x
|
ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF
1934
|
For
the fiscal year ended December
31, 2007
|
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT OF 1934
|
For the
transition period from ______________ to
______________
|
Delaware
|
72-0888772
|
|
(State
or other jurisdiction
|
(IRS
Employer
|
|
of
incorporation)
|
Identification
No.)
|
|
610
Jensen Beach Boulevard
Jensen
Beach, Florida
|
34957
|
|
(Address
of Principal Executive Offices)
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(Zip
Code)
|
|
(772)
334-8181
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||
Issuer's
Telephone Number, Including Area
Code
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Page
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|||||
PART
I
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|||||
ITEM
1.
|
1
|
||||
ITEM
2.
|
7
|
||||
ITEM
3.
|
7
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||||
ITEM
4.
|
8
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||||
PART
II
|
|||||
ITEM
5.
|
8
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||||
ITEM
6.
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9
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||||
ITEM
7.
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12
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||||
ITEM
8.
|
12
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||||
ITEM
8A(T)
|
12
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||||
ITEM
8B.
|
13
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||||
PART
III
|
|||||
ITEM
9.
|
13
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||||
ITEM
10.
|
15
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||||
ITEM
11.
|
17
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||||
ITEM
12.
|
19
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||||
ITEM
13.
|
19
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||||
ITEM
14.
|
24
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||||
26
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|||||
E-1
|
YEAR
ENDED
DECEMBER 31, 2006 |
||||||||
HIGH
($)
|
LOW
($)
|
|||||||
First
Quarter
|
6.45 | 6.10 | ||||||
Second
Quarter
|
7.00 | 5.40 | ||||||
Third
Quarter
|
6.00 | 5.35 | ||||||
Fourth
Quarter
|
6.20 | 5.45 |
YEAR
ENDED
DECEMBER 31, 2007 |
||||||
HIGH
($)
|
LOW
($)
|
First
Quarter
|
6.70 | 5.22 | ||||||
Second
Quarter
|
5.50 | 5.00 | ||||||
Third
Quarter
|
5.75 | 5.10 | ||||||
Fourth
Quarter
|
5.65 | 4.85 |
NAME, AGE | POSITIONS AND OFFICES HELD AND PRINCIPAL OCCUPATIONS OR EMPLOYMENT DURING PAST FIVE YEARS |
Laurence
S. Levy, 52
|
Mr.
Levy is Chairman of the Board of Directors, President, and Chief Executive
Officer of the Company since 2002. Mr. Levy founded the predecessor to
Hyde Park Holdings, LLC in July 1986 and has since served as its Chairman.
Hyde Park Holdings, LLC is an investor in middle market businesses. Mr.
Levy serves as an officer or director of many companies in which Hyde Park
Holdings, LLC or its affiliates invests. Presently, these companies
include: Ozburn-Hessey Logistics LLC, a national logistics services
company, of which Mr. Levy is a director; Derby Industries LLC, a
sub-assembly business to the appliance, food and transportation
industries, of which Mr. Levy is chairman; PFI Resource Management LP, an
investor in the Private Funding Initiative program in the United Kingdom,
of which Mr. Levy is general partner; Parking Company of America Airports
LLC, an owner and operator of airport parking garages, of which Mr. Levy
is a director. Mr. Levy is also the chairman of the board and chief
executive officer of Rand Logistics, Inc. a NASDAQ listed company which
provides bulk freight shipping services throughout the Great Lakes region
and chairman of the board and chief executive officer of Hyde Park
Acquisition Corp., a specified purpose acquisition corporation. In
addition, from March 1997 to January 2001, Mr. Levy served as Chairman of
Detroit and Canada Tunnel Corporation, a company which operates the toll
tunnel between Detroit, Michigan and Windsor, Ontario, and from August
1993 until May 1999, Mr. Levy served as Chief Executive Officer of High
Voltage Engineering Corporation, a diversified industrial and
manufacturing company. Mr. Levy received a Bachelor of Commerce degree and
a Bachelor of Accountancy degree from the University of Witwatersrand in
Johannesburg, South Africa. He is qualified as a Chartered Accountant
(South Africa). Mr. Levy received a Master of Business Administration
degree from Harvard University and graduated as a Baker
Scholar.
|
Neil
N. Hasson, 42
|
Mr.
Hasson is a Director and Chief Financial Officer of the Company since
2002. In February 2005, Mr. Hasson was appointed as a Director of
Citigroup Property Investors (“CPI”). CPI is an international real estate
investment manager. Previously, Mr. Hasson was the head of European Real
Estate for DLJ Real Estate Capital Partners, a $660 million real estate
fund managed by Donaldson, Lufkin and Jenrette ("DLJ"), where he was
involved with the acquisition of real estate throughout the world. Mr.
Hasson joined DLJ as a Managing Director in New York in January
1995.
|
Errol
Glasser, 54
|
Mr.
Glasser is a Director of the Company since 2002. Mr. Glasser has been
President of Triangle Capital, LLC, a private investment and advisory
company based in New York City since 2004. Previously, Mr. Glasser was
President of East End Capital Management and a Managing Director at
Kidder, Peabody & Co. with responsibility for its West Coast
investment banking activity.
|
Carol
Zelinski, 53
|
Ms.
Zelinski is the Secretary of the Company. Since 1997, Ms. Zelinski has
been an analyst at Hyde Park Holdings, LLC, a private investment firm. Ms.
Zelinski is not a Director of the
Company.
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan Compensation
($)
|
Nonqualified
Deferred Compensation Earnings
($)
|
All
Other Compensation
($)
|
Total
($)
|
|||||||||||||||||||||
Laurence
S. Levy
|
2007
|
200,000 | (1) | 0 | 0 | 197,750 | (2) | 0 | 0 | 44,000 | (4) | 441,750 | ||||||||||||||||||
President
and Chief Executive Officer
|
2006
|
183,000 | (1) | 0 | 0 | 250,000 | (3) | 0 | 0 | 44,000 | (4) | 477,000 | ||||||||||||||||||
Neil
N. Hasson
|
2007
|
50,000 | 0 | 0 | 0 | 0 | 0 | 12,500 | (4) | 62,500 | ||||||||||||||||||||
Chief
Financial Officer
|
2006
|
50,000 | 0 | 0 | 0 | 0 | 0 | 12,500 | (4) | 62,500 |
|
(1)
|
Effective
April 1, 2006, Mr. Levy's annual base annual salary is
$200,000.
|
|
(2)
|
On August 14, 2007
Mr. Levy was granted 50,000 stock options pursuant to our 2003 Stock
Incentive Plan, as amended. We determined the above fair market values of
the options issued under the Black-Scholes Option
Pricing Model and with
the provisions of SFAS
123(R).
|
|
(3)
|
On
April, 2006 Mr. Levy was granted 50,000 stock options pursuant to our 2003
Stock Incentive Plan, as amended. We determined the above fair market
values of the options issued using the Black-Scholes Option Pricing Model
and with the provisions of SFAS
123(R).
|
|
(4)
|
Other compensation
consists of contributions made to a SEP-IRA retirement plan.
