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Regnum Corp. – ‘10-Q’ for 6/30/20

On:  Tuesday, 10/13/20, at 3:12pm ET   ·   For:  6/30/20   ·   Accession #:  1477932-20-5847   ·   File #:  333-222083

Previous ‘10-Q’:  ‘10-Q’ on 4/29/20 for 3/31/20   ·   Next:  ‘10-Q’ on 2/3/21 for 9/30/20   ·   Latest:  ‘10-Q’ on 5/15/23 for 3/31/23   ·   15 References:   By:  Regnum Corp. – Next ‘10-Q’ on 2/3/21 for 9/30/20 To:  Regnum Corp. – ‘8-K’ on 3/31/20 for 2/5/20 To:  Regnum Corp. – ‘8-K’ on 12/18/19 for 12/16/19 To:  Regnum Corp. – ‘8-K’ on 9/25/19 for 9/24/19 To:  Regnum Corp. – ‘8-K’ on 8/22/19 for 8/20/19 To:  Regnum Corp. – ‘8-K’ on 5/17/19 for 5/14/19 To:  Regnum Corp. – ‘8-K’ on 3/6/19 for 3/4/19 To:  Regnum Corp. – ‘8-K’ on 12/31/18 for 12/28/18 To:  Regnum Corp. – ‘8-K’ on 12/3/18 for 11/28/18 To:  Regnum Corp. – ‘8-K’ on 10/2/18 for 9/27/18 To:  Regnum Corp. – ‘8-K’ on 6/29/18 for 6/28/18 To:  Regnum Corp. – ‘8-K’ on 6/6/18 for 6/5/18 To:  Regnum Corp. – ‘8-K’ on 5/15/18 for 5/10/18 To:  Regnum Corp. – ‘10-Q’ on 5/9/18 for 3/31/18 To:  Regnum Corp. – ‘S-1’ on 12/15/17 

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

10/13/20  Regnum Corp.                      10-Q        6/30/20   41:1.6M                                   Discount Edgar/FA

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒     QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly Period Ended June 30, 2020

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: 333-222083

765 Beach Street

San Francisco, California 94109

(Address of principal executive offices) (Zip Code)

(844) 496-6539

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the proceeding 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 ☐     No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One).

If an emerging growth company, indicate by the check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐     No ☒

As of October 9, 2020, the number of shares outstanding of the registrant’s common stock was 23,950,000. 

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

REGNUM CORP.

Balance Sheet

(Unaudited)

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

REGNUM CORP.

Statements of Operations

(Unaudited)

The accompanying notes are an integral part of these financial statements

REGNUM CORP

Statements of Stockholders' Equity (Deficit)

(Unaudited)

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

REGNUM CORP.

Consolidated Statements of Cash Flows

(Unaudited)

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

REGNUM CORP.

Notes to Unaudited Condensed Financial Statements

 June 30, 2020

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated interim financial statements of Regnum Corp. (the “Company” or “Regnum”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2019, contained in the Company’s annual report, as filed with the SEC on Form 10-K on April 14, 2020 (the “Form 10-K”). The December 31, 2019 balance sheet was derived from the audited financial statements of our 2019 Form 10-K. In the opinion of management all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of financial position and the results of operations for the interim periods presented, have been reflected herein.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2019 financial statements. The results of operations for the periods ended June 30, 2020 and 2019 are not necessarily indicative of the operating results for the full year.

Nature of Business

The Company was organized on March 31, 2016, under the laws of the State of Nevada. The Company was formed for the primary business purpose of servicing the increasing demand for premium entertainment content and becoming a depository of unpublished intellectual properties for resale with a focus on achieving profitability and sustaining business growth. The Company’s business model is based on acquiring unproduced and unpublished quality intellectual properties at a discount from studios, agencies and production companies for subsequent recycling or production in a wide variety of media with the intent to resell back to the entertainment community for a profit.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Basic Loss per Common Share

Basic loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share are calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are 80,000,000 common stock shares authorized at $0.001 par value and 23,950,000 shares of common stock outstanding as of June 30, 2020. The Company had no potential dilutive shares of common stock as of June 30, 2020.

