TABLE OF CONTENTS




|                                                                                               |                                                                              |  |  |  |  |  |  | 
|---------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART 1  FINANCIAL INFORMATION                                                                
|ITEM 1. FINANCIAL STATEMENTS                                                                  
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                    
|                                                                                               | Note 1. Basis of Presentation and Summary of Significant Accounting Policies
|                                                                                               | Note 2. Investment in Partnership                                           
|                                                                                               | Note 3. Notes Payable                                                       
|                                                                                               | Note 4. Long-Term Debt                                                      
|                                                                                               | Note 5. Income Taxes                                                        
|                                                                                               | Note 6. Redemption of Series E Preferred Stock                              
|                                                                                               | Note 7. Proposed Acquisitions                                               
|ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
|PART II  OTHER INFORMATION                                                                   
|ITEM 1. LEGAL PROCEEDINGS.                                                                    
|ITEM 2. CHANGES IN SECURITIES.                                                                
|ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                                       
|ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                                  
|ITEM 5. OTHER INFORMATION.                                                                    
|ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.                                                     
|SIGNATURES                                                                                    



---



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

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

FOR THE QUARTER ENDED March 31, 2000 COMMISSION FILE NO. 1-7949

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

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

|                                               |  |           
|---------------------------------------------- |  | ----------
|729 South
Federal Hwy., Suite 307, Stuart, Fl. |  | 34994     
|                                               |  |           
|(Address of principal executive offices)       |  | (Zip Code)

|                                     |  |           
|------------------------------------ |  | ----------
|10842 Old Mill Road, # 5B, Omaha, NE |  | 68154     
|                                     |  |           
|(Address of administrative offices)  |  | (Zip Code)

Registrants Telephone Number (executive office), including Area Code:
(561-220-7662)

Registrants Telephone Number (administrative office), including Area Code:(402-330-7460)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X   No

Indicate the number of shares outstanding of each of the Issuers classes
of common stock, as of the latest practicable date.

$.40 Par Value Common Stock  17,077,226 shares as of April 30, 2000, including
4,040,375 shares held by a majority owned subsidiary.





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##### Table of Contents



TABLE OF CONTENTS

|                               |                                                                  |  |      |    | 
|------------------------------ | ---------------------------------------------------------------- |  | ---- | -- | 
|                               |                                                                  |  | PAGE
|                               |                                                                  |  |     
|PART I - FINANCIAL INFORMATION
|                              
|Item 1.                        | Financial Statements                                             |  |      | 3  | 
|                              
|                              
|                              
|                              
|Item 2.                        | Managements Discussion and Analysis of Financial
Conditions And |  |      |    | 
|                               | Results of Operations                                            |  |      | 14 | 
|                              
|PART II  OTHER INFORMATION   
|                              
|Item 1.                        | Legal Proceedings                                                |  |      | 19 | 
|                              
|                              
|                              
|                              
|Item 2.                        | Changes in Securities and Use of Proceeds                        |  |      | 19 | 
|                              
|                              
|                              
|                              
|Item 3.                        | Defaults Upon Senior Securities                                  |  |      | 19 | 
|                              
|                              
|                              
|                              
|Item 4.                        | Submission of Matters to a Vote of Security Holders              |  |      | 19 | 
|                              
|                              
|                              
|                              
|Item 5.                        | Other Information                                                |  |      | 19 | 
|                              
|                              
|                              
|                              
|Item 6.                        | Exhibits and Reports on Form 8-K                                 |  |      | 19 | 

2



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##### Table of Contents



REGENCY AFFILIATES, INC.




PART 1  FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS

The following pages contain the information required by Part I, Item 1.

