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UNITED STATES
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, 2002        
|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
(State or other jurisdiction of incorporation or organization) |  | 23-2298894
(I.R.S. employer identification no.)

11845 West Olympic Boulevard, Suite 900
Los Angeles, California 90064
(Address of principal executive offices, including zip code)

(310) 876-0569(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]





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Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Act). Yes [   ] No [X]

The aggregate market value of the voting securities held by nonaffiliates of the registrant as of June
30, 2002, based upon the average of the bid and asked prices on that date, was approximately $282,954.
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 26, 2003: 87,283,661.

Documents Incorporated by Reference: None.





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TABLE OF CONTENTS



|               |                                                                                                          |  |  |  |  |  |  | 
|-------------- | -------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I        
|               | Item 1. Business.                                                                                       
|               | Item 2. Properties.                                                                                     
|               | Item 3. Legal Proceedings.                                                                              
|               | Item 4. Submission of Matters to a Vote of Security Holders.                                            
|PART II       
|               | Item 5. Market for the Registrants Common Stock and Related Stockholder Matters.                       
|               | Item 6. Selected Financial Data.                                                                        
|               | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.          
|               | Item 7A. Quantitative and Qualitative Disclosures About Market Risk.                                    
|               | Item 8. Financial Statements and Supplementary Data.                                                    
|               | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.           
|PART III      
|               | Item 10. Directors and Executive Officers of the Registrant.                                            
|               | Item 11. Executive Compensation.                                                                        
|               | Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|               | Item 13. Certain Relationships and Related Transactions.                                                
|               | Item 14. Controls and Procedures.                                                                       
|PART IV       
|               | Item 15. Exhibits, Financial Statements and Financial Statement Schedules and Reports on Form 8-K.      
|SIGNATURES    
|CERTIFICATIONS
|EXHIBIT 99.1  
|EXHIBIT 99.2  



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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 & Company, LLP. The Companys Chief Financial
Officer, Morris Engel, is a partner in Engel, Kalvin, McMillan & Company, LLP.
The Company has two employees: Mr. Engel and Allan L. Chapman, the Companys
Chairman of the Board, Chief Executive Officer and President.

The Company owns a shopping center in Grand Rapids, Michigan. Approximately
12% of the shopping centers space is leased to a tenant. The balance of the
shopping centers space has been vacant since July 1997. The Company sustained
a net operating loss of $71,213 from this property in 2002. 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 2002 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.

First Lincoln Holdings, Inc., a Delaware corporation, beneficially owns
72,867,965 shares of the Companys common stock, which represents 83.48% of the
Companys outstanding common stock. Of that aggregate number of shares, First
Lincoln Holdings, Inc. is the record owner of 1,010,000 shares and Evergreen
Acceptance Corporation, a Delaware corporation and a wholly owned subsidiary of
First Lincoln Holdings, Inc., is the record owner of 71,857,965 shares. Martin
Oliner, who is a director of the Company, is the Chairman of the Board of
Directors, President, Chief Executive Officer and sole stockholder of First
Lincoln Holdings, Inc.

The nature and direction of the future business and operations of the Company
are uncertain. The Board of Directors intends to consider suitable business
ventures for the Company.




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.

Not applicable.




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, 2002.





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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.

|            |  |      |      |     |  |   |      | 
|----------- |  | ---- | ---- | --- |  | - | ---- | 
|2002        |  | High |      | Low
|            |  |      |      |    
|1st quarter |  | $    | 0.02 |     |  | $ | 0.01 | 
|2nd quarter |  |      | 0.02 |     |  |   | 0.02 | 
|3rd quarter |  |      | 0.02 |     |  |   | 0.01 | 
|4th quarter |  |      | 0.02 |     |  |   | 0.01 | 

|            |  |      |      |     |  |   |      | 
|----------- |  | ---- | ---- | --- |  | - | ---- | 
|2001        |  | High |      | Low
|            |  |      |      |    
|1st quarter |  | $    | 0.03 |     |  | $ | 0.01 | 
|2nd quarter |  |      | 0.02 |     |  |   | 0.01 | 
|3rd quarter |  |      | 0.02 |     |  |   | 0.01 | 
|4th quarter |  |      | 0.02 |     |  |   | 0.01 | 

(b)  Holders.

The number of record holders of the Companys common stock on March 13, 2003
was 1,509.

(c)  Dividends.

The Company has not historically paid regular dividends on its common stock and
does not presently intend to do so in the future. On February 7, 1995, the
Company paid an extraordinary cash dividend of $.15 per share to stockholders
of record as of January 30, 1995. The Company has not paid any other dividends
since February 7, 1995.

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Item 6. Selected Financial Data.(a)

|                                    |  |                                       |        |      |  |      |        |      |  |      |        |   |  |   |        |   |  |   |        |  
|----------------------------------- |  | ------------------------------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | - |  | - | ------ | -
|                                    |  | (In thousands, except per share data)
|                                    |  | Year ended December 31,              
|                                    |  |                                      
|                                    |  | 2002                                  |        | 2001 |  | 2000 |        | 1999 |  | 1998
|                                    |  |                                       |        |      |  |      |        |      |  |     
|Total revenues                      |  | $                                     | 93     |      |  | $    | 164    |      |  | $    | 197    |   |  | $ | 189    |   |  | $ | 198    |  
|Income (loss) before
income taxes   |  |                                       | (181   | )    |  |      | (150   | )    |  |      | (76    | ) |  |   | (85    | ) |  |   | (82    | )
|Net income (loss)                   |  |                                       | (182   | )    |  |      | (152   | )    |  |      | (78    | ) |  |   | (87    | ) |  |   | (84    | )
|Income (loss) per share             |  |                                       | (.002  | )    |  |      | (.002  | )    |  |      | (.001  | ) |  |   | (.001  | ) |  |   | (.001  | )
|Dividends per share                 |  |                                       | 0      |      |  |      | 0      |      |  |      | 0      |   |  |   | 0      |   |  |   | 0      |  
|Total assets                        |  |                                       | 3,479  |      |  |      | 3,713  |      |  |      | 3,814  |   |  |   | 3,892  |   |  |   | 3,980  |  
|Liabilities                         |  |                                       | 32     |      |  |      | 84     |      |  |      | 32     |   |  |   | 32     |   |  |   | 33     |  
|Shareholders equity                |  |                                       | 3,447  |      |  |      | 3,629  |      |  |      | 3,782  |   |  |   | 3,860  |   |  |   | 3,947  |  
|Book value per share                |  |                                       | .04    |      |  |      | .04    |      |  |      | .04    |   |  |   | .04    |   |  |   | .05    |  
|Weighted average shares
outstanding |  |                                       | 87,284 |      |  |      | 87,284 |      |  |      | 87,284 |   |  |   | 87,284 |   |  |   | 87,284 |  



---

|(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. 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.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.

The Company conducts limited business operations, and its future is uncertain.
See Item 1. Business for a discussion of the Companys business and future
direction. 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.



|(a) |  | Results of Operations.
|--- |  | ----------------------

(i)  Year Ended December 31, 2002 Compared with Year Ended December 31, 2001.

The Company recorded a loss before income taxes of $181,041 in 2002
compared to a loss of $150,157 in 2001. The increase in loss resulted
principally from (i) a decrease in interest income of $71,080, (ii) an increase
in stock transfer agent fees of $6,183, (iii) an increase in rental property
utilities of $7,190, (iv) an increase in rental property management fees of
$2,250 and (v) an increase in rental property insurance of $2,303. The
decrease in operating results was partially offset by a decrease in
professional fees of $58,317.

