<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 September 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
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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
--- ---
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 November 9, 1999 is 87,283,661.
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REGENCY EQUITIES CORP.
INDEX
<TABLE>
<CAPTION>
Page
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<S> <C>
Part I Financial information
Item 1. Financial statements
Balance sheets as of September 30, 1999
(unaudited) and December 31, 1998......................................1
Statements of operations for the three
months and nine months ended September 30, 1999
and 1998 (unaudited)...................................................2
Statement of changes in shareholders' equity
for the nine months ended September 30, 1999
(unaudited)............................................................3
Statements of cash flows for the nine months
ended September 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>
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
REGENCY EQUITIES CORP.
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1 9 9 9 1 9 9 8
( unaudited )
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<S> <C> <C>
ASSETS
Cash and cash equivalents $ 3,058,888 $ 3,113,031
Rent receivable 2,051 3,412
Rental property owned, net of write
down for possible loss of $215,000 and
accumulated depreciation of $429,345
in 1999 and $329,544 in 1998 827,096 863,897
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$ 3,888,035 $ 3,980,340
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LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 12,445 $ 30,549
Income taxes payable 1,220 3,020
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13,665 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 $.01 per
share, authorized 125,000,000 shares;
issued and outstanding 87,283,661
shares 872,836 872,836
Additional paid-in capital 47,660,331 47,660,331
Accumulated deficit (44,658,797) (44,586,396)
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3,874,370 3,946,771
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$ 3,888,035 $ 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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- -------------------------
1 9 9 9 1 9 9 8 1 9 9 9 1 9 9 8
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<S> <C> <C> <C> <C>
REVENUES
Interest income $ 34,499 $ 37,903 $ 102,906 $ 113,422
Rental income 11,861 12,557 35,940 36,176
---------- ---------- ---------- ----------
Total revenues 46,360 50,460 138,846 149,598
---------- ---------- ---------- ----------
EXPENSES
Administrative expense 23,092 22,851 80,021 76,513
Professional fees 4,314 6,398 40,400 37,220
Rental expense 30,305 36,464 89,006 93,136
---------- ---------- ---------- ----------
Total expenses 57,711 65,713 209,427 206,869
---------- ---------- ---------- ----------
Loss before income
taxes (11,351) (15,253) (70,581) (57,271)
PROVISION FOR INCOME TAXES 610 1,820 1,510
---------- ---------- ---------- ----------
Net loss ($11,961) ($15,253) ($72,401) ($58,781)
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 87,283,661 87,283,661 87,283,661 87,283,661
========== ========== ========== ==========
LOSS PER SHARE $.000 $.000 ($.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
nine months ended
September 30, 1999 (72,401)
---------- -------- ----------- -----------
BALANCE AT
September 30, 1999 87,283,661 $872,836 $47,660,331 ($44,658,797)
========== ======== =========== ============
</TABLE>
See accompanying notes to financial statements
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REGENCY EQUITIES CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
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1 9 9 9 1 9 9 8
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<S> <C> <C>
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
Net loss ($72,401) ($58,781)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 36,801 36,801
Change in operating assets and
liabilities:
Rent receivable 1,361 1,731
Accounts payable and accrued
expenses (18,104) (6,412)
Income taxes payable (1,800) 90
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NET CASH USED IN
OPERATING ACTIVITIES: (54,143) (26,571)
CASH - BEGINNING OF PERIOD 3,113,031 3,137,924
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CASH - END OF PERIOD $3,058,888 $3,111,353
========== ==========
</TABLE>
See accompanying notes to financial statements
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<PAGE>
Regency Equities Corp.
Notes to Financial Statements
September 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 September 30, 1999, the statements of
operations for the three month periods ended September 30, 1999 and
1998 and the nine month periods ended September 30, 1999 and 1998, the
statement of changes in shareholders' equity for the nine months ended
September 30, 1999 and the statements of cash flows for the nine month
periods ended September 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 September 30, 1999 and the results of its operations
and cash flows 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,
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
During the third quarter of 1999, the Company recorded a loss of $11,351 before
income taxes compared to a net loss of $15,253 for the same period of 1998. The
decrease resulted principally from the decrease in professional fees of $2,084
and a decrease in rent expenses of $6,159.
During the nine months ended September 30, 1999, the Company recorded a loss of
$70,581 before income taxes compared to a net loss of $57,271 for the same
period of 1998. The increase resulted principally from the decrease of interest
income of $10,516 due to a decrease in the cash balance and an increase in
administrative expense and professional fees of $3,508 and $3,180, respectively.
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 a 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.
The Company has exposure to 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: November 15, 1999 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: November 15, 1999 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 SEPTEMBER
30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 3,058,888
<SECURITIES> 0
<RECEIVABLES> 2,051
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,060,939
<PP&E> 1,256,441
<DEPRECIATION> 429,345
<TOTAL-ASSETS> 3,888,035
<CURRENT-LIABILITIES> 13,665
<BONDS> 0
0
0
<COMMON> 872,836
<OTHER-SE> 3,001,534
<TOTAL-LIABILITY-AND-EQUITY> 3,888,035
<SALES> 0
<TOTAL-REVENUES> 138,846
<CGS> 0
<TOTAL-COSTS> 89,006
<OTHER-EXPENSES> 120,421
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (70,581)
<INCOME-TAX> 1,820
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (72,401)
<EPS-BASIC> (.001)
<EPS-DILUTED> (.001)
</TABLE>
