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

                                   FORM 10-QSB

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

                For the quarterly period ended September 30, 2003

                                       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
        Incorporation or organization)                  Identification Number)

610 Jensen Beach Blvd., Jensen Beach, Florida                    34957
---------------------------------------------                    -----
   (Address of principal executive offices)                   (Zip Code)

Registrant's Telephone Number, including Area Code (772) 334-8181
                                                   --------------

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 November 12, 2003 there were 3,018,412 shares of the $.01 Par Value Common
Stock outstanding.

Transitional Small Business Disclosure Form (check one): Yes |_| No |X|

<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
                        Index to the Financial Statements

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

         Item 1.  Financial Statements

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

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

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

                  Notes to Condensed Consolidated Financial Statements....................................8-11

         Item 2.  Management's Discussion and Analysis of Financial Condition
                  And Results of Operations...............................................................12-16

         Item 3.  Controls and Procedures.................................................................16

Part II - Other Information (Unaudited)

         Item 1.  Legal Proceedings.......................................................................16-20

         Item 2.  Changes in Securities and Use of Proceeds...............................................20

         Item 3.  Defaults Upon Senior Securities.........................................................20

         Item 4.  Submission of Matters to a Vote of Security Holders.....................................20

         Item 5.  Other Information.......................................................................20

         Item 6.  Exhibits and Reports on  Form 8-K.......................................................20-22

Signatures................................................................................................23
</TABLE>


                                       2
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                    September 30,      December 31,
                                                         2003             2002
                                                    -------------      ------------
                                                     (Unaudited)        (Audited)
<S>                                                  <C>               <C>
Assets
  Current Assets
      Cash and cash equivalents                      $ 3,044,685       $   101,041
      Marketable securities                           17,995,230                --
      Loan receivable                                         --           250,000
      Accrued receivables                                270,075           164,374
      Notes receivable - current                         293,103           560,573
      Income taxes receivable                                 --            11,149
      Prepaid expenses                                    75,066                --
      Other current assets                                    --            14,935
                                                     -----------       -----------
         Total current assets                         21,678,159         1,102,072
                                                     -----------       -----------

Notes receivable, net of current portion                 836,959           546,427

Property, plant and equipment, net                     1,976,380         2,037,277

Investment in partnership                                549,268        36,433,721

Other Assets
      Aggregate inventory                                832,728           833,611
      Debt issuance costs, net of amortization                --           412,731
      Deferred costs                                     250,000           250,000
      Other                                                1,300             1,373
                                                     -----------       -----------
         Total other assets                            1,084,028         1,497,715
                                                     -----------       -----------

         Total Assets                                $26,124,794       $41,617,212
                                                     ===========       ===========
</TABLE>

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


                                       3
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                  September 30,       December 31,
                                                                                      2003               2002
                                                                                  ------------        ------------
                                                                                   (Unaudited)         (Audited)
<S>                                                                               <C>                 <C>
Liabilities and Shareholders' Equity
  Current Liabilities
      Current portion of long-term debt                                           $         --        $ 13,353,260
      Notes payable - banks                                                                 --             798,938
      Current portion of notes payable - other                                              --             130,036
      Accounts payable                                                                 124,154             365,252
      Accrued expenses                                                               1,629,752           1,899,342
      Loans payable                                                                     90,000                  --
      Taxes payable                                                                         --             183,571
                                                                                  ------------        ------------
         Total current liabilities                                                   1,843,906          16,730,399

  Notes Payable - other, net of current portion                                             --           3,254,098
  Long Term Debt, net of current portion                                                    --           1,292,013
  Deferred Credit                                                                    1,459,183                  --

  Shareholders' Equity
      Serial preferred stock not subject to mandatory redemption                     1,052,988           1,052,988
         (maximum liquidation preference $24,975,312 in 2003 and 2002,
         respectively)
      Common stock, par value $.01 authorized 25,000,000 shares                         37,728              27,055
      Additional paid-in capital                                                     8,177,786           6,106,846
      Readjustment resulting from quasi-reorganization at December 31, 1987         (1,670,596)         (1,670,596)
      Retained earnings                                                             17,682,042          17,282,200
      Note receivable - sale of stock                                               (2,440,000)         (2,440,000)
      Treasury stock, 1,160,247 and 1,115,025 shares in 2003 and 2002,                 (18,243)            (17,791)
         respectively
                                                                                  ------------        ------------
         Total shareholders' equity                                                 22,821,705          20,340,702
                                                                                  ------------        ------------

         Total Liabilities and Shareholders' Equity                               $ 26,124,794        $ 41,617,212
                                                                                  ============        ============
</TABLE>

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


                                       4
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
                 Condensed Consolidated Statements of Operations
             Three and Nine Months Ended September 30, 2003 and 2002
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                           Three Months Ended                    Nine Months Ended
                                                   --------------------------------      ---------------------------------
                                                   September 30,      September 30,      September 30,       September 30,
                                                       2003               2002               2003               2002
                                                   -------------      -------------      -------------       -------------
<S>                                                 <C>                <C>                <C>                <C>
Revenues                                            $        --        $        --        $        --        $        --
                                                    -----------        -----------        -----------        -----------

Costs and expenses
  Selling and administrative                          1,306,583            536,307          2,842,731          1,408,953
                                                    -----------        -----------        -----------        -----------

(Loss) from operations                               (1,306,583)          (536,307)        (2,842,731)        (1,408,953)
Income from equity investment in partnerships           765,729          1,484,996          3,776,245          4,471,796
Rental income                                            23,996                 --             71,988                 --
Dividends and interest                                   56,723             29,217            141,814            113,203
Unrealized gain on marketable securities                 27,802                 --             27,802                 --
Other income                                              7,075              5,580              8,567              6,393
Interest expense                                         (1,435)          (283,548)          (714,150)          (811,896)
                                                    -----------        -----------        -----------        -----------
Income (loss) before income tax expense, and           (426,693)           699,938            469,535          2,370,543
  minority interest
Income tax expense                                         (869)                --            (69,693)                --
Minority interest                                            --              5,395                 --             16,609
                                                    -----------        -----------        -----------        -----------
Income (loss) from continuing operations               (427,562)           705,333            399,842          2,387,152
(Loss) from operations of discontinued                       --            (88,820)                --           (471,129)
  components, net of $0 tax effect in 2002
                                                    -----------        -----------        -----------        -----------
Net income (loss)                                   $  (427,562)       $   616,513        $   399,842        $ 1,916,023
                                                    ===========        ===========        ===========        ===========