Accounting Basis

The basis is accounting principles generally accepted in the United States of America. The Company has adopted a December 31 fiscal year-end.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and financial instruments which mature within six months of the date of purchase.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition

Revenues from the sale of intellectual property are recognized when persuasive evidence of an arrangement exists, the intellectual property has been delivered or is made available for delivery, the customer can begin the use of the intellectual property, the fee is fixed or determinable and collectability is reasonably assured, which is generally upon execution of a purchase agreement and delivery of the intellectual property.

Intangible Assets

The Company capitalizes the costs of acquiring intellectual property. The Company amortizes these charges in the same expected ratio as the associated ultimate revenue.

Impairment of Long-Lived Assets

The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under Accounting Standards Codification (ASC) 360-10-35-17 if events or circumstances indicate that their carrying amounts might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using rules of ASC 930-360-35, Asset Impairment, and 360-10-15-3 through 15-5, Impairment or Disposal of Long-Lived Assets.

Income Taxes

The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse.

ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

If applicable, the Company would classify interest and penalties related to uncertain tax positions in income tax expense. Through June 30, 2020, there has been no interest expense or penalties related to unrecognized tax benefits.

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use (“ROU”) asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). This new standard is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those annual reporting periods, with early adoption permitted. We adopted this new standard effective January 1, 2019. Adoption did not have any effect on the Company.

Management has considered all recent accounting pronouncements issued since the last audit of the Company’s financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

2. GOING CONCERN

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has a limited operating history and has not yet established strong liquidity or a reliable ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern over an extended period of time. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until its operations become established enough to be considered reliably profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

2. GOING CONCERN (Continued)

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. These factors raise substantial doubts about the Company’s ability to continue as a going concern for one year from the issuance date from these financial statements. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

3. STOCKHOLDERS’ EQUITY

As of June 30, 2020, the Company has authorized 80,000,000 shares of $0.001 par value common stock, of which 23,950,000 shares are issued and outstanding.

As of June 30, 2020, the Company has authorized 5,000,000 shares of $0.001 par value preferred stock, of which none are issued and outstanding.

On March 27, 2020, the Company issued 1,000,000 shares of common stock to an individual who served as a member of the Board of Directors of the Company from February 27, 2020 to March 27, 2020, as payment for services rendered. The shares were valued at $0.0596 per share, being the market closing price for the shares on the date of issuance.

4. RELATED PARTY TRANSACTIONS

During the six months ended June 30, 2020, the Company paid $6,877 to its president and chief executive officer as compensation for executive services rendered through March 31, 2020. Additionally, Wookey, a related party, made $38,615 in payments on behalf of the Company for trade accounts payable during the six months ended June 30, 2020.

5. INCOME TAXES

Income tax expense consists of the following:

Income tax expense differed from the amounts computed by applying the U.S. federal statutory tax rate applicable to the Company’s level of pretax income as a result of the following:

6. CONCENTRATION

For the period from January 1, 2019 to June 30, 2020, revenues consisted of sales to six customers.

7. SIGNIFICANT EVENTS

Consulting Agreement

On February 12, 2020, Tiffani Jones, the former sole director and officer of the Company, entered into a Consulting Agreement with the Company, whereby Ms. Jones agreed to perform consulting services on a part-time basis for thirty days (beginning February 12, 2020) for $3,750, plus the reimbursement of certain travel expenses. The agreement can be extended for up to two additional thirty-day periods for $3,750 each with the mutual consent of the parties. The agreement can be terminated by the Company at any time. As of June 30, 2020, the Company has paid Ms. Jones $6,877 pursuant to this consulting agreement. The agreement terminated on March 31, 2020.

8. SUBSEQUENT EVENTS

On September 29, 2020, the Company entered into an option assignment agreement, whereby the Company sold its option to acquire all right, title, and interest in and to one screenplay, in consideration for $2,250.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Report. These factors include:

You should read the matters described and incorporated by reference in “Risk Factors” and the other cautionary statements made in this Report, and incorporated by reference herein, as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.