3



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REGENCY AFFILIATES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|                                   |                                          |                      |            |                |           |                   |            |           |           | 
|---------------------------------- | ---------------------------------------- | -------------------- | ---------- | -------------- | --------- | ----------------- | ---------- | --------- | --------- | 
|                                   |                                          |                      |            | March 31, 2000 |           | December 31, 1999
|                                   |                                          |                      |            |                |           |                  
|                                   |                                          |                      |            | (Unaudited)   
|CURRENT ASSETS                    
|                                  
|                                  
|                                  
|                                  
|                                   | Cash and cash equivalents                |                      | $          | 1,381,321      |           |                   | $          | 2,348,989 |          
|                                  
|                                  
|                                  
|                                  
|                                   | Accounts receivable, net of allowance    |                      |            | 1,393,956      |           |                   |            | 2,373,275 |          
|                                  
|                                  
|                                  
|                                  
|                                   | Inventory                                |                      |            | 1,973,936      |           |                   |            | 1,842,992 |          
|                                  
|                                  
|                                  
|                                  
|                                   | Other current assets                     |                      |            | 274,186        |           |                   |            | 238,687   |          
|                                   |                                          |                      |            |                |           |                   |            |          
|                                   |                                          | Total current assets |            |                | 5,023,399 |                   |            |           | 6,803,943 | 
|                                  
|PROPERTY, PLANT AND EQUIPMENT, NET |                                          |                      | 4,452,997  |                |           |                   | 4,427,891  |          
|                                  
|INVESTMENT IN PARTNERSHIP          |                                          |                      | 21,090,034 |                |           |                   | 19,959,517 |          
|                                  
|OTHER ASSETS                      
|                                  
|                                  
|                                  
|                                  
|                                   | Aggregate inventory                      |                      |            | 838,383        |           |                   |            | 838,383   |          
|                                  
|                                  
|                                  
|                                  
|                                   | Goodwill, net of amortization            |                      |            | 980,450        |           |                   |            | 902,138   |          
|                                  
|                                  
|                                  
|                                  
|                                   | Debt issuance costs, net of amortization |                      |            | 670,705        |           |                   |            | 710,493   |          
|                                  
|                                  
|                                  
|                                  
|                                   | Other                                    |                      |            | 96,677         |           |                   |            | 15,270    |          
|                                   |                                          |                      |            |                |           |                   |            |          
|                                   |                                          | Total other assets   |            |                | 2,586,215 |                   |            |           | 2,466,284 | 
|                                   |                                          |                      |            |                |           |                   |            |          
|                                   |                                          | $                    | 33,152,645 |                |           | $                 | 33,657,635 |          
|                                   |                                          |                      |            |                |           |                   |            |          

