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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QA
(X )
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934

 
For the quarter period ended June 30, 2011

 (  )
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934

 
For the transition period form                                                       to
   
 
Commission File number       000-53611 

 
REGENCY RESOURCES, INC.
                                           (Exact name of registrant as specified in its charter)

Nevada 
98-0515726                                
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

11 Glouchester Ave., Flat 5, Camden Town, London, England, NW1 7AU
(Address of principal executive offices)

011-44-207-267-2160
(Registrant’s telephone number)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definition of “large accelerated filer”, “accelerated filer” and “small reporting company” Rule 12b-2 of the Exchange Act.
 
Large accelerated filer                                                                                                            [  ]
Accelerated filer                                                                             [  ]
Non-accelerated filer                                                                                                              [  ]
(Do not check if a small reporting company)
 Small reporting company                                                             [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
Yes [   ]   No   [X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PROCEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 after the distribution of securities subsequent to the distribution of securities under a plan confirmed by a court.  Yes No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

July 15, 2011: 2,450,000 common shares

 
1

 
 
   
Page Number
PART 1.
FINANCIAL INFORMATION
 
     
ITEM 1.
Financial Statements (unaudited)
3
     
 
Balance Sheet as at June 30, 2011 and December 31, 2010
4
     
 
Statement of Operations
For the three and six months ended June 30, 2011 and 2010 and for the period December 11, 2006 (Date of Inception) to June 30, 2011
 
5
     
 
Statement of Cash Flows
For the six months ended June 30, 2011 and 2010 and for the period December 11, 2006 (Date of  Inception) to June 30, 2011
 
6
     
 
Notes to the Financial Statements.
7
     
ITEM 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
11
     
ITEM 3.
Quantitative and Qualitative Disclosures about Market Risk
21
     
ITEM 4.
Controls and Procedures
22
     
ITEM 4T.
Controls and Procedures
22
     
PART 11.
OTHER INFORMATION
23
     
ITEM 1.
Legal Proceedings
23
     
ITEM 1A.
Risk Factors
23
     
ITEM 2.
Unregistered Sales of Equity Securities and Use of Proceeds
27
     
ITEM 3.
Defaults Upon Senior Securities
27
     
ITEM 4.
Submission of Matters to a Vote of Security Holders
27
     
ITEM 5.
Other Information
28
     
ITEM 6.
Exhibits
28
     
 
SIGNATURES.
29

 
2

 

PART 1 – FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

The accompanying balance sheets of Regency Resources, Inc. (Pre-exploration stage company) at June 30, 2011 (with comparative figures as at December 31, 2010) and the statement of operations for the three and six months ended June 30, 2011 and 2010 and for the period from December 11, 2006 (date of inception) to June 30, 2011 and the statement of cash flows for the six months ended June 30, 2011 and 2010 and for the period from December 11, 2006 (date of inception) to June 30, 2011 have been prepared by the Company’s management in conformity with accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

Operating results for the six months ended June 30, 2011 are not necessarily indicative of the results that can be expected for the year ending December 31, 2011.
 
 
3

 

REGENCY RESOURCES, INC.
(Pre-exploration Stage Company)
BALANCE SHEETS
 
   
June 30, 2011
   
December 31, 2010
 
   
(Unaudited)
       
ASSETS
           
             
CURRENT ASSETS
 
 
       
             
Cash
  $ -     $ -  
                 
Total Current Assets
  $ -     $ -  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
               
                 
CURRENT LIABILITIES
               
                 
Accounts payable
  $ 15,227     $ 12,035  
Advances from related parties
    57,761       52,646  
                 
Total Current Liabilities
    72,988       64,681  
                 
STOCKHOLDERS’ DEFICIENCY
               
                 
Common stock
               
200,000,000 shares authorized, at $0.001 par value;
               
2,450,000 shares issued and outstanding
    2,450       2,450  
Capital in excess of par value
    39,200       39,200  
Deficit accumulated during the pre-exploration stage
    (114,638 )     (106,331 )
                 
Total Stockholders’ Deficiency
    (72,988 )     (64,681 )
                 
Total Liabilities and Stockholders’ Deficiency
  $ -     $ -  


The accompanying notes are an integral part of these unaudited financial statements.

 
4

 

REGENCY RESOURCES, INC.
(Pre-exploration Stage Company)
STATEMENT OF OPERATIONS

For three and six months ended June 30, 2011 and 2010 and for the period from December 11, 2006 (date of inception) to June 30, 2011
(Unaudited)
 
   
Three months ended
June 30, 2011
   
Three months ended
June 30, 2010
   
Six Months Ended
June 30, 2011
   
Six Months Ended
June 30, 2010
   
From Dec. 11, 2006
(date of inception) to
June 30, 2011
 
                           
 
 
REVENUES
  $ -     $ -     $ -     $ -     $ -  
                                         
EXPENSES
                                       
Professional fees
    1,920       1,125       6,340       2,250       24,302  
Exploration and staking
    -       -       -       -       2,646  
Impairment loss on mineral claim
    -       -       -       -       12,000  
Legal
    -       -       -       -       2,000  
Management fees
    -       1,850       -       4,850       30,000  
General and administrative
    777       1,043       1,967       2,459       43,690  
                                         
NET LOSS
  $ (2,697 )   $ (4,018 )   $ (8,307 )   $ (9,559 )   $ (114,638 )
                                         
                                         
NET LOSS PER COMMON SHARE
                                       
                                         
Basic and diluted
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )        
                                         
WEIGHTED AVERAGE OUTSTANDING SHARES
                                       
                                         
Basic and diluted
    2,450,000       2,450,000       2,450,000       2,450,000          

 
The accompanying notes are an integral part of these unaudited financial statements.

 
5

 

REGENCY RESOURCES, INC.
(Pre-exploration Stage Company)
STATEMENT OF CASH FLOWS

For the six months ended June 30, 2011 and 2010 and for the period from December 11, 2006 (date of inception) to June 30, 2011
(Unaudited)
 
   
Six months ended
June 30, 2011
   
Six months ended
June 30, 2010
   
From Dec. 11, 2006 (date of
inception) to June 30, 2011
 
                   
CASH FLOWS FROM OPERATING ACTIVITIES:
                 
                   
  Net loss
  $ (8,307 )   $ (9,559 )   $ (114,638 )
                         
  Adjustments to reconcile net loss to net cash (Used) in operating activities:
                       
                         
  Impairment loss on mineral claims
    -       -       12,000  
  Changes in accounts payable
    3,192       (679 )     15,227  
                         
  Net Cash (Used) in Operations
    (5,115 )     (10,238 )     (87,411 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                       
                         
  Acquisition of mineral claims
    -       -       (12,000 )
                         
  Net cash (Used) in investing activities
    -       -       (12,000 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
                         
  Advances from related parties
    5,115       9,814       57,761  
  Proceeds from issuance of common stock
    -       -       41,650  
                         
  Net cash from financing activities
    5,115       9,814       99,411  
                         
Net (Decrease) Increase in Cash
    -       (424 )     -  
                         
Cash at Beginning of Period
    -       424       -  
                         
CASH AT END OF PERIOD
  $ -     $ -     $ -  



The accompanying notes are an integral part of these unaudited financial statements

 
6

 

REGENCY RESOURCES, INC.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2011
(Unaudited)

1. ORGANIZATION

The Company, Regency Resources Inc., was incorporated under the laws of the State of Nevada on December 11, 2006 with the authorized capital stock of 200,000,000 shares at $0.001 par value.

