UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

           X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
          ---        OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2002

                                       OR

               TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


            For the transition period from ___________ to ___________


                         COMMISSION  FILE NUMBER 1-7949

                            REGENCY AFFILIATES, INC.
             (Exact name of registrant as specified in its charter)



                 DELAWARE                                72-0888772
                 --------                                ----------
    (State or other jurisdiction of        (IRS Employer Identification Number)
    incorporation or organization)



729 SOUTH FEDERAL HIGHWAY, SUITE 307, STUART, FLORIDA        34994
-----------------------------------------------------      ---------
     (Address of principal executive offices)              (Zip Code)



Registrant's Telephone Number, including Area Code  (561) 220-7662
                                                    --------------


     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
                                                     -----        -----

As  of  May  20,  2002 there were 1,939,874 shares of the $ .01 Par Value Common
Stock


<PAGE>
<TABLE>
<CAPTION>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                        INDEX TO THE FINANCIAL STATEMENTS




                                                                                  Page
<S>                                                                            <C>
Part I - Financial Information (Unaudited)

     Item 1.  Financial Statements

              Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . .    3-4

              Consolidated Statements of Operations . . . . . . . . . . . . . .      5

              Consolidated Statements of Cash Flows . . . . . . . . . . . . . .    6-7

              Notes to Consolidated Financial Statements  . . . . . . . . . . .   8-12

     Item 2.  Management's Discussion and Analysis of Financial Condition
              and Results of Operations . . . . . . . . . . . . . . . . . . . .  13-15

Part II - Other Information (Unaudited)

     Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . .     16

     Item 2.  Changes in Securities and Use of Proceeds . . . . . . . . . . . .     16

     Item 3.  Defaults Upon Senior Securities . . . . . . . . . . . . . . . . .     16

     Item 4.  Submission of Matters to a Vote of Security Holders . . . . . . .     16

     Item 5.  Other Information . . . . . . . . . . . . . . . . . . . . . . . .     16

     Item 6.  Exhibits and Reports on  Form 8-K . . . . . . . . . . . . . . . .     16

Signatures  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     17
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS




                                                March 31,   December 31,
                                                  2002          2001
                                               -----------  -------------
<S>                                            <C>          <C>
Assets

 Current Assets
  Cash and Cash Equivalents                    $   295,191  $     310,093
  Accounts receivable, net of allowance            361,251        495,160
  Income taxes receivable                            8,988          8,988
  Inventory                                        929,289        953,909
  Other current assets                             320,194        309,663
                                               -----------  -------------
     Total current assets                        1,914,913      2,077,813

Property, Plant and Equipment, Net               2,313,966      2,192,695

Investment in partnerships                      31,565,704     30,183,346

Other Assets

  Aggregate inventory                              834,194        834,194
  Goodwill, net of amortization                    514,617        484,312
  Debt issuance costs, net of amortization         315,053        362,311
  Accrued interest receivable - related party       55,084              -
  Other                                              3,150          5,205
                                               -----------  -------------
     Total other assets                          1,722,098      1,686,022

                                               $37,516,681  $  36,139,876
                                               ===========  =============
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS




                                                                           March 31,     December 31,
                                                                              2002           2001
                                                                          ------------  --------------
<S>                                                                       <C>           <C>
Current Liabilities

   Current portion of long-term debt                                      $   112,060   $     238,145
   Notes Payable - Banks                                                      930,370         906,977
   Accounts payable                                                           458,368         366,440
   Accrued expenses                                                         1,232,598       1,043,221
   Taxes payable                                                              180,000         180,000
                                                                          ------------  --------------
     Total current liabilities                                              2,913,396       2,734,783

Long term debt, net of current portion                                     14,017,647      13,495,178

Minority interest in consolidated subsidiaries                                 26,251          31,741
Shareholders' equity
   Serial preferred stock not subject to mandatory redemption
    (maximum liquidation preference $24,975,312 in 2002 and 2001,
    Respectively                                                            1,052,988       1,052,988
   Common stock, par value $.01 authorized 25,000,000 shares; issued and
    outstanding 1,939,874 shares in 2002 and 2001                              19,399       7,759,509
   Additional paid-in capital                                               8,337,404         597,294
   Readjustment resulting from quasi-reorganization at December 31, 1987   (1,670,596)     (1,670,596)
   Retained earnings                                                       15,270,885      14,589,672
   Note receivable - related party                                         (2,440,000)     (2,440,000)
   Treasury stock, 405,283 shares in 2002 and 2001                            (10,693)        (10,693)
                                                                          ------------  --------------
     Total shareholders' equity                                            20,559,387      19,878,174
                                                                          ------------  --------------

                                                                          $37,516,681   $  36,139,876
                                                                          ============  ==============
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    THREE MONTHS ENDED MARCH 31, 2002 AND 2001
                                   (UNAUDITED)



