10QSB/A 1 reg10qa0999.txt AMEND FINANCIALS AND OUTSTANDING STOCK 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1999 Commission file Number 0-9519 Regent Technologies, Inc. (Exact name of registrant as specified in its charter.) Texas 84-0807913 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2929 ELM STREET, DALLAS, TEXAS 75226 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 972 818-3738 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 practical date: Common Stock, $.10 Par Value - 5,500,817 shares as of October 31, 1999. EXPLANATORY NOTE New management of the Company is in the process of filing current and, as necessary, amended reports with the Securities and Exchange Commission (the "SEC"), including filing 10-Q, 10-K, and 8-K reports for delinquent periods. The objective is to be in compliance with reporting requirements under Section 13(a) of the Securities Exchange Act of 1934 and to take the steps necessary for the stock of the Company to begin trading. The Company plans to operate as a financial services and investment management firm. This amendment on Form 10-QSB/A amends the Company's Quarterly Report on Form 10-QSB for the three and nine month periods ended September 30, 1999 and September 30, 1998, as initially filed with the SEC on August 18, 1999, and is being filed to more accurately reflect the cancellation of the accrued salaries and disposal of the Company's subsidiaries effective January 1, 1998 on the financial statements for the three and nine month periods ended September 30, 1999 and September 30, 1998. Also, subsequent to the third quarter of 1999, the legal counsel for the Company determined that the agreement to grant stock options and to issue 40,246,209 shares of restricted Common Stock to the Straza Family Limited Partnership was void due to failure of consideration. The result of voiding this agreement was the reduction of assets and the number of shares of common stock and stock options issued and outstanding and the resulting per share loss for the three month and nine month periods ended September 30, 1999. REGENT TECHNOLOGIES, INC. FORM 10-QSB/A TABLE OF CONTENTS Page PART I FINANCIAL INFORMATION Item 1. Financial Statements................................... 2 INCOME STATEMENTS For the three months and nine months ended September 30, 1999 and 1998 (unaudited)............................ 2 BALANCE SHEETS As of September 30, 1999 (unaudited) and December 31, 1998 (audited)...................... 3 STATEMENTS OF CASH FLOWS For the nine months ended September 30, 1999 and 1998 (unaudited).......................................... 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................... 7 PART II OTHER INFORMATION Item 5. Other Information...................................... 8 Item 6. Exhibits and Reports on Form 8-K....................... 8 SIGNATURES.......................................................9 PART I. - FINANCIAL INFORMATION Item 1. Financial Statements REGENT TECHNOLOGIES, INC. INCOME STATEMENTS FOR THE THREE MONTHS and NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 (Unaudited) (Amounts in thousands, except per share data)
Three months ended Nine months ended September 30 September 30 __________________ ________________ 1999 1998 1999 1998 REVENUES Interest income and other $ 2 $ 0 $ 6 $ 2 ______ ______ ______ _____ 2 0 6 2 COSTS AND EXPENSES Selling, general and administrative expenses 10 64 40 233 Depreciation and amortization 0 0 1 2 Interest expense 0 0 0 0 ______ ______ ______ _____ 10 64 41 235 NET LOSS (8) (64) (35) (233) ------ ------ ------ ------ DISCONTINUED OPERATIONS Loss on disposal of divisions (385) NET EARNINGS (LOSS) APPLICABLE TO COMMON STOCK (8) (64) (35) (618) ------ ------ ------ ------ Loss per share $ (.002) $ (.019) $ (.008) $ (.184) Weighted average Common Shares outstanding 4,490 3,400 4,422 3,360 See Accompanying Notes to Financial Statements.
2 REGENT TECHNOLOGIES, INC. BALANCE SHEETS
September 30, 1999 December 31, 1998 ______________ ______________ (Unaudited) (Audited) ASSETS Current Assets Cash $ 0 $ 0 Note receivable from related party 8 20 Accounts receivable 28 28 ______ ______ Total Current Assets 36 48 Furniture and fixtures 8 8 Computer and electronic equipment 3 3 ______ ______ 11 11 Less accumulated depreciation 7 7 ______ ______ Total Fixed Assets 4 4 Other Assets 67 67 ______ ______ TOTAL ASSETS $ 106 $ 119
LIABILITIES Current Liabilities Accounts Payable $ 54 $ 48 Accrued Compensation 0 170 ______ ______ Total Current Liabilities 54 218 Long Term Liabilities 64 64 Shareholders' Equity (Deficiency) Common Stock, par value $.01 per share Authorized 100,000,000 shares Issued and outstanding - 5,500,817 and 3,643,693 shares 55 36 Capital in excess of par value 3,316 3,149 Accumulated deficit (3,383) (3,348) _______ _______ Total Shareholders' Equity (Deficiency) $ (12) $ (163) ____ ____ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) $ 106 $ 119 See Accompanying Notes to Financial Statements.
