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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 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: 0-3338
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REGENT GROUP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 22-1558317
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
477 MADISON AVENUE, SUITE 701
NEW YORK, NEW YORK 10022
----------------------------------------
(Address of principal executive offices)
(Zip Code)
212-207-4560
----------------------------------------------------
(Registrant's telephone number, including area code)
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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.
At June 8, 1999 there were 2,296,368 shares of
Common Stock, $.06 2/3 par value, outstanding.
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<PAGE>
REGENT GROUP, INC.
INDEX
Page No.
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PART I - FINANCIAL INFORMATION 1
Item 1. Financial Statements
Balance Sheets as of April 30, 1999
(unaudited) and July 31, 1998 2 - 3
Statements of Operations for the Nine
Months Ended April 30, 1999 and 1998
(unaudited) 4
Statements of Cash Flows for the Nine
Months Ended April 30, 1999 and 1998
(unaudited) 5 - 6
Notes to Financial Statements
(unaudited) 7 - 11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 12 - 16
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 17
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 18
<PAGE>
PART I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Certain information and footnote disclosures required under generally
accepted accounting principles have been condensed or omitted from the following
financial statements pursuant to the rules and regulations of the Securities and
Exchange Commission. It is suggested that the following financial statements be
read in conjunction with the year-end consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the year
ended July 31, 1998.
The results of operations for the nine-month period ended April 30, 1999,
are not necessarily indicative of the results to be expected for the entire
fiscal year or for any other period.
-1-
<PAGE>
REGENT GROUP, INC.
BALANCE SHEETS
ASSETS
April 30, July 31,
1999 1998
----------- ----------
(Unaudited)
Current Assets:
Cash $ 40,048 $ 4,111
Notes receivable 1,858,912 97,898
Prepaid expenses and other current assets 23,011 210,557
---------- ----------
Total Current Assets 1,921,971 312,566
Property, plant and equipment - net 2,514 3,558
Advances -- 1,131,100
---------- ----------
TOTAL ASSETS $1,924,485 $1,447,224
========== ==========
See notes to financial statements.
-2-
<PAGE>
REGENT GROUP, INC.
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
April 30, July 31,
1999 1998
------------ ------------
(Unaudited)
Current Liabilities:
Short-term debt $ 2,062,500 $ 1,157,500
Accrued expenses 270,844 211,329
Due to officer 530,000 342,500
------------ ------------
Total Current Liabilities 2,863,344 1,711,329
------------ ------------
Commitments and Contingent Liabilities
Stockholders' Deficiency:
Preferred stock, par value $1; authorized
500,000 shares (involuntary liquidation
value $777,912):
Convertible Series B, at redemption
value; issued and outstanding 65,141
shares 130,282 130,282
Cumulative Series C, par value $1,
issued and outstanding 64,763 shares 64,763 64,763
Common stock, par value $.06-2/3;
authorized 20,000,000 shares; issued
and outstanding 2,296,368 and
2,351,993 shares 153,168 156,878
Additional paid-in capital 9,440,416 9,500,101
Deficit (10,727,488) (10,116,129)
------------ ------------
Total Stockholders' Deficiency (938,859) (264,105)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIENCY $ 1,924,485 $ 1,447,224
============ ============
See notes to financial statements.
-3-
<PAGE>
REGENT GROUP, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended Three Months Ended
April 30, April 30,
-----------------------------------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
Revenues:
Sales $ -- $ 33,188 $ -- $ 25,177
----------- ----------- ----------- -----------
Costs and Expenses:
Cost of sales -- 4,102 -- --
Selling, general and
administrative
expenses 465,144 2,029,627 140,265 813,084
Interest expense 146,215 275,574 60,320 223,021
----------- ----------- ----------- -----------
611,359 2,309,303 200,585 1,036,105
----------- ----------- ----------- -----------
Loss before income tax
provision (611,359) (2,276,115) (200,585) (1,010,928)
Income tax provision -- -- -- --
----------- ----------- ----------- -----------
Net loss $ (611,359) $(2,276,115) $ (200,585) $(1,010,928)
=========== =========== =========== ===========
Loss per common
share - basic $(.27) $(1.25) $(.09) $(.19)
===== ====== ===== =====
Weighted average number
of common shares
outstanding - basic 2,296,327 1,817,295 2,296,368 1,987,808
=========== =========== =========== ===========
See notes to financial statements.