Net income (loss) per common share:
  Basic
      Continuing operations                         $     (0.14)       $      0.36        $      0.17        $      1.22
      Discontinued operations                                --              (0.04)                --              (0.24)
                                                    -----------        -----------        -----------        -----------
                                                    $     (0.14)       $      0.32        $      0.17        $      0.98
                                                    ===========        ===========        ===========        ===========
  Diluted
      Continuing operations                         $     (0.14)       $      0.36        $      0.17        $      1.22
      Discontinued operations                                --              (0.04)                --              (0.24)
                                                    -----------        -----------        -----------        -----------
                                                    $     (0.14)       $      0.32        $      0.17        $      0.98
                                                    ===========        ===========        ===========        ===========

Weighted average number of common shares
  outstanding
      Basic                                           3,011,769          1,955,599          2,338,327          1,955,599
      Diluted                                         3,094,871          1,955,599          2,417,198          1,955,599
</TABLE>

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


                                       5
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows
                  Nine Months Ended September 30, 2003 and 2002
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                      September 30,       September 30,
                                                                          2003                2002
                                                                      ------------        ------------
<S>                                                                   <C>                 <C>
Cash flows from operating activities
  Net income                                                          $    399,842        $  1,916,023
  Adjustments to reconcile net income to net cash provided
      (used) by operating activities
         Depreciation and amortization                                     473,628             458,129
         Minority interest                                                      --             (27,860)
         Unrealized gain on marketable securities                          (27,802)                 --
         Income from equity investment in partnerships                  (3,776,245)         (4,471,796)
         Distribution of earnings from partnership                      41,119,881             104,303
         Gain on disposition of net assets of subsidiaries                      --            (262,550)
         Interest accretion on long-term debt                              474,674             722,603
         Stock-based compensation                                            5,686                  --
         Changes in operating assets and liabilities
            Accounts receivable                                                225             163,506
            Loan receivable                                                250,000                  --
            Accrued receivables                                           (129,635)           (113,193)
            Income taxes receivable                                         11,149                  --
            Inventory                                                           --            (238,223)
            Other current assets                                           (60,356)             54,255
            Accounts payable                                              (241,098)            522,716
            Accrued expenses                                              (197,330)            638,780
            Taxes payable                                                 (183,571)                 --
                                                                      ------------        ------------
               Net cash provided (used) by operating activities         38,119,048            (533,307)
                                                                      ------------        ------------
Cash flows from investing activities
  Purchases of marketable securities                                   (17,967,428)                 --
  Capital expenditures                                                          --            (201,004)
  Principal repayments on notes receivable                                     872                  --
  Other                                                                         73              (9,668)
                                                                      ------------        ------------
               Net cash (used) by investing activities                 (17,966,483)           (210,672)
                                                                      ------------        ------------
Cash flows from financing activities
  Net short-term borrowings (payments)                                 (16,034,887)            464,577
  Net long-term borrowings (payments)                                   (1,174,034)            (11,870)
                                                                      ------------        ------------
               Net cash provided (used) by financing activities        (17,208,921)            452,707
                                                                      ------------        ------------
Increase (decrease) in cash and cash equivalents                         2,943,644            (291,272)
Cash and cash equivalents - beginning                                      101,041             310,093
                                                                      ------------        ------------
Cash and cash equivalents - ending                                    $  3,044,685        $     18,821
                                                                      ============        ============
</TABLE>

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


                                       6
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
           Condensed Consolidated Statements of Cash Flows (continued)
                  Nine Months Ended September 30, 2003 and 2002
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                            2003             2002
                                                         ----------       ----------
<S>                                                      <C>              <C>
Supplemental disclosures of cash flow information:
  Cash paid during the year for:
      Income taxes                                       $  252,371       $       --
      Interest                                            4,391,398          144,129
</TABLE>

Supplemental disclosures of non-cash investing and financing activities:

      On July 3, 2003, $2,004,098 in convertible notes payable and $71,378 in
      accrued interest thereupon were converted into 1,037,738 shares of common
      stock.

      On August 8, 2003, the Company reached an agreement to restructure a note
      receivable, whereby accrued interest receivable of $23,934 was converted
      into part of the principal on the new note receivable.

      On September 30, 2002 the Corporation's subsidiary, Rustic Crafts
      International, Inc., sold a majority of its net assets with a book value
      of $844,450 and obtained notes receivable totaling $1,107,000. The
      resultant gain of $262,550 is reflected in the financial statements as a
      reduction of loss from discontinued operations.

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


                                       7
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
              Notes to Condensed Consolidated Financial Statements

Note 1. 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
      Item 310 of Regulation S-B. 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 and nine month periods ended September 30, 2003 are
      not necessarily indicative of the results that may be expected for the
      year ended December 31, 2003. For further information, refer to the
      consolidated financial statements and footnotes thereto included in the
      Company's annual report on Form 10-KSB for the year ended December 31,
      2002 and quarterly reports on Form 10-QSB for the periods ended March 31
      and June 30, 2003.

      The balance sheet at December 31, 2002 has been derived from the audited
      financial statements at that date but does not include all of the
      information and footnotes required by generally accepted accounting
      principles for complete financial statements.

      Principles of Consolidation - The consolidated financial statements
      include the accounts of Regency Affiliates, Inc. (the "Company"), its
      wholly owned subsidiaries, Speed.com Inc., (through March 1, 2003, the
      date it was liquidated); Rustic Crafts International, Inc. ("Rustic
      Crafts") (through September 30, 2002, the date upon which substantially
      all of its net operating assets were disposed); and Neptune Trading Co.,
      Inc. ("Neptune") (through November 26, 2002, the date of it's disposal);
      its 80% owned subsidiaries, National Resource Development Corporation
      ("NRDC") and Transcontinental Drilling Company ("Drilling") and its 75%
      owned subsidiary, Iron Mountain Resources, Inc. All significant
      intercompany balances and transactions have been eliminated in
      consolidation.

Note 2. Earnings Per Share

      Basic earnings per share are computed by dividing net income attributable
      to common shareholders (net income less preferred stock dividend
      requirements and periodic accretion if applicable) by the weighted average
      number of common shares outstanding during the year. Diluted per share
      computations assume conversion of convertible debt and stock options
      outstanding that are "in the money". 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 periods ended September 30, 2002 to reflect
      this change in capital structure.

