FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
(X) Quarterly report pursuant to section 13 or 15(d) of the
SECURITIES AND EXCHANGE ACT OF 1934
For the Quarterly period ended September 30, 1997
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 for the transition
period from to
Commission File No. 0-17843
FLORIDA
(State or other jurisdiction of
incorporation or organization)
REGAL ONE CORPORATION
(name of small business issuer in its charter)
551 Driftstone Avenue, Las Vegas, NV 89123
(Address of principal executive offices)
95-4158065
(IRS Employer
Identification No.)
Issuer's telephone number: (702) 897-5331
Check whether the issuer (1) filed all reports required to
be filed by section 13 or 15(d) of the Exchange Act during the
past 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13, or 15(d) of the Exchange
Act after the distribution of Securities under a plan confirmed
by court.
Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuers
classes of common stock, as of the latest practicable date:
1,196,875 shares as of January 5, 1998.<PAGE>
REGAL ONE CORPORATION
Form 1O-Q for the quarter ended September 30, 1997
TABLE OF CONTENTS AND INFORMATION REQUIRED IN REPORT
Part I. Financial Information
Item 1. Financial Statements (unaudited): Page
Balance Sheet as of September 30, 1997 3
Statements of Operations for the quarters ended 4
September 30, 1997 and 1996
Statements of Cash Flows for the quarters ended 5
September 30,1997 and 1996
Notes to the Financial Statements 6
Item 2. Managements discussion and Analysis of Plan of 7
Operation
Part II. Other Information
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security 11
holders
Item 5. Other Information 11
Item 6. Exhibits and reports on form 8-K 11
SIGNATURES 12
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
REGAL ONE CORPORATION
Balance Sheet
(Unaudited)
September 30, 1997
ASSETS
Cash $ 55
___________
Total Assets $ 55
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts Payable and accrued expenses $ 95,840
Due to Officer and Shareholder 258
___________
Total Liabilities $ 97,738
Stockholders' Equity (Deficit):
Preferred Stock; $.Ol par value, authorized 50,000,000 shares;
Series A Preferred Stock; No Shares
Issued and Outstanding -0-
Series B Preferred Stock
Issued and Outstanding 208,965 500
shares (note 2)
Common Stock; no par value, authorized 50,000,000 shares;
Issued and Outstanding 1,196,875 shares 5,941,138
Accumulated Deficit ( 6,037,321)
Total Stockholders' Equity (Deficit) ( 95,683)
Total Liabilities and Stockholders' $ 55
Equity (Deficit)
___________
See accompanying Notes to Financial Statements
<PAGE>
REGAL ONE CORPORATION
Statement of Operations
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
For the quarter ended For the Nine Months
September 30 ended September 30
<S> <C> <C> <C> <C>
1997 1996 1997 1996
Revenues $ -0- $ -0- $ -0- $ -0-
Operating Expenses:
General and Administrative 6,380 7,753 38,905 7,778
expenses
_________ _________ ________ ________
Loss From Operations (6,380) (7,753) (38,905) ( 7,778)
Other Income (expense):
Equity Loss of Subsidiary -0- -0- -0- (246,227)
sold
Gain on sale of subsidiary -0- -0- -0- 295,803
_________ _________ ________ ________
Total Other Income (Expense) -0- -0- -0- 49,576
_________ _________ ________ ________
Income (Loss) Before income taxes (6,380) (7,753) (38,905) 41,798
Provision for Income Taxes -0- -0- -0- -0-
_________ _________ ________ ________
Net Income (Loss) (6,380) (7,753) (38,905) 41,798
Primary:
Net Income (Loss) per share $( .01) $( .01) $( .03) $ .04
_________ _________ ________ ________
Weighted average common and 1,196,875 1,184,575 1,196,875 1,142,208
common equivalent shares
outstanding
Fully Diluted:
Net Income (Loss) per share $( .01) $( .01) $( .03) $ .01
_________ _________ ________ ________
Weighted average common and 1,196,875 3,713,198 1,196,875 3,670,831
common equivalent shares
outstanding
See accompanying Notes to Financial Statements
</TABLE>
<PAGE>
REGAL ONE CORPORATION
Statement of Cash Flows
(Unaudited)
For the Nine Months ended
September 30
Cash flows from operating activities: 1997 1996
Net Loss $(38,905) $ 41,798
Adjustments to reconcile net loss to net cash
used by operating actvities:
Amortization of Patent Rights -0- 83,010
Gain on sale of Subsidiary -0- (295,803)
Other non-cash items -0- 71,918
Increase (Decrease) in accounts payable 23,552 13,054
and accrued expenses
Increase in due to Officer and Shareholder 258
__________ __________
Total Adjustments 23,810 (127,821)
__________ __________
Net cash used by operating actvities (15,095) ( 86,023)
Cash flows from investing activities:
Common Stock Warrants exercised -0- 130,000
Net cash provided by investing actvities -0- 130,000
Cash flows from financing activities:
Payment of contract payable -0- ( 50,000)
Net cash used by financing actvities -0- ( 50,000)
Net Decrease in cash (15,095) ( 6,023)
Cash at beginning of period 15,150 6,023
Cash at end of period $ 55 $ 40
__________ __________
Supplemental disclosure of cash flow information:
Cash paid during the period for
Income taxes $ -0- $ -0-
Interest $ -0- $ -0-
See accompanying Notes to Financial Statements
<PAGE>
REGAL ONE CORPORATION
Notes to the financial Statements
(Unaudited)
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization and Operations
Regal One Corporation (the "Company") is a Florida
Corporation incorporated in 1959. Through the fiscal year ended
December 31, 1992, the Company was engaged in the acquisition and
management of a portfolio of real estate. During 1992, the
Company decided to abandon its real estate operations and pursue
other business operations. In January 1993, the Company executed
an agreement to acquire Xechem, Inc., however the transaction was
terminated in January 1994 pursuant to a settlement agreement.