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

4



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REGENCY AFFILIATES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|                                               |                                                                                                                                     |                            |            |                |            |                   |            |            |            | 
|---------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ---------- | -------------- | ---------- | ----------------- | ---------- | ---------- | ---------- | 
|                                               |                                                                                                                                     |                            |            | March 31, 2000 |            | December 31, 1999
|                                               |                                                                                                                                     |                            |            |                |            |                  
|                                               |                                                                                                                                     |                            |            | (Unaudited)   
|CURRENT LIABILITIES                           
|                                              
|                                              
|                                              
|                                              
|                                               | Current portion of long-term debt                                                                                                   |                            | $          | 178,322        |            |                   | $          | 176,800    |           
|                                              
|                                              
|                                              
|                                              
|                                               | Current portion of serial preferred stock
subject to mandatory redemption                                                           |                            |            |               |            |                   |            | 247,800    |           
|                                              
|                                              
|                                              
|                                              
|                                               | Notes payable                                                                                                                       |                            |            | 341,000        |            |                   |            | 1,149,262  |           
|                                              
|                                              
|                                              
|                                              
|                                               | Accounts payable                                                                                                                    |                            |            | 847,899        |            |                   |            | 991,587    |           
|                                              
|                                              
|                                              
|                                              
|                                               | Accrued expenses                                                                                                                    |                            |            | 1,168,653      |            |                   |            | 1,236,160  |           
|                                               |                                                                                                                                     |                            |            |                |            |                   |            |           
|                                               |                                                                                                                                     | Total current liabilities  |            |                | 2,535,874  |                   |            |            | 3,801,609  | 
|                                              
|LONG-TERM DEBT, net of current portion         |                                                                                                                                     |                            | 12,510,329 |                |            |                   | 12,353,644 |           
|                                              
|DEFERRED INCOME TAXES                          |                                                                                                                                     |                            | 446,826    |                |            |                   | 416,695    |           
|                                              
|MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES |                                                                                                                                     |                            | 3,481,205  |                |            |                   | 3,449,637  |           
|                                              
|SHAREHOLDERS EQUITY                          
|                                              
|                                              
|                                              
|                                              
|                                               | Serial preferred stock not subject to mandatory
redemption (maximum liquidation preference
$24,975,312 in 2000 and 1999)            |                            |            | 1,052,988      |            |                   |            | 1,052,988  |           
|                                              
|                                              
|                                              
|                                              
|                                               | Common stock, par value $.40, authorized
25,000,000 shares; issued and outstanding
17,077,226 shares in 2000 and 16,894,488 in 1999 |                            |            | 6,830,891      |            |                   |            | 6,757,806  |           
|                                              
|                                              
|                                              
|                                              
|                                               | Additional paid-in capital                                                                                                          |                            |            | 2,204,502      |            |                   |            | 2,096,824  |           
|                                              
|                                              
|                                              
|                                              
|                                               | Readjustment resulting from quasi-reorganization
at December 31, 1987                                                               |                            |            | (1,670,596     | )          |                   |            | (1,670,596 | )         
|                                              
|                                              
|                                              
|                                              
|                                               | Retained earnings                                                                                                                   |                            |            | 9,153,988      |            |                   |            | 8,760,736  |           
|                                              
|                                              
|                                              
|                                              
|                                               | Accumulated other comprehensive income                                                                                              |                            |            | (55,329        | )          |                   |            | (23,675    | )         
|                                              
|                                              
|                                              
|                                              
|                                               | Treasury stock, 4,052,825 shares in 2000 and 1999                                                                                   |                            |            | (3,338,033     | )          |                   |            | (3,338,033 | )         
|                                               |                                                                                                                                     |                            |            |                |            |                   |            |           
|                                               |                                                                                                                                     | Total shareholders equity |            |                | 14,178,411 |                   |            |            | 13,636,050 | 
|                                               |                                                                                                                                     |                            |            |                |            |                   |            |           
|                                               |                                                                                                                                     | $                          | 33,152,645 |                |            | $                 | 33,657,635 |           
|                                               |                                                                                                                                     |                            |            |                |            |                   |            |           

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

5



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REGENCY AFFILIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)

|                                                       |                                                                                                     |                            |           |           |           |      |           |           |         | 
|------------------------------------------------------ | --------------------------------------------------------------------------------------------------- | -------------------------- | --------- | --------- | --------- | ---- | --------- | --------- | ------- | 
|                                                       |                                                                                                     |                            |           | 2000      |           | 1999
|                                                       |                                                                                                     |                            |           |           |           |     
|NET SALES                                              |                                                                                                     | $                          | 2,139,499 |           |           | $    | 964,557   |          
|                                                      
|                                                      
|                                                      
|                                                      
|COST AND EXPENSES                                     
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                                                     | Cost of goods sold         |           |           | 1,536,092 |      |           |           | 757,239 | 
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                                                     | Selling and administrative |           |           | 989,616   |      |           |           | 543,304 | 
|                                                       |                                                                                                     |                            |           |           |           |      |           |          
|                                                       |                                                                                                     |                            | 2,525,708 |           |           |      | 1,300,543 |          
|                                                       |                                                                                                     |                            |           |           |           |      |           |          
|INCOME (LOSS) FROM OPERATIONS                          |                                                                                                     |                            | (386,209  | )         |           |      | (335,986  | )        
|                                                      
|                                                      
|                                                      
|                                                      
|INCOME FROM EQUITY INVESTMENT IN                      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | PARTNERSHIP                                                                                         |                            |           | 1,130,517 |           |      |           | 1,045,000 |        
|                                                      
|                                                      
|                                                      
|                                                      
|OTHER INCOME, NET                                      |                                                                                                     |                            | 28,748    |           |           |      | 43,361    |          
|                                                      
|                                                      
|                                                      
|                                                      
|INTEREST EXPENSE                                       |                                                                                                     |                            | (279,265  | )         |           |      | (274,625  | )        
|                                                       |                                                                                                     |                            |           |           |           |      |           |          
|INCOME BEFORE INCOME TAX EXPENSE
AND MINORITY INTEREST |                                                                                                     |                            | 493,791   |           |           |      | 477,750   |          
|                                                      
|                                                      
|                                                      
|                                                      
|INCOME TAX EXPENSE                                     |                                                                                                     |                            | (65,895   | )         |           |      | (23,810   | )        
|                                                      
|                                                      
|                                                      
|                                                      
|MINORITY INTEREST                                      |                                                                                                     |                            | (34,644   | )         |           |      | 1,532     |          
|                                                       |                                                                                                     |                            |           |           |           |      |           |          
|NET INCOME                                             |                                                                                                     | $                          | 393,252   |           |           | $    | 455,472   |          
|                                                       |                                                                                                     |                            |           |           |           |      |           |          
|NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS        
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | (after accrued preferred stock
dividends of $8,033 and preferred stock accretion of $4,855 in 1999) |                            | $         | 393,252   |           |      | $         | 442,584   |        
|                                                       |                                                                                                     |                            |           |           |           |      |           |          
|NET INCOME PER COMMON SHARE                           
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                                                     | Basic                      |           | $         | 0.03      |      |           | $         | 0.04    | 
|                                                       |                                                                                                     |                            |           |           |           |      |           |          
|                                                       |                                                                                                     | Diluted                    |           | $         | 0.03      |      |           | $         | 0.03    | 
|                                                       |                                                                                                     |                            |           |           |           |      |           |          