Note 3. Marketable Securities

      During the quarter ended September 30, 2003, the Company purchased
      marketable securities for cash. The cost and fair value of the Company's
      investments in marketable securities are as follows as of September 30,
      2003:


                                       8
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
              Notes to Condensed Consolidated Financial Statements

<TABLE>
<CAPTION>
                                                                                 Gross
            Trading Securities:                             Amortized         Unrealized
                                                              Cost               Gains          Fair Value
                                                           ------------       ----------       ------------
<S>                                                        <C>                <C>              <C>
               18,000,000 US Treasury Bills                $ 17,967,428       $   27,802       $ 17,995,230
</TABLE>

Note 4. Notes Receivable

      On August 8, 2003, the Company reached an agreement with regard to
      restructuring the note receivable due to its subsidiary, Rustic Crafts,
      from RCI Wood Products, Inc. in the original amount of $400,000, bearing
      interest at 7% per annum with an original maturity of September 30, 2003.
      The Company agreed to the issuance of a judgment note receivable in the
      amount of $423,934 (comprised of $400,000 original principal plus interest
      accrued thereon through August 8, 2003), bearing interest at a rate of
      7.5% based on actual days on a 360-day basis. Monthly payments of
      principal and interest of $5,032 are required beginning September 8, 2003,
      continuing until August 8, 2006, when all outstanding principal and
      interest will become due and payable.

      In connection with the note restructuring, the Company obtained a security
      interest in the accounts receivable, inventory, fixed assets and other
      operating assets of RCI Wood Products, Inc. The judgment note is
      personally guaranteed by the president of RCI Wood Products, Inc.

Note 5. Investment in Partnership

      In April 2003, the Company entered into an amendment to the partnership
      agreement for Security Land and Development Company Limited Partnership
      ("Security"). The amendment provides for the distribution of the net
      proceeds of a loan to Security to the Company and the non-Company partners
      on a 50/50 basis, provided that such allocation would result in a minimum
      distribution to the Company of $39,000,000 (a "qualified financing"). This
      qualified financing was obtained in June 2003 (see below). The amendment
      also provides that, following the qualified financing, the Company will be
      entitled to (i) 95% of Security's distributions of cash flow until it has
      received $2,000,000 of such distributions, and thereafter 50% of such
      distributions, and (ii) once it has received $2,000,000 of cash flow
      distributions, a $180,000 annual management fee from Security. The
      foregoing percentages are inclusive of the Company's interest as a limited
      partner in 1500 Woodlawn, the general partner of Security.

      The refinancing of Security's property at 1500 Woodlawn Drive, Woodlawn,
      Maryland closed on June 24, 2003. US SSA LLC (a single purpose entity
      owned by Security) borrowed $98,500,000 through a public debt issue
      underwritten by CTL Capital, LLC. Proceeds of the refinancing were used to
      repay the outstanding balance of Security's 1994 indebtedness, to
      establish reserves to make capital improvements to the property, to
      provide reserves required by the new debt, to pay costs and expenses
      related to issuing the debt, to pay fees related to the lease extension
      with the GSA and the financing, and to make a distribution to the partners
      of Security. The debt is for a term of 15.3 years maturing October 31,
      2018 at which time the loan will have been paid down to a balance of
      $10,000,000. Security also obtained residual value insurance for
      approximately $10,000,000. The interest cost of the financing is 4.63%.
      The financing is non-recourse to the Company. The Company received
      $41,018,943 from the Security distribution. In connection with the
      Security refinancing and distribution, the Company was required to repay
      its KBC Bank loan. The payoff amount was $14,145,410, which included a
      release fee and make-whole premium.


                                       9
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
              Notes to Condensed Consolidated Financial Statements

Note 6. Repurchase of Common Stock

      In September 2003, the Company's Board of Directors authorized the
      repurchase of the Company's common stock in the aggregate amount not to
      exceed $1,000,000. The shares will be repurchased from time to time in
      open market transactions or privately negotiated transactions at the
      Company's discretion, subject to market conditions and other factors.
      Under the program, no shares will knowingly be purchased from the
      Company's officers or directors or from any such person's affiliates.
      Through November 18, 2003, the Company has not repurchased any shares
      under the repurchase plan.

Note 7. Related Party Transactions

      On July 3, 2003, Royalty Holdings LLC ("Royalty"), the holder of a
      $2,004,098 5% Convertible Promissory Note of the Company due October 16,
      2012 (the "Note"), elected to convert the principal amount of the Note and
      the $71,378 of accrued and unpaid interest thereon into 1,037,738 shares
      of the Company's Common Stock. Royalty is an affiliate of Laurence S. Levy
      and Neil N. Hasson, directors and executive officers of the Company. Also
      on July 3, 2003, the Company prepaid the full $1,250,000 principal amount
      of, and all accrued and unpaid interest under, the 9% Promissory Note held
      by Royalty in accordance with the mandatory prepayment provisions of such
      note. The Company also repaid all amounts outstanding under the $300,000
      working capital loan facility from Royalty, and terminated the facility.
      This amount consisted of $180,000 of principal and $2,910 of accrued and
      unpaid interest.

      In the three months ended September 30, 2003, Royalty Holdings LLC
      ("Royalty") advanced $90,000 to the Company. Accrued interest thereupon at
      September 30, 2003 was $1,756. The principal amount and all accrued
      interest were repaid in full on November 11, 2003.

      Pursuant to a License Agreement entered into in March 2003, Royalty
      Management, Inc., which is wholly-owned by Laurence Levy, the Company's
      President and a director, provides New York City office space, office
      supplies and services to the Company for $100,000 per year.

      On July 23, 2003, the Company repaid the full $130,000 principal amount,
      plus accrued interest of $8,337 thereon, in loans to the Company from its
      former shareholder, Statesman Group, Inc. ("Statesman"). The loans were
      made in July, August and October 2002 prior to the October 2002 repurchase
      by the Company of all of Statesman's shares. The loans bore interest at
      the rate of 7% per annum.

      Beginning with the fiscal quarter ended March 31, 2003, each non-employee
      director is granted 250 shares of Common Stock at the end of each full
      calendar quarter for which such individual has served as a director of the
      Company. Compensation expense of $5,400 has been recognized for issuances
      through September 30, 2003.

