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

                                   FORM 10-QSB

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

                  For the quarterly period ended March 31, 2004

                                       OR

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

                For the transition period from ______ to _______

                          COMMISSION FILE NUMBER 1-7949

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

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|

As of May 17, 2004 there were 3,018,912 shares of the $.01 Par Value Common
Stock outstanding.

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

<PAGE>

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

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

         Item 1.  Financial Statements

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

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

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

                  Notes to Condensed Consolidated Financial Statements..........7-9

         Item 2.  Management's Discussion and Analysis or Plan of Operation  ...10-14

         Item 3.  Controls and Procedures ......................................14-15

Part II - Other Information (Unaudited)

         Item 1.  Legal Proceedings      .......................................15-16

         Item 2.  Changes in Securities and Small Business Issuer Purchases
                  of Equity Securities   .......................................17

         Item 3.  Defaults Upon Senior Securities     ..........................17

         Item 4.  Submission of Matters to a Vote of Security Holders  .........17

         Item 5.  Other Information   ..........................................17-18

         Item 6.  Exhibits and Reports on Form 8-K  ............................19-20

Signatures......................................................................21
</TABLE>


See notes to the condensed consolidated financial statements.
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheet
                                 March 31, 2004

Assets

   Current Assets
     Cash and cash equivalents                                       $ 1,501,378
     Restricted cash - in escrow                                          80,782
     Marketable securities                                            16,995,390
     Accrued receivables                                                 265,392
     Other current assets                                                 22,104
                                                                     -----------

        Total Current Assets                                          18,865,046

   Property and equipment, net                                             5,393
   Investment in partnerships                                            649,268

   Other Assets
     Aggregate inventory                                                 832,427
     Deferred costs                                                      250,000
     Other                                                                 1,300
                                                                     -----------

        Total Other Assets                                             1,083,727
                                                                     -----------

              Total Assets                                           $20,603,434
                                                                     ===========


See notes to the condensed consolidated financial statements.                  3
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheet
                                 March 31, 2004

<TABLE>
<S>                                                                           <C>
Liabilities and Shareholders' Equity
   Current Liabilities
     Accounts payable                                                         $    309,822
     Accrued expenses                                                              114,018
                                                                              ------------
        Total Current Liabilities                                                  423,840

   Deferred credit                                                               1,452,581
                                                                              ------------

              Total Liabilities                                                  1,876,421
                                                                              ------------

   Commitments and contingencies

   Shareholders' equity
     Serial preferred stock not subject to mandatory redemption
       (Maximum liquidation preference $24,975,312)                              1,052,988

     Common stock, par value $.01; authorized 8,000,000 shares;
       issued 4,178,645 shares; outstanding 3,018,412 shares                        37,734

     Additional paid-in capital                                                  8,180,544
     Readjustment resulting from quasi-reorganization at December 31, 1987      (1,670,596)
     Retained earnings                                                          13,584,586
     Note receivable - sale of stock                                            (2,440,000)

     Treasury stock, 1,160,233 shares                                              (18,243)
                                                                              ------------

        Total Shareholders' Equity                                              18,727,013
                                                                              ------------

        Total Liabilities and Shareholder's Equity                            $ 20,603,434
                                                                              ============
</TABLE>


See notes to the condensed consolidated financial statements.                  4
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
                 Condensed Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                        Three Months Ended March 31,
                                                        ----------------------------
                                                           2004             2003
                                                        -----------      -----------
<S>                                                     <C>              <C>
Net Sales                                               $        --      $        --

Costs and expenses
     Selling, general and administrative expenses         1,860,144          346,913
                                                        -----------      -----------
                                                          1,860,144          346,913
                                                        -----------      -----------

Loss from operations                                     (1,860,144)        (346,913)

Income from equity investment in partnerships               399,466        1,570,555
Rental income                                                 4,599           23,896
Interest and dividend income                                 40,857           41,212
Other income, net                                            35,948            1,492
Interest expense                                                 --         (385,744)
                                                        -----------      -----------

Net Income (Loss)                                        (1,379,274)         904,498
                                                        ===========      ===========

Net income (loss) per common share:
   Basic                                                $     (0.46)     $      0.45
                                                        ===========      ===========
   Diluted                                              $     (0.46)     $      0.28
                                                        ===========      ===========