The Company was organized for the purpose of acquiring and developing mineral properties. At the report date mineral claims, with unknown reserves, had been acquired. The Company has not established the existence of a commercially minable ore deposit and therefore has not reached the exploration stage and is considered to be in the pre-exploration stage.
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Methods

The Company recognizes income and expenses based on the accrual method of accounting.

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.

Basic and Diluted Net Income (loss) Per Share

Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights unless the exercise becomes antidulutive and then the basic and diluted per share amounts are the same.

Evaluation of Long-Lived Assets

The Company periodically reviews its long term assets and makes adjustments, if the carrying value exceeds fair value.

Income Taxes

The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

 
7

 
REGENCY RESOURCES, INC.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2011
(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Income Taxes - Continued

The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

The Company’s deferred tax assets, valuation allowance, and change in valuation allowance are as follows (“NOL” denotes Net Operating Loss):

Period Ending
 
Estimated NOL Carry Forward
   
NOL Expires
   
Estimated Tax Benefit from NOL
   
Valuation Allowance
   
Net Tax Benefit
 
                               
December 31, 2006
    1,678       2026       503       (503 )     -  
                                         
December 31, 2007
    8,517       2027       2,555       (2,555 )     -  
                                         
December 31, 2008
    39,475       2028       11,842       (11,842 )     -  
                                         
December 31, 2009
    35,459       2029       10,638       (10,638 )     -  
                                         
December 31, 2010
    21,202       2030       6,361       (6,361 )     -  
                                         
June 30, 2011
    8,307       2031       2,492       (2,492 )     -  
                                         
    $ 114,638             $ 34,391     $ (34,391 )   $ -  

The total valuation allowance as of June 30, 2011 is $(34,391) which increased by $(2,492) for the reported period.

Foreign Currency

The books of the Company are maintained in United States dollars and this is the Company’s functional and reporting currency. Translations denominated in other than the United States dollar are translated as follows with the related transaction gains and losses being recorded in the Statement of Operations:

(i)
Monetary items are recorded at the rate of exchange prevailing as at the balance sheet date;
(ii)
Non-Monetary items including equity are recorded at the historical rate of exchange; and
(iii)
Revenues and expenses are recorded at the period average in which the transaction occurred.

 
8

 

REGENCY RESOURCES, INC.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2011
(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Revenue Recognition

Revenue is recognized on the sale and delivery of a product or the completion of a service provided.

Advertising and Market Development

The company expenses advertising and market development costs as incurred.

Financial Instruments

The carrying amounts of financial instruments are considered by management to be their fair value due to their short term maturities.

Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in accordance with general accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.

Statement of Cash Flows

For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.

Mineral Property Acquisition and Exploration Costs

Mineral property acquisition costs are initially capitalized when incurred. These costs are then assessed for impairment when factors are present to indicate the carrying costs may not be recoverable. Mineral exploration costs are expensed when incurred.

Environmental Requirements

At the report date environmental requirements related to the mineral claim acquired are unknown and therefore any estimate of any future cost cannot be made.

Reclassification

Certain prior period amounts have been reclassified to conform with the current period’s financial statement presentation.

 
9

 

REGENCY RESOURCES, INC.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2011
(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Recent Accounting Pronouncements

The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.

3. AQUISITION OF MINERAL CLAIM

On February 15, 2007, the Company acquired the Mara Gold Claim located in the Republic of Fiji from The Mara Group LLC., an unrelated company, for the consideration of $7,000. The Mara Gold Claim is located 20 km North West of the city Suva, Fiji. Under Fijian law, the claim remains in good standing as long as the Company has an interest in it. There is no annual maintenance fee or minimum exploration work required on the Claim.

On July 1, 2008, the Company acquired the La Trinidad Gold Claim located in the Republic of the Philippines from Kalibo Resources Inc., an unrelated company, for the consideration of $5,000. Under Philippine mining laws, the claim remains in good standing as long as the Company has an interest in it.
Based on impairment analyses, the Company determined the above acquisition costs were impaired. Therefore, the Company recorded impairment losses of $7,000 and $5,000 in 2007 and 2008, respectively.

4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

During the six months ended June 30, 2011, the directors made advances of $5,115 to the Company.

The two Directors have acquired 67% of the common stock issued and outstanding and the President has made advances to the Company of $57,761. These advances are non-interest bearing and payable on demand.

5. CAPITAL STOCK

On April 15, 2007, Company completed a private placement consisting of 1,650,000 common shares sold to directors and officers at a price of $0.001 per share for a total consideration of $1,650. On October 31, 2008, the Company completed a private placement of 800,000 common shares at $0.05 per share for a total consideration of $40,000.

6.
GOING CONCERN

The Company will need additional working capital to service its debt and to develop the mineral claims acquired, which raises substantial doubt about its ability to continue as a going concern. Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional equity funding, and long term financing, which will enable the Company to operate for the coming year.
 
 
10

 
 
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the information contained in the financial statements of Regency Resources, Inc. (“Regency” or the “Company”) and the notes which form an integral part of the financial statements which are attached hereto.

The financial statements mentioned above have been prepared in conformity with accounting principles generally accepted in the United States of America and are stated in United States dollars.

Regency was incorporated under the laws of the State of Nevada on December 11, 2006 under the name of Regency Resources Inc. (“Regency”). Our fiscal year end is December 31.  Our executive offices are located at 11 Glouchester Ave, Flat 5, Camden Town, London, NW1 7AU, England.
We do not have any subsidiaries, affiliated companies or joint venture partners.

We are a start-up mineral company in the pre-exploration stage and have not generated any operating revenues since inception.  We have incurred losses since inception and our auditors have issued a going concern opinion since we must raise additional capital, through the sale of our securities, in order to fund our operations.  There can be no assurance we will be able to raise this capital.

On February 15, 2007 Regency purchased a 100% interest in the Mara Gold Claim (the “Mara Claim”) from The Mara Group LLC., an unrelated company, for $7,000. The Mara Claim consists of one 8 unit claim block containing 122.5 hectares (approximately 307 acres) located about 20 km North West of the city of Suva, in the Republic of Fiji.  The Mara Claim is a gold exploration project.
 
 
On July 1st, 2008 we acquired a 100% interest in the La Trinidad Gold Claim (the “La Trinidad Claim”) from an unrelated mineral exploration company, Kalibo Resources Inc., for the sum of $5,000.  The La Trinidad Claim, a gold exploration project, covers approximately 94.5 hectares (233.5 acres) located 45 kilometers North East of the city of Lingayen in the Republic of the Philippines.  The ‘La Trinidad Claim’ and the “Mara Claim” are sometimes referred to herein collectively as the “Regency Claims”

There can be no assurance that a commercially viable mineral deposit, an ore reserve, exists on either of the Regency Claims or can be shown to exist unless and until sufficient and appropriate exploration work is carried out and a comprehensive evaluation of such work concludes economic and legal feasibility.   Such work could take many years of exploration and would require expenditure of very substantial amounts of capital, capital we do not presently have and may never be able to raise.  To date, we have not conducted any exploration work on either of the Regency Claims.

We have no full-time employees and management of Regency devote a very small percentage of their time to the affairs of the Company. While neither of our officers and directors is a director or officer of any other company involved in the mining industry there can be no assurance such involvement will not occur in the future.  Such involvement could create a conflict of interest.
 