(ii)  Year Ended December 31, 2001 Compared with Year Ended December 31,
2000.

The Company recorded a loss before income taxes of $150,157 in 2001 compared to
a loss before income taxes of $76,362 in 2000. The increase in loss resulted
principally from (i) a decrease in interest income of $31,733, (ii) an increase
in accounting fees of $8,212 due to a change in auditing firms and Securities
and Exchange Commission required reviews of the Companys Quarterly Reports on
Form 10-Q, and (iii)

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an increase in legal fees of $42,246 due to two proposed mergers which were
terminated during the year. The increase in operating loss was offset in part
by a decrease of $7,003 in rental operating expenses

(b)  Liquidity, Capital Resources and Future Operations.

As of December 31, 2002, the Company had cash in the amount of $2,736,423
invested in interest-bearing demand deposit accounts with two major United
States banks. The Company has sufficient cash for its current operating needs;
the Company does not currently have any material commitments for capital
expenditures; and it has no present plans to incur any indebtedness.

The business direction of the Company is uncertain. As a result, the reported
financial information contained in this Annual Report on Form 10-K is not
necessarily indicative of future operating results or of future financial
condition.




Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The Company has exposure to interest rate changes as a result of interest rate
changes relating to the cash and cash equivalent balances that it maintains
with two banks. However, the Company believes that any such reasonably
anticipated changes in interest rates are unlikely to have a material effect on
the Companys financial position and results of operations.




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 15 herein.




Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

On February 12, 2001, the Company filed with the Securities and Exchange
Commission (the Commission) a Current Report on Form 8-K regarding a change
in accountants. On February 20, 2001, the Company filed with the Commission an
amendment to its Current Report on Form 8-K for the purpose of setting forth
additional information regarding its change in accountants.

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PART III




Item 10. Directors and Executive Officers of the Registrant.

The directors and executive officers of the Company are as follows:

|                 |  |     |    |                           |  |                                                                          
|---------------- |  | --- | -- | ------------------------- |  | -------------------------------------------------------------------------
|Name             |  | Age |    | Position with the Company
|                 |  |     |    |                          
|William J. Adams |  |     | 73 |                           |  | Director and Secretary                                                   
|Allan L. Chapman |  |     | 65 |                           |  | Chairman of the Board of Directors, Chief Executive
Officer and President
|Morris Engel     |  |     | 76 |                           |  | Chief Financial Officer and Treasurer                                    
|Ira L. Gottshall |  |     | 45 |                           |  | Director                                                                 
|Martin Oliner    |  |     | 55 |                           |  | Director                                                                 

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 & Company, 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 Regional Vice President of IOF Foresters, which is an
insurance company. Mr. Gottshall served as President of National Affiliated
Corp., an insurance holding company, from January 1997 until January 1998.
Prior to 1997, Mr. Gottshall served as an executive officer of several other
insurance companies, including as President and Chief Executive Officer of
First Delaware Life Insurance Company from July 1991 until January 1994 and as
a Vice President of Evergreen Acceptance Corporation from September 1992 until
January 1994.

Martin Oliner has served as a director of the Company since November 1993 and
has been engaged in the private practice of law since 1972. Mr. Oliner serves
as Chairman of the Board of Directors, President and Chief Executive Officer of
First Lincoln Holdings, Inc., which is an insurance holding company.

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Directors are elected at the annual meeting of stockholders to serve during the
ensuing year and until a successor is duly elected and qualified. In February
2003, Ronald LaBow resigned as a director of the Company, and in March 2003,
Peter M. Graham resigned as a director of the Company. 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.




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, 2002, December
31, 2001 and December 31, 2000 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

|                                |  |      |      |            |  |                     |        |                  |  |            |   |            |  |              |   |           |  |                        |   |         |  |              |   |  |  |  |   |  |  |   |       | 
|------------------------------- |  | ---- | ---- | ---------- |  | ------------------- | ------ | ---------------- |  | ---------- | - | ---------- |  | ------------ | - | --------- |  | ---------------------- | - | ------- |  | ------------ | - |  |  |  | - |  |  | - | ----- | 
|                                |  |      |      |            |  |                     |        |                  |  |            |   |            |  |              |   |           |  | Long-Term Compensation |   |         |  |             
|                                |  |      |      |            |  |                     |        |                  |  |            |   |            |  |              |   |           |  |                        |   |         |  |             
|                                |  |      |      |            |  |                     |        |                  |  |            |   |            |  |              |   |           |  | Awards                 |   | Payouts |  |              |   | 
|                                |  |      |      |            |  |                     |        |                  |  |            |   |            |  |              |   |           |  |                        |   |         |  |              |   | 
|                                |  |      |      |            |  | Annual Compensation |        |                  |  |            |   | Securities |  |              |   |           |  |                        |   |        
|                                |  |      |      |            |  |                     |        | Restricted       |  | Underlying |   |            |  |              |   | All Other
|Name and                        |  |      |      |            |  |                     |        |                  |  |            |   |            |  | Other Annual |   | Stock     |  | Options/               |   | LTIP    |  | Compensation
|Principal Position              |  | Year |      | Salary ($) |  | Bonus ($)           |        | Compensation ($) |  | Awards($)  |   | SARs(#)    |  | Payouts($)   |   | ($)(1)   
|                                |  |      |      |            |  |                     |        |                  |  |            |   |            |  |              |   |          
|Allan L. Chapman                |  |      | 2002 |            |  | $                   | 36,000 |                  |  |            | 0 |            |  |              | 0 |           |  |                        | 0 |         |  |              | 0 |  |  |  | 0 |  |  | $ | 3,000 | 
|Chairman, Chief                 |  |      | 2001 |            |  | $                   | 36,000 |                  |  |            | 0 |            |  |              | 0 |           |  |                        | 0 |         |  |              | 0 |  |  |  | 0 |  |  | $ | 4,000 | 
|Executive Officer and President |  |      | 2000 |            |  | $                   | 36,000 |                  |  |            | 0 |            |  |              | 0 |           |  |                        | 0 |         |  |              | 0 |  |  |  | 0 |  |  | $ | 4,000 | 



---

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

(b)  Compensation of Directors.

During 2002, the Companys directors received $1,000 per Board meeting and $500
per committee meeting attended.

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(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.

(d)  Compensation Committee Interlocks and Insider Participation.

The sole member of the Companys Stock Option/Compensation Committee is William
J. Adams. Mr. Adams is the Companys Secretary, which is not a salaried
position.




Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

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 March 1, 2003 by each such person or group and the
percentage of the outstanding shares of the Companys common stock beneficially
owned as of March 1, 2003 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.