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

6



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REGENCY AFFILIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)

|                                                 |                                                                                      |                                              |                      |                                              |            |          |            |          |            |         |         |  
|------------------------------------------------ | ------------------------------------------------------------------------------------ | -------------------------------------------- | -------------------- | -------------------------------------------- | ---------- | -------- | ---------- | -------- | ---------- | ------- | ------- | -
|                                                 |                                                                                      |                                              |                      |                                              |            | 2000     |            | 1999    
|                                                 |                                                                                      |                                              |                      |                                              |            |          |            |         
|CASH FLOWS FROM OPERATING ACTIVITIES            
|                                                
|                                                
|                                                
|                                                
|                                                 | Net income                                                                           |                                              | $                    | 393,252                                      |            |          | $          | 455,472  |           
|                                                
|                                                
|                                                
|                                                
|                                                 | Adjustments to reconcile net income to net
cash from (used by) operating activities:
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                      | Depreciation and amortization                |                      |                                              | 107,632    |          |            |          | 55,498     |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                      | Change in deferred income taxes              |                      |                                              | 30,131     |          |            |          |           |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                      | Minority interest                            |                      |                                              | 34,644     |          |            |          | (1,532     | )      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                      | Stock issued for services rendered           |                      |                                              | 101,113    |          |            |          |           |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                      | Income from equity investment in partnership |                      |                                              | (1,130,517 | )        |            |          | (1,045,000 | )      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                      | Interest amortization on long-term debt      |                      |                                              | 220,637    |          |            |          | 229,390    |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                      | Gain on disposal of rental properties        |                      |                                              |           |          |            |          | (19,250    | )      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                      | Changes in operating assets and liabilities:
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                      |                                              | Accounts receivable  |                                              |            | 979,319  |            |          |            | 259,102 |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                      |                                              | Inventory            |                                              |            | (130,944 | )          |          |            | (71,131 | )      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                      |                                              | Other current assets |                                              |            | (35,499  | )          |          |            | (8,512  | )      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                      |                                              | Accounts payable     |                                              |            | (143,688 | )          |          |            | (56,752 | )      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                      |                                              | Accrued expenses     |                                              |            | (76,357  | )          |          |            | 180,217 |        
|                                                 |                                                                                      |                                              |                      |                                              |            |          |            |         
|                                                 |                                                                                      |                                              |                      | Net cash from (used by) operating activities |            |          | 349,723    |          |            |         | (22,498 | )
|                                                
|CASH FLOWS FROM INVESTING ACTIVITIES            
|                                                
|                                                
|                                                
|                                                
|                                                 | Capital expenditures                                                                 |                                              |                      | (108,033                                     | )          |          |            | (208,910 | )         
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from sale of rental properties                                              |                                              |                      |                                             |            |          |            | 126,565  |           
|                                                
|                                                
|                                                
|                                                
|                                                 | Other                                                                                |                                              |                      | (106,095                                     | )          |          |            |         |           
|                                                 |                                                                                      |                                              |                      |                                              |            |          |            |         
|                                                 |                                                                                      |                                              |                      | Net cash used by investing activities        |            |          | (214,128   | )        |            |         | (82,345 | )
|                                                
|CASH FLOWS FROM FINANCING ACTIVITIES            
|                                                
|                                                
|                                                
|                                                
|                                                 | Net short-term borrowings (payments)                                                 |                                              |                      | (808,262                                     | )          |          |            | 5,000    |           
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from long-term borrowings                                                   |                                              |                      |                                             |            |          |            | 65,372   |           
|                                                
|                                                
|                                                
|                                                
|                                                 | Repayment of long-term borrowings                                                    |                                              |                      | (22,642                                      | )          |          |            | (12,497  | )         
|                                                
|                                                
|                                                
|                                                
|                                                 | Redemption of Series E preferred stock                                               |                                              |                      | (159,300                                     | )          |          |            |         |           
|                                                
|                                                
|                                                
|                                                
|                                                 | Other                                                                                |                                              |                      | (81,405                                      | )          |          |            | (12,576  | )         
|                                                
|                                                
|                                                
|                                                
|                                                 | Dividends paid                                                                       |                                              |                      |                                             |            |          |            | (8,033   | )         
|                                                 |                                                                                      |                                              |                      |                                              |            |          |            |         
|                                                 |                                                                                      |                                              |                      | Net cash from (used by) financing activities |            |          | (1,071,609 | )        |            |         | 37,266  |  
|                                                
|FOREIGN CURRENCY TRANSLATION ADJUSTMENT          |                                                                                      |                                              | (31,654              | )                                            |            |          |           |         
|                                                 |                                                                                      |                                              |                      |                                              |            |          |            |         
|                                                
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                                      |                                              | (967,668             | )                                            |            |          | (67,577    | )       
|                                                
|CASH AND CASH EQUIVALENTS  BEGINNING            |                                                                                      |                                              | 2,348,989            |                                              |            |          | 2,168,541  |         
|                                                 |                                                                                      |                                              |                      |                                              |            |          |            |         
|                                                
|CASH AND CASH EQUIVALENTS  ENDING               |                                                                                      | $                                            | 1,381,321            |                                              |            | $        | 2,100,964  |         
|                                                 |                                                                                      |                                              |                      |                                              |            |          |            |         