|
Option
Awards
|
Stock
Awards
|
||||||||||||||||||||||||||||||||
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
(#)
|
Option
Exercise Price
($)
|
Option
Expiration Date
|
Number
of Shares or Units of Stock That Have Not Vested
(#)
|
Market
Value of Shares or Units of Stock That Have Not
Vested
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
That Have Not Vested
(#)
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
Other Rights That Have Not Vested
(#)
|
||||||||||||||||||||||||
Laurence
S. Levy (1)
|
25,000 | 0 | 0 | 1.35 |
4/3/2013
|
||||||||||||||||||||||||||||
50,000 | 0 | 0 | 1.53 |
10/1/2013
|
|||||||||||||||||||||||||||||
50,000 | 0 | 0 | 2.01 |
6/10/2014
|
|||||||||||||||||||||||||||||
50,000 | 0 | 0 | 6.27 |
4/1/2016
|
|||||||||||||||||||||||||||||
50,000 | 0 | 0 | 5.10 |
8/14/2017
|
0 | 0 | 0 | 0 | |||||||||||||||||||||||||
Neil
N. Hasson (1)
|
25,000 | 0 | 0 | 1.35 |
4/3/2013
|
||||||||||||||||||||||||||||
50,000 | 0 | 0 | 1.53 |
10/1/2013
|
|||||||||||||||||||||||||||||
50,000 | 0 | 0 | 2.01 |
6/10/2014
|
0 | 0 | 0 | 0 |
1.
|
The
options were granted pursuant to the Issuer’s 2003 Stock Incentive Plan,
as amended.
|
Name
|
Fees
Earned or Paid in Cash
($)
|
Stock
Awards ($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan Compensation ($)
|
Nonqualified
Deferred Compensation Earnings
($)
|
All
Other Compensation ($)
|
Total
($)
|
|||||||||||||||||||||
Errol
Glasser
|
30,000 | (1) | $ | 7,500 | (2) | 0 | 0 | 0 | 0 | $ | 37,500 |
PLAN
CATEGORY
|
(a)
NUMBER
OF SECURITIES
TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS,
WARRANTS
AND RIGHTS
(#)
|
(b)
WEIGHTED-AVERAGE EXERCISE
PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS
($)
|
(c)
NUMBER
OF SECURITIES REMAINING AVAILABLE FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (a))
|
|||||||||
Equity
compensation plans approved by security holders
|
N/A | N/A | N/A | |||||||||
Equity
compensation plans not approved by security holders (1)
|
380,000 | 3.08 | 10,000 | |||||||||
Total
|
380,000 | 3.08 | 10,000 |
__________________________
|
NAME
AND ADDRESS OF
BENEFICIAL
OWNER
|
AMOUNT
BENEFICIALLY OWNED
|
PERCENT
OF CLASS
|
||||||
Royalty
Holdings, LLC and Royalty Management, Inc.
462
Fifth Avenue, 25th
Fl.
New
York, New York 10017
|
1,823,738 | (1) | 51.6 | % | ||||
Laurence
S. Levy (1)
c/o
Hyde Park Holdings, LLC
461
Fifth Avenue, 25th
Fl.
New
York, New York 10017
|
2,098,738 | (1)(2) | 55.8 | % | ||||
Michael
J. Meagher
Stephen
C. Smith
c/o
The Seaport Group LLC
360
Madison Avenue
New
York, New York 10017
|
257,583 | (3) | 7.3 | % |
(1)
|
Based
on information contained in an amendment to the Statement on Schedule 13D
filedby
such entities on January 9, 2008.
|
(2)
|
Comprised
of (i) the 1,823,738 shares that are beneficially owned by Royalty
Management, Inc., of which Mr. Levy is the President, sole director and
sole stockholder, (ii) 225,000 shares underlying currently exercisable
options granted to Mr. Levy under the Company's 2003 Stock Incentive Plan,
as amended and (iii) 50,000 shares owned
directly.
|
(3)
|
Based
on information contained in an amendment to the Statement on Schedule 13G
filed
by such entity on February 14, 2008.
|
NAME
AND ADDRESS OF
BENEFICIAL
OWNER
|
AMOUNT
AND NATURE OF BENEFICIAL OWNER
|
PERCENT
OF CLASS
|
||||||
Laurence
S. Levy (1)
|
2,098,738 | (2) | 55.8 | % | ||||
Neil
N. Hasson (1)
|
175,000 | (3) | 4.8 | % | ||||
Errol
Glasser
505
Park Avenue
Suite
1902
New
York, New York 10022
|
21,750 | (4) | * | |||||
All
current Directors and
Executive
Officers as a group (3 persons)
|
2,295,488 | 58.9 | % |
(1)
|
The
address of such beneficial owner is c/o Hyde Park Holdings,
LLC, 461
Fifth Avenue, 25th
Fl., New
York, New York 10017.
|
(2)
|
Comprised
of (i) the 1,823,738 shares that are beneficially owned by Royalty
Management, Inc.,
of which Mr. Levy is the President, sole director and sole stockholder,
(ii) 225,000
shares underlying currently exercisable options granted to Mr. Levy under
the Company's
2003 Stock Incentive Plan, as amended and (iii) 50,000 shares owned
directly.
|
(3)
|
Comprised
of 125,000 shares of Common Stock underlying options currently
exercisable
granted to Mr. Hasson under the Company's 2003 Stock Incentive Plan, as
amended
and 50,000 shares owned directly.
|
(4)
|
Includes
12,500 shares of Common Stock underlying stock options currently
exercisable
or exercisable within
sixty days issued to such individual under the Company's
2003 Stock Incentive Plan, as amended and 9,250
directly.
|
The
following documents are filed as part of this report:
|
||||
Financial
Statements:
|
Page
|
|||
Report
of Independent Registered Public Accounting Firm
|
F-1 | |||
Consolidated
Balance Sheets
|
F-2 - F-3 | |||
Consolidated
Statements of Operations
|
F-4 | |||
Consolidated
Statements of Shareholders' Equity
|
F-5 | |||
Consolidated
Statements of Cash Flows
|
F-6 - F-7 | |||
Notes
to Consolidated Financial Statements
|
F-8 - F-23 |
Exhibit
No.
|
Description
of Document
|
|
3.1(i)(a)
|
Restated
Certificate of Incorporation of the Company (filed as exhibit 3.1(i)(a) to
the Company's Form 10-Q dated 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
Form 10-Q, dated November 19, 2002, and incorporated herein by
reference).
|
3.1(i)(c)
|
Certificate
of Amendment to Restated Certificate of Amendment (filed as Exhibit A to
the Company's Information Statement on Schedule 14C filed on October 27,
2003).
|
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 Registrant'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 No. 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 Form 10-Q dated November 19, 2002, and incorporated herein by
reference).
