x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the quarterly period ended: June 30,
2009
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OR | |
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
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For
the transition period from _______________ to
_______________
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Delaware |
72-0888772
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(State or other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) |
Identification
No.)
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610
Jensen Beach Boulevard
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Jensen Beach, Florida |
34957
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(Address of Principal Executive Office) |
(Zip
Code)
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Large accelerated
filer ¨
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Accelerated
filer ¨
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Non-accelerated
filer (Do not check if a smaller reporting company) ¨
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Smaller reporting
company x
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Part
I. Financial Information
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Item
1. Financial Statements
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Consolidated
Balance Sheets June 30, 2009 (unaudited) and December 31,
2008
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3
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Consolidated
Statements of Operations (Unaudited)
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4
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Consolidated
Statement of Cash Flows (Unaudited)
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5
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Notes
to Consolidated Financial Statements
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6
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Item 2. Management’s Discussion and
Analysis of Financial Condition and Results of Operations
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8
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Item
3. Quantitative and Qualitative Disclosures About Market
Risk
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12
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Item
4. Controls and Procedures
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12
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Part
II. Other Information
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Item
1. Legal Proceedings
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12
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Item
1A. Risk Factors
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12
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Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
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12
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Item
3. Defaults Upon Senior Securities
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12
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Item
4. Submission of Matters to a Vote of Security
Holders
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12
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Item
5. Other Information
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13
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Item
6. Exhibits
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13
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Signatures
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15
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Assets
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||||||||
June
30,
2009
(Unaudited)
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December
31, 2008
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Current
Assets
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||||||||
Cash and cash
equivalents
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$ | 645,926 | $ | 7,469,213 | ||||
Marketable
securities
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9,499,561 | 2,900,000 | ||||||
Interest receivable, net of
allowance of $644,109
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- | - | ||||||
Other current
assets
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122,533 | 404,424 | ||||||
Total Current
Assets
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10,268,020 | 10,773,637 | ||||||
Property,
plant and equipment, net
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7,366 | 9,283 | ||||||
Investment
in partnerships/LLC
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11,807,933 | 10,972,900 | ||||||
Deferred
tax asset
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1,105,000 | 1,105,000 | ||||||
Other
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1,300 | 1,300 | ||||||
Total Assets
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$ | 23,189,619 | $ | 22,862,120 |
Liabilities
and Shareholders’ Equity
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||||||||
Current
Liabilities
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||||||||
Accounts payable and accrued
expenses
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$ | 273,477 | $ | 300,600 | ||||
Settlement
payable
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3,044,092 | 3,025,269 | ||||||
Total
Liabilities
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3,317,569 | 3,325,869 | ||||||
Commitments
and contingencies
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- | - | ||||||
Shareholders'
equity
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||||||||
Serial preferred stock Series C
and D, 234,544 shares outstanding,
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||||||||
not subject to mandatory
redemption (Maximum liquidation
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||||||||
preference $21,141,940)
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486,076 | 486,076 | ||||||
Common stock, par value $.01;
authorized 8,000,000 shares;
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||||||||
issued 3,534,812 shares;
outstanding 3,468,544 shares
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35,349 | 35,349 | ||||||
Additional paid-in
capital
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7,376,219 | 7,281,219 | ||||||
Readjustment resulting from
quasi-reorganization at
December
1987
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(1,670,596 | ) | (1,670,596 | ) | ||||
Retained earnings
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14,053,852 | 13,813,053 | ||||||
Note receivable - sale of stock,
net of allowance of $2,440,000
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- | - | ||||||
Treasury stock, 66,268 shares at
cost
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(408,850 | ) | (408,850 | ) | ||||
Total Shareholders'
Equity
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19,872,050 | 19,536,251 | ||||||
Total
Liabilities and Shareholders’ Equity
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$ | 23,189,619 | $ | 22,862,120 | ||||
Three
Months Ended June 30,
