<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
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
REGENCY EQUITIES CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 23-2298894
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
11845 WEST OLYMPIC BOULEVARD, SUITE 900
LOS ANGELES, CALIFORNIA 90064
(Address of principal executive offices and zip code)
(310) 827-9604
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common stock ($.01 par value)
(Title of Class)
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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/
The aggregate market value of the voting securities held by nonaffiliates of
the registrant as of March 3, 2000, based upon the average of the bid and asked
prices on that date, was approximately $778,838. For purposes of this
calculation, all officers and directors of the registrant were considered
affiliates, as were all beneficial owners (whether individuals, entities or
groups) of more then ten percent of the registrant's Common Stock.
Number of shares of Common Stock, par value $.01, outstanding as of
March 28, 2000: 87,283,661.
Documents Incorporated by Reference: None.
<PAGE>
PART I
ITEM 1. BUSINESS.
The corporate headquarters of Regency Equities Corp. (the "Company") are located
at 11845 West Olympic Boulevard, Suite 900, Los Angeles, California 90064. The
Company shares this suite on a rent-free basis with the accounting firm of
Engel, Kalvin, McMillan & Kipper, LLP. The Company's Chief Financial Officer,
Morris Engel, is a partner in Engel, Kalvin, McMillan & Kipper, LLP. The Company
has two employees: Mr. Engel and Allan L. Chapman, the Company's Chairman of the
Board, Chief Executive Officer and President.
The Company owns a shopping center in Grand Rapids, Michigan. Approximately 12%
of the shopping center's space is leased to a tenant. The balance of the
shopping center's space has been vacant since July 1997. The Company sustained a
net operating loss of $72,220 from this property in 1999. For further
information regarding the Grand Rapids property, see the Company's financial
statements and notes thereto that are included in this Annual Report on
Form 10-K.
During 1999 and the preceding several years, substantially all of the Company's
remaining assets have consisted of cash which has been deposited with several
major United States banks. For further information regarding the amount of
revenue, operating profit or loss and identifiable assets attributable to the
Company's various operations, reference is made to the Company's financial
statements and notes thereto that are included in this Annual Report on
Form 10-K.
On January 16, 1995, the Company's Board of Directors approved a cash dividend
of $.15 per share to stockholders of record as of January 30, 1995 and payable
on February 7, 1995. The aggregate amount of the dividend was $13,092,549, which
represented approximately 77.5% and 77.8% of the Company's total assets and
stockholders' equity, respectively, as of December 31, 1994.
First Lincoln Holdings, Inc., a Delaware corporation, beneficially owns
72,867,965 shares of the Company's common stock, which represents 83.48% of the
Company's outstanding common stock. Of that aggregate number of shares, First
Lincoln Holdings, Inc. is the record owner of 1,010,000 shares and Evergreen
Acceptance Corporation, a Delaware corporation and a wholly owned subsidiary of
First Lincoln Holdings, Inc., is the record owner of 71,857,965 shares. Martin
Oliner, who is a director of the Company, is the Chairman of the Board of
Directors, President, Chief Executive Officer and sole stockholder of First
Lincoln Holdings, Inc.
The nature and direction of the future business and operations of the Company
are uncertain. The Company intends to consider suitable business ventures in
which it can employ its liquid assets. During 1999, the Company conducted
preliminary negotiations with First Lincoln Holdings, Inc. regarding a cash
merger transaction which, if consummated, would have resulted in all
stockholders other than First Lincoln Holdings, Inc. and Evergreen Acceptance
Corporation receiving cash in exchange for their shares of the Company's common
stock. No specific transaction of the type described in the preceding sentence
was proposed or agreed upon by the parties, and it is uncertain whether or when
such a transaction will be considered again by the parties.
2
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ITEM 2. PROPERTIES.
See "Item 1. Business." The Company does not own any real property other than
the Grand Rapids shopping center described above.
ITEM 3. LEGAL PROCEEDINGS.
REGENCY EQUITIES CORP. V. WITMARK, INC., NO. 97-06049-CK (COUNTY OF KENT,
MICH.).
During 1997, the Company was advised that Witmark, Inc., which occupied
approximately 88% of the Grand Rapids shopping center, had commenced liquidation
proceedings. The Company filed an action against Witmark, Inc. for amounts due
under its lease. On September 8, 1997, the Company settled this lawsuit for a
cash payment from Witmark, Inc. of $120,000 and the return of the premises to
the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to the Company's stockholders during the quarter ended
December 31, 1999.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS.
(a) MARKET INFORMATION.
Until February 8, 1995, the principal market for the Company's common stock was
the Nasdaq National Market System. On that date, primarily as a result of the
Company's February 7, 1995 cash dividend which represented approximately 77.5%
of its total assets, the Company's stock was delisted from the Nasdaq National
Market System. The common stock is now traded over-the-counter, and there is not
an active market for such stock.
The following table reflects the highest and lowest per share prices for the
Company's common stock as quoted for the periods indicated. Because there is no
longer an established, active public trading market for the Company's common
stock, the following prices may not be an accurate indication of the value of
such stock.