This information should be read in conjunction with the interim unaudited financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto and “Part II. Other Information - Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations“ contained in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission on April 14, 2020 (the “Annual Report”).

Certain capitalized terms used below and not otherwise defined below, have the meanings given to such terms in the footnotes to our unaudited consolidated financial statements included in “Part I. Financial Statements – Item 1. Financial Statements“, in this Quarterly Report on Form 10-Q. 

In this Quarterly Report on Form 10-Q, we may rely on and refer to information regarding the industries in which we operate in general from market research reports, analyst reports and other publicly available information. Although we believe that this information is reliable, we cannot guarantee the accuracy and completeness of this information, and we have not independently verified any of it. 

Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,” “Regnum”, and “Regnum Corp.” refer specifically to Regnum Corp.

In addition, unless the context otherwise requires and for the purposes of this Report only:

Where You Can Find Other Information

We file annual, quarterly, and current reports and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC like us at http://www.sec.gov. Copies of documents filed by us with the SEC are also available from us without charge, upon oral or written request to our Secretary, who can be contacted at the address and telephone number set forth on the cover page of this Report. The Company is working on updating its website.

Current Overview

Regnum Corp. was organized on March 31, 2016 under the laws of the State of Nevada. We were formed for the primary business purpose of servicing the increasing demand for premium entertainment content and becoming a depository of unpublished intellectual properties for resale with a focus on achieving profitability and sustaining business growth. Our business model is based on acquiring unproduced and unpublished quality intellectual properties at a discount from studios, agencies and production companies, for subsequent recycling or production in a wide variety of media, with the intent to resell such works back to the entertainment community for a profit.

Recent Transactions and Changes of Control

On February 5, 2020, Ocean Ave Holdings, LLC (“Ocean”) which is owned and controlled by Ms. Tiffani Jones, the former sole director and officer of the Company, sold 20,000,000 shares of restricted common stock of the Company in consideration for $345,000, to Tri Capital Energy Corporation (“Tri Capital”), pursuant to an Agreement for the Purchase of Common Stock. The shares which were sold represented 87% of the Company’s then outstanding shares, which resulted in a change of control of the Company.

Tri Capital is controlled by Gary Allen and Mark Gustavson, its directors and its Chief Executive Officer and Chief Financial Officer, respectively.

Subsequently, on February 26, 2020, Tri Capital sold all 20,000,000 shares of the restricted common stock of the Company which it acquired pursuant to the February 5, 2020 Agreement for the Purchase of Common Stock, to Wookey Technologies Corporation (former Wookey Search Technologies Corporation) (“Wookey”), pursuant to a Stock Purchase Agreement. Consideration for the acquisition of the shares was $50,000 in cash and a promissory note (secured by the 20 million shares of the Company purchased pursuant to the agreement) in the amount of $400,000. A $200,000 principal payment was due under the note on the earlier of (a) March 15, 2020; and (b) two business days after either the Company or Wookey had raised $1 million, subject to a thirty day extension as part of the first extension option discussed below (which amount has not been paid to date, but which due date was mutually extended by the parties) and the note was due and payable on the earlier of April 1, 2020 (which date could be extended for up to two 30 day periods in the event an extension fee of $10,000 was paid for each extension) and two business days after either the Company or Wookey had raised $2 million. Subsequent to entering into the note, the parties mutually verbally agreed that Wookey would pay an extension fee of $20,000 to Tri Capital on or before April 6, 2020, in consideration for an extension of the due date of the note to May 1, 2020, which amount was not paid by such date. Wookey paid Tri Capital $10,000 on May 21, 2020 and $10,000 on June 1, 2020, in consideration for extensions of the note, which payments did not reduce the principal amount of the note. Wookey previously advanced Tri Capital $100,000 on January 16, 2020, which amount reduced the principal balance of the note to $300,000. As of the date of this filing, Wookey and Tri Capital are in discussions regarding the due date of the note. The note contains standard and customary events of default. Upon the occurrence of an event of default under the note, Tri Capital can exercise its rights under a pledge agreement entered into between Tri Capital and Wookey and re-take control and ownership of the 20 million shares of the Company, and therefore take back control of the Company.