3 REGENT TECHNOLOGIES, INC. STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, (Unaudited) (Amounts in thousands)
1999 1998 ____ ____ Cash Flow From Operating Activities: Loss From Operations $ (35) $ (618) _______ _______ Adjustments To Reconcile Net Income to Net Cash (Used)Provided by Operating Activities Depreciation 1 Loss on disposal of subsidiaries (Increase) Decrease in 385 Receivables Deposits 18 Increase (Decrease) in Accounts payable 9 (28) Accrued compensation (165) 185 _______ _______ Net Cash Used In Operating Activities $ (190) $ (58) _______ _______ Cash Flow From Investing Activities: Net collections on notes $ 0 $ 0 Decrease to equipment Costs of investment in subsidiary Increase in other assets Net Cash Used In _______ _______ Investing Activities $ 0 $ 0 Cash Flow From Financing Activities: Notes receivable for issuance of Common Stock $ 0 $ 0 Net issuance of Common Stock 190 56 Decrease to equipment Net proceeds from note to shareholder _______ _______ Net Cash Provided From Financing Activities $ 190 $ 56 _______ _______ Increase (decrease) in Cash 0 (2) Cash at Beginning of Period $ 0 $ 2 _______ _______ Cash at End of Period $ 0 $ 0 See Accompanying Notes to Financial Statements.
4 REGENT TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS September 30, 1999 (unaudited) and December 31, 1998 (1) BASIS OF PRESENTATION The accompanying financial statements, which should be read in conjunction with the financial statements of Regent Technologies, Inc. ("the Company") included in the 1998 Annual Report filed on Form 10-K/A, are unaudited but have been prepared in the ordinary course of business for the purpose of providing information with respect to the interim period. The Company believes that all all adjustments (none of which were other than normal recurring accruals) necessary for a fair presentation for such periods have been included. (2) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General The terms "Company" and "Regent" when used herein mean Regent Technologies, Inc. and its subsidiaries. Regent Technologies, Inc., formerly Regent Petroleum Corporation, was incorporated under the laws of the State of Colorado on January 18, 1980. In 1994, new management redirected the Company's core business as an incubator for the development of emerging technologies and the shareholders voted to rename the Company at a shareholders meeting held on December 19, 1994. At the shareholders meeting held on March 4, 1998, the shareholders approved a 1 for 6 reverse split of the Common Stock of the Company. On December 19, 1994, the Board approved the acquisition of SSB Environmental, Inc. ("SSBE") for restricted common stock and incentives. SSBE was the Company's entry into the landfill mining business in the State of New York. On September 15, 1996, the Company announced it had initiated highspeed Internet access for home and business using the National Knowledge Networks, Inc. ("NKN") digital network under a Technology License which licenses the hardware and the software necessary for the Company to offer access to the Internet. The License was obtained from NKN Technologies, Inc. ("NKN") for 2,500,000 shares of common stock of the Company, 600,000 registered shares and 1,900,000 restricted shares. On December 7, 1996, the License was assigned to the Company's wholly owned subsidiary, Regent Tel1 Communications, Inc. ("TEL1"). Effective September 1, 1997, Regent acquired ConnecTen, L.L.C. ("ConnecTen") for 100,000 shares of Regent restricted common stock. The focus of ConnecTen was to provide a wide range of Internet services for corporate customers including high-speed access, web hosting, server co- location and web page development. Effective January 1, 1998, TEL1 initiated the offering of wireless products through Regent's acquisition of Channel Services, L.C. which allowed TEL1 to succeed to Channel's status as a preferred customer of AT&T Wireless Services Corp. Channel Services was acquired through the issuance of 1,281,667 shares of restricted common stock and warrants which can be exercised for an additional 80,000 shares of Regent restricted common stock. On March 20, 1998, the Company announced its entry into the digital printing and prepress business through its new subsidiary company, Regent Digital Imaging, Inc. ("RDI"). RDI was incorporated as a Texas corporation and was initiated because of the Company's knowledge of and access to the technologies related to this industry and the Company's belief that the digital printing business can be enhanced through utilization of the Internet. Recent Business Developments Effective January 1, 1998, and in an effort to allow new management to initiate new directions for the Company, the aforementioned named subsidiary companies have been