<TABLE>
<CAPTION>
1999 HIGH LOW
---- ---- ---
<S> <C> <C>
1st quarter $0.030 $0.015
2nd quarter $0.030 $0.025
3rd quarter $0.025 $0.025
4th quarter $0.030 $0.015
</TABLE>
<TABLE>
<CAPTION>
1998 HIGH LOW
---- ---- ---
<S> <C> <C>
1st quarter $0.020 $0.015
2nd quarter $0.015 $0.015
3rd quarter $0.015 $0.015
4th quarter $0.015 $0.015
</TABLE>
(b) HOLDERS.
The number of record holders of the Company's common stock on March 13, 2000 was
1,552.
(c) DIVIDENDS.
The Company has not historically paid regular dividends on its common stock and
does not presently intend to do so in the future. On February 7, 1995, the
Company paid an extraordinary cash dividend of $.15 per share to stockholders of
record as of January 30, 1995. The Company has not paid any other dividends
since February 7, 1995.
3
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.(a)
<TABLE>
<CAPTION>
(In thousands except per share data)
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total revenues $ 189 198 $ 334 $ 398 $ 926
Income (loss) before
income taxes (85) (82) 28 133 171
Net income (loss) (87) (84) (395) 399 292
Income (loss) per share (.001) (.001) (.005) .005 .003
Dividends per share 0 0 0 0 .15
Total assets 3,892 3,980 4,055 4,455 4,240
Liabilities 32 33 24 29 213
Shareholders' equity 3,860 3,947 4,031 4,426 4,027
Book value per share .04 .05 .05 .05 .05
Weighted average shares
outstanding 87,284 87,284 87,284 87,284 87,284
</TABLE>
- ------------------------------
(a) The selected financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the Company's financial statements and
notes thereto that are included elsewhere in this Annual Report on
Form 10-K. On February 7, 1995, the Company paid a cash dividend of
$.15 per share to stockholders of record as of January 30, 1995. The
aggregate amount of the dividend was $13,092,549, which represented
approximately 77.5% and 77.8% of the Company's total assets and
stockholders' equity, respectively, as of December 31, 1994. The
nature and direction of the future business plans and operations of
the Company are uncertain. See "Item 1. Business." As a result of
these factors, the selected financial data are not necessarily
indicative of the Company's future financial condition or results of
operations.
4
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following discussion should be read in conjunction with the Company's
financial statements and notes thereto that are included elsewhere in this
Annual Report on Form 10-K. See "Item 1. Business" for a description of recent
developments affecting the Company and the future direction of the Company.
(a) RESULTS OF OPERATIONS.
(i) YEAR ENDED DECEMBER 31, 1999 COMPARED WITH YEAR ENDED DECEMBER 31,
1998.
The Company recorded a loss before income taxes of $84,933 in 1999 compared to a
loss before income taxes of $81,864 in 1998. The increase in loss resulted
principally from (i) a reduction in interest income of $12,659 and (ii) an
increase in directors' and committee fees of $7,000. The decline in operating
results was partially offset by (i) receipt of a one-time fee of $3,150 for use
of vacant space in the Company's rental property and (ii) decreases in
stockholders' reports of $4,465, professional fees of $5,436 and depreciation
expense of $3,862.
The Company recorded a net loss of $86,753 in 1999 compared to a net loss of
$84,084 in 1998. The increase in net loss was principally due to the same
items that are described in the immediately preceding paragraph. The net
loss is after adjustments in the valuation allowance against deferred assets.
A valuation allowance is provided to reduce the deferred tax assets to a
value which, more likely than not, will be realized. The valuation allowance
against deferred tax assets is determined by management based on its estimate
of the amount which will be realized from future profitability with
reasonable certainty. In view of the fact that the Company has not yet
completed a definitive business plan, the amount of deferred tax benefits
expected to be realized for the determination of the valuation allowance was
based upon an assumption of two years of future operations and the sale of
the rental property at the end of the two-year period.
(ii) YEAR ENDED DECEMBER 31, 1998 COMPARED WITH YEAR ENDED DECEMBER
31, 1997.
The Company recorded a loss before income taxes of $81,864 in 1998 compared to
income before income taxes of $27,907 in 1997. The decrease resulted principally
from (i) a decrease in rental income of $138,574 attributable to the termination
of the lease of the Michigan shopping center with Witmark, Inc. and (ii) an
increase in rental operating expenses of $11,229. The decline in operating
results was partially offset by a decrease in legal fees of $35,791 primarily
attributable to the settlement of litigation with Witmark, Inc. See "Item 3.
Legal Proceedings."
The Company recorded a net loss of $84,084 in 1998 compared to a net loss of
$395,177 in 1997. The decrease in net loss resulted principally from a
decrease of $447,844 in the valuation allowance against deferred tax assets.
In view of the fact that the Company has not yet completed a definitive
business plan, the amount of deferred tax benefits expected to be realized
for the determination of the valuation allowance was based upon an assumption
of two years of future operations and the sale of the rental property at the
end of the two-year period.