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

7



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|                                                                        |              |  |      |        |      |  |   |        | 
|----------------------------------------------------------------------- | ------------ |  | ---- | ------ | ---- |  | - | ------ | 
|                                                                        |              |  | 2000 |        | 1999
|                                                                        |              |  |      |        |     
|Supplemental disclosures of cash flow information:                     
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Cash paid during the period for:                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Income taxes |  | $    | 80,020 |      |  | $ | -0-    | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Interest     |  |      | 85,423 |      |  |   | 38,483 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Supplemental disclosure of non cash investing and
financing activities:



| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | In 2000 the Company issued 95,877 shares of common stock in exchange for
885 shares of Series E preferred stock.



| |                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------
| | In 2000 the Company issued 86,833 shares of common stock as payment
for public relations and consulting services rendered.

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

8



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##### Table of Contents



REGENCY AFFILIATES, INC. AND SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




Note 1.   Basis 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, 2000 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2000. 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, 1999.
|  
|B. |  | Principles of Consolidation The consolidated financial statements
include the accounts of Regency Affiliates, Inc. (the Company), its
wholly-owned subsidiary, Rustic Crafts International, Inc. (Rustic
Crafts), its 80% owned subsidiaries National Resources Development
Corporation (NRDC), Transcontinental Drilling Company (Drilling) and
RegTransco, Inc. (RTI), and its majority owned subsidiary Glas-Aire
Industries Group, Ltd. (Glas-Aire). All significant inter-company
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 (net income less preferred
stock dividend requirements and periodic accretion) by the weighted
average number of common shares outstanding during the relevant period.
Diluted earnings per share computations assume the exercise of common
stock options and the conversion of Series E,
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. The shares of the Company
held by Glas-Aire were treated as treasury shares for earnings per share
computations.                                                                                                                                                                                                      
|  
|D. |  | Inventory Inventories are stated at the lower of cost or market using
the first-in, first-out method (FIFO). Inventory is comprised of the
following at March 31, 2000:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