Additionally, the parties entered into a Voting Agreement whereby Wookey provided voting control over the 20 million shares of Company common stock. Such Voting Agreement terminates automatically upon the payment in full of the $400,000 promissory note. As such, Tri Capital continues to exercise voting control over the Company. Additionally, Mark Gustavson, the 46% owner of Tri Capital provided Mr. Allen a voting agreement to vote his ownership in Tri Capital until such time as the $400,000 promissory note has been fully paid.

Wookey is controlled by Mark Gustavson, its Chief Executive Officer, director and holder of approximately 53% of its outstanding voting securities.

On February 12, 2020, Ms. Tiffani Jones, the former sole director and officer of the Company, who resigned from such positions as described below, entered into a Consulting Agreement with the Company (the “Consulting Agreement”), whereby Ms. Jones agreed to perform consulting services on a part-time basis for thirty days (beginning February 12, 2020) for $3,750, plus the reimbursement of certain travel expenses. The agreement can be extended for up to two additional thirty-day periods for $3,750 each with the mutual consent of the parties. The agreement can be terminated by the Company at any time. The agreement contains customary confidentiality, liability limitation and similar provisions. The agreement expired on March 31, 2020.

On February 27, 2020, Ms. Jones took action to increase the number of the Company’s directors from one to three pursuant to Section 2.03 of the Company’s bylaws. After taking action to increase the number of the Company’s board of directors (the “Board”), Ms. Jones appointed Gary Allen and Mark Gustavson to the Board, pursuant to the power provided to her as the then sole director pursuant to the Company’s bylaws. Following the increase in the number of the directors and the appointments of Mr. Allen and Mr. Gustavson, Ms. Jones resigned as a director of the Company. Her resignation was not the result of a disagreement with the Company.

Also on February 27, 2020, Ms. Jones resigned as the Company’s Chief Executive Officer, President, Treasurer, and Secretary and Mark Gustavson was appointed to serve as the Company’s Chief Executive Officer and Secretary, and Robert J. Stubblefield was appointed to serve as the Company’s Chief Financial Officer and Treasurer to fill the vacancies resulting from Ms. Jones resignation. Her resignation was not the result of a disagreement with the Company.

Mr. Allen is the Chief Executive Officer and a director of Tri Capital. Mr. Gustavson is the Chief Financial Officer and a director of Tri Capital and the sole director and Chief Executive Officer of Wookey. Mr. Gustavson holds 3,750,000 shares or approximately 46% of the outstanding shares of common stock of Tri Capital and 12 million shares, or approximately 50.3% of the outstanding common stock of Wookey. Tri Capital holds 600,000 shares, or approximately 2.5% of the outstanding common stock of Wookey.

On March 29, 2020, Mr. Ross Meador was appointed as the Vice President and General Counsel of the Company. Mr. Meador holds 1,750,000 shares or approximately 7.3% of the outstanding common stock of Wookey and serves as the Vice President and General Counsel of Wookey.

Effective on March 27, 2020, Mr. Allen resigned as a member of the Board of Directors of the Company, leaving Mr. Gustavson as the sole member of the Board of Directors.

On March 27, 2020, the Company agreed to issue 1 million shares of restricted common stock to Gary Allen (who served as a member of the Board of Directors of the Company from February 27, 2020 to March 27, 2020) in consideration for services agreed to be rendered and agreed to be rendered by Mr. Allen to the Company.

Plan of Operations

Since inception, we have acquired three bundles of various scripts and manuscripts from an independent production company and a producer at a deep discount for a total of $2,300, 21 of which were recycled and subsequently optioned off/sold for a total of $44,800.

