UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒	QUATERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal three months ended March 31, 2021

OR

 

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

 

For the transition period from: _____________to______________

 

333-222083

(Commission File Number)

 

Regnum Corp.

(Exact name of registrant as specified in its charter)

 

Nevada		82-0832447
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

 

600 3^rd Ave Floor 10

New York, NY 10016

(Address of Principal Executive Office) (Zip Code)

 

(917) 647-1498

(Registrant’s telephone number, including area code)

 

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

 

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

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐  No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☒  No ☐

 

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 preceding 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 and post such files). Yes ☒  No ☐

 

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

 

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth	☒

 

If an emerging growth company, indicate by 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 August 18^th, 2021, there were 22,950,000 shares of common stock issued and outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

  

	TABLE OF CONTENTS
		Pages
PART I. FINANCIAL INFORMATION		3
Item 1.	Financial Statements	3
	Condensed Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020	3
	Condensed Statements of Operations for the three month periods ended March 31 2021 and 2020 (unaudited)	4
	Condensed Statements of Stockholders’ Equity as of March 31, 2021, and 2020 (unaudited)	5
	Condensed Statements of Cash Flows for the three months ended March 31 2021 and 2020 (unaudited)	6
	Notes to 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	13
Item 4.	Controls and Procedures	13
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	35
SIGNATURES		36

 

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PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS REGNUM CORP

Balance Sheet

  

		March 31,				December 31,
		2021				2020
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash		$	-			$	-
Accounts receivable			4,500				4,500
Total Current Assets			4,500				4,500
OTHER ASSETS
Intangible assets		$	-			$	-
Total Other Assets			-				-
TOTAL ASSETS		$	4,500			$	4,500
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		$	7,470			$	5,523
Accrued taxes payable			800				800
Account payable - related party			49,963				48,570
Total Current Liabilities			58,233				54,893
TOTAL LIABILITIES			58,233				54,893
STOCKHOLDERS’ EQUITY
Common stock: $0.001 par value, 80,000,000
shares authorized, 23,950,000 shares
issued and outstanding, respectively			23,950				23,950
Additional paid-in capital			77,150				77,150
Retained earnings			(154,833	)			(151,493	)
Total Stockholders’ Equity			(53,733	)			(50,393	)
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY		$	4,500			$	4,500

 

The accompanying notes are an integral part of these financial statements

 

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REGNUM CORP

Statements of Operations

  

		For the Three Months Ended
		March 31,
		2021				2020
REVENUES		$	-			$	-
COST OF SALES			-				-
GROSS PROFIT			-				-
OPERATING EXPENSES
Legal and professional fees			2,860				6,877
General and administrative			480				60,167
Total Operating Expenses			3,340				67,044
INCOME (LOSS) FROM OPERATIONS			(3,340	)			(67,044	)
OTHER EXPENSES			-				-
INCOME (LOSS) BEFORE TAXES			(3,340	)			(67,044	)
INCOME TAX EXPENSE			-				-
NET INCOME (LOSS)		$	(3,340	)		$	(67,044	)
BASIC AND DILUTED INCOME
PER COMMON SHARE		$	0.00			$	0.00
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING			23,950,000				23,004,945

 

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

 

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REGNUM CORP
Statements of Stockholders’ Equity (Deficit) For the three months ended in March 31,2021 and 2020
														Retained
										Additional				Earnings				Total
		Common Stock								Paid-In				(Accumulated				Stockholders’
		Shares				Amount				Capital				Deficit)				Equity
Balance, December 31, 2019			22,950,000			$	22,950			$	18,550			$	(33,820	)		$	7,680
Common shares issued for services rendered			1,000,000				1,000				58,600				-				59,600
Net income for the quarter ended March 31 2020			-				-				-				(67,044	)			(67,044	)
Balance March 31, 2020			23,950,000				23,950				77,150				(100,864	)			236
Balance, December 31, 2020			23,950,000				23,950				77,150				(151,493	)			(50,393	)
Net loss for the quarter ended March 31 2021			-				-				-				(3,340	)			(3,340	)
Balance, March 31, 2021			23,950,000			$	23,950			$	77,150			$	(154,833	)		$	(53,733	)

  

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

  

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REGNUM CORP
Statements of Cash Flows (Unaudited)
		For the Three Months Ended
		March 31,
		2021				2020
OPERATING ACTIVITIES
Net income (loss)		$	(3,340	)		$	(67,044	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Common stock issued for services			-				59,600
Changes in operating assets and liabilities:
Accounts payable			1,947				-
Account payable - related party			1,393				-
Net Cash Provided By (Used In) Operating Activities			-				(7,444	)
INVESTING ACTIVITIES			-				-
FINANCING ACTIVITIES			-				-
NET INCREASE (DECREASE) IN CASH			-				(7,444	)
CASH AT BEGINNING OF PERIOD			-				7,444
CASH AT END OF PERIOD		$	-			$	-
The accompanying notes are an integral part of these financial statements.

 

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REGNUM CORP

Notes to Financial Statements

March 31, 2021 and December 31, 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, 2020, contained in the Company’s annual report, as filed with the SEC on Form 10-K on August 13, 2021 (the “Form 10-K”). The December 31, 2020 balance sheet was derived from the audited financial statements of our 2020 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, 2020 financial statements. The results of operations for the periods ended March 31, 2021 and 2020 are not necessarily indicative of the operating results for the full year.

 

Nature of Business

Regnum Corp. (“The Company”) was organized on March 31, 2016, under the laws of the State of Nevada. The Company was formed for a primary business purpose of servicing the increasing demand for premium entertainment content and becoming a depository of unpublished intellectual properties for resale with focus on achieving profitability and sustaining business growth. The Company’s business model has been based on acquiring unproduced and unpublished quality intellectual properties at a discount from studios, agencies and production companies for subsequent recycling or production in 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 is 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 December 31, 2020 and March 31, 2021. The Company had no potential dilutive shares of common stock as of March 31, 2021.

 

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.

 

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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 costs over the costs 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 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 March 31, 2021, there has been no interest expense or penalties related to unrecognized tax benefits.

 

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” which supersedes the most current revenue recognition requirements. This ASU requires entities to recognize revenue in a way that depicts the transfer of goods or services to customers in an amount that reflects the consideration which the entity expects to be entitled to in exchange for those goods or services. The Company adopted the pronouncement under the modified retrospective method of transition in the first quarter of 2018. The adoption of the new standard did not have a material effect on the overall timing or amount of revenue recognized.

 

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.

 

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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 March 31, 2021, 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.

 

4. RELATED PARTY TRANSACTIONS

 

During the year ended December 31, 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 payments on behalf of the Company for trade accounts payable during the year ended December 31, 2020 and the three months ended March 31 2021. The balance was $49,963 at March 31, 2021 and $48,570 at December 31, 2020.

 

5. INCOME TAXES

 

Income tax expense consists of the following:

 

		March 31,
		2021				2020
Federal		$	-			$	-
State			-
Total		$	-			$	-

 

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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:

 

		March 31,
		2021				2020
Federal tax at statutory rate		$	-			$	-
State taxes, net of federal benefit			-				-
Net operating loss carryforward			-				-
Total		$	-			$	-

 

6. CONCENTRATION

 

For the period from January 1, 2020, to March 31, 2021, revenues consisted of sales to six customers.

 

7. SUBSEQUENT EVENTS

 

On April 7, 2021, Wookey Technologies Corporation, a Delaware corporation, the previous majority shareholder of the Company, entered into a stock purchase agreement for the sale of 20,000,000 shares of Common Stock of the Company, to Phoenixus AG, an accredited investor. Phoenixus AG also acquired an additional 2,680,000 shares of common stock from three minority shareholders. In connection with the sale of such shares, an aggregate of 1,000,000 shares of common stock held by Gary Allen were returned to the Company for cancellation. As a result of the acquisition of 22,680,000 shares of common stock and the cancellation of 1,000,000 shares, Phoenixus AG holds approximately 99% of the issued and outstanding shares of Common Stock of the Company, and as such it is able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required and, ultimately, the direction of the Company.