Foreign Currency and Exchange Rates
 
Our mineral properties are located, in the case of the La Trinidad Property, in the Republic of Philippines and the Mara Gold Claim, in the Republic of Fiji. Costs expressed in the geological reports on these mineral properties are expressed in the local currency, Philippine Pesos (“PHP”) in the case of the La Trinidad Property, and Fijian dollars (“FJD”), in the case of the Mara Gold Claim. For purposes of consistency and to express United States Dollars throughout this Form 10-`Q, Philippine Pesos have been converted into United States currency at the rate of US $1.00 being approximately equal to PHP 43.25 or
 
PHP 1.00 being approximately equal US $ 0.02303; and Fijian Dollars have been converted into United States currency at the rate of US $1.00 being approximately equal to FJD $1.746 or FJD $ 1.00 being approximately equal US $ 0.56743 which is the exchange rate as at June 30, 2011.

 
11

 

DESCRIPTION OF THE PROPERTY
 
Provided we have sufficient funds to do so, we intend to undertake exploration work on both of the Regency Claims. The Regency Claims were selected for acquisition due to previously recorded exploration work and because the claims are not located in an environmentally sensitive region. However, at present we do not have funds available to undertake only Phase I work on the La Trinidad Claim as described below.
 
We are presently in the pre-exploration stage and there is no assurance that mineralized material with any commercial value exits on either of our properties.
 
We do not have any ore body and have not generated any revenues from our operations.  Our planned exploration work is exploratory in nature.  There can be no assurance that a commercially viable mineral deposit, an ore reserve, exists on either of the Regency Claims or can be shown to exist unless and until sufficient and appropriate exploration work is carried out and a comprehensive evaluation of such work concludes economic and legal feasibility.   Such work could take many years of exploration and would require expenditure of very substantial amounts of capital, capital we do not presently have and may never be able to raise.  To date, we have not conducted any exploration work on either of the Regency Claims. We presently do not have funds sufficient to complete even Phase 1 of a two-phase exploration program recommended for the la Trinidad Gold Claim.
 
Descriptions of the Regency Claims, our two exploration property interests, are as follows:

La Trinidad Claim
 
Location and Access
 
Regency is the registered and beneficial owner of a 100% interest in the La Trinidad Claim, located in the Republic of Philippines.   Regency is the only party having an interest in La Trinidad Claim and it has not entered into any agreements regarding the Claim and there are no outstanding royalties or charges of any kind. There is a tax on any income from the property in the amount of 11%. The La Trinidad Claim covers an area of approximately 94.5 hectares (approximately 233.5 acres) and is located about 45 km North East of the city of Lingayen and 35 km South West of the city of San Fernanda. The claim is accessible by all-weather government-maintained roads to the towns of Lingayen and to San Fernanda.
The property is accessible by motor vehicle.  Year-round deep sea port facilities exist at Lingayen.  As well, Lingayen has an experienced work force and will provide all the necessary services needed for an exploration and development operation, including police, hospitals, groceries, fuel, helicopter services, hardware and other necessary items. Drilling companies and assay facilities are also present in Lingayen.

The La Trinidad is an unpatented claim which is subject to federal  safety and environmental standards.   Licensing fees, equivalent to $560, must be paid in full with the application to renew the existing license.   The renewal process can take up to 14 days to process.

In the case of Trinidad Claim, it was acquired through a private assignment from Kalibo Resources Inc., an unrelated company incorporated in the Philipinnes.  Regency did not acquire its ownership in La Trinidad Claim directly from the Department of Energy and Natural Resources of the Philippines as is done in many cases.  Regency has all the mineral rights relating to La Trinidad Claim whether they are on surface or having to be mined in the future.

The topography and relief of the La Trinidad Claim is fairly rugged. The claim falls within the so-called tropical climate zone, a zone characterized by high temperatures the whole year round, relatively high rainfall and lush vegetation. Rainfall can occur in every month, but the wettest months are October, November and December.  Annual rainfall is approximately 1.5 meters.  Due to the steep, deforested, mountains on average 60 percent of the rainwater quickly runs off the claim area, with the remaining 40% quickly evaporating or seeping into underground aquifers.  Exploration work can be undertaken year round on the La Trinidad Claim.

 
12

 

The following represents certain identifying information in locating and verifying ownership of the La Trinidad Gold Claim:
 
Claim Name:
La Trinidad Gold Mine
Certificate Number:
PLCC2139969
Title Number:
L1299153
Latitude:
16º 28 ’00” North
Longitude:
120º 37’ 00” East
Transfer No.
338-873
Parcel Identifier:
069-548-762
Assignment Transfer:
Kalibo Resources Inc.
Registered Owner:
Regency Resources Inc. [fee simple]
 
The La Trinidad Claim is in good standing until such time as it is abandoned by the Company.   Once Regency obtains a licensing fee for its exploration work it is required to pay a fee to the Department of Energy and Natural Resources in the amount of $560.  When renewing the existing license it has 30 days to make the required payment of a similar amount and it can take upwards to 14 days to process the application.

Property Geology

The La Trinidad Claim is underlain by Precambrian rocks, sediments and volcanics, exposed along a wide axial plain.  The volcanics are hornfelsed and commonly contain minor pyrite, ­pyrrhotite.  To the east of the claim are intrusives consisting of rocks such as tonalite, monzonite, and gabbro while on the western most point of the claim the intrusives also consist of a large mass of granodiorite.

In general the intrusive volcanics culminate with effluents of hydrothermal solutions that carry precious metals in the form of naked elements, oxides or sulphides.   These hydrothermal solutions intrude into the older rocks as quartz veins. These rocks may be broken due to mechanical and chemical weathering into sand size particles and carried by streams and channels. Gold occurs also in these sands as placers.
The area consists of interlayered chert, argillite and massive andesitics to basaltic volcanics.
 
Recent exploration for gold occurrences in the area immediately surrounding the La Trinidad Claim has been encouraging.  This area is well know for numerous productive mineral occurrences including the Cabarroguis Gold Mine located approximately 55 kilometers (34 miles) to the west of our claim.

Electricity on the property is supplied by Meralco Power from the City of Lingayen,   The power is constant with no major disruptions.   Water is also supplied from Lingayen from Meralco Hydro Service.

Previous Exploration

The La Trinidad Claim has seen very limited historical exploration.  Several properties to the west of our claim have been drilled by junior exploration companies.  We have not yet undertaken any work on the La Trinidad Claim and  there is no known mineralization on the La Trinidad Claim.  .  To date, there has been no significant work done on the property but the property is ready for the beginning stages of exploration work.
 
Plan of Operation: Proposed Exploration Work
 
Mr. Roberto Cua, P. Geo., authored the "Summary of Exploration on The La Trinidad Property, La Trinidad, Philippines” dated July 7, 2008 (the “Cua Report”), in which he recommended a phased exploration program to properly evaluate the potential of the La Trinidad Claim. We must conduct exploration to determine what minerals exist on our property and whether they can be economically extracted and profitably processed. Subject to having funds sufficient to do so, we plan to proceed with exploration of the La Trinidad Claim, in the manner recommended in the Cua Report, to determine the potential for discovering commercially exploitable deposits of gold.
 
 
13

 
 
We do not have any ores or reserves whatsoever at this time on the La Trinidad Claim. Our planned work is exploratory in nature.
 