-4-
<PAGE>
REGENT GROUP, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
April 30,
---------------------------
1999 1998
----------- -----------
Cash flows from operating activities:
Net loss $ (611,359) $(2,276,115)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 1,044 101,140
Unpaid executive compensation 187,500 180,000
Disposal of fixed assets -- 3,737
Common stock issued in lieu of
payment of expenses 1,293 633,925
Cancellation of common stock previously
issued in lieu of payment of expenses (64,688) --
Changes in operating assets and
liabilities net of acquisition 247,061 1,292,005
----------- -----------
Net Cash Used in
Operating Activities (239,149) (65,308)
----------- -----------
Cash flows from investing activities:
Purchase of property, plant and
equipment -- (23,767)
Acquisition of business assets - net of
cash acquired -- (1,063,197)
Advance -- (80,000)
Loans to unaffiliated entity (629,914) --
----------- -----------
Net Cash Used in Investing
Activities (629,914) (1,166,964)
----------- -----------
Cash flows from financing activities:
Proceeds from borrowings 1,112,500 998,200
Repayments of borrowings (207,500) (57,500)
Exercise of common stock warrants -- 220,000
----------- -----------
Net Cash Provided by Financing
Activities 905,000 1,160,700
----------- -----------
Net increase (decrease) in cash and cash
equivalents 35,937 (71,572)
Cash and Cash Equivalents - beginning
of year 4,111 76,441
----------- -----------
Cash and Cash Equivalents - end of
year $ 40,048 $ 4,869
=========== ===========
(Continued)
See notes to financial statements
-5-
<PAGE>
REGENT GROUP, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued)
Nine Months Ended
April 30,
---------------------------
1999 1998
----------- -----------
Changes in operating assets and liabilities -
net of acquisition:
Increase in accounts receivable $ -- $ 23,903
Decrease in prepaid expenses and
sundry receivables 187,546 349,835
Decrease in other assets -- 446,424
Increase in accounts payable -- 176,466
Increase in accrued expenses 59,515 368,183
Decrease in deferred revenue -- (25,000)
----------- -----------
$ 247,061 $ 1,292,005
=========== ===========
Supplementary information:
Cash paid during the year for:
Interest $ 30,764 $ 119,432
=========== ===========
Income taxes $ -- $ --
=========== ===========
Details of Acquisition:
Fair value of assets $ 594,561
Liabilities 1,672,042
-----------
Net Liabilities Assumed $ 1,077,481
===========
Cash paid $ 1,115,000
Less: cash acquired 51,803
-----------
Net Cash Paid for Acquisition $ 1,063,197
===========
See notes to financial statements.
-6-
<PAGE>
REGENT GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION
The balance sheet as of April 30, 1999, the statement of operations for
the nine months ended April 30, 1999 and 1998, and the statement of cash flows
for the periods then ended have been prepared by Regent Group, Inc. (the
"Company" or "Regent") and are unaudited. In the opinion of management, all
adjustments (consisting solely of normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows for
all periods presented have been made. Certain items in the April 30, 1998
consolidated financial statements have been reclassified to conform to April 30,
1999 classifications. The information for July 31, 1998 was derived from audited
financial statements.
2. RECENT DEVELOPMENTS
a) On May 20, 1999, the Company signed a letter of intent to acquire one
hundred (100%) percent of the outstanding common stock of StockSiren.com LLC
(("Stock Siren"), a New York limited liability company which owns the following
websites: Stocksheet.comTM, MarketOwl.comTM, StockTarget.comTM, and
StockSiren.comTM. The websites cater to individual and professional investors.
The Company will acquire the websites in exchange for a total of approximately
11.1 million shares of its common stock. The websites are financial websites
that offer historical data on publicly traded companies, comprehensive reporting
on the performance of numerous Wall Street stock analysts and a financial web
portal through which users are able to access numerous financial research tools.
The transaction is expected to close within four to six weeks.
In connection with the acquisition of Stock Siren, the Company will
contribute all of its assets and liabilities to a wholly-owned subsidiary of
Regent. Immediately after the closing, the Company will sell one hundred (100%)
of the shares of the subsidiary to the debt-holders of the subsidiary.
b) On September 22, 1997, the Company acquired eighty (80%) percent of the
common stock of United States Lead Testing and Removal Service, Inc. ("U.S.