 

On May 13, 2021, the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with SevenScore Pharmaceuticals, LLC, a Delaware limited liability company (“SevenScore”).

 

The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement, (a) SevenScore will be merged with and into the Company (the “Merger”), with the Company being the surviving corporation in the Merger, and, (b) at the effective time of the Merger (the “Effective Time”), membership interests in SevenScore will be converted into the right to receive an aggregate of 25,878,168 shares of common stock of the Company (the “Merger Consideration”). Each SevenScore membership interest shall by virtue of the Merger and without any action on the part of the holder thereof, be automatically converted into and exchangeable for a fraction of a fully paid and nonassessable share of the Company’s Common Stock equal to one multiplied by a fraction obtained by dividing (A) 25,878,168 by (B) 26,128,168 (the “Exchange”).

 

In accordance with SFAS 165 Company management reviewed all material events through the date of this report and there are no additional material subsequent events to report.

 

Also, on April 7, 2021, Mark Gustavson, Chief Executive Officer, Secretary and Director of the Company, and Ross Meador, Vice President and General Counsel of the Company, resigned their positions with the Company. Upon such resignations, Anne Kirby was appointed as Chief Executive Officer, President and sole Director. Rob Stubblefield remains the Chief Financial Officer of the Company.

 

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

 

The following discussion of the Company’s historical performance and financial condition should be read together with the financial statements and related notes in “Item 1. Financial Statements”” of this Report. This discussion contains forward-looking statements based on the views and beliefs of our management, as well as assumptions and estimates made by our management. These statements by their nature are subject to risks and uncertainties, and are influenced by various factors. As a consequence, actual results may differ materially from those in the forward-looking statements. See “Item 1A. Risk Factors” of this report for the discussion of risk factors.

 

Plan of Operations

 

We had working capital of <$53,732> as of March 31, 2021. We anticipate the need for additional funding in order to continue our operations at their current levels, and to pay the costs associated with being a public company. As announced on April 7, 2021, we may also require additional funding in the future to expand or complete acquisitions. In the event we require additional funding, we plan to raise that through the sale of debt or equity, which may not be available on favorable terms, if at all, and may, if sold, cause significant dilution to existing stockholders. If we are unable to access additional capital moving forward, it may hurt our ability to grow and to generate future revenues.

 

We reiterate that the Company’s business plan changed significantly and materially in April 2021, after the period for which the financial statements presented hereby cover. As a result, these results do not represent the Company’s potential results in the future.

 

RESULTS OF OPERATIONS

 

Results of Operations for the Three months ended March 31, 2021, compared to the Three Months Ended March 31, 2020

 

We had no revenue for the three months ended March 31, 2021, or for the three months ended March 31, 2020.

 

Our operating expenses for the three months ended March 31, 2021, were $3,340 which consisted of legal and professional fees of $2,860 and general and administrative expenses of $480. For the three months ended March 31, 2020, our operating expenses were $67,044 which consisted of legal and professional fees of $6,877 and general and administrative expenses of $60,167 which was primarily driven by the expense related to granting 1 million shares of Stock to Gary Allen during the first quarter of 2020. Our operating expenses were lower in Q1 2021 due to decreased activities pending the sale to SevenScore.

 

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We had a net loss of $3,340 for the three months ended March 31, 2021, compared to net loss of $67,044 for the three months ended March 31, 2020. The decrease in net loss is primarily because the expense for granting stock to Gary Allen in 2020 is a non-recurring item. Legal and professional fees and general and administrative expenses also declined.

 

Liquidity and Capital Resources

 

The Company’s cash position was $0 on March 31, 2021, and on March 31, 2020. For three months ended March 31, 2021, the company’s cash needs were met via payments made on its behalf by Wookey Project Corp, which is a related party of the company and were recorded as accounts payable – related party. As of March 31, 2021, the Company had current assets of $4,500 and current liabilities of $58,232 compared to $4,500 and $54,893, respectively, as of December 31, 2020. This resulted in working capital of <$53,732> on March 31, 2021, and <$50,393> on December 31, 2020.

 

Net cash used in operating activities amounted to $0 for the three months ended March 31, 2021, compared to using net cash of $7,444 for the three months ended March 31, 2020.

 

Net cash used in investing activities was $0 for the three months ended March 31, 2021 and 2020.

 

Net cash provided by financing activities was $0 for the three months ended March 31, 2021 and 2020.

 

We do not currently have any additional commitments or identified sources of additional capital from third parties or from our officers, directors or majority stockholders. Additional financing may not be available on favorable terms, if at all.

 

In the future, we may be required to seek additional capital by selling additional debt or equity securities, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then stockholders. Financing may not be available in amounts or on terms acceptable to us, or at all. In the event we are unable to raise additional funding and/or obtain revenues sufficient to support our expenses, we may be forced to curtail or abandon our business operations, and any investment in the Company could become worthless.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements.

 

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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 assumption and estimates. Our critical accounting policies are outlined in “Note 1 - Summary of Significant Accounting Policies” to the financial statements included herein.

 

Critical Accounting Policies:

 

Emerging Growth Company. Section 107 of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

 

RECENTLY ISSUED ACCOUNTING STANDARDS

 

For more information on recently issued accounting standards, see “Note 1 - Summary of Significant Accounting Policies” to the Notes to Financial Statements included herein.

 

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

 

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and that such information is accumulated and communicated to management, including the Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosures.

 

Evaluation of Disclosure Controls and Procedures

 

In connection with the preparation of this Quarterly Report on Form 10-Q, our management, with the participation of our Principal Executive Officer and Principal Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2021, as required by Rule 13a-15 of the Exchange Act. Based on the evaluation described above, our management, including our Principal Executive Officer and Principal Financial Officer, concluded that, as of March 31, 2021, our disclosure controls and procedures were not effective.

 

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Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act and is a process designed by, or under the supervision of, our Principal Executive Officer and Principal Financial Officer and effected by our Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

 

	●	Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
	●	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of our management and directors; and
	●	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

 

Based on its evaluation, our management has concluded that, as of March 31, 2021, our internal controls over financial reporting was not effective, due to the same material weaknesses that rendered our disclosure controls and procedures ineffective. During 2020, the Company lacked the appropriate personnel to handle all the varying recording and reporting tasks on a timely basis. The Company has begun to address these material weaknesses as resources become available by hiring additional professional staff, such as a Chief Financial Officer, who was appointed on February 27, 2020, outsourcing certain aspects of the recording and reporting functions, and separating responsibilities.

 

We are a smaller reporting company and are exempt from the requirement for an attestation report on the Company’s internal controls over financial reporting by our registered public accounting firm.

 

Limitations on the Effectiveness of Controls

 

The Company’s disclosure controls and procedures are designed to provide the Company’s Principal Executive Officer and Principal Financial Officer with reasonable assurances that the Company’s disclosure controls and procedures will achieve their objectives. However, the Company’s management does not expect that the Company’s disclosure controls and procedures or the Company’s internal control over financial reporting can or will prevent all human error. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Furthermore, the design of a control system must reflect the fact that there are internal resource constraints, and the benefit of controls must be weighed relative to their corresponding costs. Because of the limitations in all control systems, no evaluation of controls can provide complete assurance that all control issues and instances of error, if any, within the Company are detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur due to human error or mistake. Additionally, controls, no matter how well designed, could be circumvented by the individual acts of specific persons within the organization. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and such design may not succeed in achieving its stated objectives under all potential future conditions.

 

Changes in Internal Control Over Financial Reporting.

 

There were no changes in our internal control over financial reporting during the three months ended March 31, 2021, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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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

 

Risks Related to Our Business Operations:

 

We currently have a Management Agreement with SevenScore, pursuant to which the management fees are highly speculative.

 

The Management Agreement with SevenScore provides for the provision of financial and management consulting services to SevenScore by officers and employees of the Company. The Management Fee is to be determined by in good faith by the parties, with such fee being commercially reasonable and consistent with market standards. As a result, such fee will depend on several factors, including, without limitation, the financial and other results of SevenScore, and the contribution thereto by officers and employees of the Company. No assurances can be given of the amount of timing of payment of such management.