The reserves on this particular property are unproven and the program suggested is one of exploration.

In the Philippines, Regency will not require an exploration license until such time as it undertakes exploration activities.   The license will be obtained by the exploratory company or geologist doing the work and the fee will be dependent upon the outlay of funds estimated to be spent on the exploration activities.
 
Mr. Cua is, and has since 1998 been, a registered Professional Geologist in good standing in the Geological Society of Philippines. He graduated from the University of far east, Manila, with a degree in geology (B. Sc.,1981) and a Master’s degree (M. Sc.) in 1986 from the same university.
 
The Cua Report concludes that:
 
-              the area of the La Trinidad Claim is well known for numerous productive mineral occurrences
-
the locale of the La Trinidad Gold Claim is underlain by the units of the Precambrian rocks that are found at those mineral occurrence sites.
-
these rocks consisting of cherts and argillites (sediments) and andesitic to basaltic volcanic have been intruded by granodiorite.
-
structures and mineralization probably related to this intrusion are found throughout the region and occur on the claim. They are associated with all the major mineral occurrences and deposits in the area.
-
mineralization found on the claim is consistent with that found associated with zones of extensive mineralization. Past work however has been limited and sporadic and has not tested the potential of the property.
-
potential for significant amounts of mineralization to be found exists on the property and it merits intensive exploration.
 
The Cua Report recommends a two-phase exploration program to properly evaluate the potential of the claims.   We anticipate, based on the budgets set forth in the Cua Report, that Phase I work will cost $12,700 (PHP 602,000).
 
Mr. Cua has indicated a total cost of $40,300 for both Phase I and Phase II as follows:

Phase I
  1.  
Geological Mapping
  $ 6,731  
  2.  
Geophysical Surveying
    5,969  
     
Total Phase I
  $ 12,700  

Phase II

  1.  
Geochemical surveying and surface sampling (including sample collection  and assaying)
      27,600  
     
Total of Phases I and II
  $ 40,300  

No costs have been incurred to date.  The above estimated costs relate to future exploration work.

 
14

 
 
Phase I work will include establishing a grid and the creation of maps showing the location of all roads in and near the perimeter of the Regency Claims.  The laying out of a grid and line cutting involves the physical cutting of the underbrush and overlay to establish an actual grid on the ground whereby items can be related one to another more easily and with greater accuracy. When we map, we essentially generate a drawing of the physical features of the land we are interested in as well as a depiction of what may have been found in relation to the boundaries of the property. So we will actually draw a scale map of the area and make notes on it as to the location where anything was found that was of interest or not.  In the process we will also identify any showings which appear to warrant sampling, i.e. any rock formations that appear to warrant our taking soil and rock samples from the claims to a laboratory where a determination of the elemental make up of the sample and the exact concentrations of gold and/or uranium and other indicator minerals can be made.
 
The work is phased in such a manner as to allow decision points to ensure that future work has a value and will provide better or additional information as to the viability of the claim. By utilizing a multi-phase work program, at the end of each phase a decision can be made as to whether the phase has provided the necessary information to increase the viability of the project. If the information obtained as a result of any phase indicates that there is no increased probability of finding an economically viable deposit at the end of the project, a determination would be made that the work should cease at that point.
 
Assuming the results of the Phase I work identify suitable targets, thus indicating further exploration of the La Trinidad Claim is warranted, we intend, provided we are able to raise funds to do so, to undertake a Phase II geochemical surveying and surface sampling program at a cost of approximately $25,260 (PHP 1,205,000).    Assuming the results of a Phase II trenching program identify suitable drill targets a Phase III drilling program could be undertaken.  Once again, our ability to conduct such Phase III work is subject to our ability to raise funds to do so.
 
Plant and Equipment
 
With the Philippines being a hub for mining activities in Asia, ultra modern equipment is used by the various mining companies.   The high safety standards enforce the level of good equipment being available with the most modern and up to date mining equipment being at our disposal.

There is no plant or equipment on the La Trinidad Claim at the present time.
 
Mara Claim
 
Location and Access
 
The Mara Claim gold exploration project consists of 1 unpatented mineral claim, covering 122.5 hectares (approximately 303 acres) located 20 kilometers (approximately 12.5 miles) North West of the town of Suva, Fiji. The claim was assigned to Regency by The Mara Group LLC., an unaffiliated seller,  and the said assignment was filed with the Mineral Resources Department of the Ministry of Energy and Mineral Resources of the Government of the Republic of Fiji.  Regency owns a 100% interest in the property.
The Mara Claim is accessible from Suva, Fiji by traveling on the country’s only highway system which for the most part consists of one lane in each direction and by taking an all weather gravel road. The town of Suva has an experienced work force and will provide all the necessary services needed for an exploration and development operation, including police, hospitals, groceries, fuel, helicopter services, hardware and other necessary items. Drilling companies and assay facilities are present in Suva.
The Mara Claim lies at an elevation of 1,650 feet near the northeast end of the Nakanai Mountain Range. The main mountain ridge has a maximum peak of 2,642 feet with steep east facing slopes.
Tropical mountain forests grow at lower elevations in the northwest corner of the claim and good rock exposure is found along the peaks and ridges in the eastern portion of the claim. The climate is mild year round with the rainy season falling from May to October.

Regency is the only party having an interest in Mara Claim and it has not entered into any agreements regarding the Claim. Since the acquisition of the Mara Claim was subject to a private transaction, rather than obtaining the Claim directly from the Government of Fiji, by law, Regency must provide a royalty to the Government of Fiji (13.75%) from the revenue from the production of minerals so long as the Claim is owned by Regency.

 
15

 
 
The claim was assigned to Regency from The Mara Group LLC, an unrelated company incorporated in Fiji, and a transfer of title was made with the Fiji Ministry of Mines. The assignment cost was $5,000 including a geological report. Therefore, Regency acquired the surface rights to the minerals and any minerals located beneath the soil.  A subsequent application for a mining license is $825 and is due and payable upon filing an application for the mining license. The Company is responsible upon obtaining an interest in the claim to adhere to the safety and environmental requirements of Fiji.

The Mara Claim is an unpatented mineral claim which will lend itself to hard rock drilling rather than being a placer type mineralization deposit.   The claim is a Federal mining claim and all rights to the mineralization of the Mara Claim belong to Regency.

The following represents certain identifying information in locating and verifying ownership of the Mara Claim:
 
Claim Name:
Mara Gold Mine
License Number:
SV5698721
Title Number:
FT286971
Latitude:
18º 08 ’00” South
Longitude:
178º 25’ 00” East
Registered Owner:
Regency Resources Inc.

The Claim is in good standing until such time as the Company decides to abandon it.  When Regency undertakes an exploration program it is required to obtain a mining license from the Ministry of Mines with a payment by Regency of $825 which is renewable each year at the same fee cost.

There are no known environmental concerns or parks designated for any area contained within the claims.
The property has no encumbrances.  As and when advanced exploration is contemplated there may be bonding requirements for reclamation.

The Claim is connected by the local power authority and has full electricity.   Three back up generators are also present in the area due to the country’s frequent power outages.

Property Geology

The property is underlain by rocks of the Savura Volcanic Group and is derived from a potassium-rich magma of shoshonite association evolving from an absarokite parent magma to shoshonite, bankite and monzonite derivates. The Savura Volcanic Group consists of interlayered chert, argillite and massive andesitic to basaltic volcanics. The volcanics are hornfelsed, commonly contain minor pyrite, ­pyrrhotite.