                                                            2002         2001
                                                         -----------  -----------
<S>                                                      <C>          <C>
Net Sales                                                $  502,883   $3,385,072
                                                         -----------  -----------

Costs and expenses
  Costs of goods sold                                       397,884    2,572,388
  Selling and administrative                                635,271    1,187,923
                                                         -----------  -----------
                                                          1,033,155    3,760,311
                                                         -----------  -----------

(Loss) from operations                                     (530,272)    (375,239)
Income from equity investment in partnerships             1,486,660    1,225,396
Other income, net                                            62,393       24,583
Interest expense                                           (343,058)    (314,345)
                                                         -----------  -----------
Income before income tax expense, and minority interest     675,723      560,395
Income tax expense                                                -      (68,923)
Minority interest                                             5,490      (37,460)
                                                         -----------  -----------
Net income                                               $  681,213   $  454,012
                                                         ===========  ===========

Net income per common share:
  Basic                                                  $     0.35   $     0.26
                                                         ===========  ===========
  Diluted                                                $     0.35   $     0.26
                                                         ===========  ===========


                                                         -----------  -----------
Weighted average number of common shares outstanding      1,939,874    1,725,162
</TABLE>



The accompanying notes are an integral part of these financial statements.


                                        5
<PAGE>
<TABLE>
<CAPTION>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   THREE MONTHS ENDED MARCH 31, 2002 AND 2001
                                  (UNAUDITED)




                                                         2002          2001
                                                     ------------  ------------

<S>                                                  <C>           <C>
Cash flows from operating activities

 Net income                                          $   681,213   $   454,012

Adjustments to reconcile net income to net cash
  used by operating activities
    Depreciation and amortization                         90,589       166,889
    Change in deferred income taxes                            -       (21,818)
    Minority interest                                     (5,490)       32,460
    Income from equity investment in partnerships     (1,382,358)   (1,225,396)
    Interest amortization on long-term debt              252,040       210,771
    Changes in operating assets and liabilities
     Accounts receivable                                 133,909     1,143,075
     Accrued interest receivable                         (55,084)            -
     Inventory                                            24,620       (65,057)
     Other current assets                                (10,531)     (250,579)
     Accounts payable                                     91,928      (246,997)
     Accrued expenses                                    189,377     1,003,337
                                                     ------------  ------------
      Net cash from (used by) operating activities        10,213     1,200,697

Cash flows from investing activities
 Capital expenditures                                   (194,907)      (73,017)
 Other                                                     2,055         8,601
                                                     ------------  ------------
      Net cash used by investing activities             (192,852)      (64,416)
                                                     ------------  ------------

Cash flows from financing activities
 Net short-term borrowings (payments)                     23,393       (89,440)
 Net long-term borrowings (payments)                     144,344      (741,249)
                                                     ------------  ------------
      Net cash from (used) by financing activities       167,737      (830,689)
                                                     ------------  ------------
Foreign currency translation adjustment                        -       (28,255)
Increase (decrease) in cash and cash equivalents         (14,902)      277,337
Cash and cash equivalents - beginning                    310,093       928,636
                                                     ------------  ------------
Cash and cash equivalents - ending                   $   295,191   $ 1,205,973
                                                     ============  ============
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                        6
<PAGE>
<TABLE>
<CAPTION>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                    THREE MONTHS ENDED MARCH 31, 2002AND 2001
                                  (UNAUDITED)




                                                      2002      2001
                                                    --------  --------
<S>                                                 <C>       <C>

Supplemental disclosures of cash flow information:
 Cash paid during the year for:
   Income taxes                                     $      -  $ 86,695
   Interest                                           39,366     6,478
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                        7
<PAGE>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.   Bases of Presentation and Summary of Significant Accounting Policies

          A.   Basis  of  Presentation  -  The  accompanying unaudited condensed
               consolidated  financial  statements  have  been  prepared  in
               accordance  with  generally  accepted  accounting  principles for
               interim  financial  information and with the instructions to Form
               10-Q  and  Article 10 of Regulation S-X. Accordingly, they do not
               include  all  of  the  information  and  footnotes  required  by
               generally  accepted  accounting principles for complete financial
               statements.  In  the  opinion  of  management,  all  adjustments
               (consisting  of  normal  recurring accruals) considered necessary
               for a fair presentation have been included. Operating results for
               the  three-month  period ended March 31, 2002 are not necessarily
               indicative of the results that may be expected for the year ended
               December  31,  2002.  For  further  information,  refer  to  the
               consolidated  financial statements and footnotes thereto included
               in  the  Registrant Company and Subsidiaries' annual  report  on
               Form  10-K  for  the  year  ended  December  31,  2001.