Between May 9, 2020 and June 11, 2020, the Company entered into six option agreements to acquire all right, title, and interest in, and to, various screenplays written by two different authors, by paying $1,000 pursuant to each option agreement. The screenplays are entitled “Confessions”, “Battle Realm”, “Acts of Contrition”, “Terminal Island”, “Future Monster Hunters of America”, and “The Wow”. The option agreements provide the Company the exclusive right for a period of six months (extendable thereafter for additional six-month terms at a cost of $1,000 each) to acquire such screenplays by paying additional consideration based on a percentage of the budget of, final determination of the credit for the writer of, and net proceeds of, any movie produced from such screenplays, and various other royalties in the event the screenplays are made into television series. The agreements also provide the sellers the first opportunity to provide writing services in connection with each screenplay which requires additional services. The terms of such option agreements are described in the form of option agreement attached as Exhibit 10.16 hereto.

On June 16, 2020, the Company entered into two option assignment agreements, whereby the Company sold its option to acquire all right, title, and interest in and to two screenplays, each in consideration for $2,250. The terms of such option assignment agreements are described further in Exhibits 10.17 and 10.18 filed herewith.

We had no cash, no current assets and $48,432 of liabilities as of June 30, 2020. We will need to raise additional funding in order to continue our operations and to pay the costs associated with being a public company, for the next 12 months, which funding may not be available on favorable terms, if at all.

The Company is continuing to pursue its business of procuring unproduced and unpublished quality intellectual properties at a discount from independent writers, filmmakers, studios, agencies and production companies for subsequent reworking and/or production in a wide variety of media with intent to resell back to the entertainment community for profit and may also seek to enter into an acquisition, merger or business combination, which will likely result in a change in its business focus. 

Separately, as discussed above, on February 26, 2020, Wookey acquired 20,000,000 shares of the restricted common stock of the Company, which represented 87% of the Company’s outstanding shares and resulted in a change of control of the Company. Wookey, through its wholly-owned subsidiary Wookey Project Corp, is engaged in the operation of a virtual reality platform known as Sansar, which is focused on hosting live musical performances online using virtual reality technology. The Company continues to evaluate entering into a transaction with Wookey in the future, the result of would be that the business of the Company would change to that of Wookey. The Company may however enter into other acquisitions, mergers or combinations in the future, pursuant to which the Company’s business focus may change, provided that no definitive agreements or understandings have been entered into or agreed to, to date. Whether or not a transaction is entered into and/or closes, the Company intends to continue to pursue the acquisition and development of intellectual properties in a wide variety of media.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We monitor our estimates on an on-going basis for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. We base our estimates on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates if past experience or other assumptions do not turn out to be substantially accurate.

Certain of our accounting policies are particularly important to the portrayal and understanding of our financial position and results of operations and require us to apply significant judgment in their application. As a result, these policies are subject to an inherent degree of uncertainty. In applying these policies, we use our judgment in making certain assumptions and estimates. Our critical accounting policies are outlined in Note 1 to the notes to the unaudited condensed financial statements included herein.

Results of Operations for the Three Months Ended June 30, 2020 compared to the Three Months ended June 30, 2019.

We had $4,500 of revenues for the three months ended June 30, 2020, and $1,000 of revenues for the three months ended June 30, 2019. The increase in revenues was the result of the Company selling its option to acquire all right, title, and interest in and to two screenplays during the second quarter of 2020. We hope to continue to generate revenue in the future relating to intellectual property sales as we continue to acquire and recycle IP for resale.

Our operating expenses for the three months ended June 30, 2020 were $44,690, compared to $8,422 for the comparable period of 2019. Our 2020 operating expenses consisted of general and administrative expenses of $2,965, legal and professional expenses of $39,467, and amortization of intangible assets of $2,258. The legal and professional expenses consisted of fees paid in connection with preparation and review of our SEC filings as well as other corporate and securities matters.

For the three months ended June 30, 2019, our operating expenses were $8,422, which consisted of amortization of intangible assets of $57, legal and professional fees of $7,104 and general and administrative expenses of $1,261.

We had a net loss for the three months ended June 30, 2020 of $40,190, compared to a net loss of $7,422 for the three months ended June 30, 2019. The increase in net loss is primarily due to the increase in operating expenses associated with the increase in legal fees for the current period, compared to the prior year’s period.

Results of Operations for the Six Months Ended June 30, 2020 compared to the Six Months ended June 30, 2019.