|
10.1
|
2003
Stock Incentive Plan of the Company (filed as Exhibit 10.1 to the
Company's Annual Report on Form 10-KSB for the year ended 2002 filed on
April 15, 2003 and incorporated herein by reference)
*
|
10.2
|
Amendment
No. 1 to 2003 Stock Incentive Plan (filed as Exhibit 8 to Amendment No. 3
to Schedule 13D filed by Royalty Holdings LLC, Royalty Management, Inc.,
Laurence Levy and Neil Hasson on October 3, 2003, and incorporated herein
by reference.) *
|
10.3
|
Amendment
No. 2 to 2003 Stock Incentive Plan (filed as Exhibit 10.1 to the Company's
Quarterly Report on Form 10-QSB on August 23, 2004, and incorporated
herein by reference.) *
|
10.4
|
Stock
Option Agreement, dated April 1, 2003, between the Company and Stanley
Fleishman (filed as Exhibit 10.2 to the Company's Annual Report on Form
10-KSB for the year ended 2002 filed on April 15, 2003, and incorporated
herein by reference). *
|
10.5
|
Stock
Option Agreement, dated April 1, 2003, between the Company and Errol
Glasser (filed as Exhibit 10.3 to the Company's Annual Report on Form
10-KSB for the year ended 2002 filed on April 15, 2003, and incorporated
herein by reference). *
|
10.6
|
Stock
Option Agreement, dated April 1, 2003, between the Company and Laurence
Levy (filed as Exhibit 10.4 to the Company's Annual Report on Form 10-KSB
for the year ended 2002 filed on April 15, 2003, and incorporated herein
by reference). *
|
10.7
|
Stock
Option Agreement, dated April 1, 2003, between the Company and Neil Hasson
(filed as Exhibit 10.5 to the Company's Annual Report on Form 10-KSB for
the year ended 2002 filed on April 15, 2003, and incorporated herein by
reference). *
|
10.8
|
Stock
Option Agreement, dated October 1, 2003 between the Company and Laurence
Levy (filed as Exhibit 11 to Amendment No. 3 to Schedule 13D filed by
Royalty Holdings LLC, Royalty Management, Inc., Laurence Levy and Neil
Hasson on October 3, 2003, and incorporated herein by reference).
*
|
10.9
|
Stock
Option Agreement, dated October 1, 2003 between the Company and Neil
Hasson (filed as Exhibit 12 to Amendment No. 3 to Schedule 13D filed by
Royalty Holdings LLC, Royalty Management, Inc., Laurence Levy and Neil
Hasson on October 3, 2003, and incorporated herein by reference).
*
|
10.10
|
Stock
Option Agreement, dated October 1, 2003 between the Company and Errol
Glasser (filed as Exhibit 10.9 to the Company's Annual Report on Form
10-KSB filed on April 14, 2004, and incorporated herein by reference).
*
|
10.11
|
Stock
Option Agreement, dated October 1, 2003 between the Company and Stanley
Fleishman (filed as Exhibit 10.10 to the Company's Annual Report on Form
10-KSB filed on April 14, 2004, and incorporated herein by reference).
*
|
10.12
|
Stock
Option Agreement, dated as of August 13, 2004 between the Company and
Laurence Levy (filed as Exhibit 10.2 to the Company's Quarterly Report on
Form 10-QSB filed on August 23, 2004, and incorporated herein by
reference). *
|
10.13
|
Stock
Option Agreement, dated as of August 13, 2004 between the Company and Neil
Hasson (filed as Exhibit 10.3 to the Company's Quarterly Report on Form
10-QSB filed on August 23, 2004, and incorporated herein by reference).
*
|
10.14
|
License
Agreement, dated March 17, 2003, between the Company and Royalty
Management, Inc. (filed as Exhibit 10.1 to the Company's Annual Report on
Form 10-KSB for the year ended 2002 filed on April 15, 2003, and
incorporated herein by reference).
|
10.15
|
Demand
Note from the Company in favor of Royalty Holdings LLC (filed as Exhibit
10.1 to the Company's Annual Report on Form 10-KSB for the year ended 2002
filed on April 15, 2003, and incorporated herein by
reference).
|
10.16
|
Redemption
Agreement, dated October 16, 2002, between the Company and Statesman
(filed as exhibit 99.1 to Company's Current Report on Form 8-K filed
October 18, 2002, and incorporated herein by
reference).
|
10.17
|
Call
Option Agreement, dated October 16, 2002, between the Company and
Statesman (filed as exhibit 99.2 to Company's Current Report on Form 8-K
filed October 18, 2002, and incorporated herein by
reference).
|
10.18
|
Contingent
Payment Agreement, dated October 16, 2002, between the Company and William
R. Ponsoldt, Sr. (filed as exhibit 99.3 to Company's Current Report on
Form 8-K filed October 18, 2002, and incorporated herein by reference).
*
|
10.19
|
Amended
and Restated Certificate of Designations of the Series C Preferred Stock
(filed as exhibit 99.4 to Company's Current Report on Form 8-K filed
October 18, 2002, and incorporated herein by
reference).
|
10.20
|
Note
Purchase Agreement, dated October 16, 2002, between the Company Royalty
Holdings LLC (filed as exhibit 99.5 to Company's Current Report on Form
8-K filed October 18, 2002, and incorporated herein by
reference).
|
10.21
|
5%
Convertible Promissory Note of the Company (filed as exhibit 99.6 to
Company's Current Report on Form 8-K filed October 18, 2002, and
incorporated herein by reference).
|
10.22
|
9%
Promissory Note of the Company (filed as exhibit 99.7 to Company's Current
Report on Form 8-K filed October 18, 2002, and incorporated herein by
reference).
|
10.23
|
Amended
and Restated Promissory Note of the Company (filed as exhibit 99.8 to
Company's Current Report on Form 8-K filed October 18, 2002, and
incorporated herein by reference).
|
10.24
|
Amendment
No. 1 to Pledge Agreement (filed as exhibit 99.9 to Company's Current
Report on Form 8-K filed October 18, 2002, and incorporated herein by
reference).
|
10.25
|
Letter
Agreement, dated October 16, 2002, between the Company and Statesman
(filed as exhibit 99.10 to Company's Current Report on Form 8-K filed
October 18, 2002, and incorporated herein by
reference).
|
10.26
|
Employment
Agreement, dated October 16, 2002, between Laurence S. Levy and the
Company (filed as exhibit 99.11 to Company's Current Report on Form 8-K
filed October 18, 2002, and incorporated herein by reference).
*
|
10.27
|
Employment
Agreement, dated October 16, 2002, between Neil N. Hasson and the Company
(filed as exhibit 99.12 to Company's Current Report on Form 8-K filed
October 18, 2002, and incorporated herein by reference).
*
|
10.28
|
Employment
Agreement dated June 3, 1997, between Regency Affiliates, Inc. and William
R. Ponsoldt, Sr., and Agreement dated June 3, 1997, between Regency
Affiliates, Inc. and Statesman Group, Inc. (filed as exhibits 10(a) and
(b) to the Company's report on Form 8-K dated June 13, 1997, and
incorporated herein by reference).