Weighted average number of common shares outstanding
   Basic                                                  3,018,412        1,995,771
                                                        ===========      ===========
   Diluted                                                3,018,412        3,196,093
                                                        ===========      ===========
</TABLE>


See notes to the condensed consolidated financial statements.                  5
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                    Three Months Ended March 31,
                                                                   -----------------------------
                                                                       2004             2003
                                                                   ------------     ------------
<S>                                                                <C>              <C>
Cash Flows from operating activities
   Net income (loss)                                               $ (1,379,274)    $    904,498
   Adjustments to reconcile net income (loss) to net cash
     provided by (used in) operating activities
       Depreciation and amortization                                      1,164           80,057
       Income from equity investment in partnerships                   (399,466)      (1,570,555)
       Impairment of notes, accrued interest receivable               1,182,626               --
       Distribution of earnings from partnership                             --          100,938
       Interest accretion on long-term debt                                  --          279,012
       Unrealized gain on marketable securities                         (35,948)              --
       Changes in operating assets and liabilities
        Accounts receivable                                               3,077              225
        Loan receivable                                                      --          250,000
        Accrued receivables                                             (20,986)         (47,490)
        Income taxes receivable                                              --           11,149
        Other current assets                                             42,190           (5,598)
        Accounts payable                                               (291,128)         (55,632)
        Accrued expenses                                                  8,095           59,371
                                                                   ------------     ------------
            Net cash provided by (used in) operating activities        (889,650)           5,975
                                                                   ------------     ------------

Cash flows from investing activities
   Payments received on notes receivable                                  1,563               --
   Proceeds from sales of marketable securities                      57,000,000               --
   Purchases of marketable securities                               (55,464,416)              --
   Net proceeds from sale of property and equipment                     402,632               --
                                                                   ------------     ------------
            Net cash provided by investing activities                 1,939,779               --
                                                                   ------------     ------------

Cash flows from financing activities
   Net long-term borrowings (payments)                                       --         (117,979)
   Net short-term borrowings (payments)                                      --           69,272
                                                                   ------------     ------------
            Net cash used in financing activities                  $         --     $    (48,707)
                                                                   ============     ============

Increase (decrease) in cash and cash equivalents                   $  1,050,129     $    (42,732)
Cash and cash equivalents - beginning                                   451,249          101,041
                                                                   ------------     ------------
Cash and cash equivalents - ending                                 $  1,501,378     $     58,309
                                                                   ============     ============

<CAPTION>
                                                                    Three Months Ended March 31,
                                                                   -----------------------------
                                                                       2004             2003
                                                                   ------------     ------------
<S>                                                                <C>              <C>
Supplemental disclosures of cash flow information:
     Cash paid during the year for
       Interest                                                    $         --     $     49,681

</TABLE>


See notes to the condensed consolidated financial statements.                  6
<PAGE>

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

Note 1. Basis of Presentation

      The accompanying unaudited condensed consolidated financial statements
      have been prepared in accordance with generally accepted accounting
      principles for interim financial information and with the instructions to
      Item 310 of Regulation S-B. Accordingly, they do not include all of the
      information and footnotes required by generally accepted accounting
      principles for complete financial statements. In the opinion of
      management, all adjustments (consisting of normal recurring accruals)
      considered necessary for a fair presentation have been included. Operating
      results for the three month period ended March 31, 2004 are not
      necessarily indicative of the results that may be expected for the year
      ended December 31, 2004. For further information, refer to the
      consolidated financial statements and footnotes thereto included in the
      Company's annual report on Form 10-KSB for the year ended December 31,
      2003.

      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") through September 20, 2002 the date that its operating assets
      were disposed of, its 75% owned subsidiary, Iron Mountain Resources, Inc.
      ("IMR"), and its 80% owned subsidiary, National Resource Development
      Corporation ("NRDC"). All significant intercompany balances and
      transactions have been eliminated in consolidation.

Note 2. Earnings Per Share

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

Note 3. Property and Equipment

      On January 12, 2004, the Company sold its rental property located in
      Scranton, PA for $531,500, less costs to sell of approximately $48,000. No
      gain or loss was recognized on the transaction as the property was written
      down to fair value at December 31, 2003. Property and equipment at March
      31, 2004 was as follows:

            Machinery and equipment                        $ 43,708
            Less: Accumulated depreciation                  (38,315)
                                                           --------
                                                           $  5,393
                                                           ========

      Depreciation expense for the three months ended March 31, 2004 and 2003
      was $1,164 and $20,299, respectively.