 

If the proposed Merger with SevenScore is not consummated, our business could suffer materially and our stock price could decline.

 

On May 13, 2021, the Company, entered into the Merger Agreement with SevenScore. The consummation of the proposed Merger is subject to several closing conditions, including the approval by the respective boards of directors and other customary closing conditions.

 

If the proposed Merger is not consummated, we may be subject to several material risks and our business and stock price could be adversely affected, as follows:

 

·

We have incurred and expect to continue to incur significant expenses related to the proposed Merger even if the Merger is not consummated.

 

	·	Entry into the Merger Agreement may restrict our ability to solicit competing acquisition proposals and the conduct of our business.
	·	If the Merger Agreement is terminated after we have invested significant time and resources in the transaction process, we will have a limited ability to continue its current operations without obtaining additional financing to fund our operations.
	·	The market price of our common stock may decline to the extent that the current market price reflects a market assumption that the proposed Merger will be completed.

 

In addition, if the Merger Agreement is terminated and our Board of Directors determines to seek another business combination, it may not be able to find a third party willing to provide equivalent or more attractive consideration than the consideration to be provided by each party in the Merger. In such circumstances, our Board of Directors may elect to, among other things, divest all or a portion of our business, or take the steps necessary to liquidate all our business and assets, and in such case, the consideration that we receive may be less attractive than the consideration to be received pursuant to the Merger Agreement.

 

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Even if the Merger is consummated, our stockholders may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with the Merger.

 

If the combined company of the Merger is unable to realize the strategic and financial benefits currently anticipated from the Merger, our stockholders will have experienced substantial dilution of their ownership interest without receiving any commensurate benefit. Significant management attention and resources will be required to integrate the two companies. Delays in this process could adversely affect the combined company’s business, financial results, financial condition and stock price following the Merger. Even if the combined company were able to integrate the business operations successfully, there can be no assurance that this integration will result in the realization of the full benefits of synergies, innovation and operational efficiencies that may be possible from this integration and that these benefits will be achieved within a reasonable period.

 

During the pendency of the Merger, we may not be able to enter a business combination with another party.

 

Entry into Merger Agreement may impede our ability to make acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the Merger. As a result, if the Merger is not completed, we may be at a disadvantage to our competitors. In addition, while the Merger Agreement is in effect, we may be prohibited from soliciting, initiating, encouraging or taking actions designed to facilitate any inquiries or the making of any proposal or offer that could lead to the entering into certain extraordinary transactions with any third party, such as a sale of assets, an acquisition of our common stock, a tender offer for our common stock, a merger or other business combination outside the ordinary course of business. Any such transactions could be favorable to our stockholders.

 

The issuance of shares of our common stock to stockholders in the Merger will substantially dilute the voting power of our current stockholders. Having a minority share position may reduce the influence that current stockholders have on the management of us.

 

The security holders of SevenScore currently hold approximately 99% of the outstanding common stock of the Company. At the Effective Time of the merger, the former security holders will cancel the shares of the Company currently held and will receive an equivalent number of shares in the Merger, i.e., approximately 99% of the aggregate number of Post-Closing Shares of the Company. As a result, all other stockholders of the Company currently and immediately after the Merger are expected to own approximately 1% of the aggregate number of shares of the Company. Accordingly, the issuance of the shares of Company common stock to equity holders in the Merger will significantly reduce the ownership stake and relative voting power of each share of Company common stock held by current Company stockholders. Consequently, following the merger, the ability of the Company’s current stockholders to influence the management of the Company will be substantially reduced.

 

There is no assurance when or if the Merger will be completed. Any delay in completing the Merger may substantially reduce the benefits that we expect to obtain from the Merger.

 

There can be no assurance that we and will be able to consummate the Merger. If the Merger and the integration of the companies’ respective businesses are not completed within the expected timeframe, such delay may materially and adversely affect the synergies and other benefits that we expect to achieve because of the Merger and could result in additional transaction costs or other effects associated with uncertainty about the Merger.

 

We and SevenScore can agree at any time to terminate the Merger Agreement.

 

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The issuance of our common stock in connection with the Merger could decrease the market price of our common stock.

 

In connection with the Merger and as part of the merger consideration, we expect to issue shares of common stock to equity holders. The anticipated issuance of our common stock in the Merger may result in fluctuations in the market price of our common stock, including a stock price decrease.

 

Failure to complete the Merger could negatively affect the value of our common stock and our future business and financial results.

 

If the Merger is not completed, our ongoing businesses could be adversely affected and we will be subject to a variety of risks associated with the failure to complete the Merger, including without limitation the following:

 

·

diversion of management focus and resources from operational matters and other strategic opportunities while working to implement the Merger;

 

·

reputational harm due to the adverse perception of any failure to successfully complete the Merger; and

 

·

having to pay certain costs relating to the Merger, such as legal, accounting, financial advisory and filing fees.

 

If the Merger is not completed, these risks could materially affect the market price of our common stock and our business and financial results and may result in the cessation of our operations.

 

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

 

We had working capital of <$53,732> as of March 31, 2021. With our current cash on hand, expected revenues and based on our current average monthly expenses, we anticipate the need for 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 may require additional funding in the future to support our operations and/or may 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.

 

We have net losses from operations and there is substantial doubt about our ability to continue as a going concern. If we are not able to generate positive cash flow, our business operations may fail.

 

The Company has incurred a net loss of $3,340 for the three months ended March 31, 2021 and had an accumulated deficit of $154,832 on March 31, 2021. In addition, the Company has a history of losses. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to meet its obligations in the ordinary course of business is dependent upon its ability to establish profitable operations and obtain additional funds when needed. We may not be able to generate sufficient revenues to support our operations or continue as a going concern. As a result, the opinion the Company received from its independent registered public accounting firm on its December 31, 2020 financial statements contain an explanatory paragraph stating that there is substantial doubt regarding the Company’s ability to continue as a going concern. If we become unable to continue as a going concern, we may have to liquidate our assets, and may realize significantly less than the values at which they are carried on our financial statements, and stockholders may lose all or part of their investment in our common stock. The accompanying financial statements do not contain any adjustments for this uncertainty.

 

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.

 

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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:

 

	·	additional equity financing may not be available to us on satisfactory terms and any equity we are able to issue could lead to dilution for current stockholders;
	·	loans or other debt instruments may have terms and/or conditions, such as interest rate, restrictive covenants and control or revocation provisions, which are not acceptable to management or our sole Director;
	·	the current environment in capital markets combined with our capital constraints may prevent us from being able to obtain adequate debt financing; and
	·	if we fail to obtain required additional financing to grow our business, we will need to delay or scale back our business plan, reduce our operating costs or reduce our headcount, each of which would have a material adverse effect on our business, future prospects and financial condition.

 

Future sales of our securities could adversely affect the market price of our common stock and our future capital-raising activities could involve the issuance of equity securities, which would dilute your investment and could result in a decline in the trading price of our common stock.

 

SevenScore may sell securities in the public or private equity markets if and when conditions are favorable, or at prices per share below the current market price of our common stock. SevenScore may issue additional shares of common stock in future financing transactions or as incentive compensation for our executive management and other key personnel, consultants and advisors.

 

We rely on key personnel and, if we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able to grow effectively.

 

Our success depends in large part upon the abilities and continued service of our executive officers and other key employees. There can be no assurance that we will be able to retain the services of such officers and employees. Our failure to retain the services of our key personnel could have a materially adverse effect on our business. In order to support our projected growth, we will be required to effectively recruit, hire, train and retain additional qualified management personnel. Our inability to attract and retain the necessary personnel could have a materially adverse effect on our business.

 

We may have difficulty obtaining future funding sources, if needed, and we may have to accept terms that would adversely affect stockholders.