          B.   Principals  of  Consolidation  and  Nature  of  Business  -  The
               consolidated financial statements include the accounts of Regency
               Affiliates,  Inc. (the "Company"), its wholly owned subsidiaries,
               Rustic  Crafts  International,  Inc.  ("Rustic  Crafts"), its 80%
               owned  subsidiaries,  National  Resource  Development Corporation
               ("NRDC"),  Transcontinental  Drilling  Company  ("Drilling")  and
               RegTransco, Inc. ("RTI"), its 75% owned subsidiary, Iron Mountain
               Minerals,  Inc.  ("IMM")  and its 50% owned subsidiary, Glas-Aire
               Industries Group, Ltd. ("Glas-Aire") from September 23, 1999, the
               date  in which the company achieved an ownership interest greater
               than  50%  through  October  1,  2001, the date this interest was
               disposed  of.  All  significant  intercompany  balances  and
               transactions  have  been  eliminated  in  consolidation.

          C.   Earnings  Per  Share  -  Basic earnings per share are computed by
               dividing  net  income  attributable to common shareholders by the
               weighted  average  number of common shares outstanding during the
               year.  Diluted  earnings  per  share  computations  assume  the
               conversion  of  Series  B,  and  Junior  Series D preferred stock
               during  the  period  that  the  preferred  stock  issues  were
               outstanding.  If  the  result  of  these  assumed  conversions is
               dilutive,  the  dividend  requirements and periodic accretion for
               the  preferred  stock issues are reduced. On February 5, 2002 the
               Company's  stockholders  approved  a one-for ten  reverse  stock
               split  of  the  Company's  common  stock,  par  value  $0.40  per
               share,  and  a  decrease in the par value to $0.01 per share. The
               computation  of  basic  and  diluted  EPS have been retroactively
               adjusted  for  the  period  ending March 31, 2001 to reflect this
               change  in  capital  structure.

          D.   Inventory - Inventories are stated at the lower of cost or market
               using  the  first-in,  first-out  (FIFO)  method.  Inventory  is
               comprised  of  the  following  at  March  31,  2002:


                          Raw materials and supplies  $282,822
                          Work-in-process                7,144
                          Finished products            639,323
                                                      $929,289
                                                      ========

          E.   Aggregate  Inventory  -  Inventory, which consists of 70+ million
               short  tons  is stated at lower of cost or market. The Company is
               also subject to a royalty agreement which requires the payment of
               certain  royalties to a previous owner of the aggregate inventory
               upon  sale  of  the  aggregate.  In  December  2001 the aggregate
               inventory  was  sold to Iron Mountain Minerals, Inc., a 75% owned
               subsidiary of the Company. The purchase price was $18,200,000 and
               is  payable,  with  interest  of  2.46%  in  ninety-six


                                        8
<PAGE>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1.   Bases of Presentation and Summary of Significant Accounting Policies
          (Continued)

               equal  payments  of  principal  and  interest commencing December
               2003.  The  intercompany  gain  on  this  transaction  has  been
               eliminated  in  the  consolidation  process  resulting  in  the
               aggregate  inventory  being  carried  at  it's  historical  cost.
               Otherwise,  the  Company  has  made  only  casual  sales  of  the
               inventory  during  the  periods.

          F.   Income  Taxes  -  The  Company  utilizes  Statement  of Financial
               Accounting Standards No. 109 ("SFAS 109"), "Accounting for Income
               Taxes,"  which  requires  an  asset  and  liability  approach  to
               financial  accounting  and  reporting  for  income  taxes.  The
               difference  between  the  financial  statement  and  tax basis of
               assets  and  liabilities  is determined annually. Deferred income
               tax  assets  and  liabilities  are  computed  for those temporary
               differences  that  have future tax consequences using the current
               enacted  tax  laws  and  rates that apply to the periods in which
               they  are  expected  to affect taxable income. In some situations
               SFAS  109  permits  the  recognition  of  expected  benefits  of
               utilizing  net  operating  loss  and  tax  credit  carryforwards.
               Valuation  allowances  are  established  based  upon management's
               estimate,  if  necessary.  Income  tax expense is the current tax
               payable  or  refundable  for  the  period  plus  or minus the net
               exchange  in  the  deferred  tax  assets  and  liabilities.

Note  2.  Investment  in  Partnership

               In  November  1994,  the  Company purchased a limited partnership
               interest  in  Security  Land  and  Development  Company  Limited
               Partnership  ("Security"),  which  owns  and  operates  an office
               complex. The Company has limited voting rights and is entitled to
               be  allocated 95% of the profit and loss of the Partnership until
               October  31,  2003 (the lease termination date of the sole tenant
               of  the  office  complex)  and  50% thereafter. The Company is to
               receive  certain  limited  cash  flow  after  debt service, and a
               contingent  equity  build-up  depending  upon  the  value  of the
               project  upon  termination  of  the  lease.  The  Company is also
               entitled  to  receive  certain  management  fees  relating to the
               partnership.