Note 4. Notes Receivable

      At March 31, 2004, the Company held notes receivable totaling $1,127,708,
      which were deemed uncollectible due to lack of cash flows generated and
      continual default on payment terms by the issuer. Management determined to
      record full impairment of the notes and any accrued interest thereon,
      resulting in an impairment charge of $1,182,626, which is included in the
      Selling, General & Administrative caption of the accompanying Condensed
      Consolidated Statements of Operations. Management intends however, to
      continue to pursue options available to receive payment on the obligations
      from debtor.


                                                                               7
<PAGE>

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

Note 5. Litigation

On January 20, 2004, a purported derivative and class action lawsuit was filed
by two individual shareholders of the Company in the New Castle County Court of
Chancery, Delaware, naming as defendants certain current and former directors of
the Company, Royalty Holdings LLC and certain of its affiliates, Statesman
Group, Inc. and, nominally, the Company. The complaint alleges, among other
things, breaches of fiduciary duties by the former director defendants and
Statesman Group, Inc. in connection with (i) the exercise by Statesman Group,
Inc. in 2001 of an option to acquire shares of common stock of the Company, (ii)
the 2001 sale of rock aggregate by the Company to Iron Mountain Resources, Inc.
and (iii) the October 2002 recapitalization of the Company. The complaint also
alleges breaches of fiduciary duties by the current director defendants in
connection with the payment by the Company in 2003 of accrued compensation owed
to William R. Ponsoldt, Sr. for periods prior to the October 2002
recapitalization of the Company. The complaint also alleges that Royalty
Holdings LLC and its affiliates knowingly participated in the breaches of
fiduciary duties by the former director defendants relating to the October 2002
recapitalization of the Company.

In addition to other damages, plaintiffs seek unspecified compensatory and/or
rescissory damages against all defendants, a declaration that all Company stock
issued to Statesman Group, Inc., William R. Ponsoldt, Sr., Royalty Holdings LLC
and any person affiliated with the foregoing is void, an order rescinding any
payments in any form made by the Company to William R. Ponsoldt, Sr. or any of
his affiliates or family members, an order rescinding the October 2002
recapitalization of the Company, and an order rescinding Statesman Group, Inc.'s
2001 option exercise and rescinding the option itself. The Company, as a nominal
defendant, has not taken any position with respect to the merits of the lawsuit.
However, the Company understands that the other defendants in the lawsuit
believe that the claims raised by the plaintiffs are without merit, and that
such defendants intend to defend the claims vigorously.

The defendants in the lawsuit other than Statesman Group, Inc. are entitled to
be indemnified by the Company for damages, if any, and expenses, including legal
fees, they may incur as a result of the lawsuit, subject to certain
circumstances under which such indemnification is not available. In addition,
other than with respect to the claims against the current director defendants in
their capacities as such, the claims contained in the lawsuit are not covered by
insurance, as the Company's carrier has declined coverage on the basis of the
"insured vs. insured" exclusion since one of the named plaintiffs, Donald D.
Graham, was previously a director of the Company. The Company has submitted a
claim to its carrier with respect to the claims in the lawsuit against the
current director defendants. No assurance can be given as to the position that
the carrier will take with respect to such claims.

Note 6. Subsequent Events

On April 30, 2004, the Company, through a newly-formed, wholly-owned subsidiary
called Regency Power Corporation, a Delaware corporation, acquired a 50%
membership interest in MESC Capital, LLC, a Delaware limited liability company,
from DTE Mobile, LLC, pursuant to an Assignment and Assumption Agreement dated
as of April 30, 2004. The purchase price for the 50% membership interest was
$3,000,000 and was funded from Regency's working capital. The terms of the
Assignment and Assumption Agreement were negotiated on an arms'-length basis
between Regency and DTE Mobile. DTE Mobile, which is owned by an unregulated
subsidiary of a large energy company that has significant experience in owning,
managing and operating electric generation and on-site energy facilities, owns
the other 50% membership interest in MESC Capital.