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Six
Months Ended June 30,
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|||||||||||||||
2009
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2008
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2009
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2008
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Net
Sales
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$ | - | $ | - | $ | - | $ | - | ||||||||
Costs
and expenses
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General and administrative
expenses
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324,073 | 341,722 | 558,104 | 622,531 | ||||||||||||
324,073 | 341,722 | 558,104 | 622,531 | |||||||||||||
Loss
from operations
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(324,073 | ) | (341,722 | ) | (558,104 | ) | (622,531 | ) | ||||||||
Income
from equity investment in partnerships
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391,602 | 525,083 | 835,033 | 1,213,128 | ||||||||||||
Interest
and dividend income
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1,167 | 36,678 | 2,866 | 97,385 | ||||||||||||
Interest
expense
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(9,502 | ) | - | (18,823 | ) | - | ||||||||||
Net
income before income taxes
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59,194 | 220,039 | 260,972 | 687,982 | ||||||||||||
Income
tax expense
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10,000 | 11,421 | 20,174 | 21,061 | ||||||||||||
Net
Income
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$ | 49,194 | $ | 208,618 | $ | 240,798 | $ | 666,921 | ||||||||
Net
Income per common share
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Basic
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$ | .01 | $ | .06 | $ | .07 | $ | .19 | ||||||||
Diluted
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$ | .01 | $ | .06 | $ | .06 | $ | .18 | ||||||||
Weighted
average number of common shares outstanding
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Basic
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3,534,812 | 3,532,445 | 3,534,812 | 3,532,127 | ||||||||||||
Diluted
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3,723,010 | 3,761,843 | 3,717,091 | 3,764,356 |
Six Months Ended June 30,
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2009
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2008
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Cash
flows from operating activities
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Net income
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$ | 240,798 | $ | 666,921 | ||||
Adjustments to reconcile net
income to
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net cash used in operating
activities
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Depreciation and
amortization
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1,917 | 1,917 | ||||||
(Income) from equity investment
in partnerships
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(835,033 | ) | (1,213,128 | ) | ||||
Stock-based
compensation
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95,000 | - | ||||||
Changes in operating assets and
liabilities
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14,850 | |||||||
Other current
assets
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281,892 | (11,400 | ) | |||||
Accounts payable and accrued
expenses
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(27,123 | ) | (96,764 | ) | ||||
Settlement
payable
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18,823 | - | ||||||
Net cash (used in) operating
activities
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(223,726 | ) | (637,604 | ) | ||||
Cash
flows from investing activities
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||||||||
Proceeds
from partnership distributions
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- | 875,000 | ||||||
Proceeds from sales of
marketable securities
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32,100,000 | 28,600,000 | ||||||
Purchases of marketable
securities
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(38,699,561 | ) | (28,812,292 | ) | ||||
Net
cash provided by (used in) investing activities
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(6,599,561 | ) | 662,708 | |||||
Increase
(decrease) in cash and cash equivalents
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(6,823,287 | ) | 25,104 | |||||
Cash
and cash equivalents – beginning
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7,469,213 | 253,566 | ||||||
Cash
and cash equivalents – ending
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$ | 645,926 | $ | 278,670 | ||||
Six
Months Ended June 30,
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||||||||
2009
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2008
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Supplemental
disclosures of cash flow information:
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Cash paid during the period
for:
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Interest
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$ | - | $ | - | ||||
Income taxes
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$ | 98,324 | $ | 66,315 |
3.1(i)(a)
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Restated
Certificate of Incorporation of the Company (filed as Exhibit 3.1(i)(a) to
the Company's Quarterly Report on Form 10-Q for the period ended September
30, 2002, filed on November 19, 2002, and incorporated herein by
reference).
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3.1(i)(b)
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Corrected
Certificate of Amendment reflecting amendment to Restated Certificate of
Incorporation of the Company (filed as Exhibit 3.1(i)(b) to the Company's
Quarterly Report
on Form 10-Q for the period ended September 30, 2002, filed on November
19, 2002, and incorporated herein by reference).
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3.1(i)(c)
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Certificate
of Amendment of Restated Certificate of Incorporation of Regency
Affiliates, Inc. (filed as Exhibit A to the Company's Information
Statement on Schedule 14C filed on October 27, 2003 and incorporated
by reference herein).
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3.1(i)(d)
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Certificate
of Designation - Series B Preferred Stock, $10 Stated Value, $.10 par
value (filed as Exhibit to Form 10-K dated June 7, 1993 and incorporated
herein by reference).
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3.1(i)(e)
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Amended
and Restated Certificate of Designation, Series C Preferred Stock, $100
Stated Value, $.10 par value (filed as Exhibit 99.4 to the Company's
Current Report on
Form 8-K filed on October 18, 2002, and incorporated herein by
reference).
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3.1(i)(f)
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Certificate
of Designation - Series D Junior Preferred Stock, $10 Stated Value, $.10
par value (filed as Exhibit to Form 10-K dated June 7, 1993 and
incorporated herein by reference).