 

We will need to raise funds from additional financing in the future to complete our business plan and may need to raise additional funding in the future to support our operations. We have no commitments for any financing and any financing commitments may result in dilution to our existing stockholders. We may have difficulty obtaining additional funding and we may have to accept terms that would adversely affect our stockholders. For example, the terms of any future financings may impose restrictions on our right to declare dividends or on the way we conduct our business. Additionally, we may raise funding by issuing convertible notes, which if converted into shares of our common stock would dilute our then stockholders’ interests. Lending institutions or private investors may impose restrictions on a future decision by us to make capital expenditures, acquisitions, or significant asset sales. If we are unable to raise additional funds, we may be forced to curtail or even abandon our business plan.

 

Our ability to grow and compete in the future will be adversely affected if adequate capital is not available.

 

The ability of our business to grow and compete depends on the availability of adequate capital, which in turn depends in large part on our cash flow from operations and the availability of equity and debt financing. Our cash flow from operations may not be sufficient or we may not be able to obtain equity or debt financing on acceptable terms or at all to implement our growth strategy. As a result, adequate capital may not be available to finance our current growth plans, take advantage of business opportunities or respond to competitive pressures, any of which could harm our business.

 

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If we are unable to manage future growth effectively, our profitability and liquidity could be adversely affected.

 

Our ability to achieve our desired growth depends on our execution in functional areas such as management, sales and marketing, finance, general administration and operations. To manage any future growth, we must continue to improve our operational and financial processes and systems and expand, train, and manage our employee base and control associated costs. Our efforts to grow our business, both in terms of size and in diversity of customer bases served, will require expansion in certain functional areas and put a significant strain on our resources. We may incur significant expenses as we attempt to scale our resources and make investments in our business that we believe are necessary to achieve long-term growth goals. If we are unable to manage our growth effectively, our expenses could increase without a proportionate increase in revenue, our margins could decrease and our business and results of operations could be adversely affected.

 

We rely on our management and if they were to leave our company our business plan could be adversely affected.

 

We are largely dependent upon the personal efforts and abilities of our existing management, including Ms. Anne Kirby, our Chief Executive Officer, and Mr. Robert J. Stubblefield, our Chief Financial Officer and Treasurer, each of whom plays an active role in our operations. Moving forward, should the services of any of such persons be lost for any reason, the Company will incur costs associated with recruiting replacements and any potential delays in operations which this may cause. If we are unable to replace such individual with a suitably trained alternative individual(s), we may be forced to scale back or curtail our business plan.

 

We do not currently have any employment agreements or maintain key person life insurance policies on our executive officers.

 

We do not currently have any employment agreements in place with management.

 

The Company has not entered into an employment agreement with Ms. Anne Kirby, our Chief Executive Officer, or Mr. Robert J. Stubblefield, our Chief Financial Officer. As such, there are no contractual relationships guaranteeing that Ms. Anne Kirby or Mr. Stubblefield will stay with the Company and continue its operations. In the event any of such persons were to resign, the Company may be unable to get another officer to fill the void and performance may be significantly affected.

 

Our majority stockholder controls most of our voting securities and therefore has the ability to influence matters affecting our stockholders.

 

Phoenixus AG, our majority stockholder, which holds approximately 99% of our outstanding shares of common stock, has the ability, to influence matters affecting our stockholders and will therefore exercise control in determining the outcome of all corporate transactions or other matters, including the election of directors, mergers, consolidations, the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. Any investor who purchases shares will be a minority stockholder and as such will have little to no say in the direction of the Company and the election of directors. Additionally, it will be difficult if not impossible for investors to remove our current Director, which will mean she will remain in control of who serves as officers of the Company as well as whether any changes are made in the Board of Directors. As a potential investor in the Company, you should keep in mind that even if you own shares of the Company’s common stock and wish to vote them at annual or special stockholder meetings, your shares will likely have little effect on the outcome of corporate decisions. Investors may find it difficult to replace our management if they disagree with the way our business is being operated.

 

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Our officers and directors lack experience in and with publicly traded companies.

 

Ms. Anne Kirby, our Chief Executive Officer, has not served as an officer or director of a publicly traded company. Mr. Robert J. Stubblefield, our Chief Financial Officer, has served in senior level financial, accounting, and operations roles for public companies. However, Mr. Stubblefield has limited experience with the financial accounting and preparation requirements of financial statements which we are required to file on a quarterly and annual basis under the Exchange Act and will rely on outside legal advisors for guidance regarding such requirements. We plan to initially rely on outside accountants and bookkeepers to help us create a system of accounting controls and procedures to maintain the Company’s accounting records with appropriate internal controls. As a result of the above, our operations, earnings and ultimate financial success could suffer irreparable harm due to our executives’ inexperience with publicly traded companies and especially in connection with the financial accounting and preparation requirements of the Exchange Act.

 

Risks Related to SevenScore:

 

SevenScore is a pre-revenue stage biotechnology company and has a history of operating losses; SevenScore expects to continue to incur operating losses, and SevenScore may never achieve or maintain profitability.

 

Since our inception, SevenScore has incurred operating losses each year due to costs incurred in connection with research and development activities and general and administrative expenses associated with our operations. Leronlimab is in the later stages of clinical development for multiple indications. CytoDyn submitted a BLA for leronlimab as a combination therapy with highly active antiretroviral therapy (HAART) for HIV patients to the FDA for review on May 11, 2020. In July 2020, CytoDyn received a Refusal to File letter from the FDA regarding the BLA filing. CytoDyn had a type A meeting with the FDA on September 11, 2020 and subsequently has agreed to a pathway to refile the BLA

 

SevenScore has a limited operating history.

 

SevenScore has been in existence for approximately three years. Our limited operating history means that there is a high degree of uncertainty in our ability to: (i) develop and commercialize drug candidates; (ii) achieve FDA approval; and (iii) respond to competition. Additionally, even if we do implement our business plan, we may not be successful. No assurances can be given as to exactly when, if at all, we will be able to recognize revenues or profits high enough to sustain our business. We face all the risks inherent in a new business, including the expenses, difficulties, complications and delays frequently encountered in connection with conducting operations, including capital requirements. Given our limited operating history, we may be unable to effectively implement our business plan which would result in a loss of your investment.

 

SevenScore will need additional funding to launch leronlimab; such financing is likely to substantially dilute our existing stockholders.

 

Until SevenScore can generate enough product revenue to finance our cash requirements, which SevenScore may never achieve, SevenScore expects to finance our cash needs primarily through public or private equity offerings, debt financings or through strategic alliances. SevenScore cannot be certain that additional funding will be available on acceptable terms or at all. In addition, any additional funding that SevenScore does obtain will dilute the ownership held by our existing security holders.

 

SevenScore has no clinical development authority related to leronlimab. If CytoDyn is unable to secure FDA approval, SevenScore may not be able to successfully commercialize leronlimab.

 

Approval of leronlimab is no guarantee of commercial success. The sale and marketing of drug products is a complicated and multifaceted process and many approved drugs are not commercially successful.

 

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If CytoDyn is not able to obtain any required regulatory approvals for leronlimab, SevenScore will not be able to commercialize leronlimab, which would materially and adversely affect our business, financial condition, and stock price.

 

Failure of CytoDyn to obtain regulatory approval for leronlimab will prevent us from commercializing such product candidate as a prescription product and our ability to generate revenue will be materially impaired. The FDA has substantial discretion in the approval process and may refuse to accept any application or may decide that CytoDyn’s data is insufficient for approval and require additional clinical trials, pre-clinical data or other studies.

 

Clinical trials may fail to demonstrate the desired safety and efficacy of product candidates, which could prevent or significantly delay completion of clinical development and regulatory approval.

 

Any product candidate, including leronlimab, is subject to the risks of failure inherent in drug-related product development. In addition, even if we believe the data collected from clinical trials of the product candidate are promising, these data may not be sufficient to support approval by the FDA. If regulatory authorities do not approve leronlimab, SevenScore would be unable to commercialize the product and our business operations and financial condition would be harmed.

 

The commercialization of leronlimab is subject to several risks.