divested to related parties. See "Note 3. Transactions with Related Parties." During the first quarter, 1999, the Company entered into negotiations to develop businesses related to landfill management and reclamation including the potential to enter the waste hauling business. Depreciation Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives (5 years). The straight-line method of depreciation is used for financial reporting purposes, while accelerated methods are used for federal income tax purposes. Income Taxes The Company utilizes the method of accounting for federal income tax set forth in Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" (SFAS 109). SFAS 109 requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities, using enacted tax rates in effect in the years which the differences are expected to reverse. These temporary differences primarily relate to depreciation, depletion and amortization. The Company has not recognized the benefit of any net operating loss carryforwards as the result of adopting SFAS 109, and no deferred tax assets have been recorded on the books of the Company due to uncertainty as to the Company's ability to utilize the loss carryforwards. Loss Per Share Loss per share is based on the weighted average number of common shares outstanding for each period presented. Common Stock equivalents are included if dilutive. In February 1997, the Financial Accounting Standards Board issued Statement No. 128, "Earnings per Share," which is required to be adopted for years ending after December 15, 1997. Under the new requirements for calculating primary earnings per share, the dilutive effect of stock options and warrants will be excluded. Statement No. 128 is not expected to have a material impact on the net loss per share of the Company. Cash Equivalents The Company does not consider any of its assets to meet the definition of a cash equivalent. 5 REGENT TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS September 30, 1999 (unaudited) and December 31, 1998 (3) TRANSACTIONS WITH RELATED PARTIES During the first quarter of 1999, the Directors approved settlement agreements with the Chairman, the President, the General Counsel, the Director of Marketing and the Chief Technical Officer to terminate each of their employment contracts and the deferred compensation amounts due thereunder. The Company issued 50,000 shares of restricted Common Stock each to the General Counsel and the Director of Marketing to fulfill previous commitments. In addition, the Company released the Chief Technical Officer from his employment contract in exchange for the stock grant thereunder. Pursuant thereto, 42,876 shares of restricted Common Stock was returned to the Company. The Chairman accepted a $90,000 promissory note for the $90,000 deferred compensation owed. The promissory note was assigned to a third party and redeemed by the Company with 900,000 shares of restricted Common Stock. In addition, the Chairman agreed to accept, effective January 1, 1998, conveyance of 100% of the assets and liabilities of Regent Digital Imaging, Inc. and ConnecTen, LLC in exchange for all indebtedness owed to the Chairman including monies owed under a secured line of credit and termination of his employment contract. From the assets of the transferred companies, the Chairman agreed to pay certain Company payables, including $20,000 to the Company plus monies owed to the General Counsel, the Chief Technical Officer and the Director of Marketing and related taxes for the termination of their employment contracts. The promissory note was assigned to a third party and paid by the Company with 900,000 shares of restricted Common Stock. The President accepted a $90,000 promissory note and an account payable of $10,000 for the $80,000 deferred compensation owed and $20,000 of expense reimbursement for the termination of his employment contract. In addition, the President agreed to accept, effective January 1, 1998, conveyance of 100% of the assets and of Channel Services, L.C. in exchange for the liabilities of the company. The only asset was a computer. The promissory note was assigned to a third party and paid by the Company with 900,000 shares of restricted Common Stock. Effective January 1, 1998, Woody Inc. purchased 100% of the shares of the stock of Tel1 Communications, Inc. for $67,000 in the form of a promissory note due and payable on or before December, 2003. During the third quarter of 1999, the Company issued 40,246,209 shares of Restricted Common Stock to the Straza Family Limited Partnership in exchange for $1,200,000 notes receivable and issued stock options to that entity. Subsequently, this exchange was reversed with all shares and options voided or returned to the Company. (4) COMMITMENTS The Company has a lease on