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|                                                |                                                                            |                    |                 |            |                     |  |      |      |  
|----------------------------------------------- | -------------------------------------------------------------------------- | ------------------ | --------------- | ---------- | ------------------- |  | ---- | ---- | -
|                                                |                                                                            |                    | Shares of Stock |            | Approximate Percent
|Name of Beneficial Owner                        |                                                                            | Beneficially Owned |                 | of Class  
|                                                |                                                                            |                    |                 |           
|Five Percent Shareholders                       |                                                                            |                    |                 |            |                     |  |      |     
|First Lincoln Holdings, Inc.(1)                 |                                                                            |                    |                 |            |                     |  |      |     
|Evergreen Acceptance Corporation                |                                                                            |                    | 72,867,965      |            |                     |  | 83.5 | %   
|                                                | 1001 Jefferson Plaza, Suite 200
1001 Jefferson Street
Wilmington, DE 19801 |                    |                 |            |                     |  |      |      |  
|Directors and Named Executive Officers          |                                                                            |                    |                 |            |                     |  |      |     
|William J. Adams                                |                                                                            |                    | 20,000          |            |                     |  | *    |     
|Allan L. Chapman                                |                                                                            |                    | 248,008         |            |                     |  | *    |     
|Ira L. Gottshall                                |                                                                            |                    | 0               |            |                     |  | 0    |     
|Martin Oliner(2)                                |                                                                            |                    | 72,867,965      |            |                     |  | 83.5 | %   
|All Directors and Executive Officers
as a Group |                                                                            |                    |                 |            |                     |  |      |     
|                                                | (5 Persons)(2)                                                             |                    |                 | 73,135,973 |                     |  |      | 83.8 | %



---

|*   |  | Owns less than 1% of the Companys outstanding shares of common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(1) |  | Evergreen Acceptance Corporation is a wholly owned subsidiary of First
Lincoln Holdings, Inc. Evergreen Acceptance Corporation is the record
owner of 71,857,965 shares of the Companys common stock; Evergreen
Acceptance Corporation and First Lincoln Holdings, Inc. share voting and
investment power with respect to such shares. First Lincoln Holdings,
Inc. is the record owner of 1,010,000 shares of the Companys common
stock, as to which it has sole voting and investment power.                                                                   
|   
|   
|   
|   
|(2) |  | Information presented for Mr. Oliner includes shares of the Companys
common stock that are owned by First Lincoln Holdings, Inc. and its wholly
owned subsidiary, Evergreen Acceptance Corporation. Mr. Oliner serves as
Chairman of the Board, Chief Executive Officer and President of First
Lincoln Holdings, Inc. Mr. Oliner and trusts for the benefit of his
family are the beneficial owners of all of the outstanding capital stock
of First Lincoln Holdings, Inc. Mr. Oliner does not have direct ownership
of any shares of the Companys common stock.

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Equity Compensation Plan Information

The following table sets forth certain information as of December 31, 2002
regarding securities authorized for issuance under the Companys equity
compensation plans.

|                                                           |  |                   |       |                   |  |                     |     |           |  |  |           | 
|---------------------------------------------------------- |  | ----------------- | ----- | ----------------- |  | ------------------- | --- | --------- |  |  | --------- | 
|                                                           |  | Number of         |       |                   |  |                     |     |           |  | 
|                                                           |  | securities to be  |       |                   |  |                     |     | Number of
|                                                           |  | issued upon       |       | Weighted-average  |  | securities         
|                                                           |  | exercise of       |       | exercise price of |  | remaining available
|                                                           |  | outstanding       |       | outstanding       |  | for future issuance
|                                                           |  | options, warrants |       | options, warrants |  | under equity       
|                                                           |  | and rights        |       | and rights        |  | compensation plans 
|                                                           |  |                   |       |                   |  |                    
|Equity compensation
plans approved by
security holders     |  |                   | - 0 - |                   |  |                     | N/A |           |  |  | 5,450,000 | 
|Equity compensation
plans not approved
by security holders |  |                   | - 0 - |                   |  |                     | N/A |           |  |  | N/A       | 
|Total                                                      |  |                   | - 0 - |                   |  |                     | N/A |           |  |  | 5,450,000 | 

The compensation plans approved by security holders represent the
Companys 1986 Stock Option Plan and Incentive Stock Option Plan.




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 & Company, LLP. The Company
paid fees of $16,227 to Engel, Kalvin, McMillan & Company, LLP in 2002 in
consideration for accounting and tax services rendered by that firm.




Item 14. Controls and Procedures.

Within the 90-day period prior to the filing date of this report, an evaluation
was conducted under the supervision and with the participation of the Companys
management, including our Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of the Companys disclosure
controls and procedures, as such term is defined in Rules 13a-14(c) and
15d-14(c) under the Securities Exchange Act of 1934 (the Exchange Act).
Based on that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that the Companys disclosure controls and procedures are
effective in bringing to their attention on a timely basis material information
relating to the Company that is required to be disclosed in the Companys
reports that are filed under the Exchange Act. Subsequent to the date that the
Chief Executive Officer and Chief Financial Officer completed their evaluation,
there have not been any significant changes in the Companys internal controls
or in other factors that could significantly affect such internal controls.

9



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##### Table of Contents






PART IV




Item 15. Exhibits, Financial Statements and Financial Statement Schedules and Reports on Form 8-K.

(a)  Index to Financial Statements and Financial Statement Schedules.

|                                                                                             |  |          |      | 
|-------------------------------------------------------------------------------------------- |  | -------- | ---- | 
|                                                                                             |  | Page No.
|                                                                                             |  |         
|Report of Singer Lewak Greenbaum & Goldstein LLP                                             |  |          | F-1  | 
|Balance Sheets  December 31, 2002 and 2001                                                  |  |          | F-2  | 
|Statements of Operations 
Years Ended December 31, 2002, 2001 and 2000                      |  |          | F-3  | 
|Statements of Changes in Shareholders Equity 
Years Ended December 31, 2002, 2001 and 2000 |  |          | F-4  | 
|Statements of Cash Flows 
Years Ended December 31, 2002, 2001, 2000                         |  |          | F-5  | 
|Notes to Financial Statements                                                                |  |          | F-6  | 
|Report of Singer Lewak Greenbaum & Goldstein LLP on Schedules                                |  |          | F-14 | 
|Supplemental Information  Selected Quarterly Financial Data                                 |  |          | F-15 | 
|Schedule II  Valuation and Qualifying Accounts                                              |  |          | F-16 | 
|Schedule III  Real Estate and Accumulated Depreciation                                      |  |          | F-17 | 

| |                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Schedules not listed above are omitted
because they are inapplicable or the
information required is presented in the
financial statements or the footnotes
thereto.

(b)  Exhibits.

|     |  |                                                                                                                                                                                                                           
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1  |  | Certificate of Incorporation of the Company as amended and restated to
date, incorporated herein by this reference to Exhibit 3.1 to the
Companys Annual Report on Form 10-K for the fiscal year ended December
31, 1991.
|    
|3.2  |  | By-laws of the Company, incorporated herein by this reference to Exhibit
3.2 to the Companys Annual Report on Form 10-K for the fiscal year
ended December 31, 1990.                                                     
|    
|10.1 |  | 1986 Stock Option Plan, incorporated herein by this reference to Exhibit
10.1 to the Companys Annual Report on Form 10-K for the fiscal year
ended December 31, 1991.                                                    
|    
|10.2 |  | Incentive Stock Option Plan, incorporated herein by this reference to
Exhibit 10.2 to the Companys Annual Report on Form 10-K for the fiscal
year ended December 31, 1991.                                               

10



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##### Table of Contents



|     |  |                                                                                                                                                                                                                                           
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|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 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.  
|    
|99.1 |  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. § 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                              
|    
|99.2 |  | Certification of Chief Financial Officer Pursuant to 18 U.S.C. § 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                               

(c)  Reports on Form 8-K.

The Company did not file any Reports on Form 8-K for the quarter ended December
31, 2002.

