<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, 1997
                                         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 February 20, 1998, based upon the
average of the bid and asked prices on that date, was approximately $424,821.
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 24, 1998:  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.  Net operating
income on this property was approximately $69,918 in 1997.  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 1997 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.

In December 1994, the Board of Directors scheduled an annual meeting of the
Company's stockholders for January 16, 1995.  On approximately December 28,
1994, the Company mailed to its stockholders a notice of the annual meeting
and a proxy statement which solicited proxies with respect to six persons
nominated for election as directors by the Board of Directors.  On or about
January 9, 1995, a group called the Regency Shareholders Committee (the
"Committee") began distributing to the Company's stockholders a proxy
statement in which the Committee solicited proxies with respect to the
election of an opposing slate of six director nominees.  The Committee's
proxy statement disclosed that the Committee members were Lawrence Butler,
Jack Howard, Ronald LaBow and Warren G. Lichtenstein, and that the costs of
the Committee's proxy solicitation efforts would be borne by Mr. LaBow,
Richard Sandler and Steel Partners II, L.P., a Delaware Limited Partnership
("Steel Partners").

On January 16, 1995, the Company's Board of Directors conducted a meeting
prior to the scheduled meeting of the stockholders.  The 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. At its meeting, the Board of Directors also postponed the
January 16 annual meeting of stockholders.

On June 11, 1996, Evergreen Acceptance Corporation, a subsidiary of First
Lincoln Holdings, Inc., purchased 38,745,340 shares of the Company's
outstanding common stock from Messrs. Lichtenstein, Butler and Howard, Steel
Partners, the Committee, Richard Sandler, EJ Associates, RA Partnership and
members of a group affiliated with these shareholders (collectively referred
to herein as the "Selling Shareholders").  The transaction occurred


                                       1

<PAGE>

pursuant to a Stock Purchase Agreement dated as of June 10, 1996 among
Evergreen Acceptance Corporation, the Company and the Selling Shareholders.
Pursuant to the Stock Purchase Agreement, the Company, First Lincoln
Holdings, Inc., Evergreen Acceptance Corporation and certain of the Selling
Shareholders also released various claims against each other.

As a result of this transaction, First Lincoln Holdings, Inc. 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, its wholly owned subsidiary, is the
record owner of 71,857,965 shares.  Prior to the consummation of this
transaction, First Lincoln Holdings, Inc. and Evergreen Acceptance
Corporation beneficially owned an aggregate of 34,122,125 shares of the
Company's common stock, which represented 39.1% of the Company's outstanding
common stock.

As a result of the cash dividend that was paid on February 7, 1995, the
Company's total assets were reduced by almost 78%.  The Company's Board of
Directors has not yet determined the future direction of the Company.
However, the Company intends to consider suitable business ventures in which
it can employ its liquid assets.

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. REISS AND SIEGAL, 93 CIV. 8096 (S.D.N.Y) (CSH).

In February 1990, the Company acquired an $850,000 promissory note with a
four-year term and an interest rate of 13% per annum. The note was secured by
a second mortgage on a commercial building in Westchester County, New York.
The obligor on the promissory note was Earl Reiss ("Reiss"), and the
guarantor was Richard Siegal ("Siegal").

During 1993, Reiss ceased making interest payments on the mortgage loan, and
the Company ceased accruing interest on the loan.  The Company also commenced
an action for collection against Reiss and Siegal.  In November 1994, the
court awarded a summary judgment against Reiss in the amount of $1,341,093.
In July 1995, the court awarded a summary judgment against Siegal in the
amount of $1,564,753.  On October 3, 1995, the Company entered into a
settlement agreement with Siegal whereby the Company received $900,000 in
cash in full settlement of all amounts outstanding owed by Reiss and Siegal.

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,


                                       2

<PAGE>

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, 1997.

                                       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>
                          1997                HIGH           LOW
                      -----------            ------         ------
                      <S>                    <C>            <C>
                      1st quarter            $0.015         $0.010
                      2nd quarter             0.015          0.015
                      3rd quarter             0.015          0.010
                      4th quarter             0.015          0.013

                         1996                 HIGH           LOW
                      -----------            ------         ------

                      1st quarter            $0.020         $0.011
                      2nd quarter             0.020          0.010
                      3rd quarter             0.020          0.015
                      4th quarter             0.015          0.010
</TABLE>

(b)  HOLDERS.