its office space located at 2929 Elm Street, Dallas, Texas for $3,500 per month, which lease expires on August 31, 2000. Effective January 1, 1999, this space was sub- leased to Worksoft, Inc. for the lease amount. (5) CHANGES IN MANAGEMENT AND EVENTS Effective June 22, 1999, the Board of Directors elected Lupe Vasquez and Brian Layton as Directors. Lupe Vazquez declined to serve as a Director. Effective June 28, 1999, the Board of Directors accepted the resignations of Roy W. Mers as Director, Chairman and as Chief Executive Officer and David A. Nelson as Director and President. Effective June 28, 1999, the Board of Directors elected Robyn Sterritt as Director, President and Chief Executive Officer. Ms. Sterritt was also elected Chairman of the Board of Directors effective June 28, 1999. 6 Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations The statements contained in this Form 10-QSB that are not historical facts are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as "believes," "expects," "may," "will," should" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. From time to time, the Company or its representatives have made or may make forward-looking statements, orally or in writing. Such forward-looking statements may be included in various filings made by the Company with the Securities and Exchange Commission, or press releases or oral statements made by or with the approval of an authorized executive officer of the Company. These forward-looking statements, such as statements regarding anticipated future revenues, capital expenditures and other statements regarding matters that are not historical facts, involve predictions. The Company's actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Business and Acquisition Strategy With the Company's decision to expand and initially focus on waste, landfill and facilities management, the Company will seek to develop these businesses with the acquisition of companies in markets where consolidations are an appropriate method for long-term growth. Financial Condition Liquidity and Capital Resources At September 30, 1999, the Company had a negative net working capital of $197,000. The Company has no amortization requirements under any term loan agreements. The Company is not current on its trade payables. Results of Operations COMPARISION OF THE NINE MONTHS ENDED SEPTEMBER 30, 1999 TO THE NINE MONTHS ENDED SEPTEMBER 30, 1998 The Company's net loss for the nine months ending September 30, 1999 was $35,000 or $.008 cents per common share, compared with a net loss of $618,000 for the same period in 1998. An amount of $4,000 was recorded as Other Income due to the receipt of 42,876 shares of restricted Common Stock for the settlement of an employment contract and an amount of $2,000 was recorded as Other Income due to adjustments to accounts payable. A total of $30,000 was recorded as expense to fulfill previous employee commitments and a total of $10,000 for administrative and accounting services. 7 PART II - OTHER INFORMATION Item 5. Other Information Effective June 22, 1999 the Board of Directors elected Lupe Vasquez and Brian Layton as Directors. Effective June 28, 1999 the Board of Directors accepted the resignations of Roy W. Mers as Director, Chairman and Chief Executive Officer and David A. Nelson as Director and President. Effective June 28, 1999 the Board of Directors elected Robyn Sterritt as a Director, President and Chief Executive Officer. Ms. Sterritt was also elected as Chairman of the Board of Directors effective June 28, 1999. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27. Financial data schedule for the quarter ended September 30, 1999 (included only in the copy of this report filed electronically). (b) Reports on Form 8-K On March 9, 1999, Regent announced that it had sold all of the assets of its wholly owned subsidiary, Regent Digital, Inc. to The Color Place, Inc., a Texas corporation. The corporate headquarters were moved to 2929 Elm Street, Dallas, Texas 75226. On April 2, 1999 Regent announced the sale of all of the assets of ConnecTen, L.L.C. to Internet Allegiance, Inc. On July 14, 1999, Regent announced the changes to its Board of Directors and officers; sale of Restricted Common Stock and options to purchase additional shares of Restricted Common Stock to the Straza Family Limited Partnership; and, its plans to expand. 8 SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly cause this report to be signed on its behalf by the undersigned thereunto duly authorized. REGENT TECHNOLOGIES, INC. Registrant June 22, 2005 David A. Nelson Date Principal Financial Officer Principal Executive Officer 2
CT 1,000 9-MOS Dec-31-1999 Jan-01-1999 Sep-30-1999 0 0 36 0 0 36 11 8 106 54 55 (12) 106 0 6 0 41 0 (35) 0 (35) 0 0 0 (35) (.008) (.008)