Lead") for $2 million. U.S. Lead markets and sells franchises to provide lead
testings, hazard assessment, in-place management, abatement planning and
monitoring to owners of commercial and residential real estate. U.S. Lead has
executed an agreement with HFS Inc. ("HFS") to become their exclusive preferred
vendor for lead testing services for Century 21, ERA and Coldwell Banker. HFS is
a global consumer services company. Through April 30, 1999, the Company advanced
U.S. Lead $1,131,100 toward the purchase price.
-7-
<PAGE>
REGENT GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
2. RECENT DEVELOPMENTS (continued)
The Company rescinded the acquisition effective April 30, 1998. All assets
and liabilities of U.S. Lead as of that date were reacquired by U.S. Lead. The
Company incurred losses from U.S. Lead from the date of acquisition through the
date of rescission of approximately $1,115,000, which is included in the
statement of operations for the year ending July 31, 1998. On October 31, 1998,
the advances made to U.S. Lead by the Company in the amount of $1,131,100 as
partial payment of the original purchase price were converted into a convertible
debenture due October 30, 1999. The Company can convert the debenture into
17,544,453 shares of U.S. Lead common stock. No interest was earned on the
advances until the signing of the debenture agreement, and no measurement on the
warrant to convert was ascribed by the Company. Upon rescission, the Company
recognized a gain of approximately $1,100,000. Subsequent to the rescission, the
Company loaned U.S. Lead an additional $100,000 due on demand with interest at
15% per annum.
c) On May 20, 1999 the Company announced that by mutual consent of the
parties to its agreement to acquire New Century Ventures, Inc., previously
announced, has been rescinded.
3. BASIS OF PRESENTATION
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business.
The Company experienced recurring losses and negative cash flows from
operations through April 30, 1999. In addition, losses and negative cash flows
from operations have continued throughout the period subsequent to April 30,
1999. Also, as of April 30, 1999, the Company has a working capital deficit of
approximately $1 million.
As stated in recent developments above, the Company will acquire Stock
Siren and its four domaine websites. The Company will also transfer and sell its
net liabilities to the debt-holders of the Company. The Company's ability to
continue as a going concern is dependent upon the new acquisitions to generate
enough sales to support the Company's overhead. In addition the operations of
the Company is dependent upon its ability to obtain needed working capital.
There is no assurance that the financing will be completed nor that the closing
will be consummated. This raises substantial doubt about the ability of the
Company to continue as a going concern.
These financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classifications of liabilities that might be necessary should the Company be
unable to continue as a going concern.
-8-
<PAGE>
REGENT GROUP, INC.
Notes to Financial Statements
(Unaudited
4. NOTES RECEIVABLE
Notes receivable consist of the following:
April 30, July 31,
1999 1998
---------- ----------
Loan to Edenfield Enterprises, Inc.,
interest at 8%, due on demand $ 97,898 $ 97,898
Loan to U.S. Lead Testing and
Removal Service, Inc., converted
into a debenture on October 31,
1998, interest at 8%, due October
30, 1999; convertible into
17,544,453 shares of U.S. Lead 1,131,100 1,131,100
Loan to U.S. Lead Testing and Removal
Service, Inc., interest at 15%, due
on demand 100,000 --
Loan to New Century Ventures, Inc.,
interest at 8%, due on demand 529,914 --
---------- ----------
1,858,912 1,228,998
Current portion 1,858,912 97,898
---------- ----------
$ -- $1,131,100
========== ==========
5. DEBT
Short-term debt is as follows:
April 30, July 31,
1999 1998
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Unsecured note, due on demand,
interest at 12% per annum (1) $ 367,500 $ 432,500
Secured note, due March 20, 2000,
interest at 7.5% per annum (2) 100,000 100,000
Unsecured note, due on demand,
interest at 12% per annum (3) 200,000 200,000
Unsecured notes, due on demand,
interest from 8% to 12% per
annum (4) 250,000 250,000
Unsecured notes, due on demand,
interest at 12% per annum (5) 55,000 55,000
Unsecured notes, due on demand,
interest at 12% per annum (6) 240,000 120,000
Secured note, due October 30, 1999,
interest at 15% per annum (7) 100,000 --
-9-
<PAGE>
REGENT GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
5. DEBT (continued)
April 30, July 31,
1999 1998
---------- ----------
Secured note, due April 2000, 750,000 --
---------- ----------
interest at 16% per annum (8) $2,062,500 $1,157,500
========== ==========
(1) The unsecured note is payable to Mrs. Barbara Greenfield ("Mrs.
