SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 or 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended September 30, 2001
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: 0-17843
REGAL ONE CORPORATION
(name of small business issuer as specified in its charter)
Florida 95-4158065
(State or other jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
C/O Christopher H. Dietrich, Attorney at Law
11300 W. Olympic Blvd., Suite 800
Los Angeles, California 90064
(Address of Principal Executive Offices)
(310) 312-6888
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or 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 September 30, 2001, the Company had 1,269,716 shares of
common stock issued and outstanding and 208,965 shares of
convertible preferred stock issued and outstanding, each of which
is convertible into 100 shares of the Company's common stock.
Part 1
ITEM 1: Financial Statements
REGAL ONE CORPORATION
BALANCE SHEETS
September 30, 2001 and December 31, 2000
September 30, December 31,
2001 2000
(Unaudited) (Audited)
ASSETS
Current Assets
Cash $ 5,192 $ 2,336
Prepaid expenses 243 -
------------ ------------
Total Assets $ 5,435 $ 2,336
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Due to stockholders
and officers $ 157,184 $ 148,003
Accounts payable and
accrued liabilities 136,594 124,122
---------- ----------
Total Current Liabilities 293,778 272,125
---------- ----------
Stockholders' Equity (Deficit)
Preferred stock, no par value.
Authorized 50,000,000 shares;
issued and outstanding
208,965 shares 500 500
Common stock, no par value.
Authorized 50,000,000 shares;
issued and outstanding
1,269,716 shares at
September 30, 2001 and
December 31, 2000 6,036,604 6,036,604
Accumulated deficit (6,325,447) (6,306,893)
----------- -----------
Net Stockholders' Equity
(Deficit) (288,343) (269,789)
----------- -----------
Total Liabilities and Stockholders'
Equity (Deficit) $ 5,435 $ 2,336
======== ========
See the accompanying notes to the Financial Statements.
(format change)
REGAL ONE CORPORATION
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Three Months and Nine Months Ended September 30, 2001 and 2000
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
-----------------------------------------------------
Expenses:
Consulting and outside services $ - $ - $ - $21,000
Professional services 2,675 5,572 15,433 25,178
Other, selling, general and
administrative expenses 585 645 1,572 1,691
------- ------- ------- ---------
3,260 6,217 17,005 47,869
------- ------- ------- ---------
Loss from Operations (3,260) (6,217) (17,005) (47,869)
------- ------- -------- ---------
Other Income (Expense):
Interest Expense (801) - (1,549) -
------- ------- -------- ---------
Loss Before Provision for Income
Taxes (4,061) (6,217) (18,554) (47,869)
Income Tax Expenses - - - -
------- -------- -------- ---------
Net Income (Loss) (4,061) (6,217) (18,554) (47,869)
Other Comprehensive Income - - - -
------- -------- -------- ---------
Comprehensive (Loss) $(4,061) $(6,217) $(18,554) $(47,869)
======== ======== ========= =========
Basic and Diluted Net Loss per
Common Share $ (.00) $ (.01) $ (.01) $ (.04)
========= ======== ========= =========
Shares Used in Computing Basic
and Diluted per Share Data 1,269,716 1,269,716 1,269,716 1,244,243
========= ========= ========= =========
See the accompanying notes to the Financial Statements.
(format change)
REGAL ONE CORPORATION
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2001 and 2000
(Unaudited)
2001 2000
------ ------
Cash flows from operating activities:
Net income (loss) $(18,554) $(47,869)
--------- ---------
Adjustments to reconcile net loss
to net cash used by operating
activities:
Noncash consulting fees - 36,000
(Increase) Decrease in
prepaid expenses (243) -
Expenses paid by stockholders
and officers 9,181 -
Increase (Decrease)in accounts payable
and accrued liabilities 12,472 (12,288)
-------- --------
Total Adjustments 21,410 23,712
-------- --------
Net cash used by operating
activities 2,856 (24,157)
-------- --------
Cash Flows from Investing Activities:
Net cash provided by
investing activities - -
Cash flows from financing activities:
Proceeds from sales of stock - 26,530
-------- --------
Net cash used by
financing activities - 26,530
-------- --------
Net increase (decrease) in cash 2,856 2,373
Cash at beginning of period 2,336 8
-------- --------
Cash at end of period $ 5,192 $ 2,381
======== ========
See the accompanying notes to the Financial Statements.
REGAL ONE CORPORATION
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2001 and 2000
(See Accountants' Report)
(Unaudited)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
2001 2000
------ ------
Cash paid during the year
for interest $ - $ -
========== =========
Cash paid during the year
for income taxes $ - $ -
========== =========
See the accompanying notes to the Financial Statements.