The number of record holders of the Company's common stock on February 20,
1998 was 1,598.

(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


                                       3


<PAGE>

extraordinary cash dividend of $.15 per share to stockholders of record as of
January 30, 1995.  The Company did not pay any other dividends during 1995,
1996 or 1997.

ITEM 6.   SELECTED FINANCIAL DATA.(a)

                       (In thousands except per share data)

<TABLE>
<CAPTION>
                                              Year ended December 31,
                               -------------------------------------------------------
                                 1997        1996        1995        1994        1993
                               -------     -------     -------     -------     -------
<S>                            <C>         <C>         <C>         <C>         <C>
Total revenues                 $   334     $   398     $   926     $   773     $   797
Income (loss) before
  income taxes                      28         133         171         267        (260)
Net income (loss)                 (395)        399         292        (298)        277
Income (loss) per share          (.005)       .005        .003       (.003)       .003
Dividends per share                  0           0         .15           0           0
Total assets                     4,055       4,455       4,240      16,893      17,181
Liabilities                         24          29         213          66          56
Shareholders' equity             4,031       4,426       4,027      16,827      17,125
Book value per share               .05         .05         .05         .19         .20
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


<PAGE>

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, 1997 COMPARED WITH YEAR ENDED
DECEMBER 31, 1996.

The Company recorded income before income taxes (benefit) of $27,907 in 1997
compared to $132,988 in 1996.  The decrease resulted principally from (i) a
decrease in rental income of $86,023 attributable to the termination of the
lease with Witmark, Inc. and (ii) an increase of legal fees of $39,616
attributable to the litigation with Witmark, Inc.  See "Item 3. Legal
Proceedings."  The decline in operating results was partially offset by an
increase in interest income of $22,246.

The Company recorded a net loss of $395,177 in 1997 compared to net income of
$399,410 in 1996.  The decrease in net income resulted principally from (i)
the decreases that are described in the immediately preceding paragraph and
(ii) an increase of $447,844 in the valuation allowance against deferred tax
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.  The net change in the
total valuation allowance for the years ended December 31, 1997 and 1996 was
($446,233) and ($1,223,793), respectively.  The decease in 1997 resulted
primarily from a decrease in the expected income from operations and the sale
of the rental property over the next two years.  The decrease in 1996
resulted primarily from the expiration of loss carry-forwards offset by the
increase in the amount of deferred tax assets to be realized in the future as
determined by management.

     (ii) YEAR ENDED DECEMBER 31, 1996 COMPARED WITH YEAR ENDED DECEMBER 31,
1995.

The Company recorded income before income taxes (benefit) of $132,988 in 1996
compared to $170,849 in 1995.  The decrease resulted principally from (i) a
decrease in interest income of $35,451 and (ii) a one-time $500,000 gain in
1995, representing the recovery of amounts previously reserved by the
Company, on the settlement of amounts due to the Company with respect to a
mortgage note and related interest receivable.  See "Item 3. Legal
Proceedings."

The decline in operating results was partially offset by (i) a decrease in
administrative expenses of $120,860 as a result of the termination of the
1995 proxy contest between the Company and the Regency Shareholders
Committee, and (ii) a decrease in legal and other professional fees of
$375,726 as a result of the termination of the proxy contest.


                                       5


<PAGE>

The Company recorded net income of $399,410 in 1996 compared to $292,281 in
1995.  The increase in net income resulted principally from (i) the decreases
that are described in the immediately preceding paragraph and (ii) a decrease
of $315,870 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.  The amount of the deferred tax assets considered
realizable, however, could be reduced in the near term if estimates of future
taxable income during the carryforward period are reduced.  The net change in
the total valuation allowance for the years ended December 31, 1996 and 1995
was ($1,223,793) and ($630,603), respectively.  The decrease in 1996 resulted
primarily from the expiration of loss carryforwards offset by the increase in
the amount of deferred tax assets to be realized in the future as determined
by management. The decrease in 1995 resulted primarily from the expiration of
loss carryforwards.

(b)  LIQUIDITY, CAPITAL RESOURCES AND FUTURE OPERATIONS.

As of December 31, 1997, the Company had cash in the amount of $3,137,924
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 direction of the Company is uncertain, although the Company's Board of
Directors is in the process of addressing this issue.  See "Item 1.
Business." 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)  NEW ACCOUNTING STANDARDS.