*
|
10.29
|
Asset
Purchase and Sale Agreement dated February 27, 1997, between Rustic Crafts
Co., Inc. and certain individuals, as Sellers, and Regency Affiliates,
Inc., as Purchaser, and Assignment and Assumption of Purchase Agreement
dated March 17, 1997, between Regency Affiliates, Inc., and Rustic Crafts
International, Inc. (filed as exhibit 10.1 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1997 at page E-1, and
incorporated herein by reference).
|
10.30
|
Amended
and Restated Agreement between Regency Affiliates, Inc. and the Statesman
Group, Inc., dated March 24, 1998 (filed as exhibit 10.2 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1997, at page
E-36, and incorporated herein by
reference).
|
10.31
|
Loan
Agreement and Pledge and Security Agreement with KBC Bank N.V., dated June
24, 1998 (filed as exhibits 10.1 and 10.2 to the Company's report on Form
10-Q for the quarter ended June 30, 1998, and incorporated herein by
reference).
|
10.32
|
Security
Land And Development Company Limited Partnership Agreement, as amended by
Amendment Nos. 1 through 6 (filed as Exhibit 1(a) to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994, and incorporated
herein by reference).
|
10.33
|
Seventh
Amendment to Partnership Agreement of Security Land and Development
Company Limited Partnership dated June 24, 1998 (filed as exhibit 10.3 to
the Company's report on Form 10-Q for the quarter ended June 30, 1998, and
incorporated herein by reference).
|
10.34
|
Eighth
Amendment to Partnership Agreement of Security Land and Development
Company Limited Partnership, dated April 8, 2003 (filed as Exhibit 10.27
to the Company report on Form 10-KSB for the year ended December 31, 2002,
filed on April 15, 2003, and incorporated herein by
reference).
|
10.35
|
Purchase
Agreement for a 5% Limited Partnership Interest in 1500 Woodlawn Limited
Partnership, the General Partner of Security (filed as exhibit 10.2 to the
Company's report on Form 10-K for the year ended December 31, 2001, and
incorporated herein by reference).
|
10.36
|
Glas-Aire
Redemption Agreement (incorporated herein by reference to the Company's
Current Report on Form 8-K filed on October 16,
2001).
|
10.37
|
Statesman
exercise agreement (incorporated herein by reference to the Company's
Current Report on Form 8-K filed on October 25,
2001).
|
10.38
|
Ninth
Amendment to Security Land and Development Company Limited Partnership
Amended and Restated Limited Partnership Agreement (filed as Exhibit 10.1
to the Company's Form 8-K filed on June 25, 2003, and incorporated herein
by reference).
|
10.39
|
Seventh
Amendment to First Amended and Restated Limited Partnership Agreement of
1500 Woodlawn Limited Partnership (filed as Exhibit 10.2 to the Company's
Form 8-K filed on June 25, 2003, and incorporated herein by
reference).
|
10.40
|
Assignment
and Assumption Agreement, dated as of April 30, 2004, between DTE Mobile,
LLC and Regency Power Corporation (incorporated by reference from the
Company's Current Report on 8-K filed on May 11,
2004).
|
10.41
|
Membership
Interest Purchase Agreement, dated as of January 30, 2004, between MESC
Capital, LLC and Mobile Energy Services Holdings, Inc. (incorporated by
reference from the Company's Current Report on 8-K filed on May 11,
2004).
|
10.42
|
Stock
Option Agreement, dated as of June 14, 2005 between the Company and
Laurence S. Levy (incorporated by reference from an Amendment to Schedule
13D filed on June 24, 2005). *
|
10.43
|
Stock
Option Agreement, dated as of June 14, 2005 between the Company and Neil
Hasson (incorporated by reference from an Amendment to Schedule 13D filed
on June 24, 2005). *
|
10.44
|
Stock
Option Agreement, dated as of April 1, 2006 between the Company and
Laurence S. Levy (incorporated by reference from the Company's Quarterly
Report on Form 10-QSB filed on May 19, 2006).
*
|
10.45
|
Stock
Option Agreement, dated as of August 14, 2007 between the Company and
Laurence S. Levy (incorporated by reference from the Company's Quarterly
Report on Form 10-QSB filed on October 5, 2007).
*
|
21
|
Schedule
of Subsidiaries
|
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).
|
*
|
Indicates
that exhibit is a management contract or compensatory plan orarrangement.
|
REGENCY AFFILIATES, INC. | |||
August
6, 2008
|
By:
|
/s/ Laurence S. Levy | |
Date
|
Laurence
S. Levy, President and
Chief
Executive Officer
|
||
August
6, 2008
|
By:
|
/s/ Neil N. Hasson | |
Date
|
Neil
N. Hasson, Chief Financial Officer
|
||
August
6, 2008
|
By:
|
/s/ Laurence S. Levy | |
Date
|
Laurence
S. Levy, President,
Chief
Executive Officer and Director
|
||
August
6, 2008
|
By:
|
/s/ Neil N. Hasson | |
Date
|
Neil
N. Hasson, Chief Financial
Officer
and Director
|
||
August
6, 2008
|
By:
|
/s/ Errol Glasser | |
Date
|
Errol
Glasser, Director
|
||
Exhibit
No.
|
Description
of Document
|
3.1(i)(a)
|
Restated
Certificate of Incorporation of the Company (filed as exhibit 3.1(i)(a) to
the Company's Form 10-Q dated 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
Form 10-Q, dated November 19, 2002, and incorporated herein by
reference).
|
3.1(i)(c)
|
Certificate
of Amendment to Restated Certificate of Amendment (filed as Exhibit A to
the Company's Information Statement on Schedule 14C filed on October 27,
2003).
|
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).
|
Exhibit
No.
|
Description
of Document
|
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 Registrant'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 No. 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 Form 10-Q dated November 19, 2002, and incorporated herein by
reference).
|
10.1
|
2003
Stock Incentive Plan of the Company (filed as Exhibit 10.1 to the
Company's Annual Report on Form 10-KSB for the year ended 2002 filed on
April 15, 2003, and incorporated herein by reference)
*
|
10.2
|
Amendment
No. 1 to 2003 Stock Incentive Plan (filed as Exhibit 8 to Amendment No. 3
to Schedule 13D filed by Royalty Holdings LLC, Royalty Management, Inc.,
Laurence Levy and Neil Hasson on October 3, 2003, and incorporated herein
by reference.) *
|
10.3
|
Amendment
No. 2 to 2003 Stock Incentive Plan (filed as Exhibit 10.1 to the Company's
Quarterly Report on Form 10-QSB on August 23, 2004, and incorporated
herein by reference.) *
|
10.4
|
Stock
Option Agreement, dated April 1, 2003, between the Company and Stanley
Fleishman (filed as Exhibit 10.2 to the Company's Annual Report on Form
10-KSB for the year ended 2002 filed on April 15, 2003, and incorporated
herein by reference). *
|
10.5
|
Stock
Option Agreement, dated April 1, 2003, between the Company and Errol
Glasser (filed as Exhibit 10.3 to the Company's Annual Report on Form
10-KSB for the year ended 2002 filed on April 15, 2003, and incorporated
herein by reference). *
|
10.6
|
Stock
Option Agreement, dated April 1, 2003, between the Company and Laurence
Levy (filed as Exhibit 10.4 to the Company's Annual Report on Form 10-KSB
for the year ended 2002 filed on April 15, 2003, and incorporated herein
by reference). *
|
10.7
|
Stock
Option Agreement, dated April 1, 2003, between the Company and Neil Hasson
(filed as Exhibit 10.5 to the Company's Annual Report on Form 10-KSB for
the year ended 2002 filed on April 15, 2003, and incorporated herein by
reference). *
|
Exhibit
No.
|
Description
of Document
|
10.8
|
Stock
Option Agreement, dated October 1, 2003 between the Company and Laurence
Levy (filed as Exhibit 11 to Amendment No. 3 to Schedule 13D filed by
Royalty Holdings LLC, Royalty Management, Inc., Laurence Levy and Neil
Hasson on October 3, 2003, and incorporated herein by reference).