|                           |  |   |           | 
|-------------------------- |  | - | --------- | 
|Raw materials and supplies |  | $ | 840,683   | 
|                          
|                          
|                          
|                          
|Work in process            |  |   | 260,539   | 
|                          
|                          
|                          
|                          
|Finished products          |  |   | 872,714   | 
|                           |  |   |           | 
|                           |  | $ | 1,973,936 | 
|                           |  |   |           | 

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|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|E. |  | Aggregate Inventory Aggregate inventory consists of
70+ million short tons and is stated at lower of cost or market.
The Company is subject to a royalty agreement which requires the payment of
certain royalties to a previous owner of the aggregate upon sales of the
aggregate. 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 period 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 on
managements estimate, if necessary. Income tax expense is the current
tax payable or refundable for the period plus or minus the net change 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. The
Company can force the sale of the property after December 31, 2004.

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 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

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##### Table of Contents



allocable share of income or loss. The investment in
partnership included in the Consolidated Balance Sheet at March 31, 2000 was
$21,090,034. The income from the Companys equity investment in the
partnership for the three months ended March 31, 2000 was $1,130,517.

Summarized operating data for Security for the three months ended March 31,
2000, and March 31, 1999, is as follows:

|                              |            |   |           |           |      |   |           |           | 
|----------------------------- | ---------- | - | --------- | --------- | ---- | - | --------- | --------- | 
|                              |            |   | 2000      |           | 1999
|                              |            |   |           |           |     
|Revenues                      |            | $ | 3,314,485 |           |      | $ | 3,293,300 |          
|                             
|                             
|                             
|                             
|Operating Expenses            |            |   | 904,881   |           |      |   | 852,100   |          
|                             
|                             
|                             
|                             
|Depreciation and Amortization |            |   | 710,067   |           |      |   | 709,100   |          
|                             
|                             
|                             
|                             
|Interest Expense, Net         |            |   | 509,519   |           |      |   | 632,100   |          
|                              |            |   |           |           |      |   |           |          
|                              | Net Income |   | $         | 1,190,018 |      |   | $         | 1,100,000 | 
|                              |            |   |           |           |      |   |           |          




Note 3.   Notes 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, 2000 and bears
interest at the Banks prime rate minus one-half percent (8.5% at March 31,
2000). 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, 2000, the amount outstanding under the line of credit was $341,000.

The Companys subsidiary, Glas-Aire, has established a Canadian $1,000,000
(U.S. $680,000) line of credit with a Canadian bank. The line of credit is
collateralized by accounts receivable and inventory and bears interest at the
rate of the Canadian banks prime rate plus one-half percent (6.6% at March 31,
2000). At March 31, 2000, the amount outstanding under the line of credit was
zero.




Note 4.   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, 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. As of March
31, 2000, the amount outstanding under the Loan is $10,693,566, including
$180,849 of interest for the three months ended March 31, 2000.

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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 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 in 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 $l63,500 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, 2000. The
outstanding balance on these loans is $1,806,340 at March 31, 2000.

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, 2000.

Lease Obligations Glas-Aire has two long-term lease obligations to
purchase equipment. These obligations were five year capital leases and have
been recorded as a capital asset and long-term debt. The equipment is pledged
as collateral for the leases. The terms of the leases require equal monthly
installment of $7,484 including principal and interest over a five year period.
Interest rates on the leases range from 6.5% to 8.6%. The total outstanding
balance of these lease obligations is $188,745 at March 31, 2000.

12



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Note 5.   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 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.