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 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.

In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income.
SFAS No. 130 requires that an enterprise report, by major components, and as
a single total, the change in its net assets during the period from nonowner
sources. Adoption of this statement will not impact the Company's financial
statements.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

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.


                                       6

<PAGE>

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                68      Director and Secretary

Allan L. Chapman                60      Chairman of the Board of Directors,
                                        Chief Executive Officer and President

Morris Engel                    71      Chief Financial Officer and Treasurer

Ira L. Gottshall                40      Director

Peter M. Graham                 43      Director

Ronald LaBow                    63      Director

Martin Oliner                   50      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 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 and is a
director of National Affiliated Corp., an


                                       7

<PAGE>

insurance holding company.  Mr. Gottshall served as President of National
Affiliated Corp. 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 has served as Chairman of the Executive Committee of Ladenburg,
Thalmann & Co. Inc., an investment banking firm, since 1990, as its Director
of Corporate Finance since 1989, as its President since 1995 and as a
director of the firm since 1982.  He also serves as a director of SPI
Suspension & Parts Industries, Ltd. and Seventh Generation, 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 has been principally engaged
in the ownership of two insurance subsidiaries, First Delaware Life Insurance
Company and Lincoln Liberty Life Insurance 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 on a timely
basis by the Reporting Persons during and with respect to the Company's most
recent fiscal year.


                                      8

<PAGE>

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,
1997, December 31, 1996 and December 31, 1995 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    1997   $36,000      0            0             0           0             0            $ 4,000
Chairman, Chief     1996   $36,000      0            0             0           0             0            $ 4,000
Executive Officer   1995   $36,000      0            0             0           0             0            $10,000
and President
</TABLE>

----------------
(1) Represents Mr. Chapman's receipt of directors' fees.

(b)  COMPENSATION OF DIRECTORS.

During 1997, 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

<PAGE>

(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 10, 1998 by each such person or group
and the percentage of the outstanding shares of the Company's common stock
beneficially owned as of February 10, 1998 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)                                    0             0
</TABLE>


                                      10
<PAGE>

<TABLE>
<C>                                            <C>                  <C>
ALL DIRECTORS AND EXECUTIVE
  OFFICERS AS A GROUP
  (7 persons)                                  255,000                   *
</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 does not include any shares of the
     Company's common stock that are owned by First Lincoln Holdings, Inc. or
     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 is also the direct
     or indirect of owner of all of the outstanding capital stock of First
     Lincoln Holdings, Inc.  Mr. Oliner disclaims beneficial ownership of the
     shares of the Company's common stock that are owned by First Lincoln
     Holdings, Inc. and Evergreen Acceptance Corporation.

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 $17,167 to Engel, Kalvin, McMillan & Kipper, LLP in 1997
in consideration for accounting and tax services rendered by that firm.

                                   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, 1997 and 1996. . . . . . . . . . .    F-2

Statements of Operations - Years
     Ended December 31, 1997, 1996 and 1995. . . . . . . . . . .    F-3
</TABLE>

                                    11

<PAGE>

<TABLE>
<S>                                                              <C>
Statements of Changes in Shareholders'
     Equity - Years Ended December 31, 1997,
     1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . .    F-4

Statements of Cash Flows - Years Ended
     December 31, 1997, 1996 and 1995. . . . . . . . . . . . . .    F-5

Notes to Financial Statements. . . . . . . . . . . . . . . . . .    F-6

Report of BDO Seidman, LLP on Schedules. . . . . . . . . . . . .    F-12

Schedule II - Valuation and Qualifying Accounts. . . . . . . . .    F-13

Schedule III - Real Estate and Accumulated
     Depreciation. . . . . . . . . . . . . . . . . . . . . . . .    F-14

Schedule IV - Mortgage Loan on Real Estate and Interest Earned
     on Mortgage  . . . . . . . . . . . . . . . . . . . . . . . .   F-15

          Schedules not listed above are omitted because they are
          inapplicable or the information required is presented
          in the financial statements or the footnotes thereto.
</TABLE>

EXHIBITS.

<TABLE>
     <S>   <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

                                      12

<PAGE>

           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.