In August 1995, the Company acquired Carbonex Systems Corporation
("Carbonex"), a development stage company, in a reverse
acquisition. Effective on June 1, 1996, Carbonex was sold (See
Note 2). In November 1996, the Company executed a Letter of
Intent to acquire all of the issued and outstanding common stock
of Quality Franchise Systems, Inc. However, a final agreement
was never completed, and the Company is no longer pursuing this
acquisition. In June 1997, the Company announced its intent to
acquire substantially all of the assets of Safesight Inc. a
development stage company engaged in the design of vehicle anti-collision
warning products. However, a final agreement was never
completed and the Company is no longer pursuing this acquisition.
Basis of Presentation
The unaudited financial statements presented herein have
been prepared by the Company, without audit, pursuant to the
rules and regulations for interim financial information and the
instruction to Form 10-QSB and Regulation S-B. Accordingly,
certain information and footnote disclosure normally included in
financial statements prepared in accordance with generally
accepted accounting principals have been omitted. These
unaudited financial statements should be read in conjunction with
the financial statement and notes thereto included in the
Company's Annual Report Form 10-KSB for the fiscal year ended
December 31, 1996. In the opinion of management, the unaudited
financial statements reflect all adjustments (consisting of
normal recurring accruals only) which are necessary to present
fairly the financial position, results of operation, and changes
in cash flows of the Company. Operating results for the interim
periods are not necessarily indicative of the results which may
be expected for the entire year.
Income Taxes
The Company did not provide for income taxes in the
accompanying interim financial statements since the Company does
not anticipate generating taxable income for the full year.
Net Income (Loss) Per Share Computation
Net income (loss) per share is based on the weighted average
number of common stock warrants for all periods presented. The
outstanding preferred stock and common stock warrants are not
considered in the calculations because they are anti-dilusive.
NOTE 2 - ACQUISITION OF CARBONEX SYSTEMS CORPORATION
Effective August 7, 1995, The Company acquired in a reverse
acquisition all of the issued and outstanding shares of common
stock of Carbonex Systems Corporation ("Carbonex"), a development
stage Delaware Corporation, owning certain exclusive rights to a
proprietary emission reduction system for internal combustion
engines. To effect the acquisition of Carbonex, the Company
issued a total of 464,000 shares of 8.75% convertible,
participating voting series B Preferred Stock. Each share of
series B Preferred Stock may be converted into 100 shares of
common stock and has 100 votes allowed to a share of common
stock. The amortization of Patent Rights in 1995 is related to a
patent acquired as part of Carbonex.
Effective on June 1, 1996, the Company entered into a Stock
Transfer Settlement Agreement and General Release whereby all the
issued and outstanding shares of common stock of Carbonex were
exchanged for 255,035 shares of Series B Preferred Stock. As
part of the agreement, the Company assumed certain specified
accounts payable totaling approximately $61,000. The net impact
of this transaction was a gain on sale of approximately $295,803,
primarily due to the forgiveness of the debt and accrued interest
payable.
NOTE 3 - GOING CONCERN AND MANAGEMENT'S PLAN
For the fiscal year ended December 31, 1996, the independent
auditors report included an explanatory paragraph calling
attention to a going concern issue. The Company has suffered
recurring losses from operations and at September 30, 1997,
continues to have an accumulated deficit. The accompanying
financial statements have also been prepared contemplating
continuation of the Company as a going concern, which is
dependent upon the Company obtaining additional financing to
satisfy the operating needs of the Company and/or completing a
successful merger.