5
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(b) LIQUIDITY, CAPITAL RESOURCES AND FUTURE OPERATIONS.
As of December 31, 1999, the Company had cash in the amount of $3,068,600
invested in interest-bearing demand deposit accounts with two major United
States banks. The Company has sufficient cash for its current operating needs;
the Company does not currently have any material commitments for capital
expenditures; and it has no present plans to incur any indebtedness.
The business direction of the Company is uncertain. As a result, the reported
financial information contained in this Annual Report on Form 10-K is not
necessarily indicative of future operating results or of future financial
condition.
(c) IMPACT OF YEAR 2000.
The Year 2000 issue affects computer applications that may not properly
recognize and process data for the Year 2000 and beyond because of the use of
two digits rather than four to define an applicable year. To date, the Company
has not experienced any problems as a result of the commencement of the Year
2000. Although the Company does not anticipate any such problems, there is no
assurance that problems related to the Year 2000 issue will not arise in the
future.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
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.
6
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information with respect to this item is set forth in the Company's
financial statements and notes thereto included in this Annual Report on Form
10-K and listed in the Index to Financial Statements and Financial Statement
Schedules set forth in Item 14 herein.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
William J. Adams 70 Director and Secretary
Allan L. Chapman 62 Chairman of the Board of Directors, Chief
Executive Officer and President
Morris Engel 73 Chief Financial Officer and Treasurer
Ira L. Gottshall 42 Director
Peter M. Graham 45 Director
Ronald LaBow 65 Director
Martin Oliner 52 Director
</TABLE>
William J. Adams has served as Secretary and a director of the Company since
June 1992 and is presently engaged in the private practice of law. Mr. Adams
served as Vice President, Secretary and General Counsel of First Lincoln
Holdings, Inc., an insurance holding company which was formerly called First
Executive Corporation, from 1982 through May 1993, and as a director and as
Secretary and General Counsel of Evergreen Acceptance Corporation, a subsidiary
of First Lincoln Holdings, Inc., from 1982 through May 1993.
Allan L. Chapman has served as Chairman of the Board of Directors, Chief
Executive Officer and President of the Company since June 30, 1992. He has also
served as President of the Sterling Group, an actuarial consulting firm, since
March 1991. He served as a Senior Vice President and a director of Executive
Life Insurance Company from 1980 until February 1991 and as a Vice President of
First
7
<PAGE>
Executive Corporation (now called First Lincoln Holdings, Inc.), an insurance
holding company, from 1980 until February 1991.
Morris Engel has served as Chief Financial Officer of the Company since May 1991
and as Treasurer since March 1993. He has also been a partner in the accounting
firm of Engel, Kalvin, McMillan & Kipper, LLP since November 1990. Mr. Engel was
a partner in the accounting firm of Laventhol & Horwath from 1969 to 1990.
Ira L. Gottshall has served as a director of the Company since August 1992. Mr.
Gottshall is a consultant in the life insurance industry. Mr. Gottshall served
as President of National Affiliated Corp., an insurance holding company, from
January 1997 until January 1998. Prior to 1997, Mr. Gottshall served as an
executive officer of several other insurance companies, including as President
and Chief Executive Officer of First Delaware Life Insurance Company from July
1991 until January 1994 and as a Vice President of Evergreen Acceptance
Corporation from September 1992 until January 1994.
Peter M. Graham has served as a director of the Company since March 1991. Mr.
Graham is a principal of Ladenburg, Thalmann & Co. Inc., an investment
banking firm. Mr. Graham served as Director of Corporate Finance of
Ladenburg, Thalmann & Co. Inc. from 1989 until 1995, as its President from
1995 until 1998, as its Vice Chairman from 1998 until June 1999 and as a
director of the firm from 1982 until June 1999. He also serves as a director
of Alloy Online, Inc.
Ronald LaBow has served as a director of the Company since May 1985. Mr. LaBow
has served as Chairman of the Board of Directors of WHX Corp., a steel
manufacturing company, since January 1991.
Martin Oliner has served as a director of the Company since November 1993 and
has been engaged in the private practice of law since 1972. Mr. Oliner serves
as Chairman of the Board of Directors, President and Chief Executive Officer
of First Lincoln Holdings, Inc., which is an insurance holding company.
Directors are elected at the annual meeting of stockholders to serve during the
ensuing year and until a successor is duly elected and qualified. Officers serve
at the pleasure of the Board of Directors. There are no family relationships
between or among any of the directors and executive officers of the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and regulations adopted
thereunder require the Company's directors and officers and persons who own
more than ten percent of the outstanding shares of the Company's common stock
(collectively, the "Reporting Persons") to file with the Securities and
Exchange Commission and the Company initial reports of ownership and reports
of changes in ownership of the Company's common stock and other equity
securities. Based solely upon (i) the Company's review of the Forms 3, 4 and
5 that were furnished by the Reporting Persons to the Company pursuant to
Section 16(a) and applicable regulations during and with respect to the
Company's most recent fiscal year and (ii) written representations received
by the Company from its directors and officers, the Company believes that all
applicable Section 16(a) filing requirements were complied with
8
<PAGE>
on a timely basis by the Reporting Persons during and with respect to the
Company's most recent fiscal year.