     10.10 Stock Purchase Agreement dated as of June 11, 1996, among the
           Company, Evergreen Acceptance Corporation and the selling
           shareholders named in the Stock Purchase Agreement, incorporated
           herein by this reference to Exhibits 1 and 2 to Amendment No. 13
           dated May 13, 1996 to a Schedule 13D filed by First Lincoln
           Holdings, Inc. and Evergreen Acceptance Corporation and Amendment
           No. 14 dated June 12, 1996 to said Schedule 13D filed by First
           Lincoln Holdings, Inc. and Evergreen Acceptance Corporation.

     27.1  Financial Data Schedule (included only in the electronic filing)

</TABLE>

REPORTS ON FORM 8-K.

No Current Reports on Form 8-K were filed by the Company during the quarter
ended December 31, 1997.


                                       13

<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 26, 1998           REGENCY EQUITIES CORP.


                               By /s/  ALLAN L. CHAPMAN
                                  ----------------------------------------
                                  Allan L. Chapman, Chairman of the Board,
                                  Chief Executive Officer and President


                                  14

<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 26, 1998          By /s/  ALLAN L. CHAPMAN
                                 ----------------------------------------------
                                 Allan L. Chapman
                                 Chairman of the Board, Chief Executive Officer
                                 and President (Principal Executive Officer)


Date:  March 26, 1998         By /s/ MORRIS ENGEL
                                 ----------------------------------------------
                                 Morris Engel
                                 Chief Financial Officer and Treasurer
                                (Principal Financial and Accounting Officer)


Date:  March 26, 1998         By /s/ WILLIAM J. ADAMS
                                 ----------------------------------------------
                                 William J. Adams
                                 Secretary and Director


Date:  March 26, 1998         By /s/  RONALD LABOW
                                 ----------------------------------------------
                                 Ronald LaBow
                                 Director


Date:  March 26, 1998         By /s/ PETER M. GRAHAM
                                 ----------------------------------------------
                                 Peter M. Graham
                                 Director


Date:  March 26, 1998         By /s/  IRA L. GOTTSHALL
                                 ----------------------------------------------
                                 Ira L. Gottshall
                                 Director


Date:  March 26, 1998         By /s/  MARTIN OLINER
                                 ----------------------------------------------
                                 Martin Oliner
                                 Director


                                      15
<PAGE>






                                REGENCY EQUITIES CORP.

                              ANNUAL REPORT ON FORM 10-K

                        ITEM 8 AND ITEM 14(a)(1) and 14(a)(2)

                FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

                             YEAR ENDED DECEMBER 31, 1997




<PAGE>

                            REPORT OF INDEPENDENT AUDITORS




Board of Directors
Regency Equities Corp.


We have audited the accompanying balance sheets of Regency Equities Corp. as
of December 31, 1997 and 1996 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, 1997.  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, 1997 and 1996 and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1997 in
conformity with generally accepted accounting principles.

                                        BDO SEIDMAN, LLP



Los Angeles, California
February 24, 1998

                                       F-1


<PAGE>

                                REGENCY EQUITIES CORP.

                                    BALANCE SHEETS

<TABLE>
<CAPTION>
                                                     DECEMBER 31,
                                             ----------------------------
                                                1997             1996
                                             -----------      -----------
<S>                                          <C>              <C>
ASSETS
   Cash (Note A)                             $ 3,137,924      $ 2,974,146
   Rent receivable                                 3,752           98,148
   Rental property owned, net of write
    down for possible loss of $215,000
    and accumulated depreciation of
    $343,476 in 1997 and $294,408 in
    1996 (Note B)                                912,965          962,033
   Deferred income taxes (Note D)                                 421,164
                                             -----------      -----------
                                             $ 4,054,641      $ 4,455,491
                                             -----------      -----------
                                             -----------      -----------

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
   Accounts payable and accrued
    expenses                                 $    22,366      $    27,739
   Income taxes payable (Note D)                   1,420            1,720
                                             -----------      -----------
                                                  23,786           29,459
                                             -----------      -----------

CONTINGENCIES (NOTE A)

SHAREHOLDERS' EQUITY (Note G):
   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                       (44,502,312)     (44,107,135)
                                             -----------      -----------
                                               4,030,855        4,426,032
                                             -----------      -----------
                                             $ 4,054,641      $ 4,455,491
                                             -----------      -----------
                                             -----------      -----------
</TABLE>
                   See accompanying notes to financial statements.

                                       F-2


<PAGE>

                                  REGENCY EQUITIES CORP.