 

Regulatory approval of leronlimab is no guarantee of commercial success. The sale and marketing of drug products is a complicated and multifaceted process, and many approved drugs are not commercially successful. If approved for marketing, the commercial success of leronlimab will depend upon its acceptance by customers and other stakeholders, including physicians, patients and health insurers. The degree of market acceptance of leronlimab will depend on a number of factors, including:

 

	·	demonstration of clinical safety and efficacy;
	·	relative convenience and ease of administration;
	·	the prevalence and severity of any adverse effects;
	·	safety, tolerability and efficacy of leronlimab compared to competing products;
	·	pricing and cost-effectiveness;
	·	the inclusion or omission of leronlimab in applicable treatment guidelines;
	·	the effectiveness of our or any future collaborators’ sales and marketing strategies;
	·	limitations or warnings contained in FDA approved labeling; and
	·	our ability to obtain and maintain sufficient third-party coverage or reimbursement from government health care programs, including Medicare and Medicaid, private health insurers and other third-party payors.

 

SevenScore’s ability to successfully commercialize and generate revenues from leronlimab depends on a number of factors, including SevenScore’s ability to:

 

	·	develop and execute its sales and marketing strategies for leronlimab;
	·	achieve, maintain and grow market acceptance of, and demand for, leronlimab; and
	·	obtain and maintain adequate coverage, reimbursement and pricing from government health care programs, private health insurers and other third-party payors.

 

CytoDyn may fail to comply with its obligations under the License Agreement and related agreements. Any of the preceding factors could affect CytoDyn’s commitment to, and ability to perform, its obligations under the License Agreement, which could adversely affect the commercial success of leronlimab

 

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Certain agreements and related license agreements require us to make significant milestone, royalty, and other payments, which will require additional funding.

 

SevenScore owes CytoDyn development and sales milestones, as well as royalty and other payments. No assurances can be given that such milestones will be met or that SevenScore will be able to make sure payments. Failure to meet such milestones or make such payments could materially impact the license agreements and the ability of SevenScore to benefit therefrom. As a result, failure to meet such milestones and/or make such payments could materially affect SevenScore’s financial results and reduce the value of its equity.

 

SevenScore expects to rely on third-party manufacturers and will be dependent on their quality and effectiveness.

 

SevenScore cannot guarantee its supply partner, CytoDyn, will be able to supply the drug.

 

The principal suppliers for materials used in SevenScore’s business is CytoDyn. Because SevenScore has no direct control over such supplier, interruptions or delays in the products and services provided thereby may be difficult to remedy in a timely fashion. In addition, if such supplier is unable or unwilling to deliver the necessary products or raw materials, SevenScore may be unable to redesign or adapt our technology to work without such raw materials or products or find alternative suppliers or manufacturers. In such events, SevenScore could experience interruptions, delays, increased costs or quality control problems, or be unable to sell the applicable products, all of which could have a significant adverse impact on our revenue.

 

SevenScore relies on key personnel and, if it is unable to retain or motivate key personnel or hire qualified personnel, SevenScore may not be able to grow effectively.

 

SevenScore’s success depends in large part upon the abilities and continued service of its executive officers and other key employees. There can be no assurance that it will be able to retain the services of such officers and employees. The failure to retain the services of our key personnel could have a materially adverse effect on its business. In order to support our projected growth, SevenScore will be required to effectively recruit, hire, train and retain additional qualified management personnel. Its inability to attract and retain the necessary personnel could have a materially adverse effect on its business.

 

There is no guarantee that SevenScore will be able to in-license clinical or commercial drugs in the future.

 

Our current pipeline is focused on leronlimab and its various indications in order to operate a diversified and sustainable business SevenScore will need in-license or buy in the future commercial drugs and clinical programs.

 

Corporate governance and reporting risks:

 

We have identified material weaknesses in our disclosure controls and procedures and internal control over financial reporting. If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common stock.

 

Maintaining effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce reliable financial statements. As reported under “Part I” - “Item 4. Controls and Procedures”, as of December 31, 2020, our CEO and CFO determined that our disclosure controls and procedures were not effective, and such disclosure controls and procedures have not been deemed effective for several quarters. Separately, management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020 and determined that such internal control over financial reporting was not effective as a result of such assessment.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.

 

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Maintaining effective disclosure controls and procedures and effective internal control over financial reporting are necessary for us to produce reliable financial statements and the Company is committed to remediating its material weaknesses in such controls as promptly as possible. However, there can be no assurance as to when these material weaknesses will be remediated or that additional material weaknesses will not arise in the future. Any failure to remediate the material weaknesses, or the development of new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements and cause us to fail to meet our reporting and financial obligations, which in turn could have a material adverse effect on our financial condition and the trading price of our common stock, and/or result in litigation against us or our management. In addition, even if we are successful in strengthening our controls and procedures, those controls and procedures may not be adequate to prevent or identify irregularities or facilitate the fair presentation of our financial statements or our periodic reports filed with the SEC.

 

Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders have limited protections against interested director transactions, conflicts of interest and similar matters.

 

The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York Stock Exchange and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than legally required, we have not yet adopted these measures.

 

Because we only have one Director, we do not currently have an independent audit or compensation committee. As a result, our Director has the ability to, among other things, determine her own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and any potential investors may be reluctant to provide us with funds necessary to expand our operations.

 

We intend to comply with all corporate governance measures relating to director independence as and when required. However, we may find it very difficult or be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effective management as a result of the Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles.

 

We incur ongoing costs and expenses for SEC reporting and compliance and without sufficient revenues we may not be able to remain in compliance, making it difficult for investors to sell their shares, if at all.

 

In order for us to remain in compliance with our on-going reporting requirements, we may require additional capital and/or future revenues to cover the cost of these filings, which could comprise a substantial portion of our available cash resources or require us to obtain additional capital through the sale of equity or debt. If we are unable to further capitalize the Company or generate sufficient revenues to remain in compliance, it may be difficult for you to resell any shares you may purchase, if at all. There are ongoing costs and expenses for SEC reporting, including the general bookkeeping and accounting costs for the preparation of the financial quarterly (Form 10-Qs) and annual filings (Form 10-Ks), and auditor’s fees. Further, there are processing costs in preparing and converting documents and disclosures through the EDGAR filing system, including certain costs for the XBRL that are required as part of the EDGAR filing. We estimate that these costs could result in up to $50,000 per year of ongoing costs.

 

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Risks relating to our common stock:

 

Stockholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of additional shares of our common stock.

 

We have no committed source of financing. Wherever possible, our Board of Directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock. Our Board of Directors has authority, without action or vote of the stockholders, to issue all or part of the authorized but unissued shares of common stock. In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing stockholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of the Company because the shares may be issued to parties or entities committed to supporting existing management.

 

Nevada law and our articles of incorporation authorize us to issue shares of stock, which shares may cause substantial dilution to our existing stockholders.

 

We have authorized capital stock consisting of 80,000,000 shares of common stock, $0.001 par value per share and 5,000,000 shares of preferred stock, $0.001 par value per share. As of the date of this Report, we have 22,950,000 shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding. As a result, our Board of Directors has the ability to issue a large number of additional shares of common stock without stockholder approval, which if issued could cause substantial dilution to our then stockholders. The issuance of shares of common stock and/or preferred stock may cause the value of our securities to decrease and/or become worthless.

 

There is no material public market for our common stock.

 

Although our common stock is quoted on the OTC Pink Market maintained by OTC Markets, to date only a limited number of shares of our common stock have traded and a significant market may not develop in the future. If for any reason a public trading market does not develop, stockholders may have difficulty selling their common stock should they desire to do so.

 

Even if a more significant trading market develops, we cannot predict how liquid that market might become. The trading price of our common stock, if any, in the future, is likely to be highly volatile and could be subject to wide fluctuations in price in response to various factors, some of which are beyond our control. These factors include:

 

	●	Quarterly variations in our results of operations or those of our competitors;
	●	Announcements by us or our competitors;

 

●

Disruption to our operations;

 

●

Commencement of, or our involvement in, litigation;

 

●

Any major change in our board or management;

 

●

Changes in governmental regulations or in the status of our regulatory approvals; and

 

●

General market conditions and other factors, including factors unrelated to our own operating performance.