At March 31, 2000, the Companys net deferred tax liabilities, utilizing a
34% effective tax rate, consists of:

|                          |                                  |          |   |             |     | 
|------------------------- | -------------------------------- | -------- | - | ----------- | --- | 
|Deferred tax assets:     
|                         
|                         
|                         
|                         
|                          | Investment partnership earnings  |          | $ | 2,765,000   |    
|                         
|                         
|                         
|                         
|                          | Net operating loss carryforwards |          |   | 9,770,000   |    
|                         
|                         
|                         
|                         
|                          | Alternative minimum tax credits  |          |   | 464,000     |    
|                         
|                         
|                         
|                         
|                          | Valuation allowance              |          |   | (12,999,000 | )  
|                          |                                  |          |   |            
|                          |                                  | Subtotal |   |             | -0- | 
|                         
|                         
|                         
|                         
|Deferred tax liabilities:
|                         
|                         
|                         
|                         
|                          | Depreciation                     |          |   | (446,826    | )  
|                          |                                  |          |   |            
|                          | Net deferred tax liabilities     |          | $ | (446,826    | )  
|                          |                                  |          |   |            

The valuation allowance was established to reduce the net deferred tax
asset to the amount that will more likely than not be realized. This reduction
is necessary due to uncertainty of the Companys ability to utilize the net
operating loss and tax credit carryforwards before they expire.

For regular federal income tax purposes, the Company has remaining net
operating loss carryforwards of approximately $29,235,000. These losses can be
carried forward to offset future taxable income and, if not utilized, will
expire in varying amounts beginning in the year 2001.

For the three months ended March 31, 2000, and 1999, the tax effect of net
operating loss carryforwards reduced the current provision for federal income
taxes by approximately $115,000 and $140,000, respectively. The Company
provided $65,895 for Canadian, state income and the alternative minimum tax in
the three months ended March 31, 2000.




Note 6.   Redemption of Series E Preferred Stock

On January 31, 2000, the holders of the Series E preferred stock either
converted their preferred shares to the Companys common stock or received cash
equal to the par value of the shares, plus accrued dividends. The Company
issued 95,877 of its common

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shares in exchange for 885 shares of preferred
stock and paid cash in the amount of $159,300 for 1,593 shares. 88.5 shares of
preferred stock are being held pending a new series of preferred stock which is
expected to be offered by the Company later in May 2000.




Note 7.   Proposed Acquisitions

In February 2000, the Company announced that it had executed letters of
intent to acquire 55% of the Knight Enterprises, Inc., a leading provider of
voice, data, video and fiber optic high speed digital access to major cable
companies throughout Florida; 100% of Southwest Mill and Lumber Company, a
California based producer of picture frame molding and frames; and 100% of
Valley Wholesale Supply Corp., a California based marketer of picture molding,
framing supplies and equipment. The Company anticipates that such acquisitions
will be financed by borrowings secured by the assets acquired, additional
borrowings secured by the Companys partnership interest in Security Land and
Development Company, and from proceeds of a private placement of preferred
stock. There can be no assurance, however, that any of the transactions
contemplated by these letters of intent will be consummated as definitive
agreements have not been executed, and, even if executed, will likely be
subject to the occurrence and/or satisfaction of certain events and
contingencies, any of which may or may not occur.




|        |  |                                                                                       
|------- |  | --------------------------------------------------------------------------------------
|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 shareholders values. The
Companys Shareholders Equity at March 31, 2000 was $14,178,411 as compared to
$11,661,634 at March 31, 1999, an increase of $2,516,777 for the twelve months
ended March 31, 2000.

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, 2000, the Companys income from its equity investment in the
Partnership was $1,130,517. 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 has increased to
$21,090,034, the partnership does not provide liquidity to the Company in
excess of the $100,000 annual management fee. The

14



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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 NRDC. To facilitate the discussions
concerning a possible sale, the NRDC zero coupon bonds (secured by the
aggregate inventory), were retired in 1999 by the issuance of 121,000 shares of
the Companys common stock. Following the termination of the 1999 NRDC Plan
of Merger with Cotton Valley Resources Corporation, the Company installed
limited aggregate crushing and marketing operations at the Groveland Mine in an
informal joint venture with another company. The Company is also exploring
the possibility of establishing a permanent infrastructure during the year
2000 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) (Statesman owns
approximately 24% of the Companys outstanding common stock) 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.

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.