The potential reserves are unproven as of yet and no mineralization is apparent for the property.  To date Regency has not undertaken any exploration work on the Mara Claim.

Previous Exploration

Fijian and British prospectors first reported gold in the area of the Mara Claim over 60 years ago. Mineral lode claims were recorded in 1947 in the surrounding areas.  Numerous showings of mineralization have been discovered in the area and six prospects have achieved significant production, with the nearby Tradewinds Gold Mine (25 kilometers away) producing 155,000 ounces of gold annually.  During the 1990’s junior mineral exploration companies drilled several properties west of the Mara Claim.
 
 
16

 

Past work on the Mara Claim since 2000 has indicated the presence of sulphide mineralization containing gold and silver values. No mineralization has been reported for the area of the property but structures and shear zones affiliated with mineralization on adjacent properties pass through it. Previous exploration work has not, to the knowledge of Mr. Robards, included any attempt to drill the structure on Mara Gold Claim. Records indicate that no detailed exploration has been completed on the property.
 
Subject to raising the necessary capital, Regency Resources Inc. is prepared to conduct preliminary exploration work on the property.

We have not completed any exploration work on the Mara Claim and the present stage of the property is in the same condition as when we purchased it.
 
Plan of Operation: Proposed Exploration Work
 
A two phased mineral exploration program, consisting of air photo interpretation, geological mapping, geochemical soil sampling and geophysical surveying to identify targets for diamond drilling, has been recommended by Peter Robads, P. Geol., in his report titled “Summary Of Exploration On The Mara Property, Suva Fiji” (the “Robard’s Report”).

In his report Mr. Robards, who visited the Mara Claim on February 5th-8th 2008, observed that (i) the area is well known for numerous productive mineral occurrences (including the Tradewinds Gold Mines some 25 kilometers (approximately 15.5 miles) to the east) and, (ii) that the locale of the Mara Claim is underlain by the same rock units of the Savura Volcanic Group that are found at those mineral occurrence sites.

Phase I work would consist of air photo interpretation of the structures, geological mapping, both regionally and detailed on the area of the main showings, geophysical survey using both magnetic and electromagnetic instrumentation in detail over the area of the showings and in a regional reconnaissance survey and geochemical soil sample surveying regionally to identify other areas on the claim that are mineralized and in detail on the known areas of mineralization. The effort of this exploration work is to define and enable interpretation of a follow-up (i.e. Phase II) diamond drill program, so that the known mineralization and the whole property can be thoroughly evaluated with the most up to date exploration techniques.

A phased exploration program to further delineate the mineralized system currently recognized on Mara Gold Claim is recommended.

The proposed budget for Phase I work is as follows:
1.   Geological Mapping                                                                                                                     $   4,000
2.   Geophysical Surveying                                                                                                                $   3,315
3.   Geochemical surveying and surface sampling                                                                         $ 13,100
     (includes sample collection and assaying)
                                   TOTAL PHASE I                                                                                          $ 20,415
 
We currently have no funds available to undertake any portion of Phase I work on the Mara Claim. Unless and until we are able to raise additional funds (through the issuance of additional shares, debt securities or loan advances from our President in addition to the $60,000 already committed to) we will be unable to undertake any exploration work on the Mara Gold Claim.
 
Plant and Equipment

The age and details as to modernization and physical condition of plant and equipment, etc. cannot be stated at this time.  This will depend on the exploration company used by the Company.   The average age, however, of equipment used by Fijian exploration companies is in excess of 10 to 15 years old.   The equipment is not very modern due to numerous sanctions that have been imposed by South Pacific and other governments in response to the various coup d’états that have occurred in Fiji over the last twenty years.

There is no plant or equipment on the Mara Claim at the present time.

 
17

 

General

Particularly since we have a limited operating history, no reserves and no revenue, our ability to raise additional funds might be limited.  If we are unable to raise the necessary funds, we would be required to suspend Regency’s operations and liquidate our company.
 
There are no permanent facilities, plants, buildings or equipment on the Regency Claims.
 
Government Regulation
 
Exploration activities are subject to various national, state, foreign and local laws and regulations in the Philippines and Fiji, which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. We believe that we are in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations passed thereunder in the Philippines and Fiji.
 
Environmental Regulation
 
Our exploration activities are subject to various federal, state and local laws and regulations governing protection of the environment. These laws are continually changing and, as a general matter, are becoming more restrictive. Our policy is to conduct business in a way that safeguards public health and the environment. We believe that our exploration activities are conducted in material compliance with applicable laws and regulations.
 
Changes to current local, state or federal laws and regulations in the jurisdictions where we operate could require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could render certain exploration activities uneconomic.
 
One of the major prerequisites for the approval of a Prospecting License or Mining Lease application is the approval of the EIA/EMP by the Dept of Environment. For current prospecting activities/mining operations, relevant waste discharge permits apply.  Additionally, the MRD’s Environment Division carries out on-site environmental inspections to ensure waste emissions are within the discharge permit/mine environmental release guidelines and comply with socio-environmental standards, which are benchmarked against international standards/best practices.

The Director of Mines at the Mineral Resources Department, grants Prospector's Rights under the Mining Act. With the consent of the Minister, the Director also grants Prospecting Licenses, Special Prospecting Licenses, Permits to Mine, Mining Leases, Special Mining Leases, Special Site Rights, and Road Access Licenses. Applications for any Right, License or Lease are considered on their own merit. The criteria for assessing merit are: the expertise and capacity/capability of the applicant to undertake the geological program, any past record that the prospecting company has in mineral exploration, and the financial standing of the company in terms of its financial ability to undertake the proposed work program.   Fees are determined at the time of application.
 
Competition
 
We compete with other exploration companies searching for gold and other precious metals properties. There is competition for the limited number of gold acquisition opportunities, some of which is with other companies having substantially greater financial resources than we do. As a result, we may have difficulty acquiring attractive exploration properties.
 
We believe no single company has sufficient market power to affect the price or supply of gold in the world market.
 
 
18

 

Employees
 
We intend to continue to use the services of consultants for exploration work on our properties. At present, we have no employees as such although each of our officers and directors devotes a portion of his time to the affairs of the Company.  None of our officers and directors has an employment agreement with us. We presently do not have pension, health, annuity, insurance, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any employee.
 
As indicated above we will hire subcontractors on an as needed basis. We have not entered into negotiations or contracts with any of the potential subcontractors.  We do not intend to initiate negotiations or hire anyone until we are nearing the time of commencement of our planned exploration activities.
 
LIQUIDITY AND CAPITAL RESOURCES
 
Since inception we have raised the capital through private placements of common stock as follows:
 
Since inception, in addition to cash advances aggregating $57,761 made by our President, on April 15, 2007 the officers and directors of the Company completed a private placement pursuant to Regulation S of the Securities Act of 1933, whereby 1,650,000 shares of common stock were sold at the price of $0.001 per share to raise $1,650.  On October 31, 2008 Regency completed a further private placement pursuant to Regulation S of the Securities Act of 1933, whereby 800,000 common shares were sold at the price of $0.05 per share to raise $40,000.
 
As of June 30, 2011, we had cash reserves of $NIL, accounts payable of $15,227, and advances from related parties of $57,761, representing a working capital deficit of $72,988.  In addition, under the terms of the President’s Loan Agreement, the Company has access to up to $60,000 in cash of which $57,761 has been advanced to date. These advances are on an ‘as needed’ basis to meet our anticipated expenses over the twelve months as itemized below:

Expense
Ref.
 