11



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##### Table of Contents






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, 2003 |  | REGENCY EQUITIES CORP.
|                     |  | By:                    |  | /s/ Allan L. Chapman                                                          
|                     |  |                        |  |                                                                               
|                     |  |                        |  | Allan L. Chapman, Chairman of the Board, Chief
Executive Officer and President

12



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##### Table of Contents



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, 2003 |  | By: |  | /s/ Allan L. Chapman                                                                                       
|                     |  |     |  |                                                                                                            
|                     |  |     |  | Allan L. Chapman
Chairman of the Board, Chief Executive Officer and
President
(Principal Executive Officer)
|                    
|Date: March 26, 2003 |  | By: |  | /s/ Morris Engel                                                                                           
|                     |  |     |  |                                                                                                            
|                     |  |     |  | Morris Engel
Chief Financial Officer and Treasurer 
(Principal Financial and Accounting Officer)           
|                    
|Date: March 26, 2003 |  | By: |  | /s/ William J. Adams                                                                                       
|                     |  |     |  |                                                                                                            
|                     |  |     |  | William J. Adams
Secretary and Director                                                                    
|                    
|Date: March 26, 2003 |  | By: |  | /s/ Ira. L. Gottshall                                                                                      
|                     |  |     |  |                                                                                                            
|                     |  |     |  | Ira L. Gottshall
Director                                                                                  
|                    
|Date: March 26, 2003 |  | By: |  | /s/ Martin Oliner                                                                                          
|                     |  |     |  |                                                                                                            
|                     |  |     |  | Martin Oliner
Director                                                                                     

13



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##### Table of Contents






CERTIFICATIONS

I, Allan L. Chapman, certify that:



|1. |  | I have reviewed this annual report on Form 10-K of Regency Equities Corp.;                                                                                                                                                                                                                                              
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual
report;                   
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                



| | (a) |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this annual
report is being prepared;
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of the registrants board of directors (or persons performing
the equivalent function):
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14



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|                     |  |                                                                              
|-------------------- |  | -----------------------------------------------------------------------------
|Date: March 26, 2003 |  | /s/ Allan L. Chapman                                                         
|                     |  |                                                                              
|                     |  | Allan L. Chapman
Chairman of the Board, Chief Executive Officer and
President

15



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##### Table of Contents



I, Morris Engel, certify that:



|1. |  | I have reviewed this annual report on Form 10-K of Regency Equities Corp.;                                                                                                                                                                                                                                              
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual
report;                   
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                



| | (a) |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this annual
report is being prepared;
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of the registrants board of directors (or persons performing
the equivalent function):
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                     |  |                                                   
|-------------------- |  | --------------------------------------------------
|Date: March 26, 2003 |  | /s/ Morris Engel                                  
|                     |  |                                                   
|                     |  | Morris Engel
Chief Financial Officer and Treasurer

16



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REGENCY EQUITIES CORP.

ANNUAL REPORT ON FORM 10-K

ITEM 8, ITEM 15(a)(1) and 15(a)(2)

FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

THREE YEARS ENDED DECEMBER 31, 2002





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##### Table of Contents



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, 2002 and 2001, and the related statements of operations,
shareholders equity, and cash flows for the years then ended. 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 auditing standards generally
accepted in the United States of America. 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. as of
December 31, 2002 and 2001 and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.

|                                       |  | 
|-------------------------------------- |  | 
|Singer Lewak Greenbaum & Goldstein LLP

Los Angeles, California
February 20, 2003

F-1



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##### Table of Contents



REGENCY EQUITIES CORP.

BALANCE SHEETS

|                                     |                                                                                                                                                       |   |              |             |      |   |           |             |  
|------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------ | ----------- | ---- | - | --------- | ----------- | -
|                                     |                                                                                                                                                       |   | DECEMBER 31,
|                                     |                                                                                                                                                       |   |             
|                                     |                                                                                                                                                       |   | 2002         |             | 2001
|                                     |                                                                                                                                                       |   |              |             |     
|ASSETS                               |                                                                                                                                                       |   |              |             |      |   |           |            
|                                     | Cash (Note A)                                                                                                                                         |   | $            | 2,736,423   |      |   | $         | 2,965,258   |  
|                                     | Rent receivable                                                                                                                                       |   |              | 5,945       |      |   |           | 3,337       |  
|                                     | Prepaid insurance                                                                                                                                     |   |              | 29,372      |      |   |           |             |  
|                                     | Rental property owned, net of write
down for possible loss of $215,000
and accumulated depreciation of
$549,380 in 2002 and $512,148 in
2001 (Note B) |   |              | 707,061     |      |   |           | 744,293     |  
|                                     |                                                                                                                                                       |   |              |             |      |   |           |            
|                                     |                                                                                                                                                       | $ | 3,478,801    |             |      | $ | 3,712,888 |            
|                                     |                                                                                                                                                       |   |              |             |      |   |           |            
|LIABILITIES AND SHAREHOLDERS EQUITY |                                                                                                                                                       |   |              |             |      |   |           |            
|LIABILITIES                          |                                                                                                                                                       |   |              |             |      |   |           |            
|                                     | Accounts payable and accrued
expenses                                                                                                                 |   | $            | 30,383      |      |   | $         | 82,209      |  
|                                     | Income taxes payable (Note C)                                                                                                                         |   |              | 1,220       |      |   |           | 1,220       |  
|                                     |                                                                                                                                                       |   |              |             |      |   |           |            
|                                     |                                                                                                                                                       |   | 31,603       |             |      |   | 83,429    |            
|                                     |                                                                                                                                                       |   |              |             |      |   |           |            
|SHAREHOLDERS EQUITY:                |                                                                                                                                                       |   |              |             |      |   |           |            
|                                     | Preferred stock, par value $.01
per share, authorized 5,000,000
shares; none issued                                                                   |   |              |             |      |   |           |             |  
|                                     | Common stock, par value $.01
per share, authorized
125,000,000 shares; issued and
outstanding 87,283,661 shares                                       |   |              | 872,836     |      |   |           | 872,836     |  
|                                     | Additional paid-in capital                                                                                                                            |   |              | 47,660,331  |      |   |           | 47,660,331  |  
|                                     | Accumulated deficit                                                                                                                                   |   |              | (45,085,969 | )    |   |           | (44,903,708 | )
|                                     |                                                                                                                                                       |   |              |             |      |   |           |            
|                                     |                                                                                                                                                       |   | 3,447,198    |             |      |   | 3,629,459 |            
|                                     |                                                                                                                                                       |   |              |             |      |   |           |            
|                                     |                                                                                                                                                       | $ | 3,478,801    |             |      | $ | 3,712,888 |            
|                                     |                                                                                                                                                       |   |              |             |      |   |           |            

See accompanying notes to financial statements.

F-2



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##### Table of Contents



REGENCY EQUITIES CORP.