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The Company continues to explore opportunities to acquire companies with
operations that will provide additional liquidity and cash flow. In February
2000, the Company announced it had executed Letters of Intent to acquire 55%
of Knight Enterprises, Inc. a leading provider of voice, data, video and fiber
optic high speed digital access to major cable companies throughout Florida;
100% of Southwest Mill and Lumber Company, a California based producer of
picture frame molding and frames; and 100% of Valley Wholesale Supply Corp.,
a California based marketer of picture molding, framing supplies and
equipment. The Company anticipates that such acquisitions will be financed by
borrowings secured by the assets acquired, additional borrowings secured by
the Companys partnership interest in Security Land and Development Company,
and from proceeds of a private placement of preferred stock. There can be no
assurance, however, that any of the transactions contemplated by these letter
of intents will be consummated as definitive agreements have not been executed,
and, even if executed, will likely be subject to the occurrence and/or
satisfaction of certain events and contingencies, any of which may or may not
occur.

Results of Operations

In September 1999, the Company acquired a 51% interest in Glas-Aire which
manufactures automotive accessories. The financial statements for March 31,
2000 include the results of Glas-Aire. The operations of the Company also
include the operations of Rustic Crafts, which is engaged in the manufacture of
decorative fireplaces, heater logs and related accessories.

2000 Compared to 1999

Net sales increased $1,174,942 in 2000 over the similar period in 1999.
The increase is due to the inclusion of $1,561,808 of sales from Glas-Aire,
offset by a decrease in sales at Rustic Crafts of $386,866. The decrease at
Rustic Crafts was due to smaller backlogs at December 31, 1999 and a decrease
in sales of low margin products.

Gross margin increased $396,089 due to gross margins from Glas-Aire of
$428,331 and decreases in gross margins of Rustic Crafts of $32,224. Rustic
Crafts increased their gross margin as a percent of sales from 21.5% in 1999 to
30.3% in 2000 reflecting their emphasis on manufacturing and selling higher
margin products.

Selling and administrative expenses increased $446,312 in 2000 as compared
to 1999. Selling and administrative expenses of Glas-Aire were $311,333 in
2000. Corporate administrative expenses reflect significantly higher
consulting and contract expenses related to increased acquisition, financing
and public relations activities. These higher costs were offset by a lower
accrual for executive bonuses.

Income from equity in partnership increased $85,517. This increase is due
to a decrease in interest expense resulting from payment of principal offset by
increases in operating expenses for the quarter.

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##### Table of Contents



Interest expense remained at about the same level as the prior year.
Increased interest expense on the KBC loan is offset by lower interest on loans
at Rustic Crafts. Glas-Aire has minimal capital leases which are included in
long-term debt.

Income tax expense and minority interest are higher in 2000 as compared to
1999 due to the inclusion of Glas-Aire operations. Glas-Aire is a 51% owned
subsidiary with substantially all of its operations conducted in Vancouver
B.C., Canada resulting in minority interest from their earnings. Also, the
Company cannot offset Glas-Aires taxable income against its net operating loss
carryforward.

Net income decreased $62,220 in 2000 compared to 1999. Glas-Aire earnings
of $36,200, after minority interests and increased equity earnings from
partnership were offset by additional losses at Rustic Crafts of $63,555 and
higher corporate administrative expenses.

Year 2000 Issues.

The Company had not anticipated any material difficulties associated with
Year 2000 issues, and none materialized. The Company made no significant
expenditures in connection with Year 2000 issues.

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:

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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i)   |  | The Company generated $349,723 of positive cash flow from
operations for the first quarter in 2000. However, it has not been
able to generate operating cash flow in the past. The cash
generated in the first quarter was largely from a decrease in
working capital due to the reduction in accounts receivable. The
Companys current operations do not generate sufficient cash flow to
cover corporate operating expenses and thus the Company must rely on
its cash reserves 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.

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PART II  OTHER INFORMATION




ITEM 1.   LEGAL PROCEEDINGS.

None.




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.

Exhibit 27  Financial Data Schedule.

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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)

|             |  |    |                                                   | 
|------------ |  | -- | ------------------------------------------------- | 
|May 17, 2000 |  | By | /s/  Larry J. Horbach                            
|Date         |  |    | Larry J. Horbach, Interim Chief Financial Officer

20