*
|
10.9
|
Stock
Option Agreement, dated October 1, 2003 between the Company and Neil
Hasson (filed as Exhibit 12 to Amendment No. 3 to Schedule 13D filed by
Royalty Holdings LLC, Royalty Management, Inc., Laurence Levy and Neil
Hasson on October 3, 2003, and incorporated herein by reference).
*
|
10.10
|
Stock
Option Agreement, dated October 1, 2003 between the Company and Errol
Glasser (filed as Exhibit 10.9 to the Company's Annual Report on Form
10-KSB filed on April 14, 2004, and incorporated herein by reference).
*
|
10.11
|
Stock
Option Agreement, dated October 1, 2003 between the Company and Stanley
Fleishman (filed as Exhibit 10.10 to the Company's Annual Report on Form
10-KSB filed on April 14, 2004, and incorporated herein by reference).
*
|
10.12
|
Stock
Option Agreement, dated as of August 13, 2004 between the Company and
Laurence Levy (filed as Exhibit 10.2 to the Company's Quarterly Report on
Form 10-QSB filed on August 23, 2004, and incorporated herein by
reference). *
|
10.13
|
Stock
Option Agreement, dated as of August 13, 2004 between the Company and Neil
Hasson (filed as Exhibit 10.3 to the Company's Quarterly Report on Form
10-QSB filed on August 23, 2004, and incorporated herein by reference).
*
|
10.14
|
License
Agreement, dated March 17, 2003, between the Company and Royalty
Management, Inc. (filed as Exhibit 10.1 to the Company's Annual Report on
Form 10-KSB for the year ended 2002 filed on April 15, 2003, and
incorporated herein by reference).
|
10.15
|
Demand
Note from the Company in favor of Royalty Holdings LLC (filed as Exhibit
10.1 to the Company's Annual Report on Form 10-KSB for the year ended 2002
filed on April 15, 2003, and incorporated herein by
reference).
|
10.16
|
Redemption
Agreement, dated October 16, 2002, between the Company and Statesman
(filed as exhibit 99.1 to Company's Current Report on Form 8-K filed
October 18, 2002, and incorporated herein by
reference).
|
10.17
|
Call
Option Agreement, dated October 16, 2002, between the Company and
Statesman (filed as exhibit 99.2 to Company's Current Report on Form 8-K
filed October 18, 2002, and incorporated herein by
reference).
|
10.18
|
Contingent
Payment Agreement, dated October 16, 2002, between the Company and William
R. Ponsoldt, Sr. (filed as exhibit 99.3 to Company's Current Report on
Form 8-K filed October 18, 2002, and incorporated herein by
reference).*
|
Exhibit
No.
|
Description
of Document
|
10.19
|
Amended
and Restated Certificate of Designations of the Series C Preferred Stock
(filed as exhibit 99.4 to Company's Current Report on Form 8-K filed
October 18, 2002, and incorporated herein by
reference).
|
10.20
|
Note
Purchase Agreement, dated October 16, 2002, between the Company Royalty
Holdings LLC (filed as exhibit 99.5 to Company's Current Report on Form
8-K filed October 18, 2002, and incorporated herein by
reference).
|
10.21
|
5%
Convertible Promissory Note of the Company (filed as exhibit 99.6 to
Company's Current Report on Form 8-K filed October 18, 2002, and
incorporated herein by reference).
|
10.22
|
9%
Promissory Note of the Company (filed as exhibit 99.7 to Company's Current
Report on Form 8-K filed October 18, 2002, and incorporated herein by
reference).
|
10.23
|
Amended
and Restated Promissory Note of the Company (filed as exhibit 99.8 to
Company's Current Report on Form 8-K filed October 18, 2002, and
incorporated herein by reference).
|
10.24
|
Amendment
No. 1 to Pledge Agreement (filed as exhibit 99.9 to Company's Current
Report on Form 8-K filed October 18, 2002, and incorporated herein by
reference).
|
10.25
|
Letter
Agreement, dated October 16, 2002, between the Company and Statesman
(filed as exhibit 99.10 to Company's Current Report on Form 8-K filed
October 18, 2002, and incorporated herein by
reference).
|
10.26
|
Employment
Agreement, dated October 16, 2002, between Laurence S. Levy and the
Company (filed as exhibit 99.11 to Company's Current Report on Form 8-K
filed October 18, 2002, and incorporated herein by reference).
*
|
10.27
|
Employment
Agreement, dated October 16, 2002, between Neil N. Hasson and the Company
(filed as exhibit 99.12 to Company's Current Report on Form 8-K filed
October 18, 2002, and incorporated herein by reference).
*
|
10.28
|
Employment
Agreement dated June 3, 1997, between Regency Affiliates, Inc. and William
R. Ponsoldt, Sr., and Agreement dated June 3, 1997, between Regency
Affiliates, Inc. and Statesman Group, Inc. (filed as exhibits 10(a) and
(b) to the Company's report on Form 8-K dated June 13, 1997, and
incorporated herein by reference).
*
|
Exhibit
No.
|
Description
of Document
|
10.29
|
Asset
Purchase and Sale Agreement dated February 27, 1997, between Rustic Crafts
Co., Inc. and certain individuals, as Sellers, and Regency Affiliates,
Inc., as Purchaser, and Assignment and Assumption of Purchase Agreement
dated March 17, 1997, between Regency Affiliates, Inc., and Rustic Crafts
International, Inc. (filed as exhibit 10.1 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1997 at page E-1, and
incorporated herein by reference).
|
10.30
|
Amended
and Restated Agreement between Regency Affiliates, Inc. and the Statesman
Group, Inc., dated March 24, 1998 (filed as exhibit 10.2 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1997, at page
E-36, and incorporated herein by
reference).
|
10.31
|
Loan
Agreement and Pledge and Security Agreement with KBC Bank N.V., dated June
24, 1998 (filed as exhibits 10.1 and 10.2 to the Company's report on Form
10-Q for the quarter ended June 30, 1998, and incorporated herein by
reference).
|
10.32
|
Security
Land And Development Company Limited Partnership Agreement, as amended by
Amendment Nos. 1 through 6 (filed as Exhibit 1(a) to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994, and incorporated
herein by reference).
|
10.33
|
Seventh
Amendment to Partnership Agreement of Security Land and Development
Company Limited Partnership dated June 24, 1998 (filed as exhibit 10.3 to
the Company's report on Form 10-Q for the quarter ended June 30, 1998, and
incorporated herein by reference).
|
10.34
|
Eighth
Amendment to Partnership Agreement of Security Land and Development
Company Limited Partnership, dated April 8, 2003 (filed as Exhibit 10.27
to the Company report on Form 10-KSB for the year ended December 31, 2002,
filed on April 15, 2003, and incorporated herein by
reference).
|
10.35
|
Purchase
Agreement for a 5% Limited Partnership Interest in 1500 Woodlawn Limited
Partnership, the General Partner of Security (filed as exhibit 10.2 to the
Company's report on Form 10-K for the year ended December 31, 2001, and
incorporated herein by reference).
|
10.36
|
Glas-Aire
Redemption Agreement (incorporated herein by reference to the Company's
Current Report on Form 8-K filed on October 16,
2001).