               Security  was  organized  to  own  and  operate  two  buildings
               containing  approximately  717,000  net  rentable  square  feet
               consisting  of  a  two-story  office  building  and  a  connected
               six-story office tower. The building was purchased by Security in
               1986 and is located on approximately 34.3 acres of land, which is
               also  owned  by  Security.  The building has been occupied by the
               United  States  Social  Security  Administration's  Office  of
               Disability  and  International  Operations  for  approximately 24
               years  under a lease between the United States of America, acting
               by  and  through  the  General  Services  Administration ("GSA").
               Effective  November  1, 1994, Security and the GSA entered into a
               nine-year  lease (the "Lease") for 100% of the building. Security
               has  received  an opinion of the Assistant General Counsel to the
               GSA  that  lease payments are not subject to annual appropriation
               by  the  United  States Congress and the obligations to make such
               payments  are  unconditional  general  obligations  of the United
               States  Government.

               The  Company  accounts  for  the investment in partnership on the
               equity  method,  whereby  the carrying value of the investment is
               increased  or  decreased  by  the  Company's  allocable  share of
               income  or  loss.  The  investment in partnership included in the
               Consolidated Balance Sheets at March 31, 2002 is $31,565,704. The
               income  from  the  Company's equity investment in the Partnership
               for  the  three  months  ended  March  31,  2002  was $1,436,660.


                                        9
<PAGE>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note  2.  Investment  in  Partnership  (Continued)

               Summarized operating data for Security for the three months ended
               March  31,  2002,  and  March  31,  2001,  is  as  follows:

                                                       2002          2001
               Revenues                          $  3,387,359   $  3,352,823
               Operating Expenses                     963,540        982,451
               Depreciation and Amortization          642,000        716,067
               Interest Expense, Net                  269,545        364,444
                  Net Income                     $  1,512,274   $  1,289,861
                                                 ------------   ------------

               Effective November 30, 2000 the Company invested $10,000 for a 5%
               limited  partnership  interest  in  1500  Wood  Lawn  Limited
               Partnership,  the  general  partner  of  Security.

               The  Company recognized income of $50,000 and $47,317 in 2002 and
               2001,  respectively,  from  the  Woodlawn  Limited  Partnership
               investment.

Note  3.  Note  and  Accrued  Interest  Receivable  -  Related  Party

               On  October  15,  2001  the  Statesman  Group,  Inc.  (Statesman)
               exercised  in full its option, which had been granted in 1997, to
               acquire  6,100,000  shares  of the Company's common stock. The
               exercise was made pursuant to an agreement which provided for (1)
               a  purchase  price at $0.40 per share (par value) rather than the
               formula price in the option, which would have yielded 25% less to
               the  Company,  (2)  the execution of a note from Statesman to the
               Company  in  the  principal  amount of $2,440,000 payable in five
               years  with  interest  to accrue at the prevailing prime rate and
               (3)  the  obligation to be collateralized by the 6,100,000 common
               shares  of  the  Company purchased upon exercise of the option as
               well  as the 20% remaining interest in the Company's 80% owned
               subsidiary,  NRDC.  Accrued interest amounted to $55,084 at March
               31,  2002.

               Statesman  is controlled by The Statesman Irrevocable Trust dated
               April  15,  1991, a trust for the benefit of William R. Ponsoldt,
               Jr. (a director of the Company) and two other children of William
               R.  Ponsoldt, Sr., the Company's President and Chief Executive
               Officer.

Note  4.  Note  Payable

               The  Company's  subsidiary,  Rustic  Crafts,  has  established  a
               $1,000,000  line  of  credit  with  PNC  Bank. The line of credit
               expires  on  May 18, 2002, (with an extention of approximately 90
               days)  is  renewable  annually  and  bears interest at the Bank's
               prime  rate minus one-half percent (5.25% at March 31, 2002). The
               accounts receivable, inventory and other assets, such as property
               and  equipment,  of Rustic Crafts have been pledged as collateral
               to secure the line of credit. The line of credit is guaranteed by
               the  Company. At March 31, 2002, the amount outstanding under the
               line  of  credit  was  $930,370.

Note 5.   Long-Term  Debt

               KBC  Bank  Loan  -  On  June 24, 1998, the Company refinanced the
               ---------------
               long-term  debt  previously  outstanding  with  Southern  Indiana
               Properties,  Inc. ("SIPI") and entered into a Loan Agreement (the
               "Loan")  with  KBC Bank N.V. ("KBC"). Under the terms of the Loan
               Agreement,  KBC  advanced $9,383,320. The due date of the Loan is
               November  30,  2003  with interest at the rate of 7.5% compounded
               semi-annually  on each June 1 and December 1, commencing December
               1, 1998. The interest may be paid by the Company in cash on these
               semi-annual dates or the Company may elect to add the interest to
               the  principal  of the Loan then outstanding. The loan is secured
               by  the  Company's  interest  in the partnership. As of March 31,
               2002,  the  amount  outstanding  under  the  Loan is $12,409,507,
               including  $252,040  of interest for the three months ended March
               31,  2002.