                                       8
<PAGE>

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

MESC Capital was formed to acquire all of the membership interests in Mobile
Energy Services Company, LLC, an Alabama limited liability company. Mobile
Energy owns an on-site energy facility that supplies steam and electricity to a
Kimberly-Clark tissue mill in Mobile, Alabama. The acquisition of Mobile Energy
was also consummated on April 30, 2004 pursuant to a Membership Interest
Purchase Agreement, dated as of January 30, 2004, between MESC Capital and
Mobile Energy Services Holdings, Inc. The purchase price under the Membership
Interest Purchase Agreement, after certain pre-closing adjustments, was
$33,600,000, and is subject to certain post-closing adjustments. The purchase
price and working capital reserves were funded by the issuance of $28,500,000 of
non-recourse debt, a total equity contribution by MESC Capital of $8,600,290,
$4,300,145 of which was funded by Regency Power and $4,300,145 of which was
funded by DTE Mobile, and a credit of $1,000,000 on account of existing and
continuing tax-exempt indebtedness of Mobile Energy. The terms of the Membership
Interest Purchase Agreement were negotiated on an arms'-length basis between
MESC Capital and Mobile Energy Services Holdings, Inc. The Company did not
participate in negotiations with respect to the Membership Interest Purchase
Agreement.

The $28,500,000 acquisition indebtedness was obtained from Allied Irish Banks,
P.L.C., which may assign or participate the loan in accordance with the terms of
the loan agreement. The loan will be fully amortized over the fifteen year term.
In connection with the acquisition of the 50% membership interest in MESC
Capital, Regency Power and DTE Mobile entered into an Operating Agreement, dated
April 30, 2004, which sets forth their respective rights and obligations as
members of MESC Capital as well as the duties and authority of DTE Mobile as the
managing member of MESC Capital. Under the Operating Agreement, Regency Power
will receive 50% of all distributions. Neither Regency Power nor DTE Mobile is
obligated to contribute additional capital, or loan or otherwise advance funds,
to MESC Capital, and neither member can sell or transfer its interest in MESC
Capital without the consent of the other and without first complying with a
right of first offer in favor of the non-selling member.

On May 10, 2004, Gary Nuttal, a former President of the Company, commenced an
arbitration against the Company with respect to certain claims allegedly arising
under his 1995 Employment Agreement with the Company. He is seeking severance
and all other compensation and benefits due him under the 1995 Employment
Agreement in an amount in excess of approximately $1,650,000 ($1,400,000 of
which is a financing bonus), 466,667 unrestricted shares of the Company
(pre-split), options to purchase additional stock of the Company, punitive
damages, interest, fees and costs associated with the arbitration. The Company
believes the claims are without merit and intends to defend them vigorously.


                                       9
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Forward-Looking Statements and Associated Risk

      Certain statements contained in this Quarterly Report on Form 10-QSB,
      including, but not limited to those regarding the Company's financial
      position, business strategy, acquisition strategy and other plans and
      objectives for future operations and any other statements that are not
      historical facts constitute "forward-looking statements" within the
      meaning of federal securities laws and 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. Such factors
      include:

            - A 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 our investment in Security Land and therefore our financial
      position and results of operations;

            - Our subsidiaries currently lack the necessary infrastructure at
      the site of the Groveland mine in order to permit them to make more than
      casual sales of the Aggregate;

            - We have had 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 our use, retroactively and/or
      prospectively, of such carryforwards, due to ownership changes or any
      other reason. The disallowance of the utilization or our net operating
      loss would severely impact or financial position and results of operations
      due to the significant amounts of taxable income that has been, and may in
      the future be, offset by our net operating loss carryforwards;

            - Royalty, an affiliate of the Company's management, beneficially
      owns approximately 60% of our common stock. As a result, Royalty has the
      ability to control the outcome of all matters requiring shareholder
      approval, including the election and removal of directors and any merger,
      consolidation or sale of all or substantially all of our assets;

            - Regency does not expect to pay dividends in the foreseeable
      future; and


                                       10
<PAGE>

                   Regency Affiliates, Inc. and Subsidiaries

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. (continued)

      The following discussion and analysis of the financial condition and
      results of operations of Regency should be read in conjunction with the
      accompanying financial statements and related notes included in Item 1 of
      this report.

General.

      The Company is committed to enhancing the value of the Company's Common
      Stock by seeking opportunities to monetize certain existing assets and by
      seeking new business opportunities on an opportunistic basis.

Liquidity and Capital Resources.

      On March 31, 2004, Regency had current assets of $18,865,046 and
      Shareholders' Equity of $18,727,013. On March 31, 2004, Regency had
      $18,496,768 in cash and marketable securities, total assets of $20,603,434
      and total current liabilities of $423,840.