NOTE 4 - STOCK OPTION PLAN
The Company has a stock option plan for its employees,
directors, officers, and consultants or advisors of the Company.
In May 1995, 3,000,000 shares were registered on Form S-8 for
this plan.
Managements Discussion and Analysis of Plan of Operation
The following discussion should be read in conjunction with
the Company's financial statements and notes thereto included
elsewhere in this Form 10-QSB report. In addition, the
discussion of the Company's expected plan of operation included
in the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996, is incorporated herein in its entirety
as the discussion of the Plan of Operation as required by Item
303(a) Regulation SB.
Plan of Operation
Through the fiscal year ended December 31, 1992, the Company
was engaged in the acquisition and management of a portfolio of
real estate. During 1992, the Company decided to abandon its
real estate operations and pursue other business operations.
In January 1993, the Company executed an agreement to
acquire Xechem, Inc., however, the transaction was terminated in
January 1994 pursuant to a settlement agreement.
In August of 1995, the Company acquired all of the issued
and outstanding common stock of Carbonex Systems Corporation
("Carbonex"). Effective on June 1, 1996, the Company entered
into a stock Transfer settlement agreement and general release
whereby all of the issued and outstanding common stock of
Carbonex were exchanged for 255,035 shares of Series B Preferred
Stock (See Note 2).
In November 1996, the Company entered into a Letter of
Intent to acquire all of the issued and outstanding stock of
Quality Franchise Systems, Inc. However, a final agreement was
never completed and the Company is no longer pursuing this
acquisition.
In June 1997, the Company announced its intent to acquire
substantially all of the assets of Safesight Inc. a development
stage company engaged in the design of vehicle anti-collision
warning products. However, a final agreement was never completed
and the Company is no longer pursuing this acquisition.
At present the Company is not in business operation but is
continuing to pursue acquisition candidates. Because of
liquidating factors, the independent auditors report for the
fiscal year ended December 31, 1996 includes an explanatory
paragraph calling attention to a going concern issue. The
Company has suffered recurring losses and at September 30, 1997
has a stockholders' deficit. The Company's ability to continue
as a going concern is dependent upon the Company obtaining
additional financing to satisfy the operating needs of the
Company and/or completing a successful merger.
Liquidity and Capital Resources - September 30, 1997 compared to
December 31, 1996
During the prior year and the current quarter, the Company
had continuing losses from operations. There can be no
assurances that the Company will be able to secure long-term
borrowings with which to finance its future operations. The
Company does not currently have any established bank lines of
credit. The Company's liquidity is reflected in the table below,
which shows comparative Working Capital, or current assets less
current liabilities which is an important measure to the
Company's ability to meet its short-term obligations.
September 30, December 31,
1997 1996
Working Capital $( 95,683) $( 56,778)
The Company's financial condition at September 30, 1997
reflects an immediate inability to meet its short-term
obligations. At September 30, 1997, the Company had a cash
balance of $55 and current liabilities of $95,738.
Capital Expenditures and Commitments
During the nine months ended September 30, 1997, the Company
had no capital expenditures. Other than the necessary computer
and office equipment, the Company has no current commitments for
material capital expenditures. The Company believes its need for
additional capital will continue. The amount of such additional
capital required is uncertain and may be beyond that generated
from operations. There can be no assurance that the Company will
be able to obtain any such capital on satisfactory terms.
Results of Operations - The quarter ended September 30, 1997
compared to the quarter ended September 30, 1996
The Company reported no revenues for the quarters ended
September 30, 1997 and 1996. During the quarters and nine months
ended September 30, 1997, operating expenses were $6,380 and
$38,905, respectively, as compared to $1,753 and 7,778,
respectively, for the quarter and nine months ended September 30,
1996 (consisting primarily of professional and consulting fees).
The nine months ended September 30, 1996, included an equity loss
of subsidiary sold of $246,227, which was offset by a gain on
sale of subsidiary of $295,803. As a result, the quarter and
nine months ended September 30, 1997 had net losses of $6,380 and
$38,905, respectively, as compared to net (loss) income of
$(7,753) and $41,798, respectively, for the quarter and nine
months ended September 30, 1996.
Factors That May Affect Future Results
A number of uncertainties exist that may affect the
Company's future operating results including the possibility of
uncertain general economic conditions, market acceptance of the
Company's operations, and the Company's ability to acquire long-term funding.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not aware of any litigation either
pending, asserted, unasserted, or threatened.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a vote of Security Holders
None
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Page No.
Exhibits
None
Form S-K
Form 8-K
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
Dated: January 20, 1998
REGAL ONE CORPORATION
(Registrant)
By /s/ Israel Rubinstein
Israel Rubinstein, President