STATEMENTS OF OPERATIONS

|                                              |                            |                          |            |                         |          |      |            |         |          |   |            |         |         |  
|--------------------------------------------- | -------------------------- | ------------------------ | ---------- | ----------------------- | -------- | ---- | ---------- | ------- | -------- | - | ---------- | ------- | ------- | -
|                                              |                            |                          |            | YEAR ENDED DECEMBER 31,
|                                              |                            |                          |            |                        
|                                              |                            |                          |            | 2002                    |          | 2001 |            | 2000   
|                                              |                            |                          |            |                         |          |      |            |        
|REVENUES:                                     |                            |                          |            |                         |          |      |            |         |          |   |            |        
|                                              | Interest income            |                          | $          | 43,681                  |          |      | $          | 114,761 |          |   | $          | 146,494 |        
|                                              | Rental income              |                          |            | 49,409                  |          |      |            | 49,182  |          |   |            | 50,051  |        
|                                              |                            |                          |            |                         |          |      |            |         |          |   |            |        
|                                              |                            | TOTAL REVENUES           |            |                         | 93,090   |      |            |         | 163,943  |   |            |         | 196,545 |  
|                                              |                            |                          |            |                         |          |      |            |         |          |   |            |        
|EXPENSES:                                     |                            |                          |            |                         |          |      |            |         |          |   |            |        
|                                              | Administrative expense     |                          |            | 106,077                 |          |      |            | 99,894  |          |   |            | 102,156 |        
|                                              | Professional fees (Note E) |                          |            | 47,432                  |          |      |            | 105,748 |          |   |            | 55,290  |        
|                                              | Rental expense             |                          |            | 120,622                 |          |      |            | 108,458 |          |   |            | 115,461 |        
|                                              |                            |                          |            |                         |          |      |            |         |          |   |            |        
|                                              |                            | TOTAL EXPENSES           |            |                         | 274,131  |      |            |         | 314,100  |   |            |         | 272,907 |  
|                                              |                            |                          |            |                         |          |      |            |         |          |   |            |        
|                                              |                            | LOSS BEFORE INCOME
TAXES |            |                         | (181,041 | )    |            |         | (150,157 | ) |            |         | (76,362 | )
|PROVISION FOR INCOME TAXES
(NOTE C)           |                            |                          | 1,220      |                         |          |      | 2,020      |         |          |   | 2,020      |        
|                                              |                            |                          |            |                         |          |      |            |         |          |   |            |        
|                                              |                            | NET LOSS                 |            | $                       | (182,261 | )    |            | $       | (152,177 | ) |            | $       | (78,382 | )
|                                              |                            |                          |            |                         |          |      |            |         |          |   |            |        
|WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING |                            |                          | 87,283,661 |                         |          |      | 87,283,661 |         |          |   | 87,283,661 |        
|                                              |                            |                          |            |                         |          |      |            |         |          |   |            |        
|NET LOSS PER SHARE                            |                            | $                        | (.002      | )                       |          | $    | (.002      | )       |          | $ | (.001      | )      
|                                              |                            |                          |            |                         |          |      |            |         |          |   |            |        

See accompanying notes to financial statements.

F-3



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##### Table of Contents



REGENCY EQUITIES CORP.

STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

THREE YEARS ENDED DECEMBER 31, 2002

|                             |          |  |              |  |            |   |         |  |         |   |             |  |  |   |             |          |  
|---------------------------- | -------- |  | ------------ |  | ---------- | - | ------- |  | ------- | - | ----------- |  |  | - | ----------- | -------- | -
|                             |          |  | COMMON STOCK |  |            |   |         |  |         |   |            
|                             |          |  |              |  | ADDITIONAL |   |         |  |        
|                             |          |  | NUMBER OF    |  |            |   |         |  | PAID-IN |   | ACCUMULATED
|                             |          |  | SHARES       |  | AMOUNT     |   | CAPITAL |  | DEFICIT
|                             |          |  |              |  |            |   |         |  |        
|BALANCE AT
January 1, 2000   |          |  | 87,283,661   |  |            | $ | 872,836 |  |         | $ | 47,660,331  |  |  | $ | (44,673,149 | )       
|                             | Net loss |  |              |  |            |   |         |  |         |   |             |  |  |   |             | (78,382  | )
|                             |          |  |              |  |            |   |         |  |         |   |             |  |  |   |             |         
|BALANCE AT
December 31, 2000 |          |  | 87,283,661   |  |            |   | 872,836 |  |         |   | 47,660,331  |  |  |   | (44,751,531 | )       
|                             | Net loss |  |              |  |            |   |         |  |         |   |             |  |  |   |             | (152,177 | )
|                             |          |  |              |  |            |   |         |  |         |   |             |  |  |   |             |         
|BALANCE AT
December 31, 2001 |          |  | 87,283,661   |  |            |   | 872,836 |  |         |   | 47,660,331  |  |  |   | (44,903,708 | )       
|                             | Net loss |  |              |  |            |   |         |  |         |   |             |  |  |   |             | (182,261 | )
|                             |          |  |              |  |            |   |         |  |         |   |             |  |  |   |             |         
|BALANCE AT
December 31, 2002 |          |  | 87,283,661   |  |            | $ | 872,836 |  |         | $ | 47,660,331  |  |  | $ | (45,085,969 | )       
|                             |          |  |              |  |            |   |         |  |         |   |             |  |  |   |             |         

See accompanying notes to financial statements.

F-4



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##### Table of Contents



REGENCY EQUITIES CORP.

STATEMENTS OF CASH FLOWS

|                            |  |   |                                                                             |                                       |   |                         |           |      |   |          |           |   |   |         |         |  
|--------------------------- |  | - | --------------------------------------------------------------------------- | ------------------------------------- | - | ----------------------- | --------- | ---- | - | -------- | --------- | - | - | ------- | ------- | -
|                            |  |   |                                                                             |                                       |   | YEAR ENDED DECEMBER 31,
|                            |  |   |                                                                             |                                       |   |                        
|                            |  |   |                                                                             |                                       |   | 2002                    |           | 2001 |   | 2000    
|                            |  |   |                                                                             |                                       |   |                         |           |      |   |         
|INCREASE (DECREASE) IN CASH |  |   |                                                                             |                                       |   |                         |           |      |   |          |           |  
|OPERATING ACTIVITIES:       |  |   |                                                                             |                                       |   |                         |           |      |   |          |           |  
|                            |  |   | Net loss                                                                    |                                       | $ | (182,261                | )         |      | $ | (152,177 | )         |   | $ | (78,382 | )      
|                            |  |   | Adjustments to reconcile net
loss to net cash used in
operating activities: |                                       |   |                         |           |      |   |          |           |   |   |         |        
|                            |  |   |                                                                             | Depreciation                          |   |                         | 37,232    |      |   |          | 37,232    |   |   |         | 37,232  |  
|                            |  |   | Changes in operating assets
and liabilities:                                |                                       |   |                         |           |      |   |          |           |   |   |         |        
|                            |  |   | Rent receivable                                                             |                                       |   | (2,608                  | )         |      |   | 1,135    |           |   |   |        |        
|                            |  |   | Prepaid insurance                                                           |                                       |   | (29,372                 | )         |      |   |         |           |   |   |        |        
|                            |  |   | Accounts payable and accrued
expenses                                       |                                       |   | (51,826                 | )         |      |   | 51,219   |           |   |   | 399     |        
|                            |  |   |                                                                             |                                       |   |                         |           |      |   |          |           |  
|                            |  |   |                                                                             | NET CASH USED IN
OPERATING ACTIVITIES |   |                         | (228,835  | )    |   |          | (62,591   | ) |   |         | (40,751 | )
|                            |  |   |                                                                             |                                       |   |                         |           |      |   |          |           |  
|DECREASE IN CASH            |  |   | (228,835                                                                    | )                                     |   |                         | (62,591   | )    |   |          | (40,751   | )
|CASH, BEGINNING OF YEAR     |  |   | 2,965,258                                                                   |                                       |   |                         | 3,027,849 |      |   |          | 3,068,600 |  
|                            |  |   |                                                                             |                                       |   |                         |           |      |   |          |           |  
|CASH, END OF YEAR           |  | $ | 2,736,423                                                                   |                                       |   | $                       | 2,965,258 |      |   | $        | 3,027,849 |  
|                            |  |   |                                                                             |                                       |   |                         |           |      |   |          |           |  

See accompanying notes to financial statements.

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##### Table of Contents



REGENCY EQUITIES CORP.

NOTES TO FINANCIAL STATEMENTS

NOTE A  SIGNIFICANT ACCOUNTING POLICIES

BUSINESS: Regency Equities Corp. (the Company) is incorporated in the state
of Delaware. The Company owns and leases to third parties a shopping center in
Grand Rapids, Michigan.