      On April 30, 2004, the Company, through a newly-formed, wholly-owned
      subsidiary called Regency Power Corporation, a Delaware corporation,
      acquired a 50% membership interest in MESC Capital, LLC, a Delaware
      limited liability company for $3,000,000, which was funded from Regency's
      working capital. (See "Subsequent Events")

      MESC Capital was formed to acquire all of the membership interests in
      Mobile Energy Services Company, LLC, an Alabama limited liability company.
      Mobile Energy owns an on-site energy facility that supplies steam and
      electricity to a Kimberly-Clark tissue mill in Mobile, Alabama. The
      acquisition of Mobile Energy was also consummated on April 30, 2004 with a
      purchase price, after certain pre-closing adjustments, of $33,600,000,
      which is subject to certain post-closing adjustments. The purchase price
      and working capital reserves were funded by the issuance of $28,500,000 of
      non-recourse debt, a total equity contribution by MESC Capital of
      $8,600,290, $4,300,145 of which was funded by Regency Power and $4,300,145
      of which was funded by DTE Mobile, and a credit of $1,000,000 on account
      of existing and continuing tax-exempt indebtedness of Mobile Energy. The
      $28,500,000 acquisition indebtedness will be fully amortized over a
      fifteen year term. Neither Regency Power nor DTE Mobile is obligated to
      contribute additional capital, or loan or otherwise advance funds, to MESC
      Capital.

      At March 31, 2004, the Company held notes receivable totaling $1,127,708,
      which were deemed uncollectible due to lack of cash flows generated and
      continual default on payment terms by the issuer. Management determined to
      record full impairment of the notes and any accrued interest thereon,
      resulting in an impairment charge of $1,182,626, which is included in the
      Selling, General & Administrative caption of the accompanying Statements
      of Operations. Management intends however, to continue to pursue options
      available to receive payment on the obligations from debtor.


                                       11
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. (continued)

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

      In order to satisfy the Company's working capital needs, in April 2003 the
      Company obtained a loan facility from Royalty Holdings LLC ("Royalty"), an
      affiliate of Messrs. Levy and Hasson, pursuant to which the Company could
      have borrowed up to an aggregate of $300,000 from Royalty. Amounts
      borrowed were evidenced by a demand note bearing interest of 8% per annum.
      On July 3, 2003, the Company repaid all amounts outstanding under the
      $300,000 working capital loan facility from Royalty, and terminated the
      facility. The payment amount consisted of $180,000 of principal and $2,910
      of accrued and unpaid interest.

      On October 16, 2002, the Company redeemed all the shares of Common Stock
      owned by Statesman Group, Inc. ("Statesman"), a former shareholder of the
      Company. The Company funded the redemption from the proceeds of an
      aggregate of $4,750,000 borrowed from Royalty, an affiliate of current
      management, in exchange for two notes - a $3,500,000 5% Convertible
      Promissory Note due October 16, 2012 and a $1,250,000 9% Promissory Note
      due October 16, 2007. Both notes allowed interest to accrue without
      current payment. The principal and interest under the Convertible
      Promissory Note could be converted into Common Stock at a conversion rate
      of $2.00 per shares.


                                       12
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. (continued)

      On November 7, 2002, Royalty converted $1,495,902 of the principal amount
      of the Convertible Note plus accrued interest into 750,000 shares of
      Common Stock and on July 3, 2003, Royalty converted the remaining
      $2,004,098 outstanding principal amount of the Convertible Note and the
      $71,378 of accrued and unpaid interest thereon into 1,037,738 shares of
      the Company's Common Stock. The 9% Promissory Note was required to be
      prepaid upon our receipt of sufficient proceeds from the Company's
      investment in Security after discharging certain other indebtedness.
      Accordingly, on July 3, 2003, the Company repaid the full $1,250,000
      principal amount of, and all accrued and unpaid interest under, the 9%
      Promissory Note.

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

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


                                       13
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. (continued)

Results of Operations.

2004 Compared to 2003

   For the three months ended March 31, 2004:

      No revenue was generated by the Company in this period.

      Selling and administrative expenses increased by $1,513,231 or 436.1% in
      2004 compared to 2003 due primarily the full impairment of the Rustic
      Craft notes and any accrued interest thereon, resulting in an impairment
      charge of $1,182,626 as well as increased professional fees relating to
      continuing litigation defense.