Note 8. Legal Proceedings

      On July 7, 2003, the Court in the action entitled Gatz et al. v. Ponsoldt,
      Sr. et al., Case No. 4:02 CV 3113 in the Federal District Court for the
      District of Nebraska, concluded that venue in the District of Nebraska was
      improper and granted defendants' motions to transfer the case to the
      District of Delaware. In connection with the transfer of the case to
      Delaware, the Court denied as moot the other motions pending before it
      without prejudice to their reassertion in the United States District Court
      for the District of


                                       10
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
              Notes to Condensed Consolidated Financial Statements

Note 8. Legal Proceedings (continued)

      Delaware, and cancelled the hearing on plaintiffs' motion for preliminary
      injunction previously set for July 21, 2003.

      On September 8, 2003, the original defendants in the action filed an
      emergency motion in the United States District Court for the District of
      Delaware to terminate prejudgment attachment relating to the compensation
      of Ponsoldt, Sr. On September 23, 2003, the original defendants also filed
      a motion to dismiss the amended Complaint. Statesman filed a motion to
      dismiss the Plaintiffs' amended complaint on September 26, 2003. On
      October 6, 2003, the District Court held a teleconference with the parties
      in which the District Court instructed plaintiffs to file an answering
      brief in response to the motion to dismiss and the motion to terminate
      prejudgment attachment by October 14, 2003.

Note 9. Deferred Credit

      Pursuant to the Security refinancing (see Note 5), the Company received
      $41,018,943 in a distribution. A portion of this distribution is in excess
      of the Company's basis in the investment, which is recognized as a
      deferred credit in the amount of $1,459,183 at September 30, 2003.

Note 10. Subsequent Events

      On October 1, 2003, the Company granted 50,000 options at an exercise
      price of $1.53 per share to each of Messrs. Levy and Hasson, and 2,500
      options at an exercise price of $1.53 per share to each of the Company's
      non-management directors, Stanley Fleishman and Errol Glasser. In
      addition, on October 1, 2003, the Company granted 5,000 options at an
      exercise price of $1.53 to a consultant of the Company. The above option
      grants were made under the 2003 Stock Incentive Plan. The Plan was amended
      on October 1, 2003 to increase the number of shares available for grant
      from 100,000 to 250,000.

      On October 22, 2003, Royalty Holdings LLC, the Company's majority
      stockholder, executed a written consent approving an amendment to the
      Company's Restated Certificate of Incorporation, as amended, to decrease
      the number of shares of authorized stock from 30,000,000 shares to
      10,000,000 shares (consisting of 8,000,000 shares common and 2,000,000
      shares preferred) as authorized by the Board of Directors.

      Please see Part II, Item 1 to this Schedule 10-QSB for a description of
      certain subsequent events relating to certain litigation involving the
      Company.


                                       11
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

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

Forward-Looking Statements and Associated Risk

      Certain statements contained in this Quarterly Report on Form 10-QSB,
      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. This Form 10-QSB contains forward-looking
      statements within the "safe harbor" provisions of the Private Securities
      Litigation Reform Act of 1995 with respect to our financial condition,
      results of operations and business. All forward looking statements in this
      Form 10-QSB are made only as of the date of this report, and we do not
      undertake any obligation to update these forward-looking statements even
      though circumstances may change in the future. 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 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.

(ii)  An unsecured default in the lease on the property owned by Security or its
      sudden catastrophe from uninsured acts of God or war could have a
      materially adverse impact upon the Company's investment in Security and
      therefore its financial position and results of operations.

(iii) 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.

      The following discussion and analysis of the financial condition and
      results of operations of Regency Affiliates, Inc. (the "Company" or "we")
      should be read in conjunction with the accompanying financial statements
      and related notes included in Item 1 of this report as well as our 2002
      Annual Report on Form 10-KSB.


                                       12
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

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

General.

      The Company is committed to enhancing the value of the Company's Common
      Stock by seeking opportunities to monetize its existing assets and by
      seeking new business opportunities on an opportunistic basis. To date, the
      Company has not entered into any letters of intent or entered into any
      binding agreements regarding any such transaction. The Company does not
      propose to restrict its search for business opportunities to any
      particular geographical area or industry, and may, therefore, acquire any
      business, to the extent of its resources. The Company's discretion in the
      selection of business opportunities is unrestricted, subject to the
      availability of such opportunities, economic conditions, and other
      factors. No assurance can be given that the Company will be successful
      identifying or securing a desirable business opportunity, and no assurance
      can be given that any such opportunity that is identified and secured will
      produce favorable results for the Company and its stockholders.

Liquidity and Capital Resources.

      In the three months ended September 30, 2003, Royalty Holdings LLC
      ("Royalty") advanced $90,000 to the Company. Accrued interest thereupon at
      September 30, 2003 is $1,756. The principal amount and all accrued
      interest were repaid in full on November 11, 2003.

      On June 24, 2003, US SSA LLC, a single purpose entity owned by Security,
      borrowed $98,500,000 through a public debt issue underwritten by CTL
      Capital, LLC. Proceeds of the refinancing were used to repay the
      outstanding balance of Security's 1994 indebtedness, to establish reserves
      to make capital improvements to the property, to provide reserves required
      by the new debt, to pay costs and expenses related to issuing the debt, to
      pay fees related to the lease extension with the GSA and the financing,
      and to make a distribution to the partners of Security. The debt is for a
      term of 15.3 years maturing October 31, 2018 at which time the loan will
      have been paid down to a balance of $10,000,000. Security also
      successfully obtained residual value insurance for approximately
      $10,000,000. The interest cost of the financing is 4.63%. The financing is
      non-recourse to the Company. The Company received approximately
      $41,000,000 from the Security distribution. In addition, under the terms
      of the Security partnership agreement, the Company is entitled to (i) 95%
      of Security's distributions of cash flow until it has received $2,000,000
      of such distributions, and thereafter 50% of such distributions and (ii)
      once it has received $2,000,000 of cash flow distributions, a $180,000
      annual management fee from Security. The foregoing percentages are
      inclusive of the Company's interest as a limited partner in 1500 Woodlawn,
      the general partner of Security. In connection with the Security
      refinancing and distribution, the Company was required to repay its KBC
      Bank loan. The payoff amount was approximately $14,125,000, which included
      a release fee and make-whole premium.