Estimated Amount
 
         
Accounting and audit
(i)
  $ 10,180  
Exploration costs – La Trinidad Gold Claim
(ii)
    12,700  
Filing fees – Nevada; Sec of State
(iii)
    475  
Office and general expenses
(iv)
    1,000  
Transfer agent fees
(v)
    1,000  
Estimated expenses
      25,355  
Account payable – unrelated parties at June 30, 2011
(vi)
    15,227  
Estimate cash requirements over the next twelve months
    $ 40,582  

(i)           Accounting and audit

Relates to fees in connection with the preparation of quarterly and annual financial statements and filings on Forms 10-K and 10-Q as follows:

Period
 
Form
   
Accountant
   
Auditor
   
Amount
 
                         
June 30, 2011
    10-Q     $ 1,120     $ 800     $ 1,920  
September 30, 2011
    10-Q       1,120       800       1,920  
December 31, 2011
    10-K       1,120       3,300       4,420  
March 31, 2012
    10-Q       1,120       800       1,920  
Estimated total
          $ 4,480     $ 5,700     $ 10,180  


 
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(ii)           Exploration costs

 
The projection of cash required over the next twelve months has assumed that Phase I of the recommended work program, set out in the Cua Report on La Trinidad claim, will be completed at an estimated cost of $12,700.  The exploration budget for the Mara claims will be deferred until the late fall of 2011.

(iii)
Filing fees in Nevada

 
To maintain the Company in good standing in the State of Nevada an annual fee of approximately $475 including a business license.
 
(iv)           Office and general

 
We have estimated a cost of approximately $1,000 for photocopying, printing, fax and delivery.
 
(v)           Transfer agent

The annual fee from Action Stock Transfer Inc. to act as transfer agent for us is $1,000
 
(vi).           Accounts payable – unrelated parties

The amount outstanding as at June 30, 2011 was $15,227 which (i) consists of the following amounts:

In-house accountant
  $ 14,768  
Photocopies, fax and delivery
    459  
         
Total
  $ 15,227  
 
Our future operations are dependent upon our ability to obtain third party financing in the form of debt and equity and ultimately to generate future profitable operations. As of the date of this Form 10-Q, we have not generated revenues, and have experienced negative cash flow from operations. We may look to secure additional funds through future debt, equity financings or advances from our officers and directors. These sources of financing may not be available or may not be available on reasonable terms.
 
The Six Months Ended June 30, 2011 Compared to the Six Months Ended June 30, 2010.
 
We incurred accumulated net losses since inception of $114,638.  An analysis of the changes in expenses for the three months ended June 30, 2011 compared to June 30, 2010 is as follows:
 
 
June 30,  2011
June 30,  2010
 
       
Accounting and auditing
  $   6,340
$    2,250
(*).
Bank charges and interest
-
60
Bank account closed during the year.
Edgarizing
952
735
General increase in Edgarizing fees
Filing fees
-
100
Miscellaneous filing fees
Management fees
-
4,850
Management fees are no longer paid due to a lack of funds in the Company.
Office
451
239
Increase in courier charges in current period.
Rent
-
1,325
Rent is no longer paid due to a lack of funds.
Transfer agent’s fees
     564
            -
Annual list of officers and directors and business licence paid during quarter.
       
Total Expenses
$  (8,307)
$  (9,559)
 

(*)
During the year ended December 31, 2009, a portion of the audit work was performed prior to December 31, 2009 (and accrued at December 31, 2009); whereas, all audit fees for the year ended December 31, 2010, were incurred and paid subsequent to the December 31, 2010 (during the three months ended March 31, 2011).  Additionally, audit fees increased from 2009 to 2010.

 
20

 
 
Balance Sheet

Total cash and cash equivalents, as at June 30, 2011 and December 31, 2010, were respectively $NIL and $NIL.  Our working capital deficit as at June 30, 2011 and December 31, 2010 were respectively, $72,988 and $64,681.

Total stockholders’ deficiency as at June 30, 2011 was $72,988.

As of June 30, 2011 shares of common stock outstanding was 2,450,000.
 
We have no plant or significant equipment to sell, nor are we going to buy any plant or significant equipment during the next twelve months. We will not buy any equipment until we have located a body of ore and we have determined it is economical to extract the ore from our claim.
 
Limited Operating History; Need for Additional Capital
 
There is no historical financial information about us upon which to base an evaluation of our performance as an exploration corporation. We are a pre-exploration stage company and have not generated any revenues from our exploration activities. Further, we have not generated any revenues since our formation on December 11, 2006.  We cannot guarantee we will be successful in our exploration activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.
 
Should we be successful in our initial exploration activities, in order to become profitable and competitive, we anticipate the need to invest considerable time and capital in the exploration of our property before we could start production of any minerals we may find. We must obtain additional equity or debt financing to provide the capital required to fully implement our phased exploration program.  We have no assurance that financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to commence, continue, develop or expand our exploration activities. Even if available, equity financing could result in additional dilution to existing shareholders.
 
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We believe that there have been no significant changes in our market risk exposures for the six months ended June 30, 2011.

There are no shares being offered to the public other than indicated in our effective registration statement and no shares have been offered pursuant to an employee benefit plan or dividend reinvestment plan.
Our shares are quoted on the OTC Bulletin Board (“OTCBB”).  Although the OTCBB does not have any listing requirements per se, to be eligible for quotation on the OTCBB, we must remain current in our filings with the SEC; being as a minimum Forms 10-Q and 10-K.  Securities already quoted on the OTCBB that become delinquent in their required filings will be removed following a 30 or 60 day grace period if they do not make their filing during that time.

In the future common stock trading price might be volatile with wide fluctuations.  Things that could cause wide fluctuations in our trading price of our stock could be due to one of the following or a combination of several of them:
our variations in our operations results, either quarterly or annually;
   
trading patterns and share prices in other exploration companies which our shareholders consider similar to ours;
   
the exploration results on the Regency Claims, and
   
other events which we have no control over.
 
 
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In addition, the stock market in general, and the market prices for thinly traded companies in particular, have experienced extreme volatility that often has been unrelated to the operating performance of such companies.  These wide fluctuations may adversely affect the trading price of our shares regardless of our future performance.  In the past, following periods of volatility in the market price of a security, securities class action litigation has often been instituted against such companies.  Such litigation, if instituted, whether successful or not, could result in substantial costs and a diversion of management’s attention and resources, which would have a material adverse effect on our business, results of operations and financial conditions.
 
Trends
 
We are in the pre-explorations stage, have not generated any revenue and have no prospects of generating any revenue in the foreseeable future.  We are unaware of any known trends, events or uncertainties that have had, or are reasonably likely to have, a material impact on our business or income, either in the long term or short term.
 
ITEM 4.  CONTROLS AND PROCEDURES
 
Disclosure Controls and Procedures
 
Under the supervision and with the participation of our management, including the Principal Executive Officer, Ms. Jane Brooke, and Principal Accounting Officer, Mr. Dragan Bozanic, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of March 31, 2011 (the “Evaluation Date”). Based on that evaluation, the Principal Executive Officer and Principal Accounting Officer have concluded that these disclosure controls and procedures were not effective as of the Evaluation Date.
 
Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Principal Executive Officer and Principal Accounting Officer, to allow timely decisions regarding required disclosure.

Notwithstanding the assessment that our internal control was not effective and that there were material weaknesses, we believe that our financial statements contained in our Quarterly Report on Form 10-Q for the three months ended March 31, 2011 fairly present our financial condition, results of operations and cash flows in all material respects.

ITEM 4A(T)
CONTROLS AND PROCEDURES

There were no changes in Regency’s internal controls over financial reporting during the six months ended June 30, 2011 that have materially affected, or are reasonably likely to materially affect, Regency’s internal control over financial reporting.  Nevertheless, management will have to introduce the above mentioned changes in internal control and procedures to protect Regency’s assets.

 
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PART 11 – OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

There are no legal proceedings to which Regency is a party or to which the Regency Claim is subject, nor to the best of management’s knowledge are any material legal proceedings contemplated.

ITEM 1A. RISK FACTORS
 
An investment in our securities involves an exceptionally high degree of risk and is extremely speculative. In addition to the other information regarding Regency contained in this Form 10-Q, you should consider many important factors in determining whether to purchase the shares in our Company. The following risk factors reflect the potential and substantial material risks that could be involved if you decide to purchase shares in our Company.
 
Risks Associated with our Company:
 
1.  
Because our auditors have issued a going concern opinion and because our officers and directors may not loan any additional money to us, we may not be able to achieve our objectives and may have to suspend or cease exploration activity.
 
Our auditors' report on our December 31, 2009 financial statements expressed an opinion that substantial doubt exists as to whether we can continue as an ongoing business for the next twelve months. Because our officers and directors maybe unwilling to commit to loan or advance additional capital to us, (beyond the $60,000 already committed to by our President, we believe that if we do not raise additional capital through the issuance of treasury shares or debt securities, we will be unable to conduct exploration activity (beyond the initial work on the La Trinidad Claim budgeted for in this Form 10-Q) and may have to cease operations and go out of business.
 
2.  
Because the probability of an individual prospect ever having reserves is extremely remote, in all probability our property does not contain any reserves, and any funds spent on exploration will be lost.
 
Because the probability of an individual prospect ever having reserves is extremely remote, in all probability our mineral properties, the Regency Claims, do not contain any reserves, and any funds spent on exploration will be lost. If we cannot raise further funds as a result, we may have to suspend or cease operations entirely which would result in the loss of your investment.
 
3.  
We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease exploration activity or cease operations.
 
We were incorporated on December 11, 2006, have not yet conducted any exploration activities and have not generated any revenues. We have no exploration history upon which to properly evaluate the likelihood of our future success or failure.  Our net loss from inception to June 30, 2011, the date of our most recent audited financial statements $114,638.  Our ability to achieve and maintain profitability and positive cash flow in the future is dependent upon
 
 
*
our ability to locate a profitable mineral property
 
*
our ability to locate an economic ore reserve
 
*
our ability to generate revenues
 
*
our ability to reduce exploration costs.
 
 
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Based upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated with the research and exploration of our mineral property. We cannot guarantee we will be successful in generating revenues in the future. Failure to generate revenues will cause us to go out of business.
 
4.  
Because our officers and directors do not have technical training or experience in starting, and operating an exploration company nor in managing a public company, we will have to hire qualified personnel to fulfill these functions. If we lack funds to retain such personnel, or cannot locate qualified personnel, we may have to suspend or cease exploration activity or cease operations that will result in the loss of your investment.
 
Because our officers and directors are inexperienced with exploring for minerals and starting, and operating a mineral exploration company, we will have to hire qualified persons to perform surveying, exploration, and excavation of our property.  Our officers and directors have no direct training or experience in these areas and as a result may not be fully aware of many of the specific requirements related to working within the industry. Their decisions and choices may not take into account standard engineering or managerial approaches, mineral exploration companies commonly use. Consequently our exploration, earnings and ultimate financial success could suffer irreparable harm due to certain of management's lack of experience in this industry.   Additionally, our officers and directors have no direct training or experience in managing and fulfilling the regulatory reporting obligations of a ‘public company’ like Regency.  Unless our two part time officers are willing to spend more time addressing these matters, we will have to hire professionals to undertake these filing requirements for Regency and this will increase the overall cost of operations. As a result we may have to suspend or cease exploration activity, or cease operations altogether, which will result in the loss of our shareholders’ investment.
 
5.  
We have no known ore reserves. Without ore reserves we cannot generate income and if we cannot generate income we will have to cease exploration activity which will result in the loss of your investment.
 
We have no known ore reserves.   Even if we find gold mineralization we cannot guarantee that any gold mineralization will be of sufficient quantity so as to warrant recovery. Additionally, even if we find gold mineralization in sufficient quantity to warrant recovery, we cannot guarantee that the ore will be recoverable. Finally, even if any gold mineralization is recoverable, we cannot guarantee that this can be done at a profit. Failure to locate gold deposits in economically recoverable quantities will mean we cannot generate income.  If we cannot generate income we will have to cease exploration activity, which will result in the loss of our shareholders’ investment.
 
6.  
If we don't raise enough money for ongoing exploration, we will have to delay exploration or go out of business, which will result in the loss of your investment.
 
We are in the very early pre-exploration stage.  We need to raise additional capital to undertake exploration activity beyond Phase I work planned for the Regency Claims.  We do not have sufficient cash on hand to continue operations for more than twelve months.  Without loan advances from our officers and directors and/or the issuance of treasury shares, we will not be able to complete even Phase I of our planned exploration activity.  You may be investing in a company that will not have the funds necessary to conduct any meaningful exploration activity due to our inability to raise additional capital. If that occurs we will have to delay exploration or cease our exploration activity and go out of business which will result in the loss of our shareholders’ investment.
 
 
7.
Because we are small and do not have much capital, we must limit our exploration and as a result may not find an ore body. Without an ore body, we cannot generate revenues and you will lose your investment.
 
Provided we undertake our planned exploration activity, any potential development of and production from the Regency Claims depends upon the results of exploration programs and/or feasibility studies and the recommendations of duly qualified engineers and geologists. Because we are small and do not have much capital, we must limit our exploration activity unless and until we raise additional capital. Any decision to expand our operations on our exploration property will involve the consideration and evaluation of several significant factors including, but not limited to:
 
 
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Costs of bringing the properties into production including exploration,  preparation of production feasibility studies, and construction of production facilities;
Availability and cost of financing;
Ongoing costs of production;
Market prices for the minerals to be produced;
Environmental compliance regulations and restraints; and
Political climate and/or governmental regulations and controls.
 
Such programs will require very substantial additional funds. Because we may have to limit our exploration, we may not find an ore body, even though our properties may contain mineralized material. Without an ore body, we cannot generate revenues and our shareholders might lose their entire investment in our company.
 
 
8.
We may not have access to all of the supplies and materials we need to begin exploration which could cause us to delay or suspend exploration activity.
 
Provided we have sufficient funds to carry out exploration activity, competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies, such as dynamite, and certain equipment such as bulldozers and excavators that we might need to conduct exploration. We have not attempted to locate or negotiate with any suppliers of products, equipment or materials. We will attempt to locate products, equipment and materials as and when we are able to raise the requisite capital.  If we cannot find the products and equipment we need, we will have to suspend our exploration plans until we do find the products and equipment we need.
 