      Income from equity investment in partnerships decreased by $1,171,089,
      74.5% less than 2003 due to an increase in interest expense relating to
      increased debt financing of the partnership.

      Interest expense decreased by $385,744 or 100% in 2004 over 2003 as a
      result of reduced loan balances.

      Net income decreased by $2,283,772 in 2004 over 2003 or 252.5%. The
      decrease was primarily due to the increased selling and administrative
      expenses as well as decreased income from equity investment offset by
      decreased interest expense.

      The Company's Shareholders' Equity at March 31, 2004 was $18,727,013 as
      compared to $21,245,200 on March 31, 2003, a decrease of $ 2,518,187.

Impact of Inflation.

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

ITEM 3. CONTROLS AND PROCEDURES

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


                                       14
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

      In connection with the evaluation of the Company's internal controls
      during the Company's last fiscal quarter, the Company's Chief Executive
      Officer and Chief Financial Officer have determined that there are no
      changes to the Company's internal controls over financial reporting that
      has materially affected, or is reasonably likely to materially effect, the
      Company's internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

      On December 14, 2001, we initiated a proceeding in The Circuit Court of
      the Nineteenth Judicial Circuit in and for Martin County, Florida, case
      number 01-1087-CA against Larry J. Horbach, individually and L.J. Horbach
      & Associates. Larry Horbach was a former interim CFO and Board member. We
      claim that Larry Horbach, without appropriate authority, borrowed $100,050
      from Mid City Bank in the name of Regency. We further claim that Horbach
      converted all or part of the proceeds from the loan for his benefit and
      breached his fiduciary duties as an officer and director. Horbach filed a
      Motion for the Court to determine whether the claims asserted against him
      were properly brought in Florida, or whether they should have been filed
      in Nebraska. The matter was fully briefed, and the Florida Court took the
      matter under advisement. The Florida Court has not yet rendered its
      decision on this jurisdictional issue.

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

      On May 2, 2002, a lawsuit (the "Federal Action") was filed in the Federal
      District Court for the District of Nebraska (the "Nebraska Court") by two
      dissident Company shareholders, Edward E. Gatz and Donald D. Graham,
      captioned Gatz et al. v. Ponsoldt, Sr., et al, against the former officers
      and directors of the Company, Statesman and, as a nominal defendant only,
      the Company. In December 2002, plaintiffs filed a seven-count Amended
      Complaint to add claims against Royalty and Royalty's control persons. All
      Defendants moved to dismiss all claims against them on jurisdictional and
      substantive grounds. On July 7, 2003, the Nebraska Court ruled that venue
      in the District of Nebraska was improper and granted defendants' motions
      to transfer the case to the District of Delaware. In connection with the
      transfer of the case to Delaware, the Court denied as moot the other
      motions pending before it without prejudice to their reassertion in the
      United States District Court for the District of Delaware (the "Delaware
      Federal Court").


                                       15
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

ITEM 1. LEGAL PROCEEDINGS. (continued)

      In September and October 2003, all defendants filed motions to dismiss the
      Federal Action with the Delaware Federal Court and plaintiffs filed a
      motion for permission to file an amended and supplemental complaint as
      well as a preliminary injunction or status quo order seeking, among other
      things, to prevent the Company from taking any actions outside the
      ordinary course of business. On December 18, 2003, the Delaware Federal
      Court issued an opinion and order which, among other things (i) granted
      defendants' motions to dismiss the amended complaint with respect to
      certain claims, (ii) denied plaintiffs' motion for leave to file a
      supplemental and second amended complaint, (iii) denied plaintiffs'
      request for a preliminary injunction and a status quo order and (iv)
      dismissed the remainder of the amended complaint for lack of subject
      matter jurisdiction. As a result of the Delaware Federal Court's opinion
      and order, the Federal Action was dismissed in its entirety.