We had $4,500 of revenues for the six months ended June 30, 2020, and $2,800 of revenues for the six months ended June 30, 2019. The increase in revenue was primarily the result of the Company selling its option to acquire all right, title, and interest in and to two screenplays. We hope to continue to generate revenue in the future relating to intellectual property sales as we continue to acquire and recycle IP for resale.

Our operating expenses for the six months ended June 30, 2020 were $111,734, compared to $33,832 for the comparable period of 2019. Our 2020 operating expenses consisted of general and administrative expenses of $63,132, legal and professional expenses of $46,344, and amortization of intangible assets of $2,258. The general and administrative expenses consisted of a $6,877 payment made to the Company’s former officer and director for consulting services, as well as the issuance of 1,000,000 shares of common stock (valued at $59,600) which were issued as payment for services rendered to our former director as discussed above.

For the six months ended June 30, 2019, our operating expenses were $33,832, which consisted of amortization of intangible assets of $114, legal and professional fees of $31,725 and general and administrative expenses of $1,993.

We had a net loss for the six months ended June 30, 2020 of $107,234, compared to a net loss of $31,032 for the six months ended June 30, 2019. The increase in net loss is primarily due to the increase in operating expenses associated with the shares of common stock issued to a former board member during the current period, and the increase in legal and professional expenses.

Liquidity and Capital Resources

The Company had no cash or current assets as of June 30, 2020, compared to $7,444 of cash as of December 31, 2019. As of June 30, 2020, the Company had total assets of $9,278 and total liabilities of $48,432, compared to $8,480 and $-0-, respectively, as of December 31, 2019. This resulted in negative working capital of $48,432 at June 30, 2020 and $7,444 of working capital at December 31, 2019.

As of June 30, 2020, we owed $38,615 to Wookey, a related party, in connection with advances made to us by such related party, which amounts are not evidenced by any note, are due on demand and which accrue no interest.

Net cash used in operating activities amounted to $1,444 and $33,228 for the six months ended June 30, 2020 and 2019, respectively. This is primarily due to net losses of $107,234 and $31,032, respectively for such periods.

Net cash used in investing activities amounted to $6,000 and $1,000 for the six months ended June 30, 2020 and 2019, and solely represented cash paid for intangible assets.

The Company does not have sufficient capital to meet its current cash needs, which include the costs of compliance with the continuing reporting requirements of the Exchange Act. The Company intends to seek additional capital through the resale of the acquired intellectual properties. Financing options may be available to the Company either via a private placement or through the public sale of stock. There is no assurance, however, that the available funds will be available or adequate. The need for additional financing is likely to persist.

Additionally, as discussed above, the Company anticipates that it will enter into a merger, acquisition or combination transaction in the future, pursuant to which it will change its business focus and its management will likely change, provided that no definitive agreements or understandings have been entered into or agreed to, to date. Whether or not a transaction is entered into, or closes, the Company intends to continue to pursue the acquisition and development of intellectual properties in a wide variety of media.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information we are required to disclose is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Commission. Mark J. Gustavson, our current Chief Executive Officer and Robert J. Stubblefield, our Principal Accounting Officer, are responsible for establishing and maintaining our disclosure controls and procedures.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Principal Accounting Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Principal Accounting Officer have concluded that, as of June 30, 2020, these disclosure controls and procedures were not effective in ensuring that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Principal Accounting Officer, as appropriate to allow timely decisions regarding required disclosure. 

Changes in Internal Controls over Financial Reporting

There have not been any changes in our internal control over financial reporting during the quarter ended June 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

Inherent Limitations over Internal Controls

Regnum’s management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within Regnum have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are not currently a party to any material legal proceeding. In addition, we are not aware of any material legal or governmental proceedings against us, or contemplated to be brought against us.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Commission on April 14, 2020 (the “Form 10-K”), under the heading “Risk Factors” except as disclosed below, and investors should review the risks provided in the Form 10-K and below, prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Form 10-K for the year ended December 31, 2019, under “Risk Factors” and below, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.

We will require additional financing, and we may not be able to raise funds on favorable terms or at all.