Greenfield"), wife of Mr. Marvin E. Greenfield ("Mr. Greenfield"), the
Company's President and Chief Executive Officer. Per the loan agreement,
Mrs. Greenfield received shares of Regent common stock as additional
consideration for all amounts loaned prior to July 31, 1998. The original
loan agreement was amended as of July 31, 1998. Mrs. Greenfield was to
receive additional shares of common stock subsequent to July 31, 1998 in
connection with her loan. The amended loan agreement, as agreed by both
parties, discontinues the receiving of any shares of Regent common stock
as of July 31, 1998. Mrs. Greenfield returned 57,500 shares to the Company
as of July 31, 1998 that were previously issued to her for additional
consideration subsequent to July 31, 1998. The Company has recorded
interest expense of $32,731 for the nine months ended April 30, 1999.
(2) The note payable to Republic Bank is collateralized by a certificate of
deposit owned by an affiliate of Mrs. Greenfield.
(3) The unsecured note is payable to a shareholder of the Company. On
September 18, 1997, in connection with this note, the unsecured
shareholder received 25,000 shares of Regent common stock as additional
consideration. The Company has recorded interest expense in the amount of
$14,071 and $17,227 for the nine months ended April 30, 1999 and 1998,
respectively, in connection with this note. On December 16, 1998, $100,000
of this note was repaid. In addition, interest in the amount of $23,277
was also paid. On March 22, 1999 an additional $100,000 was loaned to the
Company.
(4) The unsecured notes are payable to BSM, Inc., a shareholder of Regent. The
Company has recorded interest expense of $14,959 for the nine months ended
April 30, 1999.
(5) The unsecured notes are payable to Mrs. Felicia Rubin ("Mrs. Rubin"),
daughter of Mr. Greenfield. The loan agreement is similar to the note due
Mrs. Greenfield. (See (1) above.) Mrs. Rubin is still due 625 shares as of
July 31, 1998.
(6) The unsecured note is payable to Mrs. Valerie Greenfield ("Mrs. V.
Greenfield"), mother of Mr. Greenfield. The loan agreement is similar to
the note due Mrs. Greenfield. (See (1) above.) Mrs. V. Greenfield is still
due 13,125 shares as of July 31, 1998.
-10-
<PAGE>
REGENT GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
5. DEBT (continued)
(7) The note is payable to Paul Rosen, a director of the Company, and is
secured by common stock of Compost American Holding Company Inc. pledged
by a shareholder of Regent. In connection with this note, the holder was
issued warrants to purchase 100,000 shares of common stock of the Company
at an exercise price of $1.00 per share. These warrants expire one year
from the date the note is paid off or the maturity date, whichever is
earlier. The Company has recorded interest expense of $7,397 in connection
with this note, of which $3,750 has been paid.
(8) The note payable to Ballydine Investments, Limited is secured by a fifteen
(15%) percent interest in New Century Ventures, Inc. The Company has
recorded interest in the amount of $44,055 for the nine months ended April
30, 1999.
6. NEW ACCOUNTING STANDARDS
SEGMENT INFORMATION - During June 1997, the Financial Standards Board
issued Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information." This statement requires the
disclosure of financial and descriptive information about reportable operating
segments. Operating segments are defined as components of an enterprise about
which separate financial information is available that is evaluated regularly in
deciding how to allocate resources and in assessing performance. The Company has
not yet completed its evaluation of this Statement. This Statement is effective
for the Company's 1999 year end financial statements.
7. LOSS PER COMMON SHARE
Basic earnings per common share is computed by dividing net earnings by
the weighted average number of common shares outstanding during the period.
