Regency Affiliates, Inc. (Regency) seeks to enhance the value of the Company's Common Stock by pursuing opportunities to monetize its existing assets and through new business opportunities. Regency has not entered into any binding agreements regarding any such transaction. The Company does not propose to restrict its search for business opportunities to any particular geographical area or industry, and may, therefore, acquire any business, to the extent of its resources. Regency's discretion in the selection of business opportunities is unrestricted, subject to the availability of such opportunities, economic conditions and other factors. The Company's wholly owned subsidiaries are National Resource Development Corporation and Rustic Crafts International, Inc. Regency also owns interests in Security Land and Development Company Limited Partnership. In May 2004, the Company acquired a 50% equity interest in MESC Capital, LLC, a special-purpose investment vehicle.