                                       10
<PAGE>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 5.   Long-Term Debt (Continued)

               The  Company  purchased  a  residual value insurance policy which
               secures  the  repayment of the outstanding principal and interest
               when  due  with  a  maximum  liability  of $14 million. The costs
               related  to  the  insurance along with legal fees and other costs
               associated  with obtaining the Loan have been capitalized as debt
               issuance  costs and are being amortized over the life of the Loan
               using  the  effective  interest  method.

               Mortgage  Loan  -  On  March  25, 1998, Rustic Crafts purchased a
               --------------
               building  of  126,000  square  feet  located  in  Scranton,
               Pennsylvania. The purchase of this facility was funded in part by
               a  first  mortgage term loan in the amount of $960,000. The first
               mortgage term loan is payable in consecutive monthly installments
               over  10  years  with  a  20  year  amortization.

               Equipment  Loans  - In connection with the purchase of the Rustic
               ----------------
               Crafts  building, PNC Bank loaned the Company a total of $767,000
               to  finance  the acquisition of new equipment and to install such
               equipment  in  the  facility.  Principal  payments on one loan of
               $604,000 began March 2000 for 120 months in amounts sufficient to
               amortize  the  outstanding  balance  over twenty years from March
               2000.  In March 2000 the interest rate was changed to the average
               weekly  yield  on U.S. Treasury Bills, plus 200 basis points. The
               remaining  loan  in the original amount of $163,500 is payable in
               equal  monthly  installments  of  $2,518.

               Miscellaneous  Loan  -  In  June  1999, Rustic Crafts obtained an
               -------------------
               additional  loan  from  PNC  Bank  for  the  purpose  of  funding
               additional  equipment purchases and working capital in the amount
               of  $156,000.  The loan is payable in equal monthly installments,
               including  principal  and  interest,  of  $3,153.

               The  interest  rates on the mortgage loan, the equipment loan and
               the  miscellaneous  loan  range  from 7.52% to 8.25% at March 31,
               2002.  The  outstanding  balance  on these loans is $1,608,140 at
               March  31,  2002.

               Rustic Craft's real and personal property, equipment, accounts
               receivable,  inventory  and other general intangibles are pledged
               as  security  for the loans. The loans are also guaranteed by the
               Company.  The  security  agreement  requires  Rustic  Crafts  to
               maintain  certain  financial  ratios.  Rustic  Crafts  was  in
               compliance  with  such  ratios  at  March  31,  2002.

Note 6.   Income  Taxes

               As  referred  to  in  Note  1,  the  Company  utilizes  SFAS 109,
               "Accounting  for income Taxes." The deferred taxes are the result
               of  long-term  temporary  differences between financial reporting
               and  tax  reporting  for  depreciation,  earnings  from  the
               Company's  partnership  investment  in  Security  Land  and
               Development  Company  Limited Partnership related to depreciation
               and  amortization  and the recognition of income tax carryforward
               items.

               For  regular  federal  income  tax  purposes,  the  Company  has
               remaining  net  operating  loss  carryforwards  of  approximately
               $7,507,000.  These losses can be carried forward to offset future
               taxable  income  and,  if  not  utilized,  will expire in varying
               amounts  beginning  in  the  year  2002.


                                       11
<PAGE>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 6.   Income  Taxes  (Continued)

               For  the  three  months  ended  March 31, 2002, and 2001, the tax
               effect  of  net  operating loss carryforwards reduced the current
               provision  for  regular  Federal  income  taxes  by approximately
               $300,000, and $154,000, respectively. The Company provided $0 and
               $68,923,  for  Canadian, state income and the alternative minimum
               tax  in  the  three  months  ended  March  31,  2002  and  2001,
               respectively.


Note 7.   Related  Party  Transactions

               On  November  2,  2000,  L. J. Horbach, a director of the Company
               through  December  5,  2000  and L. J. Horbach and Associates, of
               which Mr. Horbach is the sole owner, purchased from Mid City Bank
               a certain promissory note of the Company for $71,109, as to which
               he  had  been  a  guarantor.  Thereafter,  Mr. Horbach filed suit
               against  the Company seeking to collect both the principal amount
               of the note and accrued interest which amounted to, collectively,
               $82,978.  In  December  2001,  the Company filed suit against Mr.
               Horbach  seeking  to  avoid  it's  alleged liability and other
               relief.

Note 8.   Segment  Information

               The  Company's operating structure includes operating segments
               for  Automobile  Accessories  through  September  30,  2001  (the
               operations  of  Glas-Aire, which was acquired in September 1999),
               Home  Furnishing  Accessories  (the  operations of Rustic Crafts,
               which  was  acquired  in  March 1997), Investment in Partnerships
               (the  investment  in  Security  Land  and  Development  Limited
               Partnership  and 1500 Wood Lawn Limited Partnership (Note 2), and
               Corporate  and  Other.  The  Company  operates  and generates its
               revenue  in  the  United  States,  Canada  and  Japan.