      In order to satisfy the Company's working capital needs, in April 2003 the
      Company obtained a loan facility from Royalty Holdings LLC ("Royalty"), an
      affiliate of Messrs. Levy and Hasson, pursuant to which the Company could
      have borrowed up to an aggregate of $300,000 from Royalty. Amounts
      borrowed were evidenced by a demand note bearing interest of 8% per annum.
      On July 3, 2003, the


                                       13
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

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

      Company repaid all amounts outstanding under the $300,000 working capital
      loan facility from Royalty, and terminated the facility. The payment
      amount consisted of $180,000 of principal and $2,910 of accrued and unpaid
      interest.

      On October 16, 2002, the Company redeemed all the shares of Common Stock
      owned by Statesman Group, Inc. ("Statesman"), a former shareholder of the
      Company. The Company funded the redemption from the proceeds of an
      aggregate of $4,750,000 borrowed from Royalty, an affiliate of current
      management, in exchange for two notes - a $3,500,000 5% Convertible
      Promissory Note due October 16, 2012 and a $1,250,000 9% Promissory Note
      due October 16, 2007. Both notes allowed interest to accrue without
      current payment. The principal and interest under the Convertible
      Promissory Note could be converted into Common Stock at a conversion rate
      of $2.00 per shares. On November 7, 2002, Royalty converted $1,495,902 of
      the principal amount of the Convertible Note plus accrued interest into
      750,000 shares of Common Stock and on July 3, 2003, Royalty converted the
      remaining $2,004,098 outstanding principal amount of the Convertible Note
      and the $71,378 of accrued and unpaid interest thereon into 1,037,738
      shares of the Company's Common Stock. The 9% Promissory Note was required
      to be prepaid upon our receipt of sufficient proceeds from the Company's
      investment in Security after discharging certain other indebtedness.
      Accordingly, on July 3, 2003, the Company repaid the full $1,250,000
      principal amount of, and all accrued and unpaid interest under, the 9%
      Promissory Note.

      On September 30, 2002, our subsidiary, Rustic Crafts International, Inc.
      ("Rustic Crafts") sold all of its operating assets subject to the
      assumption of certain of its liabilities. Prior to the sale, Rustic Crafts
      had established a $1,000,000 line of credit with PNC Bank which was
      guaranteed by the Company and expired on May 18, 2002. In conjunction with
      the Rustic Crafts asset sale, Rustic Crafts' indebtedness under the line
      of credit together with its $960,000 mortgage loan from PNC Bank and
      certain other indebtedness to PNC Bank was restructured to replace such
      indebtedness with five notes totaling $2,432,782 and have a ten year
      amortization schedule. The notes bear interest at the blended rate of
      10.8% per annum. As part of the PNC Bank debt restructuring, Rustic Crafts
      was required to pay down the outstanding loan balance with $200,000 of the
      purchase price in the Rustic Crafts asset sale, and was required to make a
      $540,000 payment in December 2002. A $40,000 payment was made to PNC Bank
      in December 2002, but Rustic Crafts and Regency failed to make the balance
      of the December 2002 payment. Accordingly, the PNC Bank debt was
      subsequently modified to provide for the payment of the remaining $500,000
      payment on or before June 30, 2003. On June 30, 2003, the Company paid all
      outstanding principal and interest due to PNC Bank, in satisfaction of the
      above described obligations.

      Management believes that the Company's cash balance and anticipated cash
      flows from operations will be adequate to fund our cash requirements for
      at least the next twelve months.


                                       14
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

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

Results of Operations.

2003 Compared to 2002

      For the three months ended September 30, 2003:

            No revenue was generated by the Company in this period.

            Selling and administrative expenses increased by $770,276 or 144% in
            2003 compared to 2002 due primarily to significant increases in
            professional fees relating to litigation defense. The Company
            continues to benefit from the reduction in executive compensation
            and related expenses.

            Income from equity investment in partnerships decreased by $719,267
            or 48% in 2003 compared to 2002 due to the refinancing of debt and
            increased operating costs of Security.

            Interest expense decreased by $282,113 in 2003 over 2002 as a result
            of the payment of substantially all interest bearing indebtedness in
            the beginning of this quarter.

            Loss from discontinued operations decreased $88,820 which sum
            represented Rustic Crafts loss in the third quarter of 2002.

            Net income decreased by $1,044,075 in 2003 over 2002. The decrease
            was primarily due to increased selling and administrative expenses
            as well as reduced income from equity investments in partnerships.

      For the nine months ended September 30, 2003:

            No revenue was generated by the company in this period.

            Selling and administrative expenses increased by $1,433,778 or 102%
            in 2003 compared to 2002 due primarily to significant increases in
            professional fees relating to litigation defense. The Company
            continues to benefit from the reduction in executive compensation
            and related expenses.

            Income from equity investment in partnerships decreased $695,551 in
            2003 compared to 2002 due to the refinancing of debt and increased
            operating costs of Security.

            Interest expense decreased by $97,746 in 2003 over 2002 as a result
            of the payment of substantially all interest bearing indebtedness
            after June 30, 2003.

            Income tax expense increased by $69,693 as a result of additional
            state tax assessments.

            Loss from discontinued operations decreased $471,129 which sum
            represented Rustic Crafts loss in the first quarter of 2002.


                                       15
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

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

      Net income decreased by $1,516,181 in 2003 over 2002 or 79%. The decrease
      was primarily due to increased selling and administrative expenses as well
      as reduced income from equity investments in partnerships.

      The Company's Shareholders' Equity at September 30, 2003 was $22,821,705
      as compared to $21,794,197 on September 30, 2002, an increase of
      $1,027,508.

Impact of Inflation.

      Although the Company has not attempted to calculate the effect of
      inflation, management does not believe inflation has had a material effect
      on its results of operations.

ITEM 3. CONTROLS AND PROCEDURES.

      The Company's management, with the participation of the Company's Chief
      Executive Officer and Chief Financial Officer, has evaluated the
      effectiveness of the Company's disclosure controls and procedures (as such
      term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
      Exchange Act of 1934, as amended) as of the end of the period covered by
      this report. Based on such evaluation, the Company's Chief Executive
      Officer and Chief Financial Officer have concluded that, as of the end of
      such period, the Company's disclosure controls and procedures are
      effective.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

      On February 7, 2002, a complaint naming the Company 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 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.