ITEM 11. EXECUTIVE COMPENSATION.
(a) SUMMARY COMPENSATION TABLE.
The following table sets forth all compensation paid or awarded by the Company
for services rendered during the fiscal years ended December 31, 1999, December
31, 1998 and December 31, 1997 to its Chief Executive Officer. No executive
officer or other employee of the Company had aggregate compensation for salary
and bonus in excess of $100,000 during the most recently completed fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------- ---------------------- --------
SECURITIES
OTHER RESTRICTED UNDERLYING
NAME AND ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS($) SARs(#) PAYOUTS($) COMPENSATION($)(1)
- ------------------ ---- --------- -------- --------------- --------- ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Allan L. Chapman 1999 $36,000 0 0 0 0 0 $5,000
Chairman, Chief 1998 $36,000 0 0 0 0 0 $4,000
Executive Officer 1997 $36,000 0 0 0 0 0 $4,000
and President
</TABLE>
- ------------------------------
(1) Represents Mr. Chapman's receipt of directors' fees.
(b) COMPENSATION OF DIRECTORS.
During 1999, the Company's directors received $1,000 per Board meeting and $500
per committee meeting, and their expenses incurred in attending such meetings
were reimbursed by the Company.
(c) INDEMNIFICATION AGREEMENTS.
The Company has entered into an indemnification agreement with each of its
current directors and executive officers. The indemnification agreements provide
for the mandatory indemnification of each director and executive officer by the
Company with respect to proceedings arising out of or related to actions taken
or omitted to be taken by the individuals as directors, officers, employees or
agents of the Company. Under the agreements, the Company is obligated to
indemnify each of these individuals to the fullest extent permitted by Delaware
law and, if requested, is obligated to advance the reasonable expenses of any
such individual with respect to a proceeding, unless independent legal counsel
determines that such payments are not permitted. The Company's obligations under
these agreements continue notwithstanding the cessation of the individuals'
tenure as directors and officers of the Company.
9
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(d) COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
The members of the Company's Stock Option/Compensation Committee are William J.
Adams and Ronald LaBow. Mr. Adams is the Company's Secretary, which is not a
salaried position.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
With respect to each person known by the Company to be the beneficial owner of
more than five percent of its common stock, each director of the Company, each
of the Company's executive officers named in the Summary Compensation Table
presented above and all directors and executive officers of the Company as a
group, the following table sets forth the number of shares of common stock
beneficially owned as of February 15, 2000 by each such person or group and the
percentage of the outstanding shares of the Company's common stock beneficially
owned as of February 15, 2000 by each such person or group. Unless otherwise
indicated, each of the following stockholders has, to the Company's knowledge,
sole voting and investment power with respect to the shares beneficially owned,
except to the extent that such authority is shared by spouses under applicable
law or otherwise noted herein. Information presented below with respect to
persons or groups owning more than five percent of the Company's common stock is
based upon Schedule 13D or 13G filings made by such persons or groups with the
Securities and Exchange Commission.
<TABLE>
<CAPTION>
APPROXIMATE
SHARES OF STOCK PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
------------------------ ------------------ --------
<S> <C> <C>
FIVE PERCENT SHAREHOLDERS
First Lincoln Holdings, Inc.(1) 72,867,965 83.48%
Evergreen Acceptance Corporation
1001 Jefferson Plaza, Suite 200
1001 Jefferson Street
Wilmington, DE 19801
DIRECTORS AND
NAMED EXECUTIVE OFFICERS
William J. Adams 20,000 *
Allan L. Chapman 235,000 *
Ira L. Gottshall 0 0
Peter M. Graham 0 0
Ronald LaBow 0 0
Martin Oliner(2) 72,867,965 83.48%
ALL DIRECTORS AND EXECUTIVE
OFFICERS AS A GROUP
(7 persons)(2) 73,122,965 83.78%
- ------------------------------
</TABLE>
* Owns less than 1% of the Company's outstanding shares of common stock.
(1) Evergreen Acceptance Corporation is a wholly owned subsidiary of First
Lincoln Holdings, Inc. Evergreen Acceptance Corporation is the record
owner of 71,857,965 shares of the Company's common stock; Evergreen
Acceptance Corporation and First Lincoln Holdings, Inc. share voting and
investment power with respect to such shares. First Lincoln Holdings, Inc.
is the record owner of 1,010,000 shares of the Company's common stock, as
to which it has sole voting and investment power.
(2) Information presented for Mr. Oliner includes shares of the Company's
common stock that are owned by First Lincoln Holdings, Inc. and its
wholly owned subsidiary, Evergreen Acceptance Corporation. Mr. Oliner
serves as Chairman of the Board, Chief Executive Officer and President
of First Lincoln Holdings, Inc. Mr. Oliner and trusts for the benefit
of his family are the beneficial owners of all of the outstanding
capital stock of First Lincoln Holdings, Inc. Mr. Oliner does not have
direct ownership of any shares of the Company's common stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Morris Engel, the Company's Chief Financial Officer and Treasurer, is a partner
in the accounting firm of Engel, Kalvin, McMillan & Kipper, LLP. The Company
paid fees of $12,286 to Engel, Kalvin, McMillan & Kipper, LLP in 1999 in
consideration for accounting and tax services rendered by that firm.