 
9.
Because our officers and directors have other outside business activities and may not be in a position to devote a majority of their time to our exploration activity, our exploration activity may be sporadic which may result in periodic interruptions or suspensions of exploration.
 
Our President and CEO, will be devoting only a small part of her time, approximately 10 hours per month, to our operations of our business.  Our CFO and Secretary-Treasurer will be devoting only approximately 10 hours per month to our operations.  As a consequence our business may suffer.  For example, because our officers and directors have other outside business activities and may not be in a position to devote a majority of their time to our exploration activity, our exploration activity may be sporadic or may be periodically interrupted or suspended.   Such suspensions or interruptions may cause us to cease operations altogether and go out of business.
 
 
10. Because mineral exploration and development activities are inherently risky, we may be exposed to environmental liabilities. If such an event were to occur it may result in a loss of your investment.
 
The business of mineral exploration and extraction involves a high degree of risk. Few properties that are explored are ultimately developed into production. At present, the Regency Claims, our only properties, do not have a known body of commercial ore. Unusual or unexpected formations, formation pressures, fires, power outages, labor disruptions, flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labor are other risks involved in extraction operations and the conduct of exploration programs.
 
 
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We do not carry liability insurance with respect to our mineral exploration operations and we may become subject to liability for damage to life and property, environmental damage, cave-ins or hazards. There are also physical risks to the exploration personnel working in the rugged terrain of the Regency Claims, often in poor climatic conditions. Previous mining exploration activities may have caused environmental damage to the Regency Claims. It may be difficult or impossible to assess the extent to which such damage was caused by us or by the activities of previous operators, in which case, any indemnities and exemptions from liability may be ineffective. If the Regency Claims are found to have commercial quantities of ore, we would be subject to additional risks respecting any development and production activities. Most exploration projects do not result in the discovery of commercially mineable deposits of ore.  
 
 
11. No matter how much money is spent on the Regency Claims, the risk is that we might never identify a commercially viable ore reserve.

No matter how much money is spent over the years on the Regency Claims, we might never be able to find a commercially viable ore reserve.  Over the coming years, we could spend a great deal of money on the Regency Claims without finding anything of value.  There is a high probability the Regency Claims do not contain any reserves so any funds spent on exploration will probably be lost.

 
      12. Even with positive results during exploration, the Regency Claims might never be put into commercial production due to inadequate tonnage, low metal prices or high extraction costs.

Even if, as a result of future exploration programs, we are successful in identifying a source of minerals of good grade we might still fail to find such minerals in the quantity, the tonnage, required to make commercial production feasible.  If the cost of extracting any minerals that might be found on the Regency Claims is in excess of the selling price of such minerals, we would not be able to develop the Regency Claims.  Accordingly even if ore reserves were found on the Regency Claims, without sufficient tonnage we would still not be able to economically extract the minerals from the Regency Claims in which case we would have to abandon the Regency Claims and seek another mineral property to develop, or cease operations altogether.
 
 
13. Because we have not put a mineral deposit into production before, we will have to acquire outside expertise. If we are unable to acquire such expertise we may be unable to put our properties into production and you may lose your investment.
 
We have no experience in placing mineral deposit properties into production, and our ability to do so will be dependent upon using the services of appropriately experienced personnel or entering into agreements with other major resource companies that can provide such expertise. There can be no assurance that we will have available to us the necessary expertise when and if we place a mineral deposit into production.

 
14. Our directors and officers control a substantial number of our outstanding shares and will be able to effect corporate transactions without further shareholder approval.

Our directors and officers own 67.35% of our outstanding shares.  Because of their control, they will be able to approve certain corporate transactions without seeking further shareholder approval.  In addition, because of their control, it will be harder to change the board of directors and management.

15  .Neither of our two directors has visited La Trinidad or Mara claims.

Our two directors have not visited our two mineral claims, being La Trinidad and the Mara claims.  Therefore, they have no personal knowledge of the mineralization on each of the claims, the terrain and the possibilities of hazards during exploration activities. They have had to rely upon the advice and opinions of the geologists working on each of the claims.

 
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Risks Associated with Our Shares:

15.
Our shares may be thinly traded, with wide share price fluctuations, low share prices and minimal liquidity.

Our share price may be volatile with wide fluctuations in response to several factors, including:

Potential investors’ anticipated feeling regarding our results of operations;
Increased competition and/or variations in mineral prices;
Our ability or inability to generate future revenues; and
Market perception of the future of the mineral exploration industry.

In addition, our share price may be impacted by factors that are unrelated or disproportionate to our operating performance.  Our share price might be affected by general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations.  In addition, stock is traded on the OTCBB, stocks traded over this quotation system are usually thinly traded, highly volatile and not followed by analysts.  These factors, which are not under our control, may have a material effect on our share price.

16. We anticipate the need to sell additional treasury shares in the future meaning that there will be a dilution to our existing shareholders resulting in their percentage ownership in the Company being reduced accordingly.

We expect that the only way we will be able to acquire additional funds is through the sale of our common stock.  This will result in a dilution effect to our shareholders whereby their percentage ownership interest in the Company is reduced.  The magnitude of this dilution effect will be determined by the number of shares we will have to issue in the future to obtain the funds required.
 
17.  Because our securities are subject to penny stock rules, you may have difficulty reselling your shares.
 
Our shares are considered to be "penny stocks" and therefore are covered by Section 15(g) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers who sell the Company's securities including the delivery of a standardized disclosure document; disclosure and confirmation of quotation prices; disclosure of compensation the broker/dealer receives; and, furnishing monthly account statements. For sales of our securities, the broker/dealer must make a special suitability determination and receive from its customer a written agreement prior to making a sale. The imposition of the foregoing additional sales practices could adversely affect a shareholder's ability to dispose of his stock.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There has been no change in our securities since the fiscal year ended December 31, 2010.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
        None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There have been no matters brought forth to the securities holders to vote upon during this quarter.

 
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ITEM 5. OTHER INFORMATION
 
        None

ITEM 6. EXHIBITS

(a)  (3)   Exhibits

The following exhibits are included as part of this report by reference:

3.1
 
Certificate of Incorporation (incorporated by reference from Regency’s Registration Statement on Form S-1 filed on March 19, 2009 Registration No. 333-158103)
     
3.2
 
Articles of Incorporation (incorporated by reference from Regency’s Registration Statement on Form S-1 filed on March 19, 2009, Registration No.333-158103)
     
3.3
 
Certificate of Correction (incorporated by reference from Regency’s Registration Statement on Form S-1 filed on March 19, 2009, Registration No. 333-158103)
     
3.4
 
By-laws (incorporated by reference from Regency’s Registration Statement on Form S-1 filed on March 19, 2009, Registration No. 333-158103)
     
4
 
Stock Specimen (incorporated by reference from Regency’s Registration Statement on Form S-1 filed on March 19, 2009, Registration No. 333-158103)
     
10.1
 
Transfer Agent and Registrar Agreement (incorporated by reference from Regency’s Registration Statement on Form S-1 filed on March 31, 2009 Registration No. 333-158103)
 
 
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SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
REGENCY RESOURCES, INC.
 
(Registrant)
   
   
   
Date: October 21, 2011
JANE C.H. BROOKE
 
Jane C. H. Brooke
Chief Executive Officer, President and Director
   
   
Date: October 21, 2011
DRAGAN BOZANIC
 
Dragan Bozanic
Chief Financial Officer, Chief Accounting Officer, Secretary and Director
 
 
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