|
10.37
|
Statesman
exercise agreement (incorporated herein by reference to the Company's
Current Report on Form 8-K filed on October 25,
2001).
|
Exhibit
No.
|
Description
of Document
|
10.38
|
Ninth
Amendment to Security Land and Development Company Limited Partnership
Amended and Restated Limited Partnership Agreement (filed as Exhibit 10.1
to the Company's Form 8-K filed on June 25, 2003, and incorporated herein
by reference).
|
10.39
|
Seventh
Amendment to First Amended and Restated Limited Partnership Agreement of
1500 Woodlawn Limited Partnership (filed as Exhibit 10.2 to the Company's
Form 8-K filed on June 25, 2003, and incorporated herein by
reference).
|
10.40
|
Assignment
and Assumption Agreement, dated as of April 30, 2004, between DTE Mobile,
LLC and Regency Power Corporation (incorporated by reference from the
Company's Current Report on 8-K filed on May 11,
2004).
|
10.41
|
Membership
Interest Purchase Agreement, dated as of January 30, 2004, between MESC
Capital, LLC and Mobile Energy Services Holdings, Inc. (incorporated by
reference from the Company's Current Report on 8-K filed on May 11,
2004).
|
10.42
|
Stock
Option Agreement, dated as of June 14, 2005 between the Company and
Laurence S. Levy (incorporated by reference from an Amendment to Schedule
13D filed on June 24, 2005). *
|
10.43
|
Stock
Option Agreement, dated as of June 14, 2005 between the Company and Neil
Hasson (incorporated by reference from an Amendment to Schedule 13D filed
on June 24, 2005). *
|
10.44
|
Stock
Option Agreement, dated as of April 1, 2006 between the Company and
Laurence S. Levy (incorporated by reference from the Company's Quarterly
Report on Form 10-QSB filed on May 19, 2006).
*
|
10.45
|
Stock
Option Agreement, dated as of August 14, 2007 between the Company and
Laurence S. Levy (incorporated by reference from the Company's Quarterly
Report on Form 10-QSB filed on October 5, 2007).
*
|
21
|
Schedule
of Subsidiaries
|
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).
|
*
|
Indicates
that exhibit is a management contract or compensatory plan orarrangement.
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
Financial
Statements
|
|
Consolidated
Balance Sheets
|
F-2 –
F-3
|
Consolidated
Statements of Operations
|
F-4
|
Consolidated
Statements of Changes
in Shareholders' Equity
|
F-5
|
Consolidated
Statements of Cash Flows
|
F-6
– F-7
|
Notes
to Consolidated Financial Statements
|
F-8
– F-23
|
December
31,
|
||||||||
2007
|
2006
|
|||||||
Assets
|
||||||||
Current
Assets
|
||||||||
Cash and cash
equivalents
|
$ | 253,566 | $ | 613,253 | ||||
Marketable
securities
|
9,782,234 | 9,485,300 | ||||||
Accrued interest
receivable, net of allowance of $644,109 in both
years
|
- | - | ||||||
Other current
assets
|
344,539 | 141,151 | ||||||
Total Current
Assets
|
10,380,339 | 10,239,704 | ||||||
Property, plant and
equipment, net
|
13,117 | 4,004 | ||||||
Investment in
partnerships / LLC
|
9,563,717 | 8,072,374 | ||||||
Deferred
tax
asset
|
1,245,500 | - | ||||||
Other
|
1,300 | 1,300 | ||||||
Total
Assets
|
$ | 21,203,973 | $ | 18,317,382 |
December
31,
|
||||||||
2007
|
2006
|
|||||||
Liabilities
and Shareholders' Equity
|
||||||||
Current
Liabilities
|
||||||||
Accounts payable and
accrued expenses
|
$ | 391,651 | $ | 473,926 | ||||
Total Current
Liabilities
|
391,651 | 473,926 | ||||||
Shareholders'
equity
|
||||||||
Serial preferred
stock, Series C and D, not subject to mandatory redemption, 234,544 shares
in 2007 and 605,291 shares in 2006 outstanding; (Maximum liquidation
preference $21,141,940 in 2007 and $24,849,410 in
2006)
|
486,076 | 1,052,988 | ||||||
Common stock, par
value $0.01; 8,000,000 shares authorized;
|
||||||||
3,531,812 in 2007
and 3,103,078 in 2006 issued;
3,465,544
in 2007 and 3,036,810 in 2006 outstanding
|
35,319 | 31,031 | ||||||
Additional paid-in
capital
|
7,112,199 | 6,417,739 | ||||||
Readjustment
resulting from quasi-reorganization at December
1987
|
(1,670,596 | ) | (1,670,596 | ) | ||||
Retained
earnings
|
15,258,174 | 12,421,144 | ||||||
Note receivable-sale
of stock, net of allowance of $2,440,000
|
- | - | ||||||
Treasury stock,
66,268 shares at cost
|
(408,850 | ) | (408,850 | ) | ||||
Total Shareholders'
Equity
|
20,812,322 | 17,843,456 | ||||||
$ | 21,203,973 | $ | 18,317,382 |
Years
Ended December 31,
|
||||||||
2007
|
2006
|
|||||||
Net
Sales
|
$ | - | $ | - | ||||
Costs
and expenses
|
||||||||
General and
administrative expenses
|
(1,426,370 | ) | (2,276,666 | ) | ||||
Loss
from operations
|
(1,426,370 | ) | (2,276,666 | ) | ||||
Other
income (expense)
|
||||||||
Income
from equity investment in partnerships
|
2,695,978 | 3,004,241 | ||||||
Interest
expense
|
- | (63,863 | ) | |||||
Impairment
of loans
|
- | (644,109 | ) | |||||
Interest
and dividend income
|
431,552 | 631,590 | ||||||
Unrealized
investment gains (losses)
|
(3,957 | ) | 2,525 | |||||
Net
income before income taxes
|
1,697,203 | 653,718 | ||||||
Income
tax expense (benefit)
|
(1,139,827 | ) | 112,651 | |||||
Net
Income
|
$ | 2,837,030 | $ | 541,067 | ||||
Net
income per common share:
|
||||||||
Basic
|
||||||||
Net income per
common share
|
$ | 0.82 | $ | 0.17 | ||||
Weighted
average number of shares
|
3,475,932 | 3,110,209 | ||||||
Diluted
|
||||||||
Net income per
common share
|
$ | 0.76 | $ | 0.14 | ||||
Weighted
average number of shares
|
3,710,303 | 3,822,732 |
Readjustment
|
||||||||||||||||||||||||||||||||||||||||||||
Additional
|
Resulting
|
Note
|
Total
|
|||||||||||||||||||||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Paid
in
|
from
Quasi-
|
Retained
|
Receivable
|
Treasury
Stock
|
Stockholders'
|