Diluted earnings per common share are computed by dividing net earnings by the
weighted average number of common and common stock equivalent shares outstanding
during the period. Common stock equivalents are excluded from the loss per share
calculated the nine months ended April 30, 1999 and 1998 because their effect
would be antidilutive. Common stock equivalents relate to stock options and
warrants.
-11-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company continues to pursue investment opportunities. On May 20, 1999
the Company entered into a letter of intent to acquire one hundred (100%)
percent of the outstanding common stock of StockSiren.com LLC, which owns four
financial websites. In connection with this acquisition the Company will
transfer and sell to the debt-holders of the Company, all of its assets and
liabilities.
All prior agreements to purchase any other companies have been rescinded by
mutual consent of all parties.
The Company believes the cash flow from the Stock Siren acquisition should
be sufficient to fund the operations of the Company over the next twelve months.
The Company's ability to continue as a going concern is dependent upon its
ability to obtain needed initial working capital through additional equity
and/or debt financing. There is no assurance that the financing will be
completed nor that the acquisition will be consummated. This raises substantial
doubt about the ability of the Company to continue as a going concern.
-12-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS
Nine Months Ended April 30, 1999 vs. Nine Months Ended April 30, 1998
---------------------------------------------------------------------
On September 22, 1997, Regent acquired eighty (80%) percent of the
outstanding common stock of U.S. Lead. The operating results of U.S. Lead have
been included in the statement of operations from the date of acquisition. On
April 30, 1998, the Company rescinded the transaction with U.S. Lead. The
financial statements for the period ended January 31, 1998 include the accounts
of the company and its subsidiary through the rescission date.
Sales
Sales decreased from $33,188 for the nine months ended April 30, 1998 to
$0 for the nine months ended April 30, 1999. The Company attributes the decrease
to the rescission of the acquisition of U.S. Lead, its only operating
subsidiary, in April 1998.
Cost of Sales
Cost of sales decreased from $4,102 for the nine months ended April 30,
1998 to $0 for the nine months ended April 30, 1999. The Company attributes the
decrease primarily to the reasons described above.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased from $2,029,627 for
the nine months ended April 30, 1998 to $465,144 for the nine months ended April
30, 1999. The Company attributes the decrease primarily to the reasons described
above.
Interest Expense
Interest expense decreased from $275,574 for the nine months ended April
30, 1998 to $146,215 for the nine months ended April 30 1999. The Company has
incurred debt to finance the loans to U.S. Lead and New Century Ventures and
help contribute to Regent's overhead expenses.
Three Months Ended April 30, 1999 vs. Three Months Ended April 30, 1998
-----------------------------------------------------------------------
Sales
Sales decreased from $25,177 for the three months ended April 30, 1998 to
$0 for the three months ended April 30, 1999. The Company attributes the
decrease to the rescission of the acquisition of U.S. Lead, its only operating
subsidiary, in April 1998.
-13-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS (continued)
Cost of Sales
Cost of sales decreased from $-0- for the three months ended April 30,
1998 to $0 for the three months ended April 30, 1999. The Company attributes the
decrease primarily to the reasons described above.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased from $813,084 for
the three months ended April 30, 1998 to $140,265 for the three months ended
April 30, 1999. The Company attributes the decrease primarily to the reasons
described above.
Interest Expense
Interest expense decreased from $223,021 for the three months ended April
30, 1998 to $60,320 for the three months ended April 30, 1999. The decrease is
primarily due to an over-accrual during the first quarter of the Company's prior
fiscal year. Loan agreements were amended as of July 31, 1998, reducing the
amount of common stock to be used in connection with various financing the
Company received.
ACCOUNTING STANDARDS
For information regarding certain promulgated accounting standards, see
Note 6 of Notes to Financial Statements.
OTHER MATTERS
YEAR 2000
Background
The Year 2000 problem is the result of computer programs being written
using two digits (rather than four) to define the applicable years. Any of the
Company's programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000, which could result in
miscalculations or system failures.
The Company does not rely heavily on computer technologies to operate its
business. However, in 1998, the Company conducted an initial assessment of its
information technology to determine which Year 2000 related problems might cause
processing errors or computer system failures.
