCE AT
June 30, 1999 87,283,661 $872,836 $47,660,331 ($44,646,836)
========== ======== =========== ===========
</TABLE>
See accompanying notes to financial statements
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<PAGE>
REGENCY EQUITIES CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
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1 9 9 9 1 9 9 8
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<S> <C> <C>
CASH USED IN OPERATING ACTIVITIES:
Net loss ($ 60,440) ($ 43,528)
Adjustments to reconcile net
loss to net used in operating
activities:
Depreciation 24,534 24,534
Change in operating assets and liabilities:
Rent receivable ( 357) 1,133
Accounts payable and accrued expenses ( 10,821) 203
Income taxes payable ( 2,410) 90
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NET CASH USED IN OPERATING ACTIVITIES ( 49,494) ( 17,568)
CASH - BEGINNING OF PERIOD 3,113,031 3,137,924
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CASH - END OF PERIOD $3,063,537 $3,120,356
========== ==========
</TABLE>
See accompanying notes to financial statements
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<PAGE>
Regency Equities Corp.
Notes to Financial Statements
June 30, 1999
(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, 1998, together with certain procedural
disclosures.
2. Basis of reporting
The balance sheet as of June 30, 1999, the statements of operations for
the three month periods ended June 30, 1999 and 1998 and the six month
periods ended June 30, 1999 and 1998, the statement of changes in
shareholders' equity for the six months ended June 30, 1999 and the
statements of cash flows for the six month periods ended June 30, 1999
and 1998 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, 1999 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,
1998.
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
(a) During the second quarter of 1999, the Company recorded a loss
of $13,181 before income taxes compared to a loss of $8,143
for the same period of 1998. The increase resulted principally
from an increase in legal expenses of $3,935.
During the six months ended June 30, 1999, the Company
recorded a loss of $59,230 before income taxes compared to a
loss of $42,018 for the same period of 1998. The increase
resulted principally from the decrease in interest income of
$7,112 due to a decrease in the cash balance and an increase
in professional fees of $5,264.
(b) Impact of Year 2000
The Company presently is not aware of any material operational
year 2000-related concerns and believes that, with minor
modifications to existing accounting software or conversion to
new software, any year 2000 concerns can be mitigated.
The Company maintains significant cash balances at two United
States banks. Management has requested and received
information from the banks which indicates that the computer
systems of the banks are year 2000 compliant.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable. The Company has exposure to interest rate
changes as a result of interest rate changes relating to the
cash and cash equivalent balances that it maintains with two
banks. However, the Company believes that any such reasonably
anticipated changes in interest rates are unlikely to have a
material effect on the Company's financial position and
results of operations.
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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.
-----------------------
(Registrant)
DATE: August 11, 1999 By /s/ ALLAN L. CHAPMAN
------------------------------------------
Allan L. Chapman
Chairman of the Board, Chief
Executive Officer and President
(Principal Executive Officer)
DATE: August 11, 1999 By /s/ MORRIS ENGEL
-----------------------------------------
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>
<CAPTION>
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,
1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 3,063,537
<SECURITIES> 0
<RECEIVABLES> 3,769
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,067,306
<PP&E> 1,256,441
<DEPRECIATION> 417,078
<TOTAL-ASSETS> 3,906,669
<CURRENT-LIABILITIES> 20,338
<BONDS> 0
0
0
<COMMON> 872,836
<OTHER-SE> 3,013,495
<TOTAL-LIABILITY-AND-EQUITY> 3,906,669
<SALES> 0
<TOTAL-REVENUES> 92,486
<CGS> 0
<TOTAL-COSTS> 58,701
<OTHER-EXPENSES> 93,015
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (59,230)
<INCOME-TAX> 1,210
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (60,440)
<EPS-BASIC> (.001)
<EPS-DILUTED> (.001)
</TABLE>