CASH: Cash at December 31, 2002 is deposited with two major U.S. banks. At
December 31, 2002 and throughout the year the Company has maintained balances
in its bank accounts in excess of the federally insured limit.

DEPRECIATION: Rental property is depreciated over its estimated useful life of
25 years using the straight-line method.

LONG-LIVED ASSETS: The Company periodically reviews long-lived assets for
impairment to determine whether any events or circumstances indicate that the
carrying amount of the assets may not be recoverable. In determining if an
impairment exists, management estimates the future undiscounted cash flows
expected to be received, including the eventual disposition of the asset, less
the related estimated cash out-flows expected to be incurred. If an impairment
is indicated based upon the above, a determination is made of the
asset's estimated fair value based upon recent appraisals. If the estimated fair value
is less than the asset's net book value, an impairment is recognized.

RENTAL INCOME: The Company recognizes minimum rents from leases on a
straight-line basis over the lease term. Overage rentals are recognized in the
period earned.

INCOME TAXES: Deferred tax assets and liabilities are determined based on the
differences between the financial statement and tax bases of assets and
liabilities, using enacted tax rates in effect for the year in which the
differences are expected to reverse. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.
Income tax expense is the tax payable for the period and the change during the
period in deferred tax assets and liabilities.

(Continued)

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##### Table of Contents



REGENCY EQUITIES CORP.

NOTES TO FINANCIAL STATEMENTS

NOTE A - SIGNIFICANT ACCOUNTING POLICIES (continued)

ACCOUNTING ESTIMATES: The preparation of financial statements requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.

EARNINGS PER SHARE: In February 1997, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards (SFAS) No. 128
Earnings Per Share (EPS). SFAS No. 128 requires dual presentation of basic
EPS and diluted EPS on the face of all income statements issued after December
15, 1997 for all entities with complex capital structures. Basic EPS is
computed as net income (loss) divided by the weighted average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
that could occur from common shares issuable through stock options, warrants
and other convertible securities. As the Company does not have any stock
options, warrants or other convertible securities outstanding, basic and
diluted EPS are the same, and only basic EPS is presented.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS: In June 2001, the Financial
Accounting Standards Board (FASB) issued SFAS No. 141, Business
Combinations. This statement addresses financial accounting and reporting for
business combinations and supersedes Accounting Principles Bulletin (APB)
Opinion No. 16, Business Combinations, and SFAS No. 38, Accounting for
Pre-Acquisition Contingencies of Purchased Enterprises. All business
combinations in the scope of this statement are to be accounted for using one
method, the purchase method. The provisions of this statement apply to all
business combinations initiated after June 30, 2001. Use of the
pooling-of-interests method for those business combinations is prohibited.
This statement also applies to all business combinations accounted for using
the purchase method for which the date of acquisition is July 1, 2001 or later.
This statement is not applicable to the Company.

(Continued)

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##### Table of Contents



REGENCY EQUITIES CORP.

NOTES TO FINANCIAL STATEMENTS

NOTE A  SIGNIFICANT ACCOUNTING POLICIES (continued)

In June 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets. This statement addresses financial accounting and reporting for
acquired goodwill and other intangible assets and supersedes APB Opinion No.
17, Intangible Assets. It addresses how intangible assets that are acquired
individually or with a group of other assets (but not those acquired in a
business combination) should be accounted for in financial statements upon
their acquisition. This statement also addresses how goodwill and other
intangible assets should be accounted for after they have been initially
recognized in the financial statements. It is effective for fiscal years
beginning after December 15, 2001. Early application is permitted for entities
with fiscal years beginning after March 15, 2001, provided that the first
interim financial statements have not been issued previously. This statement
is not applicable to the Company.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. This statement applies to legal obligations associated with the
retirement of long-lived assets that result from the acquisition, construction,
development, and/or the normal operation of long-lived assets, except for
certain obligations of lessees. This statement is not applicable to the
Company.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. This statement addresses financial accounting
and reporting for the impairment or disposal of long-lived assets. This
statement replaces SFAS No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of, the accounting and
reporting provisions of APB No. 30, Reporting the Results of Operations -
Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual, and Infrequently Occurring Events and Transactions,
for the disposal of a segment of a business, and amends Accounting Research
Bulletin No. 51, Consolidated Financial Statements, to eliminate the
exception to consolidation for a subsidiary for which control is likely to be
temporary. The Company does not expect adoption of SFAS No. 143 to have a
material impact, if any, on its financial position or results of operations.

(Continued)

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##### Table of Contents



REGENCY EQUITIES CORP.

NOTES TO FINANCIAL STATEMENTS

NOTE A  SIGNIFICANT ACCOUNTING POLICIES (continued)

In April 2002, the Financial Accounting Standards Board (FASB) issued SFAS
No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections. SFAS No. 145 updates, clarifies,
and simplifies existing accounting pronouncements. This statement rescinds
SFAS No. 4, which required all gains and losses from extinguishment of debt to
be aggregated and, if material, classified as an extraordinary item, net of
related income tax effect. As a result, the criteria in Accounting Principles
Board No. 30 will now be used to classify those gains and losses. SFAS No. 64
amended SFAS No. 4 and is no longer necessary as SFAS No. 4 has been
rescinded. SFAS No. 44 has been rescinded as it is no longer necessary. SFAS
No. 145 amends SFAS No. 13 to require that certain lease modifications that
have economic effects similar to sale-leaseback transactions be accounted for
in the same manner as sale-lease transactions. This statement also makes
technical corrections to existing pronouncements. While those corrections are
not substantive in nature, in some instances, they may change accounting
practices. This statement is not applicable to the Company.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities. This statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit
an Activity (including Certain Costs Incurred in a Restructuring). This
statement requires that a liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred. Under EITF
Issue 94-3, a liability for an exit cost, as defined, was recognized at the
date of an entitys commitment to an exit plan. The provisions of this
statement are effective for exit or disposal activities that are initiated
after December 31, 2002 with earlier application encouraged. This statement is
not applicable to the Company.

(Continued)

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##### Table of Contents



REGENCY EQUITIES CORP.

NOTES TO FINANCIAL STATEMENTS

NOTE A  SIGNIFICANT ACCOUNTING POLICIES (concluded)

In October 2002, the FASB issued SFAS No. 147 Acquisition of Certain Financial
Institutions, SFAS No. 147 removes the requirement in SFAS No. 72 and
Interpretation 9 thereto, to recognize and amortize any excess of the fair
value of liabilities assumed over the fair value of tangible and identifiable
intangible assets acquired as an unidentifiable intangible asset. This
statement requires that those transactions be accounted for in accordance with
SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other
Intangible Assets. In addition, this statement amends SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets, to include
certain financial institution-related intangible assets. This statement is not
applicable to the Company.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure, an amendment of SFAS No. 123. SFAS
No. 148 provides alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee
compensation. In addition, SFAS No. 148 amends the disclosure requirements of
SFAS No. 123 to require more prominent and more frequent disclosures in
financial statements about the effects of stock-based compensation. This
statement is effective for financial statements for fiscal years ending after
December 15, 2002. The Company has not yet determined the impact SFAS No. 148
will have on its financial statements.

NOTE B  RENTAL ACTIVITY

The Company, as lessor, leases space in a shopping center (the Center) located
in Grand Rapids, Michigan.

In July 1997, the lease for the tenant occupying 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.

The remaining approximately 87.5% of the Center is vacant.

(Continued)

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REGENCY EQUITIES CORP.