      On May 2, 2002, a lawsuit, Gatz et al. v. Ponsoldt, Sr., et al., Case No.
      4:02 CV 3113 (D. Neb.) (the "Shareholder Litigation"), was filed in the
      Federal District Court for the District of Nebraska by two dissident
      Regency shareholders, Edward E. Gatz and Donald D. Graham, against the
      Company, its former Board of Directors and Statesman (the "Original
      Defendants").The five-count complaint purported to be brought on behalf of
      the named plaintiffs, individually, as members of a class of our
      shareholders, and derivatively, and it purported to allege RICO violations
      against Mr. Ponsoldt, Sr. and Statesman, and direct and derivative
      breaches of fiduciary duties by former members of our Board of Directors.
      The complaint asserted that plaintiffs' claims arose from a variety of
      actions taken from 1993 to the present, including the Company's 1996
      employment agreement with Mr. Ponsoldt, Sr., the options granted to


                                       16
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. (continued)

      Statesman pursuant to a 1997 agreement, as amended in 1998, Statesman's
      exercise of its options, the exchange of our interest in Glas-Aire
      Industries Group, Ltd. for shares of our common stock and cash, and our
      reverse stock split which was approved at our 2002 stockholder meeting. In
      addition to damages, the complaint sought to void the shares owned and
      controlled by Mr. Ponsoldt, Sr. and Statesman. On or about July 24, 2002
      the plaintiffs moved for a preliminary injunction which sought, among
      other things, to enjoin any funding to Mr. Ponsoldt Sr., under his
      employment agreement, any acquisition by or transfer of our stock to Mr.
      Ponsoldt, Sr. or Statesman, prohibiting the redemption of Series C
      preferred stock, barring the monetization of the Security partnership
      interest without notice to the Court or plaintiffs, and, in the event of
      such monetization, prohibiting the distribution of any proceeds of such
      monetization.

      On August 27, 2002, the defendants moved for a protective order to prevent
      plaintiffs from interfering with our existing and prospective commercial
      relations and from distributing confidential Company documents. The
      Magistrate Judge granted defendants' motion and, with our agreement, on
      September 12, 2002, the Magistrate Judge entered an Order requiring the
      defendants to give plaintiffs ten days pre-closing notice of any
      transaction that concerned a monetization of our interest in Security.

      On August 30, 2002, the defendants moved to dismiss the Complaint in the
      Shareholder Litigation, on the grounds that the court does not possess
      personal jurisdiction over the individual defendants and for failure to
      state a claim for which relief could be granted. On the same date,
      defendants also filed their opposition to plaintiffs' preliminary
      injunction motion.

      Following an announcement of our October 2002 recapitalization, Plaintiffs
      filed a motion to impose sanctions on October 18, 2002, and an amended
      motion for preliminary injunction on October 23, 2002. On October 21,
      2002, the Magistrate Judge denied Plaintiffs' motion for sanctions, and on
      October 24, 2002, the District Judge denied both of Plaintiffs'
      preliminary injunction motions and, pursuant to the parties' agreement,
      entered an order requiring the defendants to give plaintiffs ten days
      pre-closing notice of any transaction that concerned a monetization of our
      interest in Security.

      On November 8, 2002, Plaintiff Graham delivered a letter to the Company
      alleging various wrongs by our former Board of Directors, including the
      Board's approval of the October 2002 recapitalization, and making various
      demands of the Board. On November 12, 2002 we responded informing Mr.
      Graham that we would form an independent committee of the Board to
      investigate his allegations and demands.


                                       17
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. (continued)

      On November 15, 2002, Plaintiffs filed a motion seeking leave to file an
      amended complaint adding allegations that had occurred since the Complaint
      was filed, and adding additional parties. On December 23, 2002, the
      Magistrate Judge granted Plaintiffs leave to file an amended complaint
      over Original Defendants' objections. Plaintiffs' Amended Complaint was
      filed January 7, 2003, against Original Defendants, and adding as
      defendants Mr. Laurence Levy, Royalty Management, Inc., and Royalty
      Holdings, LLC (the "Royalty Defendants" and together with the Original
      Defendants, the "Defendants"). The Amended Complaint was filed under seal,
      pursuant to a protective order entered by the Court on August 29, 2002,
      allegedly to prevent disclosure of our confidential information. The
      Amended Complaint is similar to the original complaint in most respects,
      continuing the original allegations made against the Original Defendants,
      but it also alleges that the October 2002 recapitalization had given rise
      to additional breaches of fiduciary duties and violations of RICO by the
      Original Defendants and the Royalty Defendants. The Amended Complaint also
      purports to claim that the recapitalization constituted a fraudulent
      conveyance. The Amended Complaint seeks compensatory damages, costs,
      interest and attorneys' fees against all Defendants, treble damages
      against Mr. Ponsoldt, Sr., Statesman and the Royalty Defendants, and also
      punitive damages against Mr. Ponsoldt, Sr. and Statesman. Plaintiffs have
      also asked for a declaration that all stock issued to Statesman, Mr.
      Ponsoldt, Sr., or their affiliates is void, and they ask that the October
      2002 recapitalization be set aside as a fraudulent conveyance.

      On March 6, 2003, the Defendants again filed motions to dismiss the
      Amended Complaint for lack of personal jurisdiction, improper venue, and
      for failure to allege claims on which relief could be granted.

      On April 9, 2003, the Company sent a letter to the Plaintiffs, notifying
      them of the terms of a proposed refinancing by Security of its existing
      indebtedness and requesting that the Plaintiffs voluntarily waive the
      balance of the court-ordered notice period relating to a monetization of
      the Security interest. The Plaintiffs declined to waive the balance of the
      notice period.

      On April 18, 2003, plaintiffs filed motions for a temporary restraining
      order and preliminary injunction seeking to prevent the monetization
      described in the April 9, 2002 notice, or alternatively, preventing use of
      the proceeds of the monetization. A hearing was held on April 21, 2003,
      following which the Court denied plaintiff's motion to prevent the
      monetization and held in abeyance plaintiffs' motion for a preliminary
      injunction with respect to the use of proceeds of a monetization.
      Plaintiffs were granted permission by the Court to conduct certain
      depositions within 45 days following the April 21, 2003 hearing in
      connection with their continuing pursuit of a preliminary injunction. The
      hearing, which was initially scheduled for July 2003, was subsequently
      cancelled after the Court concluded that venue in the District Court of
      Nebraska was improper.