                                 STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                          YEAR ENDED DECEMBER 31,
                                                 -----------------------------------------
                                                     1997          1996            1995
                                                 -----------    -----------    -----------
<S>                                              <C>            <C>            <C>
REVENUES:
   Interest income (Note G)                      $   147,741    $   125,495    $   160,946
   Rental income                                     186,642        272,665        264,850
   Recovery of reserve for
    collectibility of
    mortgage receivable (Note C)                                                   500,000
                                                 -----------    -----------    -----------
      TOTAL REVENUES                                 334,383        398,160        925,796
                                                 -----------    -----------    -----------
EXPENSES:
   Administrative expense                            108,004        101,027        221,887
   Professional fees (Note F)                         81,748         52,964        428,690
   Rental expense                                    116,724        111,181        104,370
                                                 -----------    -----------    -----------
      TOTAL EXPENSES                                 306,476        265,172        754,947
                                                 -----------    -----------    -----------

      INCOME BEFORE INCOME TAXES
       (BENEFIT)                                      27,907        132,988        170,849

      PROVISION (BENEFIT) FOR INCOME TAXES
       (NOTE D)                                      423,084       (266,422)      (121,432)
                                                 -----------    -----------    -----------
      NET INCOME (LOSS)                          $  (395,177)   $   399,410    $   292,281
                                                 -----------    -----------    -----------
                                                 -----------    -----------    -----------
WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING                               87,283,661     87,283,661     87,283,661
                                                 -----------    -----------    -----------
                                                 -----------    -----------    -----------
NET INCOME (LOSS) PER SHARE                      $     (.005)   $      .005    $      .003
                                                 -----------    -----------    -----------
                                                 -----------    -----------    -----------
</TABLE>

                        See accompanying notes to financial statements.


                                            F-3



<PAGE>

                                  REGENCY EQUITIES CORP.

                       STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                            THREE YEARS ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
                                       COMMON STOCK
                                 -------------------------       ADDITIONAL
                                  NUMBER OF                        PAID-IN          ACCUMULATED
                                   SHARES          AMOUNT          CAPITAL            DEFICIT
                                 ----------       --------       -----------       -------------
<S>                              <C>              <C>            <C>               <C>
BALANCE AT
  January 1, 1995                87,283,661       $872,836       $47,660,331       ($31,706,277)

     Dividends paid
      (Note G)                                                                      (13,092,549)

     Net income                                                                         292,281
                                 ----------       --------       -----------      -------------

BALANCE AT
  December 31, 1995              87,283,661        872,836        47,660,331        (44,506,545)

     Net income                                                                         399,410
                                 ----------       --------       -----------      -------------

BALANCE AT
  December 31, 1996              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)
                                 ----------       --------       -----------       ------------
                                 ----------       --------       -----------       ------------

</TABLE>

                        See accompanying notes to financial statements.

                                              F-4

<PAGE>

                               REGENCY EQUITIES CORP.

                             STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                           YEAR ENDED DECEMBER 31,
                                                  ----------------------------------------
                                                     1997           1996           1995
                                                  ----------    ----------     -----------
<S>                                               <C>           <C>            <C>
      INCREASE (DECREASE) IN CASH

OPERATING ACTIVITIES:

   Net income (Loss)                              ($ 395,177)    $  399,410    $   292,281

   Adjustments to reconcile net
    income (loss) to net cash
    provided by (used in) operating
    activities:
     Depreciation                                     49,068         49,068         49,068

   Changes in operating assets and
    liabilities:
     Rent receivable                                  94,396          2,841          4,453
     Accounts payable and accrued
      expenses                                    (    5,373)   (   184,039)       151,117
     Mortgage receivable                                                           850,000
     Reserve for collectibility of
      mortgage receivable                                                     (    450,000)
     Deferred income taxes                           421,164    (   269,342)  (    123,152)
     Income taxes payable                         (      300)           400   (      4,400)
                                                  ----------     ----------   ------------

      NET CASH PROVIDED BY (USED IN)
       OPERATING ACTIVITIES                          163,778    (     1,662)       769,367
                                                  ----------     ----------   ------------

FINANCING ACTIVITIES:
   Dividends paid                                                             ( 13,092,549)
                                                                               ------------

      NET CASH USED IN FINANCING
       ACTIVITIES                                                             ( 13,092,549)
                                                  ----------     ----------   ------------
INCREASE (DECREASE) IN CASH                          163,778    (     1,662)  ( 12,323,182)

CASH BEGINNING OF YEAR                             2,974,146      2,975,808     15,298,990
                                                  ----------     ----------   ------------

CASH END OF YEAR                                  $3,137,924     $2,974,146    $ 2,975,808
                                                  ----------     ----------   ------------
                                                  ----------     ----------   ------------
</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.   In 1995 the Company settled the
collection of a mortgage note (see Note C).