|||||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Reorganization
|
Earnings
|
Sale
of Stock
|
Shares
|
Amount
|
Equity
|
||||||||||||||||||||||||||||||||||
Balance
– January 1, 2006
|
605,291 | $ | 1,052,988 | 3,121,412 | $ | 31,204 | $ | 8,737,321 | $ | (1,670,596 | ) | $ | 11,880,077 | $ | (2,440,000 | ) | 55,000 | (337,795 | ) | $ | 17,253,209 | |||||||||||||||||||||||
Exercise of stock
options
|
- | - | 3,000 | 30 | 9,570 | - | - | - | - | - | 9,600 | |||||||||||||||||||||||||||||||||
Stock options granted
to officer
|
- | - | - | - | 250,000 | - | - | - | - | - | 250,000 | |||||||||||||||||||||||||||||||||
Common stock issued
to directors
|
- | - | 2,000 | 20 | 12,286 | - | - | - | - | - | 12,306 | |||||||||||||||||||||||||||||||||
Purchase treasury
shares
|
- | - | - | - | - | - | - | - | 34,602 | (222,726 | ) | (222,726 | ) | |||||||||||||||||||||||||||||||
Reserve
for uncollectible note
|
- | - | - | - | (2,440,000 | ) | - | - | 2,440,000 | - | - | - | ||||||||||||||||||||||||||||||||
Retirement
of treasury shares
|
- | - | (23,334 | ) | (233 | ) | (151,438 | ) | - | - | - | (23,334 | ) | 151,671 | - | |||||||||||||||||||||||||||||
Net
income
|
- | - | - | - | - | - | 541,067 | - | - | - | 541,067 | |||||||||||||||||||||||||||||||||
Balance
- December 31, 2006
|
605,291 | 1,052,988 | 3,103,078 | 31,031 | 6,417,739 | (1,670,596 | ) | 12,421,144 | - | 66,268 | (408,850 | ) | 17,843,456 | |||||||||||||||||||||||||||||||
Exercise of stock
options
|
- | - | 13,000 | 130 | 22,145 | - | - | - | - | - | 22,275 | |||||||||||||||||||||||||||||||||
Stock options granted
to officer
|
- | - | - | - | 197,750 | - | - | - | - | - | 197,750 | |||||||||||||||||||||||||||||||||
Conversion of
preferred shares
|
(370,747 | ) | (566,912 | ) | 430,473 | 4,305 | 562,607 | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
Purchase treasury
shares
|
- | - | - | - | - | - | - | - | 14,739 | (88,189 | ) | (88,189 | ) | |||||||||||||||||||||||||||||||
Retirement
of treasury shares
|
- | - | (14,739 | ) | (147 | ) | (88,042 | ) | - | - | - | (14,739 | ) | 88,189 | - | |||||||||||||||||||||||||||||
Net
income
|
- | - | - | - | - | - | 2,837,030 | - | - | - | 2,837,030 | |||||||||||||||||||||||||||||||||
Balance
- December 31, 2007
|
234,544 | $ | 486,076 | 3,531,812 | $ | 35,319 | $ | 7,112,199 | $ | (1,670,596 | ) | $ | 15,258,174 | $ | - | 66,268 | $ | (408,850 | ) | $ | 20,812,322 |
Years
Ended December
31,
|
||||||||
2007
|
2006
|
|||||||
Cash
flows from operating activities
|
||||||||
Net
income
|
$ | 2,837,030 | $ | 541,067 | ||||
Adjustments to
reconcile net income to net cash used in
|
||||||||
operating
activities
|
||||||||
Income from equity
investment in partnerships
|
(2,695,978 | ) | (3,004,241 | ) | ||||
Stock-based
compensation
|
197,750 | 262,306 | ||||||
Depreciation and
amortization
|
3,476 | 138 | ||||||
Impairment of notes
receivable
|
- | 644,109 | ||||||
Deferred
income
tax expense (benefit)
|
(1,245,500 | ) | - | |||||
Changes in assets
and liabilities
|
||||||||
Increase in
accrued interest receivable
|
- | (144,876 | ) | |||||
Increase in other
current assets
|
(203,388 | ) | 130,430 | |||||
Decrease in accounts
payable and accrued expenses
|
(82,275 | ) | (919,207 | ) | ||||
Net cash used in
operating activities
|
(1,188,885 | ) | (2,751,134 | ) | ||||
Cash
flows from investing activities
|
||||||||
Purchases of
property and equipment
|
(12,589 | ) | (4,142 | ) | ||||
Distribution of
earnings from partnership
|
1,204,635 | 1,428,177 | ||||||
Purchases of
marketable securities
|
(104,796,934 | ) | (112,993,310 | ) | ||||
Proceeds from sales
of marketable securities
|
104,500,000 | 109,500,000 | ||||||
Net cash provided by
(used in) investing activities
|
895,112 | (2,069,275 | ) | |||||
Cash
flows from financing activities
|
||||||||
Proceeds from the
exercise of stock options
|
22,275 | 9,600 | ||||||
Purchase of treasury
stock
|
(88,189 | ) | (222,726 | ) | ||||
Net cash used in
financing activities
|
(65,914 | ) | (213,126 | ) | ||||
(Decrease)
in cash and cash equivalents
|
$ | (359,687 | ) | $ | (5,033,535 | ) | ||
Cash
and cash equivalents – beginning
|
613,253 | 5,646,788 | ||||||
Cash
and cash equivalents – ending
|
$ | 253,566 | $ | 613,253 |
Years
Ended December 31,
|
||||||||
2007
|
2006
|
|||||||
Supplemental
disclosures of cash flow information:
|
||||||||
Cash paid during the
year for:
|
||||||||
Interest
|
$ | - | $ | 63,863 | ||||
Income
taxes
|
$ | 44,200 | $ | 169,158 |
2007
|
2006
|
|||||||
Machinery and
equipment
|
$ | 50,697 | $ | 47,850 | ||||
Leasehold
improvements
|
9,742 | - | ||||||
60,439 | 47,850 | |||||||
Accumulated
depreciation
|
47,322 | 43,846 | ||||||
$ | 13,117 | $ | 4,004 |
Trading
securities:
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
As
of December 31, 2007:
|
||||||||||||||||
9,800,000 US
Treasury bills
|
$ | 9,786,191 | $ | - | $ | 3,957 | $ | 9,782,234 | ||||||||
As
of December 31, 2006:
|
||||||||||||||||
9,500,000 US
Treasury bills
|
$ | 9,482,775 | $ | 2,525 | $ | - | $ | 9,485,300 |
2007
|
2006
|
|||||||
Balance Sheet
Data
|
||||||||
Cash and
receivables
|
$ | 1,109,104 | $ | 1,098,135 | ||||
Restricted
cash
|
2,254,315 | 2,142,313 | ||||||
Real estate,
net
|
30,456,122 | 32,916,330 | ||||||
Deferred charges,
net
|
7,172,186 | 8,069,382 | ||||||
Other
assets
|
350,681 | 322,160 | ||||||
Total
Assets
|
41,342,408 | 44,548,320 | ||||||
Accounts payable and
accrued expenses
|
350,425 | 235,552 | ||||||
Project note
payable
|
78,459,228 | 83,152,857 | ||||||
Other
liabilities
|
161,591 | 171,258 | ||||||
Total
Liabilities
|
78,971,244 | 83,559,667 | ||||||
Partners'
capital:
|
||||||||
Regency Affiliates,
Inc.