10
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K.
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
Report of BDO Seidman, LLP........................................................... F-1
Balance Sheets - December 31, 1999 and 1998.......................................... F-2
Statements of Operations - Years
Ended December 31, 1999, 1998 and 1997.................................... F-3
</TABLE>
<TABLE>
<S> <C>
Statements of Changes in Shareholders'
Equity - Years Ended December 31, 1999,
1998 and 1997 ............................................................ F-4
Statements of Cash Flows - Years Ended
December 31, 1999, 1998 and 1997.......................................... F-5
Notes to Financial Statements........................................................ F-6
Report of BDO Seidman, LLP on Schedules.............................................. F-11
Schedule II - Valuation and Qualifying Accounts...................................... F-12
Schedule III - Real Estate and Accumulated
Depreciation.............................................................. F-13
</TABLE>
Schedules not listed above are omitted because they are
inapplicable or the information required is presented in the
financial statements or the footnotes thereto.
11
<PAGE>
EXHIBITS.
3.1 Certificate of Incorporation of the Company as amended and
restated to date, incorporated herein by this reference to
Exhibit 3.1 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991.
3.2 By-laws of the Company, incorporated herein by this reference to
Exhibit 3.2 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990.
10.1 1986 Stock Option Plan, incorporated herein by this reference to
Exhibit 10.1 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991.
10.2 Incentive Stock Option Plan, incorporated herein by this
reference to Exhibit 10.2 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1991.
10.3 Indemnification Agreement dated February 7, 1995, between the
Company and William J. Adams, incorporated herein by this
reference to Exhibit 10.4 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994.
10.4 Indemnification Agreement dated February 7, 1995, between the
Company and Allan L. Chapman, incorporated herein by this
reference to Exhibit 10.5 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994.
10.5 Indemnification Agreement dated February 7, 1995, between the
Company and Morris Engel, incorporated herein by this reference
to Exhibit 10.6 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994.
10.6 Indemnification Agreement dated February 7, 1995, between the
Company and Ira L. Gottshall, incorporated herein by this
reference to Exhibit 10.7 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994.
10.7 Indemnification Agreement dated February 7, 1995, between the
Company and Peter M. Graham, incorporated herein by this
reference to Exhibit 10.8 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994.
10.8 Indemnification Agreement dated February 14, 1995, between the
Company and Ronald LaBow, incorporated herein by this reference
to Exhibit 10.9 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994.
10.9 Indemnification Agreement dated February 7, 1995, between the
Company and Martin Oliner, incorporated herein by this reference
to Exhibit 10.10 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994.
27.1 Financial Data Schedule (included only in the electronic filing)
REPORTS ON FORM 8-K.
No Current Reports on Form 8-K were filed by the Company during the quarter
ended December 31, 1999.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: March 28, 2000 REGENCY EQUITIES CORP.
By /s/ ALLAN L. CHAPMAN
---------------------------------
Allan L. Chapman, Chairman of the Board, Chief
Executive Officer and President
13
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:
Date: March 28, 2000 By /s/ ALLAN L. CHAPMAN
----------------------------------------
Allan L. Chapman
Chairman of the Board, Chief Executive
Officer and President (Principal
Executive Officer)
Date: March 28, 2000 By /s/ MORRIS ENGEL
----------------------------------------
Morris Engel
Chief Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)
Date: March 28, 2000 By /s/ WILLIAM J. ADAMS
----------------------------------------
William J. Adams
Secretary and Director
Date: March 28, 2000 By /s/ RONALD LABOW
----------------------------------------
Ronald LaBow
Director
Date: March 28, 2000 By /s/ PETER M. GRAHAM
----------------------------------------
Peter M. Graham
Director
Date: By
----------------------------------------
Ira L. Gottshall
Director
Date: By
----------------------------------------
Martin Oliner
Director
14
<PAGE>
REGENCY EQUITIES CORP.
ANNUAL REPORT ON FORM 10-K
ITEM 8, ITEM 14(a)(1) and 14(a)(2)
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 1999
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Regency Equities Corp.
We have audited the accompanying balance sheets of Regency Equities Corp. as of
December 31, 1999 and 1998 and the related statements of operations, changes in
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Regency Equities Corp. at
December 31, 1999 and 1998 and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999 in conformity
with generally accepted accounting principles.
BDO SEIDMAN, LLP
Los Angeles, California
February 21, 2000
F-1
<PAGE>
REGENCY EQUITIES CORP.