CASH:  Cash at December 31, 1997 is deposited with two major U.S. banks.  At
December 31, 1997 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. Such review includes
estimating expected future cash flows from operations and net realizable
value upon liquidation based on recent appraisals.

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.

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 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.

                                 (continued)

                                     F-6

<PAGE>


                         NOTES TO FINANCIAL STATEMENTS

                            REGENCY EQUITIES CORP.


NOTE B - RENTAL PROPERTY AND DEPRECIATION

The Company 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.

NOTE C - MORTGAGE RECEIVABLE

On February 12, 1990, the Company entered into a second mortgage agreement on
a commercial building in New York state.  The $850,000 mortgage earned
interest at a rate of 13% per annum and was due on March 1, 1994.  Interest
originally was payable annually at the rate of 8.5% per annum with the
balance of the interest and principal due upon the maturity of the loan.

The note was amended effective as of June 1, 1992 to provide that (a)
interest was currently payable at an annual rate of 3%, (b) the additional
5.5% of annual interest to be deferred was to bear interest at 6% per annum
compounded monthly, and, (c) the balance of the interest was due with the
principal upon the maturity of the loan.

During 1993, the borrower ceased making interest payments on the mortgage and
the Company (a) ceased accruing interest and (b) commenced an action for
collection against the borrower and the guarantor of the mortgage.  The
Company had provided a reserve of $187,937 against accrued interest and a
reserve of $450,000 against the principal balance.  The reserves, which were
recorded in 1993,  totalling $637,937 were determined based upon management's
estimate of the net realizable value of the underlying property.


                                  (continued)

                                      F-7

<PAGE>

                         NOTES TO FINANCIAL STATEMENTS

                            REGENCY EQUITIES CORP.


NOTE C - MORTGAGE RECEIVABLE (continued)

In November 1994, the United States District Court for the Southern District
of New York awarded a summary judgement against the borrower in the amount of
$1,341,093, which included unpaid principal and accrued interest through
October 28, 1994.  In July 1995, the Court awarded a summary judgement
against the guarantor  in the amount of $1,564,753.  The Company vigorously
pursued collection of the judgement and on October 3, 1995, entered into a
settlement agreement whereby the Company received $900,000 in cash in full
settlement of all amounts outstanding.  The settlement resulted in a gain of
$500,000 representing the recovery of amounts previously reserved.

NOTE D - INCOME TAXES (BENEFIT)

The provision (benefit) for income taxes consists of:

<TABLE>
<CAPTION>
                                          1997           1996           1995
                                        ---------       --------     ---------
<S>                                     <C>             <C>          <C>
Federal:
   Current                               $   -          $   -         ($157,115)
   Deferred                             (  24,930)        47,814        213,173

State:
   Current                                  1,920          2,920      (  23,533)
   Deferred                             (   1,750)     (   1,286)        29,506

Increase (decrease)
 in valuation allowance
 of deferred tax assets                   447,844      ( 315,870)     ( 183,463)
                                         --------      ---------       --------

   Total                                 $423,084      ($266,422)     ($121,432)
                                         --------      ---------       --------
                                         --------      ---------       --------
</TABLE>

The current benefit for 1995 results primarily from the deduction for income tax
purposes of a bad debt provision provided for in 1993.


                                  (continued)

                                      F-8


<PAGE>

                         NOTES TO FINANCIAL STATEMENTS

                            REGENCY EQUITIES CORP.