 

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In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such public companies. Such fluctuations may be even more pronounced in the future. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our actual operating performance. In addition, in the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies. This type of litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

 

There is currently a volatile, sporadic and illiquid market for our common stock.

 

Our securities are currently quoted on the OTC Pink Market maintained by OTC Markets under the symbol “RGMP,” however, we currently have a volatile, sporadic and illiquid market for our common stock, which is subject to wide fluctuations in response to several factors, including, but not limited to:

 

	·	actual or anticipated variations in our results of operations;
	·	our ability or inability to generate new revenues;
	·	increased competition; and
	·	conditions and trends in the market for our services and products.

 

Furthermore, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, global epidemics or pandemics, interest rates or international currency fluctuations may adversely affect the market price and liquidity of our common stock.

 

We have not paid any cash dividends in the past and have no plans to issue cash dividends in the future, which could cause the value of our common stock to have a lower value than other similar companies which do pay cash dividends.

 

We have not paid any cash dividends on our common stock to date and do not anticipate any cash dividends being paid to holders of our common stock in the foreseeable future. While our dividend policy will be based on the operating results and capital needs of the business, it is anticipated that any earnings will be retained to finance our future expansion. As we have no plans to issue cash dividends in the future, our common stock could be less desirable to other investors and as a result, the value of our common stock may decline, or fail to reach the valuations of other similarly situated companies who have historically paid cash dividends in the past.

 

Stockholders may face significant restrictions on the resale of our common stock due to federal regulations of penny stocks.

 

Our common stock will be subject to the requirements of Rule 15g-9, promulgated under the Exchange Act, as long as the price of our common stock is below $5.00 per share. Under such rule, broker-dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements, including a requirement that they make an individualized written suitability determination for the purchaser and receive the purchaser’s consent prior to the transaction. The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 also requires additional disclosure in connection with any trades involving a stock defined as a penny stock. Generally, the Commission defines a penny stock as any equity security not traded on an exchange or quoted on NASDAQ that has a market price of less than $5.00 per share. The required penny stock disclosures include the delivery, prior to any transaction, of a disclosure schedule explaining the penny stock market and the risks associated with it. Such requirements could severely limit the market liquidity of the securities and the ability of Company stockholders to sell their securities in the secondary market.

 

Sales of our common stock could reduce the price of our stock.

 

As of the date of this Report, we have 22,950,000 shares of our common stock which were registered under the Securities Act.

 

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

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

 

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:

 

	●	the need for additional funding;
	●	our lack of a significant operating history;
	●	the fact that our majority stockholder has significant control over our voting stock;
	●	the loss of key personnel or failure to attract, integrate and retain additional personnel;
	●	corporate governance risks;
	●	economic downturns;
	●	the level of competition in our industry and our ability to compete;
	●	our ability to respond to changes in our industry;
	●	our ability to protect our intellectual property and not infringe on others’ intellectual property;
	●	our ability to scale our business;
	●	our ability to maintain supplier relationships;
	●	our ability to obtain and retain customers;
	●	our ability to execute our business strategy in a very competitive environment;
	●	changes in laws and regulations;
	●	the market for our common stock;
	●	our ability to effectively manage our growth;
	●	dilution to existing stockholders;
	●	costs and expenses associated with being a public company;
	●	economic downturns both in the United States and globally;
	●	risk of increased regulation of our operations; and
	●	other risk factors included under “Risk Factors” below.

 

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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 audited financial statements and the notes thereto included 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:

 

	●	“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;
	●	“SEC” or the “Commission” refers to the United States Securities and Exchange Commission; and
	●	“Securities Act” refers to the Securities Act of 1933, as amended.

 

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 information on, or that may be accessed through, our website is not incorporated by reference into this Report and should not be considered a part of this Report.

 

Organizational History

 

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 was, until April 2021, 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. See “Recent Transactions and Changes of Control” below.

 

Recent Transactions and Changes of Control

 

On April 7, 2021, Wookey, the previous majority shareholder of the Company, entered into a stock purchase agreement for the sale of 20,000,000 shares of Common Stock of the Company, to Phoenixus AG, an accredited investor. Phoenixus AG also acquired an additional 2,680,000 shares of common stock from three minority shareholders. In connection with the sale of such shares, an aggregate of 1,000,000 shares of common stock held by Gary Allen were returned to the Company for cancellation. As a result of the acquisition of 22,680,000 shares of common stock, and the cancellation of 1,000,000 shares, Phoenixus AG holds approximately 99% of the issued and outstanding shares of Common Stock of the Company, and as such it is able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required and, ultimately, the direction of the Company.

 

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Also, on April 7, 2021, Mark Gustavson, former Chief Executive Officer, Secretary and Director of the Company, and Ross Meador, former Vice President and General Counsel of the Company, resigned their positions with the Company. Upon such resignations, Anne Kirby was appointed as Chief Executive Officer, President and sole Director. Rob Stubblefield remains the Chief Financial Officer of the Company.

 

On May 13, 2021, Regnum entered into an Agreement and Plan of Merger (the “Merger Agreement”) with SevenScore Pharmaceuticals, LLC, a Delaware limited liability company (“SevenScore”).

 

The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement, (a) SevenScore will be merged with and into Regnum (the “Merger”), with Regnum being the surviving corporation in the Merger, and (b) at the effective time of the Merger (the “Effective Time”), membership interests in SevenScore will be converted into the right to receive an aggregate of 25,878,168 shares of common stock of Regnum (the “Merger Consideration”). Each SevenScore membership interest shall by virtue of the Merger and without any action on the part of the holder thereof, be automatically converted into and exchangeable for a fraction of a fully paid and nonassessable share of Regnum Common Stock equal to one multiplied by a fraction obtained by dividing (A) 25,878,168 by (B) 26,128,168 (the “Exchange”). There are currently 22,950,000 shares of common stock of Regnum issued and outstanding, of which 22,700,000 shares are owned by Phoenixus AG, a company organized under the laws of Switzerland (“PAG”). Upon effectiveness of the Merger, (i) each share of Regnum Common Stock issued and outstanding and owned by PAG as of immediately prior thereto shall be cancelled and extinguished without any conversion thereof, and (ii) 22,730,409 shares of Regnum Common Stock will be owned by PAG as a result of conversion of SevenScore membership interests; (ii) 3,147,759 shares of Regnum Common Stock being owned by several other SevenScore members; and (iii) 250,000 shares of Regnum Common Stock being owned by the Regnum shareholders, other than PAG, prior to effectiveness of the Merger. As a result of the current ownership of control shares of Regnum by PAG, as well as the membership interest in SevenScore owned by PAG, the Merger will not affect a change of control of Regnum.

 

Notice of the merger, as well as the Company’s intention to change the name of the Company to SevenScore Pharmaceuticals Inc., was provide to FINRA on June 10, 2021.

 

Description of Business Operations:

 

Our prior business model was based on 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.

 

As discussed herein, in April 2021, the prior business model was abandoned and the Company entered into that certain Management Agreement (the “Management Agreement”) with SevenScore, pursuant to which officers of the Company undertook management responsibilities for the operations of SevenScore.

The Management Agreement was entered into in contemplation of a proposed business combination between the Company and SevenScore set forth in the Merger Agreement.

 

SevenScore is focused on developing and commercializing therapeutics that treat rare and infectious diseases, specifically in populations that are neglected or face adherence challenges. SevenScore’s primary asset is commercial rights of leronlimab (PRO 140) in all HIV indications within the United States. Leronlimab (PRO 140) is a CCR5 antagonist expected to receive an indication to treat Multi-Drug Resistant HIV infection, with the potential for multiple additional therapeutic indications in HIV. The names leronlimab and PRO 140 will be used interchangeably throughout this report.