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------
1999 1998
----------- -----------
<S> <C> <C>
ASSETS
Cash (Note A) $ 3,068,600 $ 3,113,031
Rent receivable 4,472 3,412
Rental property owned, net of write
down for possible loss of $215,000
and accumulated depreciation of
$437,684 in 1999 and $392,544 in
1998 (Note B) 818,757 863,897
----------- -----------
$ 3,891,829 $ 3,980,340
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued
expenses $ 30,591 $ 30,549
Income taxes payable (Note C) 1,220 3,020
----------- -----------
31,811 33,569
----------- -----------
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 ( 44,673,149) ( 44,586,396)
----------- -----------
3,860,018 3,946,771
----------- -----------
$ 3,891,829 $ 3,980,340
=========== ===========
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE>
REGENCY EQUITIES CORP.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES:
Interest income $ 137,431 $ 150,090 $ 147,741
Rental income 48,861 48,068 186,642
Miscellaneous income 3,010 - -
----------- ----------- -----------
TOTAL REVENUES 189,302 198,158 334,383
----------- ----------- -----------
EXPENSES:
Administrative expense 104,114 100,693 108,004
Professional fees (Note E) 46,030 51,376 81,748
Rental expense 124,091 127,953 116,724
----------- ----------- -----------
TOTAL EXPENSES 274,235 280,022 306,476
----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME
TAXES ( 84,933) ( 81,864) 27,907
PROVISION FOR INCOME TAXES (NOTE C) 1,820 2,220 423,084
----------- ----------- -----------
NET LOSS ($ 86,753) ($ 84,084) ($ 395,177)
=========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 87,283,661 87,283,661 87,283,661
=========== =========== ===========
NET LOSS PER SHARE ($ .001) ($ .001) ($ .005)
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
REGENCY EQUITIES CORP.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
THREE YEARS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
COMMON STOCK
------------------------- ADDITIONAL
NUMBER OF PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT
------ ------ ------- -------
<S> <C> <C> <C> <C>
BALANCE AT
January 1, 1997 87,283,661 $872,836 $47,660,331 ($44,107,135)
Net loss ( 395,177)
---------- -------- ----------- -----------
BALANCE AT
December 31, 1997 87,283,661 872,836 47,660,331 ( 44,502,312)
Net loss ( 84,084)
---------- -------- ----------- -----------
BALANCE AT
December 31, 1998 87,283,661 872,836 47,660,331 ( 44,586,396)
Net loss ( 86,753)
---------- -------- ----------- -----------
BALANCE AT
December 31, 1999 87,283,661 $872,836 $47,660,331 ($44,673,149)
========== ======== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
REGENCY EQUITIES CORP.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN CASH
OPERATING ACTIVITIES:
Net loss ($ 86,753) ($ 84,084) ($ 395,177)
Adjustments to reconcile net
loss to net cash provided by
(used in) operating activities:
Depreciation 45,140 49,068 49,068
Changes in operating assets and
liabilities:
Rent receivable ( 1,060) 340 94,396
Accounts payable and accrued
expenses 42 8,183 ( 5,373)
Deferred income taxes - - 421,164
Income taxes payable ( 1,800) 1,600 ( 300)
---------- ---------- ----------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES ( 44,431) ( 24,893) 163,778
---------- ---------- ----------
INCREASE (DECREASE) IN CASH ( 44,431) ( 24,893) 163,778
CASH BEGINNING OF YEAR 3,113,031 3,137,924 2,974,146
---------- ---------- ----------
CASH END OF YEAR $3,068,600 $3,113,031 $3,137,924
========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
REGENCY EQUITIES CORP.
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
BUSINESS: Regency Equities Corp. (the "Company") is incorporated in the state of
Delaware. The Company owns and leases to third parties a shopping center in
Grand Rapids, Michigan.
CASH: Cash at December 31, 1999 is deposited with two major U.S. banks. At
December 31, 1999 and throughout the year the Company has maintained balances in
its bank accounts in excess of the federally insured limit.
DEPRECIATION: Rental property is depreciated over its estimated useful life of
25 years using the straight-line method.
LONG-LIVED ASSETS: The Company periodically reviews long-lived assets for
impairment to determine whether any events or circumstances indicate that the
carrying amount of the assets may not be recoverable. In determining if an
impairment exists, management estimates the future undiscounted cash flows
expected to be received, including the eventual disposition of the asset, less
the related estimated cash out-flows expected to be incurred. If an impairment
is indicated based upon the above, a determination is made of the assets
estimated fair value based upon recent appraisals. If the estimated fair value
is less than the assets net book value, an impairment is recognized.
RENTAL INCOME: The Company recognizes minimum rents from leases on a
straight-line basis over the lease term. Overage rentals are recognized in the
period earned.
INCOME TAXES: Deferred tax assets and liabilities are determined based on the
differences between the financial statement and tax bases of assets and
liabilities, using enacted tax rates in effect for the year in which the
differences are expected to reverse. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.
Income tax expense is the tax payable for the period and the change during the
period in deferred tax assets and liabilities.
(continued)
F-6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
REGENCY EQUITIES CORP.