NOTE D - INCOME TAXES (BENEFIT) (continued)

The reconciliation of the provision (benefit) 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>
                                           1997           1996            1995
                                         -------         ------         ------
<S>                                      <C>             <C>            <C>
  Federal tax at statutory rate             34.0%          34.0%          34.0%
  State income tax, net of
   federal income tax benefit                6.9            3.2            2.3
  Increase (decrease) in valuation
   allowance of deferred tax assets      1,475.1         (237.5 )       (110.9 )
                                         -------         ------         ------

  Provision (benefit) for income taxes   1,516.0%        (200.3%)       ( 74.6%)
                                         -------         ------         ------
                                         -------         ------         ------
</TABLE>

Deferred tax assets (liabilities) consist of:

<TABLE>
<CAPTION>
                                             1997           1996
                                         -----------     -----------
<S>                                      <C>             <C>

  Depreciation                           (   $62,452)    (   $64,227)
  Rental income                                          (    24,905)
                                         -----------     -----------

   Gross deferred tax liabilities        (    62,452)    (    89,132)
                                         -----------     -----------

  Rental property loss allowance              76,435          76,435
  Loss carryforwards                       5,792,827       5,792,827
                                         -----------     -----------

   Gross deferred tax assets               5,869,262       5,869,262

  Valuation allowance                    ( 5,806,810)    ( 5,358,966)
                                         -----------     -----------

   Net deferred tax assets                    62,452         510,296
                                         -----------     -----------

   Deferred taxes                         $        0      $  421,164
                                         -----------     -----------
                                         -----------     -----------
</TABLE>


                                   (continued)

                                       F-9
<PAGE>

                          NOTES TO FINANCIAL STATEMENTS

                             REGENCY EQUITIES CORP.

NOTE D - INCOME TAXES (BENEFIT) (concluded)

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.  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 required was based upon two years of operations and the
sale of the rental property at the end of two year period.  The amount of the
deferred tax asset considered realizable, however, could be reduced in the
near term if estimates of future taxable income during the carryforward
period are reduced. The valuation allowance as of December 31, 1993, the year
in which SFAS 109 was adopted, was $7,726,325.  The net change in the total
valuation allowance for the years ended December 31, 1997, 1996, 1995 and
1994 were $447,844, ($1,223,793), ($630,603) and ($512,963), respectively.
The increase in 1997 results from the anticipated decrease in rental income.
The decrease in 1996 results from the expiration of loss carryforwards and
the anticipated increase in future taxable income.  The decrease in 1995
results primarily from the expiration of loss carryforwards.  The decrease in
1994 was due to the expiration of loss carryforwards and the anticipated
reduction in estimated future taxable income resulting from the Company's
payment in February 1995 of a $13,092,549 cash dividend.

The Company had operating loss carryforwards at December 31, 1997 for federal
tax purposes as follows:

<TABLE>
<CAPTION>

     EXPIRES IN:
     <S>                             <C>
         1999                        $ 6,490,000
         2000                          8,700,000
         2007                            620,000
         2010                            460,000
                                     -----------
                                     $16,270,000
                                     -----------
                                     -----------
</TABLE>

The Company also had significant Michigan state operating loss carryforwards
at December 31, 1997.

The Company made income tax payments of $2,220, $2,520, and $6,120 during
1997, 1996 and 1995, respectively.

                                 (Continued)

                                     F-10

<PAGE>

                          NOTES TO FINANCIAL STATEMENTS

                             REGENCY EQUITIES CORP.

NOTE E - 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 1995, 1996 or 1997.  No options were outstanding at December 31,
1997; however, options were available to be granted for 5,450,000 shares.

NOTE F - 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 $17,167  in 1997, $21,471 in 1996
and $27,946 in 1995.

NOTE G - DIVIDENDS PAID

On January 16, 1995, the Board of Directors declared a $13,092,549  ($.15 per
share) dividend which was paid February 7, 1995 to shareholders of record as
of January 30, 1995.  The dividend represented approximately 77.5% and 77.8%
of total assets and shareholders' equity at December 31, 1994, respectively.
Included in interest income for the year ended December 31, 1994 is $442,698
earned on the  $13,092,549 cash.

The Company's Board of Directors has not yet determined the future direction
of the Company. However, the Board intends to consider suitable business
ventures in which the Company can employ its liquid assets.

                                      F-11

<PAGE>

                        REPORT OF INDEPENDENT AUDITORS ON
                          FINANCIAL STATEMENT SCHEDULES



Board of Directors
Regency Equities Corp.