 

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On February 17, 2019, Exicure, Inc. a Delaware corporation entered into that certain License and Development Agreement (the “License Agreement”) with Dermelix Biotherapeutics, LLC, a Delaware limited liability company (“Dermelix”), an affiliate of SevenScore. On April 26, 2021, Dermelix assigned the License Agreement to SevenScore. On April 8, 2021 Dermelix assigned its intellectual property rights under the License Agreement to SevenScore. Upon consummation of the Merger, the License Agreement and the above intellectual property rights will be held by the Company (i.e. the surviving corporation of the Merger) by operation of law.

 

Business Process

 

We are currently operating under the Management Agreement, pursuant to which our CEO is assisting SevenScore as it is preparing for the commercialization of leronlimab for Multi-Drug Resistant HIV. Ongoing efforts include, the development of marketing strategies and market access plans, establishing strategic partnerships with specialty pharmacies and patient services companies, and headcount planning. The Company is also looking to in-license developmental and commercial stage products.

 

The preclinical and clinical development of PRO 140 was led by Progenics Pharmaceuticals, Inc. (“Progenics”) through 2011. CytoDyn, Inc (“CytoDyn”) acquired the asset from Progenics in October 2012. In February 2018, CytoDyn announced they had met the primary endpoint in its Phase 3 trial for leronlimab as a combination therapy with HAART for highly treatment experienced HIV patients and filed the non-clinical portion of the Biologics License Application (“BLA) on March 18, 2019. Vyera Pharmaceuticals (“Vyera”) acquired the marketing rights from CytoDyn for leronlimab in all HIV related indications with terms described in “Marketing and Sales Agreement” below. These rights were later assigned from Vyera to SevenScore. CytoDyn filed with the FDA the clinical and Chemistry, Manufacturing, and Controls (“CMC”) portions of the BLA in April and May of 2020. In July 2020, CytoDyn received a Refusal to File letter from the FDA regarding the BLA filing, and a Type A meeting was held in September 2020 to discuss the re-submission with the FDA.

 

Overview of Leronlimab

 

Leronlimab as a CCR5 Antagonist

 

SevenScore’s main focus is commercialization of a monoclonal antibody C—C chemokine receptor type 5 (“CCR5”) receptor antagonist, to be used as a platform drug for a variety of HIV indications. The target of leronlimab is the immunologic receptor CCR5. Leronlimab prevents certain strains of HIV from using the CCR5 receptor as an entry gateway for healthy cells.

 

Leronlimab binds to the second extracellular loop and N-terminus of the CCR5 receptor, and due to its selectivity and target-specific mechanism of action, leronlimab does not appear to activate the immune function of the CCR5 receptor through agonist activity. This apparent target specificity differentiates leronlimab from other CCR5 antagonists.

 

Leronlimab and Human Immunodeficiency Virus (“HIV”)

 

Leronlimab has shown promise as an antiviral agent with the advantage of fewer side effects, less toxicity and less frequent dosing requirements, as compared to daily drug therapies currently in use for the treatment of HIV. The leronlimab antibody belongs to a class of HIV therapies known as entry inhibitors that block HIV from entering into and infecting certain cells. Leronlimab blocks HIV from entering a cell by binding to a molecule called CCR5, a normal cell surface receptor protein to which certain strains of HIV, referred to as “R5” strains, attach as part of HIV’s entry into a cell.

 

Leronlimab does not appear to affect the normal function of the CCR5 co-receptor for HIV. Instead, leronlimab binds to a precise site on CCR5 that R5 strains of HIV use to enter the cell and, in doing so, inhibits the ability of these strains of HIV to infect the cell without appearing to affect the cell’s normal function. As a result, we believe leronlimab represents a distinct class of CCR5 inhibitors with advantageous virological and immunological properties and may provide a unique tool to treat HIV infected patients.

 

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To date, leronlimab has been tested and administered to patients predominantly as a subcutaneous injection. We believe that if leronlimab is approved by the FDA for use as an injectable for HIV, it may be an attractive and marketable therapeutic option for patients, particularly in the following scenarios:

 

	·	Patients with difficulty adhering to daily drug regimens;
	·	Patients who poorly tolerate existing therapies;
	·	Patients with compromised organ function, such as hepatitis C (“HCV”) co-infection; and
	·	Patients with complex concomitant medical requirements.

 

Clinical trials for leronlimab have demonstrated potent antiretroviral activity (as compared to optimized background therapy alone) and has demonstrated a clean safety profile.

 

CytoDyn’s ongoing HIV-related clinical trials have been designed to demonstrate the proof of concept that leronlimab monotherapy can continue to suppress the viral load in certain HIV-infected, treatment-experienced patients who had suppressed viral load on HAART, but would like an alternative treatment that provides a higher quality of life with one dose through a weekly self-injection. Once the viral load is undetectable, administration of leronlimab can help maintain the suppressed viral load in a subpopulation of R5 patients over an extended period (currently shown to be in excess of six years).

 

Overview of SSP-002

 

Spherical Nucleic Acid

 

Exicure’s discovery and development efforts are based on proprietary Spherical Nucleic Acid, or SNA™, technology. SNAs are nanoscale constructs consisting of synthetic nucleic acid sequences. The design of Exicure’s SNAs gives rise to distinct chemical and biological properties and may provide advantages over other nucleic acid therapeutics.

 

SSP-002

 

SSP-002 is a targeted therapy for the treatment of Netherton Syndrome (NS). NS is a rare and severe autosomal recessive disorder caused by loss-of-function mutations in the SPINK5 gene, which encodes the serine protease inhibitor LEKTI involved in skin barrier function. NS affects approximately 1 in 200,000 children born each year, and is characterized by severely inflamed, red, scaled, itchy skin, and patients are at increased risk of mortality in the first year of life due to recurrent infections and dehydration as a result of the impaired skin barrier. Currently, there are no approved treatments for NS patients and off-label use of standard of care treatments are of limited utility.

 

Competition

 

The pharmaceutical, biotechnology and diagnostic industries are characterized by rapidly evolving technology and intense competition. Our commercial efforts may compete with more established biotechnology companies that have significantly greater financial and managerial resources than we do.

 

We face competition from both very large, multi-national corporations with significant resources, and small start-up organizations. Our potential competitors include entities that develop and produce therapeutic agents. These include numerous public and private academic and research organizations and pharmaceutical and biotechnology companies pursuing production of, among other things, biologics from cell cultures, genetically engineered drugs and natural and chemically synthesized drugs. Our competitors may succeed in developing potential drugs or processes that are more effective or less costly than any that may be developed by us or that gain regulatory approval prior to our potential drug candidates. Worldwide, there are many antiviral drugs for treating HIV. SevenScore will face competition from established pharmaceutical companies. Many of these potential competitors have substantially greater capital resources, management expertise, research and development capabilities, manufacturing and marketing resources and experience than we do.

 

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Leronlimab blocks a cell receptor called CCR5, which is the entry point for most strains of HIV virus. ViiV Healthcare’s Maraviroc (Selzentry^®) is the only currently approved CCR5 blocking agent. Maraviroc must be taken daily and is believed to have side effects and toxicity. For these reasons, we believe that leronlimab, a monoclonal antibody, may prove to be useful in patients that cannot tolerate existing HIV therapies or desire a respite from those therapies. Nonetheless, manufacturers of current therapies, such as Gilead Sciences, Merck, Bristol-Myers Squibb and ViiV Healthcare, are very large, multi-national corporations with significant resources. We expect that these companies will compete fiercely to defend and expand their market share.

 

To construct a HAART regimen, three drugs from two classes of drugs are typically needed. Currently there are only five different classes of drugs from which four are primarily used to construct a HAART regimen. Each of these four classes of drugs has many drugs available in its respective class, except the entry inhibitor (“EI”) class, which has only four drugs available.

 

Acquisition and Licensing Arrangements

 

The commercialization and licensing agreement between SevenScore and CytoDyn gives SevenScore the rights to market leronlimab in all HIV related indications in United States in exchange for milestones that include payment of $500,000 due upon BLA acceptance, $2,000,000 upon FDA approval, $1,000,000 upon first sale of leronlimab and a 50% royalty.