NOTE A - SIGNIFICANT ACCOUNTING POLICIES (continued)
ACCOUNTING ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
EARNINGS PER SHARE: In February 1997, the Financial Accounting Standards
Board ("FASB") issued Statement of Financial Accounting Standards (SFAS) No
128 Earnings Per Share ("EPS"). SFAS No. 128 requires dual presentation of
basic EPS and diluted EPS on the face of all income statements issued after
December 15, 1997 for all entities with complex capital structures. Basic EPS
is computed as net income (loss) divided by the weighted average number of
common shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur from common shares issuable through stock options,
warrants and other convertible securities. As the Company does not have any
stock options, warrants or other convertible securities outstanding, basic
and diluted EPS are the same, and only basic EPS is presented.
NOTE B - RENTAL ACTIVITY
The Company, as lessor, leases space in a shopping center (the Center) located
in Grand Rapids, Michigan.
During 1997, the Company was advised that one tenant which occupied
approximately 87.5% of the Center had commenced liquidation proceedings. The
Company then filed an action against the tenant for all amounts due in
connection with the lease. In September 1997, the Company settled its lawsuit
with the tenant for a cash payment of $120,000 and the return of the leased
premises.
In July 1997, the lease for the remaining approximately 12.5% of the Center
expired. The tenant continues to occupy the space on a month-to-month basis.
Minimum rent in connection with this tenant is $3,500 per month.
(continued)
F-7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
REGENCY EQUITIES CORP.
NOTE C - INCOME TAXES
The provision for income taxes consists of:
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Federal:
Current $ - $ - $ -
Deferred 2,859,729 2,178,384 ( 24,930)
State:
Current 1,820 2,220 1,920
Deferred 202,414 150,565 ( 1,750)
Increase (decrease)
in valuation allowance
of deferred tax assets ( 3,062,143) ( 2,328,949) 447,844
---------- ---------- --------
Total $ 1,820 $ 2,220 $423,084
========== ========== ========
</TABLE>
The reconciliation of the provision for income taxes and the amount computed by
applying the statutory federal income tax rate to earnings before income taxes
is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Federal tax (benefit) at
statutory rate ( 34.0%) ( 34.0%) 34.0%
State income tax, net of
federal income tax benefit 2.1 2.7 6.9
Change in valuation allowance
of deferred tax assets 34.0 34.0 1,475.1
------ ------ --------
Provision for income taxes 2.1% 2.7% 1,516.0%
====== ====== ========
</TABLE>
(continued)
F-8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
REGENCY EQUITIES CORP.
NOTE C - INCOME TAXES (continued)
Deferred tax assets (liabilities) consist of:
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Depreciation ($ 58,658) ($ 60,842)
---------- ----------
Gross deferred tax liabilities ( 58,658) ( 60,842)
---------- ----------
Rental property loss allowance 76,435 76,435
Loss carryforwards 397,941 3,462,268
---------- ----------
Gross deferred tax assets 474,376 3,538,703
Valuation allowance ( 415,718) ( 3,477,861)
---------- ----------
Net deferred tax assets 58,658 60,842
---------- ----------
Deferred taxes $ 0 $ 0
========== ==========
</TABLE>
A valuation allowance is provided to reduce the deferred tax assets to a level
which, more likely than not, will be realized. The net deferred assets reflects
management's estimate of the amount which will be realized from future
profitability with reasonable certainty. The net change in the total valuation
allowance for the years ended December 31, 1999, 1998, and 1997 were $3,062,143,
$2,328,949 and ($447,844), respectively. The decreases in 1999 and 1998 resulted
primarily from the expiration of loss carryforwards and the increase in 1997 was
due to the decrease in rental income.
(continued)
F-9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
REGENCY EQUITIES CORP.
NOTE C - INCOME TAXES (concluded)
The Company had operating loss carryforwards at December 31, 1999 for federal
tax purposes as follows:
<TABLE>
<CAPTION>
<S> <C>
EXPIRES IN:
2006 $ 630,000
2009 460,000
2018 80,000
2019 80,000
----------
$1,250,000
==========
</TABLE>
The Company also had significant Michigan state operating loss carryforwards at
December 31, 1999.
The Company made income tax payments of $3,620, $2,020 and $1,420 during 1999,
1998 and 1997, respectively.
NOTE D - INCENTIVE STOCK OPTION PLANS
The Company has incentive stock option plans for certain officers that provide
for options to be granted at a price equal to fair market value at the date of
the grant. Options cannot be exercised after ten years from the date of the
grant or more than three months after the termination of an optionee's
employment with the Company. No stock options were granted or exercised in 1997,
1998 or 1999. No options were outstanding at December 31, 1999; however, options
were available to be granted for 5,450,000 shares.
NOTE E - RELATED PARTY TRANSACTIONS
The current Chief Financial Officer is a partner in a certified public
accounting firm which provides accounting and tax services to the Company. Fees
paid by the Company to that firm were $12,286 in 1999, $13,535 in 1998 and
$17,167 in 1997.
(continued)
F-10
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
Board of Directors
Regency Equities Corp.
The audits referred to in our report dated February 21, 2000 relating to the
financial statements of Regency Equities Corp., which is contained in Item 8 of
this Form 10K included the audit of the financial statement schedules listed in
the accompanying index. These financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statement schedules based on our audits.