NOTES TO FINANCIAL STATEMENTS

NOTE C  INCOME TAXES

The provision for income taxes consists of:

|                                                                  |          |  |        |         |      |  |        |         |   |  |        |         |  
|----------------------------------------------------------------- | -------- |  | ------ | ------- | ---- |  | ------ | ------- | - |  | ------ | ------- | -
|                                                                  |          |  | 2002   |         | 2001 |  | 2000  
|                                                                  |          |  |        |         |      |  |       
|Federal:                                                          |          |  |        |         |      |  |        |         |   |  |        |        
|                                                                  | Current  |  | $      |        |      |  | $      |        |   |  | $      |        |  
|                                                                  | Deferred |  |        | (57,039 | )    |  |        | (47,650 | ) |  |        | (25,957 | )
|State:                                                            |          |  |        |         |      |  |        |         |   |  |        |        
|                                                                  | Current  |  |        | 1,220   |      |  |        | 2,020   |   |  |        | 2,020   |  
|                                                                  | Deferred |  |        | (14,497 | )    |  |        | (12,028 | ) |  |        | (1,837  | )
|Increase (decrease)
in valuation allowance
of deferred tax assets |          |  | 71,536 |         |      |  | 59,678 |         |   |  | 27,794 |        
|                                                                  |          |  |        |         |      |  |        |         |   |  |        |        
|                                                                  | Total    |  | $      | 1,220   |      |  | $      | 2,020   |   |  | $      | 2,020   |  
|                                                                  |          |  |        |         |      |  |        |         |   |  |        |        

The reconciliation of the provision for income taxes and the amount computed by
applying the statutory federal income tax rate to earnings before income taxes
is as follows:

|                                                     |  |      |       |      |  |      |       |    |  |  |       |   
|---------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | -- |  |  | ----- | --
|                                                     |  | 2002 |       | 2001 |  | 2000
|                                                     |  |      |       |      |  |     
|Federal tax (benefit) at
statutory rate              |  |      | (34.0 | %)   |  |      | (34.0 | %) |  |  | (34.0 | %)
|State income tax, net of
federal income tax benefit  |  |      | 0.7   |      |  |      | 1.3   |    |  |  | 2.6   |   
|Change in valuation allowance
of deferred tax assets |  |      | 34.0  |      |  |      | 34.0  |    |  |  | 34.0  |   
|                                                     |  |      |       |      |  |      |       |    |  |  |       |   
|Provision for income taxes                           |  |      | 0.7   | %    |  |      | 1.3   | %  |  |  | 2.6   | % 
|                                                     |  |      |       |      |  |      |       |    |  |  |       |   

(Continued)

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##### Table of Contents



REGENCY EQUITIES CORP.

NOTES TO FINANCIAL STATEMENTS

NOTE C  INCOME TAXES (BENEFIT) (continued)

Deferred tax assets (liabilities) consist of:

|                               |                                |   |          |         |      |   |          |         |  
|------------------------------ | ------------------------------ | - | -------- | ------- | ---- | - | -------- | ------- | -
|                               |                                |   | 2002     |         | 2001
|                               |                                |   |          |         |     
|Depreciation                   |                                | $ | (63,822  | )       |      | $ | (64,488  | )      
|                               |                                |   |          |         |      |   |          |        
|                               | Gross deferred tax liabilities |   |          | (63,822 | )    |   |          | (64,488 | )
|                               |                                |   |          |         |      |   |          |        
|Rental property loss allowance |                                |   | 78,153   |         |      |   | 78,153   |        
|Loss carryforwards             |                                |   | 694,675  |         |      |   | 618,875  |        
|                               |                                |   |          |         |      |   |          |        
|                               | Gross deferred tax assets      |   |          | 772,828 |      |   |          | 697,028 |  
|Valuation allowance            |                                |   | (709,006 | )       |      |   | (632,540 | )      
|                               |                                |   |          |         |      |   |          |        
|                               | Net deferred tax assets        |   |          | 63,822  |      |   |          | 64,488  |  
|                               |                                |   |          |         |      |   |          |        
|                               | Deferred taxes                 |   | $        | 0       |      |   | $        | 0       |  
|                               |                                |   |          |         |      |   |          |        

A valuation allowance is provided to reduce the deferred tax assets to a level
which, more likely than not, will be realized. The net deferred assets
reflects managements estimate of the amount which will be realized from future
profitability with reasonable certainty. The net change in the total valuation
allowance for the years ended December 31, 2002, 2001, and 2000 were $76,466,
$63,795 and $153,027, respectively. The increases in 2002 and 2001 result
primarily from managements assessment of the value of the Companys loss
carryforward incurred in those years.

(Continued)

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##### Table of Contents



REGENCY EQUITIES CORP.

NOTES TO FINANCIAL STATEMENTS

NOTE C  INCOME TAXES (BENEFIT) (concluded)

The Company had operating loss carryforwards at December 31, 2002 for federal
income tax purposes as follows:

|            |  |   |           | 
|----------- |  | - | --------- | 
|EXPIRES IN: |  |   |           | 
|2006        |  | $ | 630,000   | 
|2009        |  |   | 460,000   | 
|2018        |  |   | 80,000    | 
|2019        |  |   | 85,000    | 
|2020        |  |   | 85,000    | 
|2021        |  |   | 150,000   | 
|2022        |  |   | 181,000   | 
|            |  |   |           | 
|            |  | $ | 1,671,000 | 
|            |  |   |           | 

The Company also had significant California and Michigan state operating loss
carryforwards at December 31, 2002.

The Company made income tax payments of $1,220, $2,020 and $2,020 during 2002,
2001 and 2000, respectively.

NOTE D  INCENTIVE STOCK OPTION PLANS

The Company has incentive stock option plans for certain officers that provide
for options to be granted at a price equal to fair market value at the date of
the grant. Options cannot be exercised after ten years from the date of the
grant or more than three months after the termination of an optionees
employment with the Company. No stock options were granted or exercised in
2000, 2001 or 2002. No options were outstanding at December 31, 2002; however,
options were available to be granted for 5,450,000 shares.

NOTE E  RELATED PARTY TRANSACTIONS

The current Chief Financial Officer is a partner in a certified public
accounting firm which provides accounting and tax services to the Company.
Fees paid by the Company to that firm were $16,227 in 2002, $20,227 in 2001
and $11,182 in 2000.

F-13



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##### Table of Contents



REPORT OF INDEPENDENT AUDITORS
FINANCIAL STATEMENT SCHEDULES

Board of Directors
Regency Equities Corp.

Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental schedules II and III are
presented for purposes of complying with the Securities and Exchange
Commissions rules and are not a part of the basic financial statements. These
schedules have been subjected to the auditing procedures applied in our audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

The Supplemental Information  Selected Quarterly Financial Data was not
audited by us and, accordingly, we do not express an opinion on it.