               Information  about the Company's Operations by segment for the
               periods  presented  follows:

<TABLE>
<CAPTION>
                                                  Home        Investment
                                 Automobile    Furnishing         in        Corporate and
                                Accessories    Accessories   Partnership        Other       Consolidated

<S>                             <C>           <C>            <C>           <C>              <C>
March 31, 2002
--------------
Net sales                       $          -  $    502,883   $          -  $            -   $     502,883
Income from equity investment
  in partnerships                          -             -      1,486,660               -       1,486,660
Segment profit/(loss)                      -      (177,999)     1,486,660        (627,448)        681,213


March 31, 2001
---------------
Net sales                       $  2,962,047  $    423,025   $          -  $            -   $   3,385,072
Income from equity investment
  in partnerships                          -             -      1,225,396               -       1,225,396
Segment profit/(loss)                 75,780      (178,304)     1,225,396        (668,860)        454,012
</TABLE>


                                       12
<PAGE>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


ITEM 2.   MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS  OF  OPERATIONS.

General.

     Regency  Affiliates,  Inc. (the "Company") is the parent company of several
     subsidiary  business operations. The Company is committed to develop and/or
     monetize  these business operations for the benefit of its shareholders and
     continues  to  commit  both  financial and personnel resources to an active
     merger  and  acquisition  program  in order to enhance common stockholder's
     values.  The  Company's  Shareholders  Equity  at  March  31,  2002  was
     $20,559,387  as  compared  to $16,501,809 at March 31, 2001, an increase of
     $4,057,578  for  the  twelve  months  ended  March  31,  2002.

Liquidity  and  Capital  Resources.

     The  investment  in  Security  is  estimated  to  provide  the Company with
     management  fees  of  approximately  $100,000  per annum until 2003. In the
     period  ending  March  31,  2002,  the  Company's income from its equity
     investment  in  the Partnership (as well as it's interest in the General
     Partner,  1500  WoodLawn  L.P.)  was  $1,486,660. These funds, however, are
     presently  committed  for  the  amortization  of  the outstanding principal
     balance  on  Security's real estate mortgage and, while the Company's
     equity  investment in the Partnership has increased to $31,565,704, neither
     provides  liquidity  to  the  Company  in  excess  of  the  $100,000 annual
     management  fee.  The  Company  has,  however, been successful in obtaining
     financing  with  respect  to  this  investment.

     On  March  15,  1998,  Rustic Crafts purchased a building of 126,000 square
     feet  located  near  the  current  facility  in Scranton, Pennsylvania. The
     purchase of this facility was funded by new borrowings from PNC Bank in the
     form of a first mortgage term loan in the amount of $960,000. Rustic Crafts
     also  obtained  financing  of approximately $923,000 from PNC Bank to equip
     the  facility  and purchase new equipment. The move to the new facility was
     completed  in  1999  and has significantly increased the operating capacity
     and  enabled  Rustic Crafts to more efficiently fill its current orders and
     increase its customer base. On the date of acquisition of the new facility,
     a  tenant was renting 23,000 square feet of this facility at a base rent of
     $17,400  per  year  plus  an  allocable share of the real estate taxes. The
     Company  intends  to  maintain this tenant relationship on an ongoing basis
     and  has  rented  an  additional 28,000 square feet to another tenant at an
     annual  minimum  rent  of  $71,680.

     The  Company  has  had  discussions  with  several  companies regarding the
     possible  sale  of  its  interest  in IMM The Company is also exploring the
     possibility of establishing a permanent infrastructure during the year 2002
     to  commercialize  the  inventory  of  previously  quarried  and stockpiled
     aggregate  at  the  Groveland  Mine  in  cooperation  with  an  experienced
     aggregate  supply  company.

     On  April  22,  1999,  the  Company  acquired  513,915  shares (35%) of the
     outstanding  common  stock of Glas-Aire ("Glas-Aire") for the issuance of a
     promissory  note  of  $650,000  due January 1, 2000, at an interest rate of
     7.5%  per  annum,  which  note was guaranteed by Mr. William Ponsoldt, Sr.,
     President  of  the Company and $1,213,000 in cash. As of September 23, 1999
     Regency  had  acquired 51.3% of the common stock of Glas-Aire. These common
     stock acquisitions were effected by open market purchases, with the funding
     provided  by  an  affiliate  of  Statesman  Group,  Inc.  ("Statesman"),  a
     substantial  shareholder  of  the Company, on an unsecured basis, by direct
     purchases  from Glas-Aire, and by a common stock exchange agreement between
     the  Company  and certain shareholders of Glas-Aire. Under the common stock
     exchange  agreement,  the Company issued 1,188,000 shares of its restricted
     common  stock  in  exchange for 288,000 Glas-Aire common shares held by the
     shareholders.


                                       13
<PAGE>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


ITEM 2.   MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS  OF  OPERATIONS.  (CONTINUED)

     The Company also sold 2,852,375 shares of its common stock to Glas-Aire for
     cash  of  $1,967,960  and  86,000  shares  of  Glas-Aire  common stock. The
     proceeds  were  used  to  repay  the  funding  provided  by an affiliate of
     Statesman  and  other  general  corporate  requirements.