The audits referred to in our report dated February 24, 1998 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 24, 1998


                                     F-12

<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, 1996        $6,582,759     ($315,870)     ($907,923)    $5,358,966
                                       ----------     ---------      ---------     ----------
   Year ended December 31, 1997        $5,358,966      $447,844       $   -        $5,806,810
                                       ----------     ---------      ---------     ----------

</TABLE>

                                       F-13
<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)
                ------------------  -----------   --------------------------------    Accumu-             on which
                           Bldg. &                           Bldg. &                  lated               deprecia-
  Descrip-                Improve-    Improve-              Improve-                 Deprecia-   Date      tion is
  tion(1)       Land       ments       ments      Land        ments       Total(5)    tion(4)  acquired    computed
-----------   --------   ---------   --------   --------    ---------    ---------   --------  --------- -----------
<S>           <C>        <C>         <C>        <C>         <C>          <C>         <C>       <C>       <C>

December 31,
 1997         $266,076    $794,337   $411,028   $266,076    $1,205,365   $1,471,441  $343,476   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,
         1997, 1996, or 1995

     (3) An allowance for possible losses of $215,000 has been provided
         at December 31, 1997 1996, and 1995 to adjust the carrying value
         of the property to estimated net realizable value.

     (4) Reconciliation of accumulated depreciation:

<TABLE>
<CAPTION>
                                                   1997          1996          1995
                                                 --------      --------      --------
           <S>                                   <C>           <C>           <C>

           Balance at beginning of period        $294,408      $245,340      $196,272
           Additions during period                 49,068        49,068        49,068
                                                 --------      --------      --------
             Balance at close of period          $343,476      $294,408      $245,340
                                                 --------      --------      --------
                                                 --------      --------      --------
</TABLE>

     (5) The aggregate cost for federal income tax purposes of the
         property for each of the three years December 31, 1995, 1996
         and 1997 was $1,471,441.


                                       F-14


<PAGE>


                                REGENCY EQUITIES CORP.

              MORTGAGE LOAN ON REAL ESTATE AND INTEREST EARNED ON MORTGAGE

                                    SCHEDULE - IV

<TABLE>
<CAPTION>

                               Part 1                                               Part 2
           Mortgage loan on Real Estate at close of period               Interest earned on mortgage
---------------------------------------------------------------------   ------------------------------
                                               Amount of
                                               principal    Amount of                      Interest
                                Carrying       unpaid at    mortgage     Interest due    income earned
                   Prior       amount of       close of      being      and accrued at    applicable
Description(1)     liens       mortgage(2)      period     foreclosed   end of period(3)    to period
---------------   ---------    -----------    -----------  ----------   ----------------  ------------
<S>               <C>          <C>            <C>          <C>          <C>               <C>
December 31,
  1997            $     0        $     0        $     0        None         $     0         $     0

</TABLE>

     (1) The loan was a second mortgage on a commercial building in New York
         state.

<TABLE>
<CAPTION>

     (2) Reconciliation of carrying amount
          of mortgage:                                           1997          1996          1995
                                                               --------      --------      --------
           <S>                                                 <C>           <C>           <C>
           Balance at beginning of period                      $      0      $      0      $400,000
           Deduction during period:
             Recovery (Reserve) for uncollectibility                                        450,000
             Payment received                                                              (850,000)
                                                               --------      --------      --------
               Balance at close of period                      $      0      $      0      $      0
                                                               --------      --------      --------
                                                               --------      --------      --------

     (3) Reconciliation of interest due and accrued:
           Balance at beginning of period                      $      0      $      0      $      0
           Additions during period:
             Interest earned
                                                               --------      --------      --------
                                                                      0             0             0
                                                               --------      --------      --------
           Deductions during period:
             Collections of interest                                                        (50,000)
             Recovery (reserve) for uncollectibility                                         50,000
                                                               --------      --------      --------
                                                                      0             0             0
                                                               --------      --------      --------
               Balance at close of period                      $      0      $      0      $      0
                                                               --------      --------      --------

</TABLE>
                                               F-15

<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

<PAGE>

          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.

10.10     Stock Purchase Agreement dated as of June 11, 1996, among the
          Company, Evergreen Acceptance Corporation and the selling
          shareholders named in the Stock Purchase Agreement, incorporated
          herein by this reference to Exhibits 1 and 2 to Amendment No. 13
          dated May 13, 1996 to a Schedule 13D filed by First Lincoln
          Holdings, Inc. and Evergreen Acceptance Corporation and Amendment
          No. 14 dated June 12, 1996 to said Schedule 13D filed by First
          Lincoln Holdings, Inc. and Evergreen Acceptance Corporation.

27.1      Financial Data Schedule (included only in the electronic
          filing)
</TABLE>