We had no cash as of June 30, 2020 and had a $43,449 working capital deficit. As such, we will need to raise additional funding in order to continue our operations at their current levels, and to pay the costs associated with being a public company, for the next 12 months, and will also require additional funding to support our operations. We may also seek to raise additional funding in the future to expand or complete acquisitions. The sources of this capital are expected to be equity investments and notes payable.

The most likely source of future funds presently available to us will be through the sale of equity capital. Any sale of share capital will result in dilution to existing stockholders. Furthermore, we may incur debt in the future, and may not have sufficient funds to repay our future indebtedness or may default on our future debts, jeopardizing our business viability.

We may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to expand our operations and business, which might result in the value of our common stock decreasing in value or becoming worthless. Additional financing may not be available to us on terms that are acceptable. Consequently, we may not be able to proceed with our intended business plans. Substantial additional funds will still be required if we are to reach our goals that are outlined in this Report. Obtaining additional financing contains risks, including:

We May Choose to Enter into a Merger, Acquisition and/or Combination Transaction in the Future.

While we have not entered into any definitive agreements or understandings to merge with or acquire any entity, we are currently in discussions regarding potential combination transactions. In the event that we do enter into a merger, acquisition or combination with a separate company in the future, new shares of common stock or preferred stock could be issued resulting in substantial dilution to our then current stockholders. Currently, we no longer anticipate that we will enter into a transaction with Wookey in the future, and instead anticipate that we will enter into a transaction with a separate, non-related party, provided that no definitive agreements or understandings have been entered into or agreed to, to date. In the event that we enter into and close a merger, acquisition or combination transaction, our business focus and management will likely change and we can make no assurances that our new management will be able to properly manage our new direction or that a change in our business focus will be successful. If we do enter into a merger, acquisition or combination transaction, and our management fails to properly manage and direct our operations, we may be forced to scale back or abandon our operations, which will cause the value of our common stock to decline or become worthless. We have not entered into any merger, acquisition or combination agreements as of the date of this filing.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There have been no sales of unregistered securities during the quarter ended June 30, 2020 and from the period from July 1, 2020 to the filing date of this report, which have not previously been disclosed in a prior Quarterly Report on Form 10-Q, Annual Report on Form 10-K or a Current Report on Form 8-K.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

Between May 9, 2020 and June 11, 2020, the Company entered into six option agreements to acquire all right, title, and interest in, and to, various screenplays written by two different authors, by paying $1,000 pursuant to each option agreement. The screenplays are entitled “Confessions”, “Battle Realm”, “Acts of Contrition”, “Terminal Island”, “Future Monster Hunters of America”, and “The Wow”. The option agreements provide the Company the exclusive right for a period of six months (extendable thereafter for additional six-month terms at a cost of $1,000 each) to acquire such screenplays by paying additional consideration based on a percentage of the budget of, final determination of the credit for the writer of, and net proceeds of, any movie produced from such screenplays, and various other royalties in the event the screenplays are made into television series. The agreements also provide the sellers the first opportunity to provide writing services in connection with each screenplay which requires additional services. The terms of such option agreements are described in the form of option agreement attached as Exhibit 10.16 hereto.

On June 16, 2020, the Company entered into two option assignment agreements, whereby the Company sold its option to acquire all right, title, and interest in and to two screenplays, each in consideration for $2,250. The terms of such option assignment agreements are described further in Exhibits 10.17 and 10.18 filed herewith.

On September 29, 2020, the Company entered into an option assignment agreement, whereby the Company sold its option to acquire all right, title, and interest in and to one screenplay, in consideration for $2,250.

Item 6. Exhibits

See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

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.

EXHIBIT INDEX

__________

* Filed herewith.

** Furnished herewith.

(1) Filed as an exhibit to the Company’s Registration Statement on Form S-1 on December 15, 2017.

(2) Filed as an exhibit to the Form 10-Q, filed on May 9, 2018 and incorporated herein by reference.

(3) Filed as an Exhibit to the Form 8-K, filed May 15, 2018 and incorporated herein by reference.

(4) Filed as an Exhibit to the Form 8-K, filed on June 6, 2018 and incorporated herein by reference.