Results  of  Operations

     In  September  1999, the Company acquired a 51% interest in Glas-Aire which
     manufacturers  automotive  accessories.  The financial statements for March
     31,  2001  include  the  results  of Glas-Aire, but not those for March 31,
     2002.  The  operations of the Company also include the operations of Rustic
     Crafts,  which  is  engaged  in the manufacturing of decorative fireplaces,
     heater  logs  and  related  accessories.

     On  October  1,  2001,  The  Company  announced  that  it  had  completed a
     transaction  for  the  disposing  of  the  Company's interest in Glas-Aire.
     Pursuant  to an agreement entered into on September 17, 2001 and amended on
     October  1, 2001, the Company exchanged 1,215,105 shares of common stock of
     Glas-Aire,  representing  approximately  50%  of the issued and outstanding
     shares  of  Glas-Aire,  for  $2,500,000  plus 4,040,375 shares of Regency's
     common  stock, or approximately 23% of the issued and outstanding shares of
     Regency. As a result of the transaction, neither Regency nor Glas-Aire owns
     any stock of the other. Glas-Aire generated net sales of $8,378,202 for the
     nine-month  period  ending  September  30,  2001. Income before income from
     equity investment and income tax expense was $449,040 over the same period.
     Glas-Aire  had been included in Regency's consolidated financial statements
     effective  September  23,  1999 (the date that we acquired 51.3% control of
     Glas-Aire)  through  September 30, 2001. Gross margins decreased $1,273,429
     in  2001  over  2000, which is primarily attributable to the disposition of
     Glas-Aire  and  its inclusion in the company's financial statements through
     only  September  30,  2001.

     During  the  period  that Regency owned it's interest of Glas-Aire, Regency
     received  no  cash  from  the  operations of Glas-Aire, so there will be no
     change  in  cash  flow  as  a  result  of the disposition of it's interest.

     The Company's current operations do not generate sufficient cash flow to
     cover  corporate  operating  expenses  and  thus  the  Company must rely on
     external  sources  to fund these expenses. The Company currently has unused
     borrowing capacity and is in discussion with additional external sources to
     provide  for  additional  borrowing  capacity  to  be  used  if  needed.

2002 Compared to 2001

     Net  sales  decreased  $2,882,189  in 2002 over the similar period in 2001,
     which  is  largely  attributable  to  the  disposition  of  the  Glas-Aire
     subsidiary.  The  remaining  difference  is  due to an increase in sales at
     Rustic  Crafts  of  $79,858.

     Gross  margin  decreased  $707,685,  which  is  largely attributable to the
     disposition  of  the Glas-Aire subsidiary. The remaining decrease is due to
     increase  in  gross  margin  from  Rustic  Crafts  of  $33,810.

     Selling  and administrative expenses decreased $552,652 in 2002 as compared
     to  2001,  which  decrease  is  largely  attributable to the disposition of
     Glas-Aire.

     Income from equity in partnerships increased $261,264. This increase is due
     to  a  decrease  in  interest expense of $161,822 resulting from payment of
     principal  and  decreases  in  operating  expenses  for  the  quarter as to
     Security  Land  income.


                                       14
<PAGE>
                    REGENCY AFFILIATES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


ITEM 2.   MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS. (CONTINUED)

     Interest  expense  increased  by  $28,713  and  is  largely attributable to
     increased  interest  expense  on  the  KBC  loan.

     Net  income  increased  $227,201 in 2002 compared to 2001. Increased equity
     earnings  from  partnerships  were  offset  by the disposition of Glas-Aire

Forward-Looking  Statements

     Certain  statements  contained  in  this  Quarterly  Report  on  Form 10-Q,
     including,  but  not  limited to those regarding the Company's financial
     position,  business  strategy,  acquisition  strategy  and  other plans and
     objectives  for  future  operations  and  any other statements that are not
     historical facts constitute "forward-looking statements" within the meaning
     of  the  Private  Securities  Litigation  Reform  Act  of  1995.  Such
     forward-looking  statements  involve known and unknown risks, uncertainties
     and  other  important  factors  that  could  cause  the  actual  results,
     performance  or  achievements  expressed or implied by such forward-looking
     statements  to  differ  materially  from any future results, performance or
     achievements  expressed  or  implied  by  such  forward-looking statements.
     Although  the  Company  believes  that  the expectations reflected in these
     forward-looking  statements  are reasonable, there can be no assurance that
     the  actual  results  or  developments  anticipated  by the Company will be
     realized  or,  even  if  substantially  realized,  that  they will have the
     expected  effect  on  its  business  or  operations.  These forward-looking
     statements  are  made  based  on  management's  expectations and beliefs
     concerning  future  events  impacting  the  Company  and  are  subject  to
     uncertainties  and  factors (including, but not limited to, those specified
     below)  which  are  difficult to predict and, in many instances, are beyond
     the  control of the Company. As a result, actual results of the Company may
     differ  materially  from those results contemplated by such forward-looking
     statements  which  include,  but  are  not  limited  to:

          (i)  The  Company's  current  operations do not generate sufficient
               cash  flow  to  cover  corporate  operating expenses and thus the
               Company must rely on external sources to fund these expenses. The
               Company's ability to continue in existence is partly dependent
               upon  its  ability  to  generate satisfactory levels of operating
               cash  flow.