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3.1(i)(g)
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Certificate
of Designation - Series E Preferred Stock, $100 Stated Value, $.10 par
value (filed as Exhibit 4.1 to the Company's Annual Report on Form 10-K
for the year ended
December 31, 1995 at page E-1, and incorporated herein by
reference).
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3.1(ii)(a)
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By-laws
of the Company (filed as Exhibit 3.4 to the Company's Registration
Statement on Form S-1, Registration Number 2-86906, and incorporated
herein by reference).
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3.1.(ii)(b)
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Amendment
No. 1 to By-Laws of the Company (filed as Exhibit 3.1(ii)(b) to the
Company's Quarterly Report on Form 10-Q for the period ended September 30,
2002, filed on November 19, 2002, and incorporated herein
by reference).
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10.1*
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Stock
Option Agreement, dated as of April 30, 2009 between the Company and
Laurence S. Levy (incorporated by reference from the Company’s Annual
Report on Form 10-K for the year ended December 31, 2008).
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31.1+
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Chief
Executive Officer’s Certificate, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
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31.2+
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Chief
Financial Officer’s Certificate, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
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32.1+
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Chief
Executive Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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32.2+
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Chief
Financial Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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+
Filed herewith
* Indicates that exhibit is a
management contract or compensatory plan or
arrangement.
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REGENCY AFFILIATES, INC. | |||
Date:
September 29, 2009
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By:
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/s/ Laurence S. Levy | |
Laurence S. Levy | |||
President and Chief Executive Officer | |||
Date:
September
29, 2009
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By:
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/s/ Neil N. Hasson | |
Neil N. Hasson | |||
Chief Financial Officer | |||
3.1(i)(a)
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Restated
Certificate of Incorporation of the Company (filed as Exhibit 3.1(i)(a) to
the Company's Quarterly Report on Form 10-Q for the period ended September
30, 2002, filed on November 19, 2002, and incorporated herein by
reference).
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3.1(i)(b)
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Corrected
Certificate of Amendment reflecting amendment to Restated Certificate of
Incorporation of the Company (filed as Exhibit 3.1(i)(b) to the Company's
Quarterly Report
on Form 10-Q for the period ended September 30, 2002, filed on November
19, 2002, and incorporated herein by reference).
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3.1(i)(c)
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Certificate
of Amendment of Restated Certificate of Incorporation of Regency
Affiliates, Inc. (filed as Exhibit A to the Company's Information
Statement on Schedule 14C filed on October 27, 2003 and incorporated
by reference herein).
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3.1(i)(d)
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Certificate
of Designation - Series B Preferred Stock, $10 Stated Value, $.10 par
value (filed as Exhibit to Form 10-K dated June 7, 1993 and incorporated
herein by reference).
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3.1(i)(e)
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Amended
and Restated Certificate of Designation, Series C Preferred Stock, $100
Stated Value, $.10 par value (filed as Exhibit 99.4 to the Company's
Current Report on
Form 8-K filed on October 18, 2002, and incorporated herein by
reference).
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3.1(i)(f)
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Certificate
of Designation - Series D Junior Preferred Stock, $10 Stated Value, $.10
par value (filed as Exhibit to Form 10-K dated June 7, 1993 and
incorporated herein by reference).
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3.1(i)(g)
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Certificate
of Designation - Series E Preferred Stock, $100 Stated Value, $.10 par
value (filed as Exhibit 4.1 to the Company's Annual Report on Form 10-K
for the year ended
December 31, 1995 at page E-1, and incorporated herein by
reference).
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3.1(ii)(a)
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By-laws
of the Company (filed as Exhibit 3.4 to the Company's Registration
Statement on Form S-1, Registration Number 2-86906, and incorporated
herein by reference).
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3.1.(ii)(b)
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Amendment
No. 1 to By-Laws of the Company (filed as Exhibit 3.1(ii)(b) to the
Company's Quarterly Report on Form 10-Q for the period ended September 30,
2002, filed on November 19, 2002, and incorporated herein
by reference).
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10.1*
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Stock
Option Agreement, dated as of April 30, 2009, between the Company and
Laurence S. Levy (incorporated by reference from the Company’s Annual
Report on Form 10-K for the year ended December 31, 2008).
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31.1+
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Chief
Executive Officer’s Certificate, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
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31.2+
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Chief
Financial Officer’s Certificate, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
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32.1+
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Chief
Executive Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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32.2+
|
Chief
Financial Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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