            On January 20, 2004, a purported derivative and class action lawsuit
      (the "Delaware State Action") was filed by the same two individual
      shareholder plaintiffs in the New Castle County Court of Chancery,
      Delaware, captioned Gatz et al. v. Ponsoldt, Sr., et al, (C.A. No. 174-N)
      naming as defendants certain current and former directors of the Company,
      Royalty and certain of its affiliates, Statesman and, nominally, the
      Company. The complaint alleges, among other things, breaches of fiduciary
      duties by the former director defendants and Statesman in connection with
      (i) the exercise by Statesman in 2001 of an option to acquire shares of
      our common stock, (ii) the 2001 sale of Aggregate by NRDC to Iron Mountain
      and (iii) the October 2002 Restructuring Transactions. The complaint also
      alleges breaches of fiduciary duties by the current director defendants in
      connection with the payment by the Company in 2003 of accrued compensation
      owed to William R. Ponsoldt, Sr. for periods prior to the October 2002
      Restructuring Transactions. The complaint also alleges that Royalty and
      its affiliates knowingly participated in the breaches of fiduciary duties
      by the former director defendants relating to the October 2002
      Restructuring Transactions. In addition to other damages, plaintiffs seek
      unspecified compensatory and/or rescissory damages against all defendants,
      a declaration that all Company stock issued to Statesman, William R.
      Ponsoldt, Sr., Royalty and any person affiliated with the foregoing is
      void, an order rescinding any payments in any form made by the Company to
      William R. Ponsoldt, Sr. or any of his affiliates or family members, an
      order rescinding the October 2002 Restructuring Transactions, and an order
      rescinding Statesman's 2001 option exercise and rescinding the option
      itself. The Company, as a nominal defendant, has not taken any position
      with respect to the merits of the Delaware State Action. Each of the other
      defendants has moved to dismiss the Delaware State Action and these
      motions are pending.

            The defendants in the Federal Action and the Delaware State Action,
      other than Statesman, are entitled to be indemnified by the Company for
      damages, if any, and expenses, including legal fees, they may incur as a
      result of the lawsuit, subject to certain circumstances under which such
      indemnification is not available. In addition, other than with respect to
      the claims against the current director defendants in their capacities as
      such, the claims contained in the Delaware State Action are not covered by
      insurance, as the Company's carrier has declined coverage on the basis of
      the "insured vs. insured" exclusion since one of the named plaintiffs,
      Donald D. Graham, was previously a director of the Company. The Company
      has submitted a claim to its carrier with respect to the claims in the
      Delaware State Action against the current director defendants. No
      assurance can be given as to the position that the carrier will take with
      respect to such claims.


                                       16
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

ITEM 2. CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
        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.

Subsequent Events:

      On April 30, 2004, the Company through a newly-formed, wholly-owned
      subsidiary called Regency Power Corporation, a Delaware corporation,
      acquired a 50% membership interest in MESC Capital, LLC, a Delaware
      limited liability company, from DTE Mobile, LLC, pursuant to an Assignment
      and Assumption Agreement dated as of April 30, 2004. The purchase price
      for the 50% membership interest was $3,000,000 and was funded from
      Regency's working capital. DTE Mobile, which is owned by an unregulated
      subsidiary of a large energy company that has significant experience in
      owning, managing and operating electric generation and on-site energy
      facilities, owns the other 50% membership interest in MESC Capital.

      MESC Capital was formed to acquire all of the membership interests in
      Mobile Energy Services Company, LLC, an Alabama limited liability company.
      Mobile Energy owns an on-site energy facility that supplies steam and
      electricity to a Kimberly-Clark tissue mill in Mobile, Alabama. The
      acquisition of Mobile Energy was also consummated on April 30, 2004
      pursuant to a Membership Interest Purchase Agreement, dated as of January
      30, 2004, between MESC Capital and Mobile Energy Services Holdings, Inc.
      The purchase price under the Membership Interest Purchase Agreement, after
      certain pre-closing adjustments, was $33,600,000, and is subject to
      certain post-closing adjustments. The purchase price and working capital
      reserves were funded by the issuance of $28,500,000 of non-recourse debt,
      a total equity contribution by MESC Capital of $8,600,290, $4,300,145 of
      which was funded by Regency Power and $4,300,145 of which was funded by
      DTE Mobile, and a credit of $1,000,000 on account of existing and
      continuing tax-exempt indebtedness of Mobile Energy. The terms of the
      Membership Interest Purchase Agreement were negotiated on an arms'-length
      basis between MESC Capital and Mobile Energy Services Holdings, Inc.
      Regency did not participate in negotiations with respect to the Membership
      Interest Purchase Agreement.