         (ii)  The  Company  currently lacks the necessary infrastructure at the
               site  of  the  Groveland  Mine to permit the Company to make more
               than  casual  sales  of  the  aggregate.

        (iii)  An  unsecured default in the Lease or sudden catastrophe to the
               Security  West  Building  from uninsured acts of God or war could
               have a materially adverse impact upon the Company's investment
               in  Security Land and Development Company Limited Partnership and
               therefore  its  financial  position  and  results  of operations.

         (iv)  The  failure  of  the Social Security Administration to renew its
               lease  of  the  Security  West  Buildings  upon its expiration on
               October  31, 2003 could have a materially adverse impact upon the
               Company's  investment in Security Land and Development Company
               Limited  Partnership.

          (v)  The Company has significant tax loss and credit carryforwards and
               no  assurance  can  be provided that the Internal Revenue Service
               would  not  attempt  to  limit  or  disallow  altogether  the
               Company's  use,  retroactively  and/or  prospectively, of such
               carryforwards,  due to ownership changes or any other reason. The
               disallowance of the utilization of the company's net operating
               loss  would  severely  impact the Company's financial position
               and  results  of  operations  due  to  the significant amounts of
               taxable  income  (generated  by  the  Company's  investment in
               Security)  that  have  in  the  past been, and is expected in the
               future  to  be,  offset  by  the  Company's net operating loss
               carryforwards.


                                       15
<PAGE>
PART II  -  OTHER INFORMATION


     ITEM 1.  LEGAL PROCEEDINGS.

          On  February  7,  2002  a complaint naming Regency Affiliates, Inc. as
          Defendant was filed in the District Court of Douglas County, Nebraska,
          case  number  1012.  The Plaintiffs are Larry J. Horbach, individually
          and  L.J.  Horbach  &  Associates  and they are demanding payment on a
          Regency  Affiliates  loan  they  purchased  from  Mid  City  Bank. The
          plaintiffs are requesting payment of $82,512.57 plus accrued interest,
          costs  and  attorney fees. We are vigorously defending this litigation
          and  had previously commenced litigation regarding the same subject in
          December  2001.

          On December 14, 2001 we initiated a proceeding in The Circuit Court of
          the  Nineteenth  Judicial  Circuit  in and for Martin County, Florida,
          case number 01-1087-CA against Larry J. Horbach, individually and L.J.
          Horbach & Associates. Larry Horbach was a former interim CFO and Board
          member.  We  claim  that Larry Horbach, without appropriate authority,
          borrowed  $100,050  from  Mid  City  Bank  in  the name of Regency. We
          further  claim that Horbach converted all or part of the proceeds from
          the  loan  for  his  benefit.

          On  September  13, 2001, Glas Aire Industries LTD., Multicorp Holdings
          Inc.,  Glas  Aire  Industries Group Ltd, Craig Grossman, Todd Garrett,
          Speed.Com,  Inc., Regency Affiliates, Inc., William Ponsoldt, and Marc
          Baldinger  were  listed  as  defendants in a proceeding in the Supreme
          Court  of British Columbia with Alex Y. W. Ding as plaintiff. The case
          number  is  S015104.  Mr. Ding, the former president of Glas-Aire, has
          asserted  that  the  October  2001 Regency-Glas-Aire transaction is in
          breach of bank agreements, securities law and fiduciary duties owed to
          Glas-Aire  and  its  stockholders.  While the company has been served,
          plaintiff  has  not  proceeded  on  this  action  and  has not filed a
          statement  of  claim on a timely basis. Should plaintiff continue with
          the action, the defendants, including Regency, would vigorously defend
          this  litigation


     ITEM 2.  CHANGES IN SECURITIES.

          None.

     ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

          None.

     ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

          None.

     ITEM 5.  OTHER INFORMATION.

          None.

     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

          None.


                                       16
<PAGE>
                                   SIGNATURES


     Pursuant  to  the  requirements  of  Section  13 or 15(d) of the Securities
Exchange  Act  of  1934, the Company has duly caused this report to be signed on
its  behalf  by  the  undersigned  thereunto  duly  authorized.




                                          REGENCY AFFILIATES, INC.
                                          ------------------------
                                          (Registrant)



Date: May 20, 2002                        /s/  Marc H. Baldinger
------------------                        ----------------------
                                          (Chief Financial Officer and Director)


                                       17
<PAGE>