                                       18
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. (continued)

      On May 16, 2003, the Special Committee appointed to investigate the
      allegations and demands made by Mr. Graham in his November 2002 letter,
      delivered its report with respect to five of such demands. The Special
      Committee concluded, among other things, that the October 2002
      recapitalization was properly approved and consummated, and that such
      approval and consummation did not constitute a breach of fiduciary duty by
      the Company's Board of Directors. The Special Committee also determined
      that continued prosecution of the derivative claims relating to the
      October 2002 recapitalization is not in the best interests of the Company
      and the shareholders whose interests would best be served by dismissal of
      such derivative claims, and directed the Board of Directors to cause the
      Corporation to file a motion to dismiss and/or for summary judgment
      dismissing such claims. Mr. Graham's counsel objected to the Special
      Committee's report and requested further investigation. The Special
      Committee conducted further investigation and concluded that no
      modification to the conclusions of its original report were warranted.

      On July 7, 2003, the Court found venue in Nebraska improper, ordered the
      case transferred to the United States District Court for the District of
      Delaware and denied all pending motions with leave to re-file them in
      Delaware.

      On September 8, 2003, the Original Defendants filed an emergency motion in
      the United States District Court for the District of Delaware to terminate
      prejudgment attachment relating to the compensation of Mr. Ponsoldt, Sr.
      On September 23, 2003, the Original Defendants also filed a motion to
      dismiss the amended Complaint. The Statesman Group filed a motion to
      dismiss the Amended Complaint on September 26, 2003. On October 6, 2003,
      the District Court held a teleconference with the parties in which the
      District Court instructed Plaintiffs to file an answering brief in
      response to the motion to dismiss and the motion to terminate prejudgment
      attachment by October 14, 2003.

      On October 14, 2003, the Plaintiffs filed an answering brief in response
      to the motion to terminate prejudgment attachment and a motion for leave
      to amend to file a Second Amended and Supplemental Complaint adding
      allegations as to events which occurred since the filing of the Amended
      Complaint. The Second Amended and Supplemental Complaint also allege
      additional violations of RICO by the Royalty Defendants.

      On October 17, 2003, the Original Defendants filed a reply in support of
      their motion to terminate prejudgment attachment.

      On October 20, 2003, the Plaintiffs filed a motion for an order
      maintaining the status quo, or in the alternative, for preliminary
      injunction, seeking, among other things, to prevent Regency from paying
      any compensation to Mr. Ponsoldt, Sr. or taking any action outside the
      ordinary course of business and to prohibit the Royalty Defendants from
      voting their shares of Regency.

      The District Court held an in-person scheduling conference on October 23,
      2003 at which time the District Court ordered that briefing on Plaintiffs'
      motion for leave to amend and for an order maintaining the status quo,
      each of which is opposed by Defendants, was to be completed by November
      17, 2003.


                                       19
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. (continued)

      On November 7, 2003, the District Court issued a memorandum order granting
      the Original Defendants' motion to terminate prejudgment attachment
      relating to the compensation of Mr. Ponsoldt, Sr. Also on November 7,
      2003, the Royalty Defendants and Regency filed motions to dismiss the
      Amended Complaint. Briefing of the motions filed by the Royalty Defendants
      is expected to be completed shortly. Once briefing on all motions has been
      completed, the Court will take the matters under advisement and advise
      counsel for the parties whether oral argument is necessary on any of the
      motions.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

      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.

                            EXHIBIT AND REPORT INDEX

      (a)   Exhibits

      Exhibit Number                       Description of Exhibit
      --------------                       ----------------------

      3.1(i)(a)               Restated Certificate of Incorporation of the
                                  Company (filed as Exhibit 3.1(i)(a) to the
                                  Company's Quarterly Report on Form 10-Q for
                                  the period ended September 30, 2002, filed on
                                  November 19, 2002, and incorporated herein by
                                  reference)


                                       20
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (continued)

      3.1(i)(b)               Corrected Certificate of Amendment reflecting
                                  amendment to Restated Certificate of
                                  Incorporation of the Company (filed as Exhibit
                                  3.1(i)(b) to the Company's Quarterly Report on
                                  Form 10-Q for the period ended September 30,
                                  2002, filed on November 19, 2002, and
                                  incorporated herein by reference)

      3.1(i)(c)               Certificate of Designation - Series B Preferred
                                  Stock, $10 Stated Value, $.10 par value (filed
                                  as Exhibit to Form 10-K dated June 7, 1993 and
                                  incorporated herein by reference).

      3.1(i)(d)               Amended and Restated Certificate of Designation,
                                  Series C Preferred Stock, $100 Stated Value,
                                  $.10 par value (filed as Exhibit 99.4 to the
                                  Company's Current Report on Form 8-K filed on
                                  October 18, 2002, and incorporated herein by
                                  reference).

      3.1(i)(e)               Certificate of Designation - Series D Junior
                                  Preferred Stock, $10 Stated Value, $.10 par
                                  value (filed as Exhibit to Form 10-K dated
                                  June 7, 1993 and incorporated herein by
                                  reference).

      3.1(i)(f)               Certificate of Designation - Series E Preferred
                                  Stock, $100 Stated Value, $.10 par value
                                  (filed as Exhibit 4.1 to the Company's Annual
                                  Report on Form 10-K for the year ended
                                  December 31, 1995 at page E-1, and
                                  incorporated herein by reference).

      3.1(ii)(a)              By-laws of the Company (filed as Exhibit 3.4 to
                                  the Company's Registration Statement on Form
                                  S-1, Registration Number 2-86906, and
                                  incorporated herein by reference)

      3.1(ii)(b)              Amendment No. 1 to By-Laws of the Company (filed
                                  as Exhibit 3.1(ii)(b) to the Company's
                                  Quarterly Report on Form 10-Q for the period
                                  ended September 30, 2002, filed on November
                                  19, 2002, and incorporated herein by
                                  reference)

      10.1                    Eighth Amendment to Security Land and Development
                                  Company Limited Partnership Amended and
                                  Restated Limited Partnership Agreement and
                                  Amended and Restated Certificate of Limited
                                  Partnership (filed as Exhibit 10.27 to the
                                  Company's Report on Form 10-KSB, filed on
                                  April 15, 2003 and incorporated herein by
                                  reference)

      10.2                    Ninth Amendment to Security Land and Development
                                  Company Limited Partnership Amended and
                                  Restated Limited Partnership Agreement (filed
                                  as Exhibit 10.1 to the Company's Form 8-K
                                  filed on June 25, 2003, and incorporated
                                  herein by reference)


                                       21
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (continued)

      10.3                    Seventh Amendment to First Amended and Restated
                                  Limited Partnership Agreement of 1500 Woodlawn
                                  Limited Partnership (filed as Exhibit 10.2 to
                                  the Company's Form 8-K filed on June 25, 2003,
                                  and incorporated herein by reference.)