-14-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
The following discussion of the implications of the Year 2000 Problem for
the Company contains numerous forward-looking statements based on inherently
uncertain information. The cost of the project and the date on which the Company
plans to complete its internal Year 2000 modifications are based on the
Company's best estimates, which were derived utilizing a number of assumptions
of future events including the continued availability of internal and external
resources, third party modifications and other factors. However, there can be no
guarantee that these estimates will be achieved, and actual results could
differ. Moreover, although the Company believes it will be able to make the
necessary modifications in advance, there can be no guarantee that failure to
modify the systems would not have a material adverse effect on the Company.
In addition, the Company places a high degree of reliance on computer
systems of third parties, such as customers, trade suppliers and computer
hardware and commercial software suppliers Although the Company is assessing the
readiness of these third parties and preparing contingency plans, there can be
no guarantee that the failure of these third parties to modify their systems in
advance of December 31, 1999 would not have a material adverse effete on the
Company.
Readiness
The Year 2000 project is intended to ensure that all critical systems,
devices and applications, as well as data exchanged with customers, trade
suppliers and other third parties, have been evaluated and will be suitable for
continued use into and beyond the Year 2000.
Since early 1998, the Company has required Year 2000 compliance statements
from all suppliers of the Company's computer hardware and commercial software.
Regardless of the compliance statements, all third party hardware and software
will also be subjected to testing to reconfirm the Year 2000 readiness.
Cost
The Company estimates that the total cost of achieving Year 2000 readiness
for its internal systems, devices and applications is approximately $25,000.
Year 2000 project costs are difficult to estimate accurately, and the projected
cost could change due to unanticipated technological difficulties and Year 2000
readiness of third parties.
Contingency Plans
In the event that the efforts of the Company's Year 2000 project do not
address all potential systems problems, the Company is currently developing
business interruption contingency plans. The Company believes, however, that due
to the widespread nature of potential Year 2000 issues, the contingency planning
process is an ongoing one which will require further modifications as the
Company obtains additional information regarding (1) the Company's project and
(2) the status of third party Year 2000 readiness. Contingency planning for
possible Year 2000 disruptions will continue to be defined, improved and
implemented.
-15-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Risks
The Company believes that completed and planned modifications and
conversions of its critical systems, devices and applications will allow it to
be Year 2000 compliant in a timely manner. There can be no assurances, however,
that the Company's internal systems, devices and applications or those of third
parties on which the Company relies will be Year 2000 compliant by year 2000 or
that the Company's or third parties' contingency plans will mitigate the effects
of any non-compliance. An interruption of the Company's ability to conduct its
business due to a Year 2000 readiness problem could have a material adverse
effect on the Company.
This Form 10-Q, other than the historical financial information, may
consist of forward-looking statements that involve risks and uncertainties,
including, but not limited to, statements contained in "Business" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." Such statements are based on many assumptions and are subject to
risks and uncertainties. Actual results could differ materially from the results
discussed in the forward-looking statements due to a number of factors
including, but not limited to, those identified in the preceding paragraph as
well as those set forth under "Business - Risks and Uncertainties" in the
Company's Form 10-K for the year ending July 31, 1998.
-16-
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: Exhibit 27.1 Financial Data Schedule.
(b) There were no Current Reports on Form 8-K filed by the registrant
during the three months ended April 30, 1999.
-17-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
REGENT GROUP, INC.
---------------------------------------------
(Registrant)
Date: June 11, 1999 By: /s/ Marvin E. Greenfield
---------------------------------------------
Marvin E. Greenfield, President
and Treasurer Duly Authorized
Officer of the Registrant
(Principal Financial Officer)
-18-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM REGENT GROUP
INC. AND SUBSIDIARY FINANCIAL STATEMENTS AT APRIL 30, 1999 AND THE NINE MONTHS
THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-END> APR-30-1999
<CASH> 40,048
<SECURITIES> 0
<RECEIVABLES> 1,858,912
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,921,971
<PP&E> 42,711
<DEPRECIATION> 40,197
<TOTAL-ASSETS> 1,924,485
<CURRENT-LIABILITIES> 2,863,344
<BONDS> 0
0
195,045
<COMMON> 153,168
<OTHER-SE> (1,287,072)
<TOTAL-LIABILITY-AND-EQUITY> 1,924,485
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 465,144
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 146,215
<INCOME-PRETAX> (611,359)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (611,359)
<EPS-BASIC> (.27)
<EPS-DILUTED> (.27)
</TABLE>