(5) Filed as an Exhibit to the Form 8-K, filed on June 29, 2018 and incorporated herein by reference.

(6) Filed as an Exhibit to the Form 8-K, filed on October 2, 2018 and incorporated herein by reference.

(7) Filed as an Exhibit to the Form 8-K, filed on December 3, 2018 and incorporated herein by reference.

(8) Filed as an Exhibit to the Form 8-K, filed on December 31, 2018 and incorporated herein by reference.

(9) Filed as an Exhibit to the Form 8-K, filed on March 6, 2019 and incorporated herein by reference.

(10) Filed as an Exhibit to the Form 8-K, filed on May 17, 2019 and incorporated herein by reference.

(11) Filed as an Exhibit to the Form 8-K, filed on August 22, 2019 and incorporated herein by reference.

(12) Filed as an Exhibit to the Form 8-K, filed on September 25, 2019 and incorporated herein by reference.

(13) Filed as an Exhibit to the Form 8-K, filed on December 18, 2019 and incorporated herein by reference.

(14) Filed as an Exhibit to the Form 8-K, filed on March 31, 2020 and incorporated herein by reference.

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing		Date		Other Filings
		12/31/20		10-K,  NT 10-K
Filed on:		10/13/20
		10/9/20
		9/29/20
		7/1/20
For Period end:		6/30/20		NT 10-Q
		6/16/20
		6/11/20
		6/1/20
		5/21/20
		5/9/20
		5/1/20
		4/14/20		10-K
		4/6/20
		4/1/20
		3/31/20		10-Q,  8-K,  NT 10-K
		3/29/20
		3/27/20
		3/15/20
		2/27/20
		2/26/20
		2/12/20
		2/5/20		8-K
		1/16/20
		12/31/19		10-K,  NT 10-K
		12/18/19		8-K
		9/25/19		8-K
		8/22/19		8-K
		6/30/19		10-Q
		5/17/19		8-K
		3/31/19		10-Q
		3/6/19		8-K
		1/1/19
		12/31/18		10-K,  8-K
		12/15/18
		12/3/18		8-K
		10/2/18		8-K
		6/29/18		8-K
		6/6/18		8-K
		5/15/18		8-K
		5/9/18		10-Q
		12/15/17		S-1
		3/31/16
				List all Filings

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1 Subsequent Filing that References this Filing

As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/03/21 Regnum Corp. 10-Q 9/30/20 37:1.2M Discount Edgar/FA

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14 Previous Filings that this Filing References

As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 3/31/20 Regnum Corp. 8-K:1,3,5,9 2/05/20 3:84K Discount Edgar/FA 12/18/19 Regnum Corp. 8-K:1,9 12/16/19 2:41K Discount Edgar/FA 9/25/19 Regnum Corp. 8-K:1,9 9/24/19 2:41K Discount Edgar/FA 8/22/19 Regnum Corp. 8-K:1,9 8/20/19 2:41K Discount Edgar/FA 5/17/19 Regnum Corp. 8-K:1,9 5/14/19 2:42K Discount Edgar/FA 3/06/19 Regnum Corp. 8-K:1,9 3/04/19 2:43K Discount Edgar/FA 12/31/18 Regnum Corp. 8-K:1,9 12/28/18 2:41K Discount Edgar/FA 12/03/18 Regnum Corp. 8-K:1,9 11/28/18 2:42K Discount Edgar/FA 10/02/18 Regnum Corp. 8-K:1,9 9/27/18 2:42K Discount Edgar/FA 6/29/18 Regnum Corp. 8-K:1,9 6/28/18 2:1M Discount Edgar/FA 6/06/18 Regnum Corp. 8-K:1,9 6/05/18 2:42K Discount Edgar/FA 5/15/18 Regnum Corp. 8-K:1,9 5/10/18 2:42K Discount Edgar/FA 5/09/18 Regnum Corp. 10-Q 3/31/18 39:6.4M Discount Edgar/FA 12/15/17 Regnum Corp. S-1 11:3.8M Discount Edgar/FA

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