      31.1                    Chief Executive Officer's Certificate, pursuant to
                                  Section 302 of the Sarbanes-Oxley Act of 2002.

      31.2                    Chief Financial Officer's Certificate, pursuant to
                                  Section 302 of the Sarbanes-Oxley Act of 2002.

      32.1                    Certification of Chief Executive Officer pursuant
                                  to 18 U.S.C. Section 1350, as adopted pursuant
                                  to Section 906 of the Sarbanes-Oxley Act of
                                  2002

      32.2                    Certification of Chief Financial Officer pursuant
                                  to 18 U.S.C. Section 1350, as adopted pursuant
                                  to Section 906 of the Sarbanes-Oxley Act of
                                  2002

      99.1                    Report of the Special Committee of the Company's
                                  Board of Directors, dated May 10, 2003, and
                                  adopting resolutions (filed as Exhibit 99.2 to
                                  Company's Quarterly Report on Form 10-Q for
                                  the period ended March 31, 2003, and
                                  incorporated by reference herein)

      (b)   Reports on Form 8-K

            Date                   Item Reported             Financial Statement
            ----                   -------------             -------------------

            September 23, 2003           5                          None.


                                       22
<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: November 19, 2003                  /s/ Laurence S. Levy
-----------------------                  ---------------------------------------
                                         (President and Chief Executive Officer)


Date: November 19, 2003                  /s/ Neil N. Hasson
-----------------------                  ---------------------------------------
                                         (Chief Financial Officer)


                                       23
<PAGE>

                            EXHIBIT AND REPORT INDEX

(a)   Exhibits

Exhibit Number                    Description of Exhibit
--------------                    ----------------------

3.1(i)(a)           Restated Certificate of Incorporation of the Company (filed
                        as Exhibit 3.1(i)(a) to the Company's Quarterly Report
                        on Form 10-Q for the period ended September 30, 2002,
                        filed on November 19, 2002, and incorporated herein by
                        reference)

3.1(i)(b)           Corrected Certificate of Amendment reflecting amendment to
                        Restated Certificate of Incorporation of the Company
                        (filed as Exhibit 3.1(i)(b) to the Company's Quarterly
                        Report on Form 10-Q for the period ended September 30,
                        2002, filed on November 19, 2002, and incorporated
                        herein by reference)

3.1(i)(c)           Certificate of Designation - Series B Preferred Stock, $10
                        Stated Value, $.10 par value (filed as Exhibit to Form
                        10-K dated June 7, 1993 and incorporated herein by
                        reference).

3.1(i)(d)           Amended and Restated Certificate of Designation, Series C
                        Preferred Stock, $100 Stated Value, $.10 par value
                        (filed as Exhibit 99.4 to the Company's Current Report
                        on Form 8-K filed on October 18, 2002, and incorporated
                        herein by reference).

3.1(i)(e)           Certificate of Designation - Series D Junior Preferred
                        Stock, $10 Stated Value, $.10 par value (filed as
                        Exhibit to Form 10-K dated June 7, 1993 and incorporated
                        herein by reference).

3.1(i)(f)           Certificate of Designation - Series E Preferred Stock, $100
                        Stated Value, $.10 par value (filed as Exhibit 4.1 to
                        the Company's Annual Report on Form 10-K for the year
                        ended December 31, 1995 at page E-1, and incorporated
                        herein by reference).

3.1(ii)(a)          By-laws of the Company (filed as Exhibit 3.4 to the
                        Company's Registration Statement on Form S-1,
                        Registration Number 2-86906, and incorporated herein by
                        reference)

3.1(ii)(b)          Amendment No. 1 to By-Laws of the Company (filed as Exhibit
                        3.1(ii)(b) to the Company's Quarterly Report on Form
                        10-Q for the period ended September 30, 2002, filed on
                        November 19, 2002, and incorporated herein by reference)

10.1                Eighth Amendment to Security Land and Development Company
                        Limited Partnership Amended and Restated Limited
                        Partnership Agreement and Amended and Restated
                        Certificate of Limited Partnership


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<PAGE>

10.2                Ninth Amendment to Security Land and Development Company
                        Limited Partnership Amended and Restated Limited
                        Partnership Agreement (filed as Exhibit 10.1 to the
                        Company's Form 8-K filed on June 25, 2003 and
                        incorporated herein by reference)

10.3                Seventh Amendment to First Amended and Restated Limited
                        Partnership Agreement of 1500 Woodlawn Limited
                        Partnership (filed as Exhibit 10.2 to the Company's Form
                        8-K filed on June 25, 2003, and incorporated herein by
                        reference.)

31.1                Chief Executive Officer's Certificate, pursuant to Section
                        302 of the Sarbanes-Oxley Act of 2002.

31.2                Chief Financial Officer's Certificate, pursuant to Section
                        302 of the Sarbanes-Oxley Act of 2002.

32.1                Certification of Chief Executive Officer pursuant to 18
                        U.S.C. Section 1350, as adopted pursuant to Section 906
                        of the Sarbanes-Oxley Act of 2002

32.2                Certification of Chief Financial Officer pursuant to 18
                        U.S.C. Section 1350, as adopted pursuant to Section 906
                        of the Sarbanes-Oxley Act of 2002

99.1                Report of the Special Committee of the Company's Board of
                        Directors, dated May 10, 2003, and adopting resolutions
                        (filed as Exhibit 99.2 to Company's Quarterly Report on
                        Form 10-Q for the period ended March 31, 2003, and
                        incorporated by reference herein)

(b)   Reports on Form 8-K

      Date                      Item Reported                Financial Statement
      ----                      -------------                -------------------

      September 23, 2003               5                            None.


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