In our opinion such financial statement schedules present fairly, in all
material respects, the information set forth therein.
BDO SEIDMAN, LLP
Los Angeles, California
February 21, 2000
F-11
<PAGE>
REGENCY EQUITIES CORP.
VALUATION AND QUALIFYING ACCOUNTS - SCHEDULE II
<TABLE>
<CAPTION>
Additions Additions
Balance at (deductions) (deductions) Balance
beginning charged to from at end
of year operations reserve of year
------- ---------- ------- -------
<S> <C> <C> <C> <C>
Deferred tax valuation
allowance deducted from deferred
tax assets:
Year ended December 31, 1998 $5,806,810 $ - ($2,328,949) $3,477,861
---------- ---------- ---------- ----------
Year ended December 31, 1999 $3,477,861 $ - ($3,062,143) $ 415,718
---------- ---------- ---------- ----------
</TABLE>
F-12
<PAGE>
REGENCY EQUITIES CORP.
REAL ESTATE AND ACCUMULATED DEPRECIATION - SCHEDULE III
<TABLE>
<CAPTION>
Costs
capitalized Gross amount
subsequent to at which carried
Initial Cost acquisition at close of period
---------------- --------------- ------------------------ Life (years)
(4) on which
(1) Bldg. & Bldg. & (5) Accumulated Date depreciation
Description Land Improvements Improvements Land Improvements Total Depreciation acquired is computed
- ----------- --------- ------------ ------------ -------- ------------ ----------- ------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
December 31,
1999 $266,076 $794,337 $411,028 $266,076 $1,205,365 $1,471,441 $437,684 Oct 1976 25
</TABLE>
(1) The property is a shopping arcade in Grand Rapids, Michigan.
(2) The property was not subject to encumbrance at December 31, 1999,
1998, or 1997
(3) An allowance for possible losses of $215,000 has been provided at
December 31, 1999 1998, and 1997 to adjust the carrying value of the
property to estimated net realizable value.
(4) Reconciliation of accumulated depreciation:
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Balance at beginning of period $392,544 $343,476 $294,408
Additions during period 45,140 49,068 49,068
-------- -------- --------
Balance at close of period $437,684 $392,544 $343,476
======== ======== ========
</TABLE>
(5) The aggregate cost for federal income tax purposes of the property
for each of the three years December 31, 1997, 1998 and 1999 was
$1,471,441.
F-13
<PAGE>
REGENCY EQUITIES CORP.
ANNUAL REPORT ON FORM 10-K
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
<S> <C> <C>
3.1 Certificate of Incorporation of the Company as amended and
restated to date, incorporated herein by this reference to Exhibit
3.1 to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1991.
3.2 By-laws of the Company, incorporated herein by this reference to
Exhibit 3.2 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990.
10.1 1986 Stock Option Plan, incorporated herein by this reference to
Exhibit 10.1 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991.
10.2 Incentive Stock Option Plan, incorporated herein by this reference
to Exhibit 10.2 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1991.
10.3 Indemnification Agreement dated February 7, 1995, between the
Company and William J. Adams, incorporated herein by this
reference to Exhibit 10.4 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994.
10.4 Indemnification Agreement dated February 7, 1995, between the
Company and Allan L. Chapman, incorporated herein by this
reference to Exhibit 10.5 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994.
10.5 Indemnification Agreement dated February 7, 1995, between the
Company and Morris Engel, incorporated herein by this reference
to Exhibit 10.6 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994.
10.6 Indemnification Agreement dated February 7, 1995, between the
Company and Ira L. Gottshall, incorporated herein by this reference
to Exhibit 10.7 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994.
10.7 Indemnification Agreement dated February 7, 1995, between the
Company and Peter M. Graham, incorporated herein by this
reference to Exhibit 10.8
<PAGE>
to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994.
10.8 Indemnification Agreement dated February 14, 1995, between the
Company and Ronald LaBow, incorporated herein by this reference
to Exhibit 10.9 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994.
10.9 Indemnification Agreement dated February 7, 1995, between the
Company and Martin Oliner, incorporated herein by this reference
to Exhibit 10.10 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994.
27.1 Financial Data Schedule (included only in the electronic filing)
</TABLE>
<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 DECEMBER 31,
1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 3,068,600
<SECURITIES> 0
<RECEIVABLES> 4,472
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,073,072
<PP&E> 1,256,441
<DEPRECIATION> 437,684
<TOTAL-ASSETS> 3,891,829
<CURRENT-LIABILITIES> 31,811
<BONDS> 0
0
0
<COMMON> 872,836
<OTHER-SE> 2,987,182
<TOTAL-LIABILITY-AND-EQUITY> 3,891,829
<SALES> 0
<TOTAL-REVENUES> 189,302
<CGS> 0
<TOTAL-COSTS> 124,091
<OTHER-EXPENSES> 150,144
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (84,933)
<INCOME-TAX> 1,820
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (86,753)
<EPS-BASIC> (.001)
<EPS-DILUTED> (.001)
</TABLE>