                                       17
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

ITEM 5. OTHER INFORMATION. (continued)

      The $28,500,000 acquisition indebtedness was obtained from Allied Irish
      Banks, P.L.C., which may assign or participate the loan in accordance with
      the terms of the loan agreement. The loan will be fully amortized over the
      fifteen year term. In connection with the acquisition of the 50%
      membership interest in MESC Capital, Regency Power and DTE Mobile entered
      into an Operating Agreement, dated April 30, 2004, which sets forth their
      respective rights and obligations as members of MESC Capital as well as
      the duties and authority of DTE Mobile as the managing member of MESC
      Capital. Under the Operating Agreement, Regency Power will receive 50% of
      all distributions, and participate equally in ultimate management
      authority through equal representation on the MESC Capital Board of
      Control. DTE Mobile, as managing member, is responsible for day-to-day
      management of MESC Capital. DTE Mobile will not receive any compensation
      for serving as managing member, and is subject to removal by the Board of
      Control with or without cause. Neither Regency Power nor DTE Mobile is
      obligated to contribute additional capital, or loan or otherwise advance
      funds, to MESC Capital, and neither member can sell or transfer its
      interest in MESC Capital without the consent of the other and without
      first complying with a right of first offer in favor of the non-selling
      member.

      The energy facility is located on approximately 11 acres of land within
      the Kimberly-Clark tissue mill in Mobile, Alabama. The facility supplies
      up to 61 megawatts of co-generated steam and electricity for use in the
      mill's operations, with a power-house fueled by a combination of coal,
      biomass and natural gas. In connection with MESC Capital's acquisition of
      Mobile Energy, Kimberly-Clark entered into a 15-year agreement with Mobile
      Energy pursuant to which Mobile Energy will be the exclusive steam
      supplier to the mill and will provide a substantial portion of the mill's
      electricity requirements. Under the agreement, Kimberly-Clark is obligated
      to make monthly fixed capacity payments, monthly fixed and variable
      operations and maintenance payments, and to reimburse Mobile Energy for
      fuel costs. Early termination of the agreement by Kimberly-Clark obligates
      Kimberly-Clark to make a termination payment to Mobile Energy in an amount
      anticipated to be sufficient to retire the acquisition financing obtained
      by MESC Capital and to provide a return on the MESC equity investment. In
      addition, in the event of an early termination by Kimberly-Clark and under
      certain conditions, DTE Mobile has agreed to make a termination payment to
      Regency Power.

      Mobile Energy operated under the protection of Chapter 11 of the United
      States Bankruptcy Code from January 1999 until late 2003. During such
      time, the energy facility was operated by an interim operator. MESC
      Capital was selected through an auction process conducted by Mobile Energy
      bondholders to be the acquirer of Mobile Energy. In connection with the
      acquisition, the interim operator was terminated and DTE Mobile and its
      affiliate will provide operations, management and maintenance services and
      asset management support for the investment and energy facility pursuant
      to agreements with MESC Capital and Mobile Energy.


                                       18
<PAGE>

                    Regency Affiliates, Inc. and Subsidiaries

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

                            EXHIBIT AND REPORT INDEX

      (a)   Exhibits

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

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

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

      3.1(i)(c)                     Certificate of Amendment of Restated
                                    Certificate of Incorporation of Regency
                                    Affiliates, Inc. (filed as Exhibit A to the
                                    Company's Information Statement on Schedule
                                    14C filed on October 27, 2003 and
                                    incorporated by reference herein).

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

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

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

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

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

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


                                       19
<PAGE>

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

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

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

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

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

      (b)   Reports on Form 8-K

            Date Filed or Furnished      Item Reported      Financial Statements
            -----------------------      -------------      --------------------

            January 29, 2004                   5                    None


                                       20
<PAGE>

                                   SIGNATURES

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

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


Date: May 24, 2004                       /s/ Laurence S. Levy
------------------                       ---------------------------------------
                                         (President and Chief Executive Officer)


Date: May 24, 2004                       /s/ Neil N. Hasson
------------------                       ---------------------------------------
                                         (Chief Financial Officer)


                                       21
<PAGE>

                            EXHIBIT AND REPORT INDEX

      (a)   Exhibits

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

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

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

      3.1(i)(c)                     Certificate of Amendment of Restated
                                    Certificate of Incorporation of Regency
                                    Affiliates, Inc. (filed as Exhibit A to the
                                    Company's Information Statement on Schedule
                                    14C filed on October 27, 2003 and
                                    incorporated by reference herein).

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

      (b)   Reports on Form 8-K

            Date Filed or Furnished      Item Reported       Financial Statement
            -----------------------      -------------       -------------------

            January 29, 2004                   5                    None.