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
Business
Regal One Corporation (the "Company") located in Las Vegas,
Nevada, is a Florida corporation originally incorporated as
Electro-Mechanical Services, Inc., in 1959 in Florida. The
Company has been involved in a variety of industries including
automobile mufflers, real estate, and the pharmaceutical and
health fields. The Company is currently not in formal business
operations, but is actively seeking a merger candidate.
Basis of Presentation
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information and the instructions
for Form 10-QSB and Regulation S-B. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. All adjustments that, in the opinion of management,
are necessary for a fair presentation of the results of
operations for the interim periods have been made and are of a
recurring nature unless otherwise disclosed herein. The results
of operations for the quarter ended September 30, 2001, are not
necessarily indicative of the results that will be realized for a
full year. For further information, refer to the financial
statements and notes thereto contained in the Company=s Annual
Report on Form 10-KSB for the year ending December 31, 2000.
NOTE 2 - GOING CONCERN
For the fiscal year ended December 31, 2000, the independent
auditors report included an explanatory paragraph calling
attention to a going concern issue. The Company has suffered
recurring losses from operations and at September 30, 2001,
continues to have an accumulated deficit. The accompanying
financial statements have also been prepared contemplating
continuation of the Company as a going concern, which is
dependent upon the Company obtaining additional financing to
satisfy the operating needs of the Company and/or completing a
successful merger.
NOTE 3 - PRIOR PERIOD ADJUSTMENT
The accompanying financial statements for the quarter ended
September 30, 2000, have been restated to correct an error made
in 1994 when 30,000 shares of common stock that had been issued
in 1993 were incorrectly canceled. The effect of the restatement
had no impact on net income. However, the number of shares of
common stock outstanding have been adjusted to reflect the
additional 30,000 shares.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
The Company is currently not in formal business operations, but
is actively seeking a merger candidate. The Company has not
generated significant revenue during the last several years, and
has funded its operation primarily through the issuance of
additional debt and equity financing. Accordingly, the Company's
ability to accomplish its business strategy and to ultimately
achieve profitable operations is dependent upon its ability to
obtain additional debt or equity financing, or to merge with a
going concern company. The Company is currently exploring a
merger option.
Results of Operations
The Company reported no revenues for the quarters ending
September 30, 2001 and 2000.
Operating expenditures decreased from $6,217 in the quarter ended
September 30, 2000, to $3,260 in the quarter ended September 30,
2001. The decrease of $2,957 is primarily attributable to
professional service expenses incurred in the third quarter of
2000.
Liquidity and Capital Resources
During the prior year and current quarter, the Company had
continuing losses from operations. There can be no assurances
that the Company will be able to secure long-term borrowings with
which to finance its future operations. The Company does not
currently have any established bank lines of credit. The
Company=s lack of liquidity is reflected in the table below,
which shows comparative working capital (current assets less
current liabilities) which is an important measure of the
Company=s ability to meet its short-term obligations.
September 30, 2001 December 31, 2000
Working Capital (deficit) $(288,343) $(269,789)
The Company's financial condition at September 30, 2001, reflects
an immediate inability to meet its short-term obligations. At
September 30, 2001, the Company had $5,192 in cash on hand. The
liabilities of the Company at September 30, 2001, aggregated
$293,778. Certain accounts payable are past due, and it is
possible that the persons to whom these obligations are due may
seek to collect the amounts due them.
Stock Option Plan
The Company's Stock Option Plan (Plan) is for its employees,
directors, officers and consultants or advisors of the Company.
In May 1995, the Company filed a registration statement on Form
S-8 covering 3,000,000 shares of common stock for this Plan.
Since May 1995, holders have exercised options to purchase
597,009 shares of common stock. No options were exercised during
the quarter ended September 30, 2001, leaving 2,402,991 yet
available, with an amended expiration date of March 31, 2002
(See the Company's 14c, filed March 23, 2001).
Cautionary Statements Regarding Forward-Looking Statements
Certain statements contained in this Form 10-QSB regarding
matters that are not historical facts are forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements
involve risks and uncertainties, and actual results may differ
materially from those expressed or implied by such
forward-looking statements. All statements that address
operating performance, liquidity issues, or events or
developments that management expects or anticipates to occur in
the future are forward-looking statements. The forward-looking
statements are based on management's current views and
assumptions regarding future events and operating performance.
Many factors could cause actual results to differ materially from
estimates contained in management's forward-looking statements.
Some of these factors are adverse economic conditions, inadequate
capital, availability of alternative financing resources,
unexpected costs, and the Company's ability to manage its
recurring losses and shareholders' deficit.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security
Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports
None
REGAL ONE CORPORATION
(Registrant)
Date: November 13, 2001 /s/ Richard Babbitt
Richard Babbitt, President