Regency Affiliates Announces Completion of Recapitalization

JENSEN BEACH, Fla., Regency Affiliates, Inc. ("Regency") announced today the completion of a recapitalization which included the redemption of the 754,950 shares of Regency common stock owned by Statesman Group, Inc., the former controlling stockholder of Regency, for an aggregate redemption payment of $1,020,000 (approximately $1.35 per share). The redemption was funded with the proceeds of loans totaling $4,750,000 from Royalty Holdings LLC, a private investor group ("Royalty") based in New York.
In addition to providing Regency with needed working capital, proceeds from the Royalty loans were used by Regency to effect the redemption referred to above, acquire an option from Statesman to purchase the 20% interest in National Resource Development Corporation not presently owned by Regency, to modify the terms of the Regency Series C preferred stock held by Statesman, and to secure additional agreements from Statesman. $3,500,000 of the Royalty loans (plus accrued interest) is convertible at the option of Royalty into shares of Regency common stock at a conversion rate of $2.00 per share.

As part of the recapitalization, the existing board of directors and management team of Regency will resign without any severance or other termination payments. Laurence S. Levy, a principal of Royalty, has been appointed President and Chief Executive Officer of Regency, and Neil N. Hasson, also a principal of Royalty, has been appointed Chief Financial Officer and Secretary of Regency. The board of directors of Regency will consist of Mr. Levy, Mr. Hasson and two independent directors. Regency's new management team members have extensive experience with operating companies and real estate investments.

Mr. Levy, Regency's new President and Chief Executive Officer, said, "We are extremely impressed with the prospects for Regency and its assets. We look forward to pursuing the monetization of Regency's current investments. We also expect to grow the asset base of Regency over the next few years with corporate acquisitions using our significant expertise in this area."

Regency's present investments include an interest in Security Land and Development Company Limited Partnership. Security Land owns a two story office building and connected six story tower totaling approximately 717,000 square feet occupied by the Social Security Administration of the United States Government.