|
3,274,894 | 143,360 | ||||||
Other
partners
|
(40,903,730 | ) | (39,154,707 | ) | ||||
Total Partners'
Capital
|
(37,628,836 | ) | (39,011,347 | ) | ||||
Total Liabilities
and Partner's Capital
|
41,342,408 | 44,548,320 | ||||||
Statement of
Operations Data
|
||||||||
Revenues
|
$ | 13,250,867 | $ | 13,250,710 | ||||
Expenses
|
8,033,403 | 8,124,183 | ||||||
Net operating
income
|
5,217,464 | 5,126,527 | ||||||
Other
expenses
|
(3,621,196 | ) | (3,425,685 | ) | ||||
Net
income
|
$ | 1,596,268 | $ | 1,700,842 |
2007
|
2006
|
|||||||
Balance Sheet
Data
|
||||||||
Cash and cash
equivalents
|
$ | 7,347,784 | $ | 2,820,687 | ||||
Restricted
cash
|
1,298,930 | 1,759,631 | ||||||
Trade
receivable
|
1,534,313 | 2,099,264 | ||||||
Current portion of
net investment in direct financing lease
|
1,312,055 | 1,212,266 | ||||||
Inventory
|
3,469,905 | 3,428,940 | ||||||
Prepaid expenses and
other current assets
|
208,546 | 232,235 | ||||||
Total current
assets
|
15,171,533 | 11,553,023 | ||||||
Debt issuance costs
and derivative instruments, net
|
935,278 | 1,626,328 | ||||||
Property and
equipment, net
|
17,287 | 53,902 | ||||||
Investment in direct
financing lease, net of current portion
|
21,789,234 | 23,101,289 | ||||||
Total
assets
|
37,913,332 | 36,334,542 | ||||||
Accounts
payable
|
4,711,825 | 1,289,754 | ||||||
Accrued
liabilities
|
29,846 | 559,602 | ||||||
Current portion of
long term debt
|
1,350,900 | 1,219,800 | ||||||
Total current
liabilities
|
6,092,571 | 3,069,156 |
Current portion of
long term debt
|
24,612,250 | 25,963,150 | ||||||
Total
liabilities
|
30,704,821 | 29,032,306 | ||||||
Members’
equity
|
7,208,511 | 7,302,236 | ||||||
Total liabilities
and members’ equity
|
37,913,332 | 36,334,542 | ||||||
Statement of
Operations Data
|
||||||||
Revenues
|
$ | 14,893,320 | $ | 14,460,440 | ||||
Expenses
|
11,196,293 | 10,225,793 | ||||||
Net operating
income
|
3,697,027 | 4,234,647 | ||||||
Other income
(expense)
|
(1,345,963 | ) | (1,466,272 | ) | ||||
Net
income
|
$ | 2,351,064 | $ | 2,768,375 |
2003
|
||||
Note
receivable, 5% per annum, with monthly payments
of principal and interest of $13,342, due 9/30/07 |
$ | 707,000 | ||
Note
receivable, 7.5% per annum, with monthly
payments of principal and interest of $5,032, with a balloon payment due 9/8/06 |
422,271 | |||
Total
|
$ | 1,129,271 |
Shares
|
Value
|
|||||||||||||||||||
2007
|
2006
|
|||||||||||||||||||
Designated
|
Outstanding
|
Carrying
|
Liquidation
|
Liquidation
|
||||||||||||||||
Series
C, $100 stated
|
||||||||||||||||||||
value,
cumulative
|
210,000 | 208,850 | $ | 229,136 | $ | 20,885,000 | (a) | $ | 20,885,000 | |||||||||||
Series
B, $10 stated
|
||||||||||||||||||||
value, 6%
cumulative
|
- | 3,707,470 | ||||||||||||||||||
Junior
Series, D, $10
|
||||||||||||||||||||
Stated value,
7%
|
||||||||||||||||||||
Cumulative
|
26,000 | 25,694 | 256,940 | 256,940 | (b) | 256,940 | ||||||||||||||
236,000 | 234,544 | $ | 486,076 | $ | 21,141,940 | $ | 24,849,410 |
Exercise
Price
Range
|
Options
|
Average
Exercise
Price
|
Average
Contract
Life
|
|||||||||||||
Outstanding
at 1/1/06
|
$ | .40 - 2.40 | 302,000 | $ | 2.12 | 10 | ||||||||||
Issued
|
6.27 | 50,000 | 6.27 | 10 | ||||||||||||
Exercised,
forfeited or expired
|
1.60-4.00 | (8,000 | ) | .40 | 10 | |||||||||||
Outstanding
at 12/31/06
|
$ | .40 – 6.27 | 344,000 | $ | 2.76 | 10 | ||||||||||
Exercise
Price
Range
|
Options
|
Average
Exercise
Price
|
Average
Contract
Life
|
|||||||||||||
Outstanding
at 1/1/07
|
$ | .40 - 6.27 | 344,000 | $ | 2.12 | 10 | ||||||||||
Issued
|
5.10 | 50,000 | 5.10 | 10 | ||||||||||||
Exercised,
forfeited or expired
|
.40-2.40 | (14,000 | ) | .40 | 10 | |||||||||||
Outstanding
at 12/31/07
|
$ | 1.35– 6.27 | 380,000 | $ | 3.08 | 10 |
2007
|
2006
|
|||||||
Deferred
tax assets:
|
||||||||
Net
operating loss carryforward
|
2,491,000 | 1,992,000 | ||||||
Valuation
allowance
|
(1,245,500 | ) | (1,992,000 | ) | ||||
Subtotal
|
$ | 1,245,500 | $ | -- |
2007
|
2006
|
|||||||
Current
|
$ | 105,673 | $ | 112,651 | ||||
Deferred
|
(1,245,500 | ) | - | |||||
$ | (1,139,827 | ) | $ | 112,651 |
2007
|
2006
|
|||||||
Federal
expense (benefit) at the statutory rate
|
34.0 | % | 34.0 | % | ||||
State
tax expense
|
6.2 | 3.8 | ||||||
Benefit
of net operating loss carry forward
|
(34.0 | ) | (34.0 | ) | ||||
Valuation
Allowance
|
(73.4 | ) | -0- | |||||
Effective
tax rate of income tax expense (benefit)
|
(67.2 | )% | 3.8 | % |
December 31, 2007
|
December 31, 2006
|
|||||||||||||||
Basic
|
Dilutive
|
Basic
|
Dilutive
|
|||||||||||||
Weighted
average number of shares outstanding
|
3,475,932 | 3,475,932 | 3,110,209 | 3,110,209 | ||||||||||||
Common
Stock equivalent shares
|
||||||||||||||||
Preferred
shares Series D
|
- | 44,841 | - | 41,576 | ||||||||||||
Preferred
shares Series B
|
- | - | - | 469,286 | ||||||||||||
Options
(treasury stock method)
|
- | 189,530 | - | 201,661 | ||||||||||||
Total
weighted average and equivalent shares
|
3,475,932 | 3,710,303 | 3,110,209 | 3,822,732 | ||||||||||||
Net
Income
|
$ | 2,837,030 | $ | 2,837,030 | $ | 541,067 | $ | 541,067 | ||||||||
Earnings
per share, basic and dilutive
|
$ | 0.82 | $ | 0.76 | $ | 0.17 | $ | 0.14 |
2008
|
$ | 21,600 | ||
2009
|
10,800 | |||
Total
|
$ | 32,400 |