Singer Lewak Greenbaum & Goldstein LLP

Los Angeles, California
February 20, 2003

F-14



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##### Table of Contents



REGENCY EQUITIES CORP.
SUPPLEMENTAL INFORMATION
SELECTED QUARTERLY FINANCIAL DATA
(UNAUDITED)

|                       |  |                    |         |         |  |         |         |         |  |   |         |   |  |   |         |  
|---------------------- |  | ------------------ | ------- | ------- |  | ------- | ------- | ------- |  | - | ------- | - |  | - | ------- | -
|                       |  | Three months ended
|                       |  |                   
|                       |  | 12/31/02           |         | 9/30/02 |  | 6/30/02 |         | 3/31/02
|                       |  |                    |         |         |  |         |         |        
|Total revenues         |  | $                  | 22,174  |         |  | $       | 23,342  |         |  | $ | 23,078  |   |  | $ | 24,496  |  
|Loss before
income tax |  | $                  | (56,487 | )       |  | $       | (39,944 | )       |  | $ | (36,949 | ) |  | $ | (47,661 | )
|Net loss               |  | $                  | (56,487 | )       |  | $       | (40,554 | )       |  | $ | (36,949 | ) |  | $ | (48,271 | )
|Loss per share         |  | $                  | (0.001  | )       |  | $       | (0.001  | )       |  | $ | (0.001  | ) |  | $ | (0.001  | )

|                       |  |                    |        |         |  |         |         |         |  |   |         |   |  |   |         |  
|---------------------- |  | ------------------ | ------ | ------- |  | ------- | ------- | ------- |  | - | ------- | - |  | - | ------- | -
|                       |  | Three months ended
|                       |  |                   
|                       |  | 12/31/01           |        | 9/30/01 |  | 6/30/01 |         | 3/31/01
|                       |  |                    |        |         |  |         |         |        
|Total revenues         |  | $                  | 32,368 |         |  | $       | 38,260  |         |  | $ | 44,960  |   |  | $ | 48,355  |  
|Loss before
income tax |  | $                  | (6,419 | )       |  | $       | (16,900 | )       |  | $ | (48,206 | ) |  | $ | (78,632 | )
|Net loss               |  | $                  | (6,419 | )       |  | $       | (17,510 | )       |  | $ | (48,206 | ) |  | $ | (80,042 | )
|Loss per share         |  | $                  | (0.000 | )       |  | $       | (0.000  | )       |  | $ | (0.001  | ) |  | $ | (0.001  | )

F-15



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##### Table of Contents



REGENCY EQUITIES CORP.

VALUATION AND QUALIFYING ACCOUNTS  SCHEDULE II

|                                                                    |                   |  |           |         |            |  |           |   |         |  |   |        |  |  |   |         | 
|------------------------------------------------------------------- | ----------------- |  | --------- | ------- | ---------- |  | --------- | - | ------- |  | - | ------ |  |  | - | ------- | 
|                                                                    |                   |  | Balance,  |         | Additions  |  | Additions |   | Balance
|                                                                    |                   |  | beginning |         | charged to |  | to        |   | end    
|                                                                    |                   |  | of year   |         | operations |  | reserve   |   | of year
|                                                                    |                   |  |           |         |            |  |           |   |        
|Deferred tax valuation
allowance deducted from
deferred tax assets: |                   |  |           |         |            |  |           |   |         |  |   |        |  |  |   |        
|                                                                    | December 31, 2001 |  | $         | 568,745 |            |  | $         |  |         |  | $ | 63,795 |  |  | $ | 632,540 | 
|                                                                    |                   |  |           |         |            |  |           |   |         |  |   |        |  |  |   |        
|                                                                    | December 31, 2002 |  | $         | 632,540 |            |  | $         |  |         |  | $ | 76,466 |  |  | $ | 709,006 | 
|                                                                    |                   |  |           |         |            |  |           |   |         |  |   |        |  |  |   |        

F-16



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##### Table of Contents



REGENCY EQUITIES CORP.
REAL ESTATE AND ACCUMULATED DEPRECIATION    SCHEDULE III

|         |  |              |         |             |  |                    |         |          |  |               |         |                  |  |          |         |          |  |           |           |      |  |         |           |  |  |   |         |           |  |          |  |          |  |  |  | 
|-------- |  | ------------ | ------- | ----------- |  | ------------------ | ------- | -------- |  | ------------- | ------- | ---------------- |  | -------- | ------- | -------- |  | --------- | --------- | ---- |  | ------- | --------- |  |  | - | ------- | --------- |  | -------- |  | -------- |  |  |  | 
|         |  |              |         |             |  |                    |         |          |  | Costs         |         |                  |  |          |         |          |  |           |           |      |  |         |           |  |  |   |         |           |  |          |  |          |  | 
|         |  |              |         |             |  |                    |         |          |  | capitalized   |         | Gross amount     |  |          |         |          |  |           |           |      |  |         |           | 
|         |  |              |         |             |  |                    |         |          |  | subsequent to |         | at which carried |  |          |         |          |  |           |           |      |  |         |           | 
|         |  | Initial Cost |         | acquisition |  | at close of period |         | (2)      |  |               |         |                  |  | Life    
|         |  |              |         |             |  |                    |         | Accumu-  |  |               |         |                  |  | on which
|(1)      |  |              |         |             |  | Bldg. &            |         |          |  |               |         |                  |  |          |         | Bldg. &  |  |           |           |      |  | lated   |           |  |  |   |         | deprecia-
|Descrip- |  |              |         |             |  | Improve-           |         | Improve- |  |               |         |                  |  | Improve- |         | (3)      |  | Deprecia- |           | Date |  | tion is
|tion     |  | Land         |         | ments       |  | ments              |         | Land     |  | ments         |         | Total            |  | tion     |         | acquired |  | computed 
|         |  |              |         |             |  |                    |         |          |  |               |         |                  |  |          |         |          |  |          
|(1)      |  | $            | 266,076 |             |  | $                  | 794,337 |          |  | $             | 411,028 |                  |  | $        | 266,076 |          |  | $         | 1,205,365 |      |  | $       | 1,471,441 |  |  | $ | 549,380 |           |  | Oct 1976 |  | 25 years



---

|(1) |  | The property is a shopping arcade in Grand Rapids, Michigan.                                                                                                                      
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|    |  | The property was not subject to encumbrance at December 31, 2002, 2001, or 2000                                                                                                   
|   
|   
|   
|   
|    |  | An allowance for possible losses of $215,000 has been provided at December 31, 2002
2001, and 2000 to adjust the carrying value of the property to estimated net
realizable value.
|   
|   
|   
|   
|(2) |  | Reconciliation of accumulated depreciation:                                                                                                                                       

|                               |                            |   |         |         |      |   |         |         |  |   |         |         | 
|------------------------------ | -------------------------- | - | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                               |                            |   | 2002    |         | 2001 |   | 2000   
|                               |                            |   |         |         |      |   |        
|Balance at beginning of period |                            | $ | 512,148 |         |      | $ | 474,916 |         |  | $ | 437,684 |        
|Additions during period        |                            |   | 37,232  |         |      |   | 37,232  |         |  |   | 37,232  |        
|                               |                            |   |         |         |      |   |         |         |  |   |         |        
|                               | Balance at close of period |   | $       | 549,380 |      |   | $       | 512,148 |  |   | $       | 474,916 | 
|                               |                            |   |         |         |      |   |         |         |  |   |         |        



|(3) |  | The aggregate cost for federal income tax purposes of the property for each
of the three years December 31, 2000, 2001 and 2002 was $1,471,441.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------

F-17



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##### Table of Contents



REGENCY EQUITIES CORP.

ANNUAL REPORT ON FORM 10-K

INDEX TO EXHIBITS

|               |  |                                                                                                                                                                                                                                            |  |      |  | 
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- |  | 
|Exhibit Number |  | Description                                                                                                                                                                                                                                |  | Page
|               |  |                                                                                                                                                                                                                                            |  |     
|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 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.  

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##### Table of Contents



|               |  |                                                                                                                                              |  |      |  | 
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- |  | 
|Exhibit Number |  | Description                                                                                                                                  |  | Page
|               |  |                                                                                                                                              |  |     
|99.1           |  | Certification of Chief Executive Officer Pursuant
to 18 U.S.C. § 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
|              
|99.2           |  | Certification of Chief Financial Officer Pursuant
to 18 U.S.C. § 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.

2