 

Intellectual Property

 

Protection of the Company’s and its partner’s intellectual property rights is important to our business. We may file patent applications in the U.S., Canada, China, and Japan, European countries that are party to the European Patent Convention and other countries on a selective basis in order to protect inventions we consider to be important to the development of our business.

 

Generally, patents issued in the U.S. are effective for either (i) 20 years from the earliest asserted filing date, if the application was filed on or after June 8, 1995, or (ii) the longer of 17 years from the date of issue or 20 years from the earliest asserted filing date, if the application was filed prior to that date. A U.S. patent, to be selected by the grantee upon receipt of FDA regulatory approval, may be subject to up to a five-year patent term extension in certain instances. While the duration of foreign patents varies in accordance with the provisions of applicable local law, most countries provide for a patent term of 20 years measured from the application filing date and some may also allow for patent term extension to compensate for regulatory approval delay. We pursue opportunities for seeking new meaningful patent protection on an ongoing basis. Through the agreement with CytoDyn, SevenScore will leverage CytoDyn’s existing leronlimab intellectual property to commercialize the product.

 

Government Regulation

 

The research, development, testing, manufacture, quality control, packaging, labeling, storage, record-keeping, distribution, import, export, promotion, advertising, marketing, sale, pricing and reimbursement of pharmaceutical products are extensively regulated by governmental authorities in the United States and other countries. The processes for obtaining regulatory approvals in the United States and in foreign countries and jurisdictions, along with compliance with applicable statutes and regulations and other regulatory requirements, both pre-approval and post-approval, require the expenditure of substantial time and financial resources. The regulatory requirements applicable to product development, approval and marketing are subject to change, and regulations and administrative guidance often are revised or reinterpreted by the agencies in ways that may have a significant impact on our business.

 

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Licensure and Regulation of Biological Products in the United States

 

In the United States, the FDA regulates human drugs under the Federal Food, Drug, and Cosmetic Act, or the FDCA, and in the case of biological products, also under the Public Health Service Act, or the PHSA, and their implementing regulations. We believe that our products will be regulated as biological products, or biologics. The failure to comply with the applicable U.S. requirements may result in FDA refusal to approve pending BLAs or delays in development and may subject an applicant to administrative or judicial sanctions, such as issuance of warning letters, or the imposition of fines, civil penalties, product recalls, product seizures, total or partial suspension of production or distribution, injunctions and/or civil or criminal prosecution brought by the FDA and the U.S. Department of Justice or other governmental entities.

 

The FDA must approve our product candidates for therapeutic indications before they may be marketed in the United States. For biologic products, the FDA must approve a BLA. An applicant seeking approval to market and distribute a new biologic in the United States generally must satisfactorily complete each of the following steps:

 

	·	completion of pre-clinical laboratory tests, animal studies and formulation studies according to good laboratory practices, or GLP, regulations or other applicable regulations;
	·	submission to the FDA of an IND, which must become effective before human clinical trials may begin and must be updated when certain changes are made;
	·	approval by an independent institutional review board, or IRB, or ethics committee representing each clinical trial site before each clinical trial may be initiated;
	·	performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practices, or GCPs, and other clinical-trial related regulations to evaluate the safety and efficacy of the investigational product for each proposed indication;
	·	preparation and submission to the FDA of a BLA requesting marketing approval for one or more proposed indications, including payment of application user fees;
	·	review of the BLA by an FDA advisory committee, where applicable;
	·	satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the biologic is produced to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;
	·	satisfactory completion of any FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data submitted in support of the BLA; and
	·	FDA review and approval of the BLA, which may be subject to additional post- approval requirements, including the potential requirement to implement a REMS, and any post- approval studies required by the FDA.

 

Manufacturing

 

SevenScore does not own or operate manufacturing facilities responsible for the production of leronlimab. As such, the Company must depend on CytoDyn and its third-party manufacturing organizations and suppliers for all our commercial grade quantities of leronlimab.

 

Employees

 

We currently have two executive officers and no other employees. The Company has several independent consultants assisting us with the Company’s upcoming launch. There can be no assurances that we will be able to identify or hire and retain additional employees or consultants on acceptable terms in the future.

 

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Risks relating to the JOBS Act:

 

The JOBS Act allows us to postpone the date by which we must comply with certain laws and regulations and to reduce the amount of information provided in reports filed with the SEC. We cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors.

 

We are and we will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenues equal or exceed $1.07 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of our initial public offering (which went effective on April 9, 2018), (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) the date on which we are deemed a “large accelerated filer” (with at least $700 million in public float) under the Exchange Act. For so long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” as described in further detail in the risk factors below. We cannot predict if investors will find our common stock less attractive because we will rely on some or all of these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We have availed ourselves of certain exemptions from various reporting requirements which are allowed pursuant to the JOBS Act and our reduced disclosure may make it more difficult for investors and securities analysts to evaluate us and may result in less investor confidence.

 

Our election not to opt out of JOBS Act extended accounting transition period may not make our financial statements easily comparable to other companies.

 

Pursuant to the JOBS Act, as an “emerging growth company”, we can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the Public Company Accounting Oversight Board (PCAOB) or the SEC. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an “emerging growth company”, can adopt the standard for the private company. This may make a comparison of our financial statements with any other public company which is not either an “emerging growth company” nor an “emerging growth company” which has opted out of using the extended transition period difficult or impossible as possible different or revised standards may be used.

 

The JOBS Act also allows us to postpone the date by which we must comply with certain laws and regulations intended to protect investors and to reduce the amount of information provided in reports filed with the SEC.

 

The JOBS Act is intended to reduce the regulatory burden on “emerging growth companies”. The Company meets the definition of an “emerging growth company” and so long as it qualifies as an “emerging growth company,” it will, among other things:

 

●

be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting;

 

●

be exempt from the “say on pay” provisions (requiring a non-binding stockholder vote to approve compensation of certain executive officers) and the “say on golden parachute” provisions (requiring a non-binding stockholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of The Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and certain disclosure requirements of the Dodd-Frank Act relating to compensation of Chief Executive Officers;

 

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●

be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act and instead provide a reduced level of disclosure concerning executive compensation; and

 

●

be exempt from any rules that may be adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.

 

The Company intends to take advantage of all of the reduced regulatory and reporting requirements that will be available to it so long as it qualifies as an “emerging growth company”. The Company has elected not to opt out of the extension of time to comply with new or revised financial accounting standards available under Section 102(b)(1) of the JOBS Act. Among other things, this means that the Company’s independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of the Company’s internal control over financial reporting so long as it qualifies as an “emerging growth company”, which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long as it qualifies as an “emerging growth company”, the Company may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers, which it would otherwise have been required to provide in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate the Company. As a result, investor confidence in the Company and the market price of its common stock may be adversely affected.

 

Notwithstanding the above, we are also currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $250 million and annual revenues of less than $100 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting company”, at such time are we cease being an “emerging growth company”, the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an “emerging growth company” or a “smaller reporting company”. Specifically, similar to “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze the Company’s results of operations and financial prospects.

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) 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.

 

	REGNUM CORP.
Date: August 18, 2021	By:	/s/ Anne Kirby
		Anne Kirby
		Chief Executive Officer
		(Principal Executive Officer)
Date: August 18, 2021	By:	/s/ Robert J. Stubblefield
		Robert J. Stubblefield
		Chief Financial Officer
		(Principal Accounting/Financial Officer)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:	/s/ Anne Kirby		By:	/s/ Robert J. Stubblefield
	Anne Kirby Chief Executive Officer (Principal Executive Officer) and Director			Robert J. Stubblefield Chief Financial Officer (Principal Accounting/Financial Officer)
Date:	August 18, 2021		Date:	August 18, 2021

  

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ITEM 6. EXHIBITS

EXHIBIT INDEX

  

Exhibit No.		Document Description
3.1		Articles of Incorporation of Regnum Corp. (1)
3.2		Bylaws of Regnum Corp. (1)
2.1		Agreement and Plan of Merger Agreement, dated May 13, 2021, by and among Regnum Corp., and SevenScore Pharmaceuticals LLC. (incorporated by reference to Exhibit 2.1 to the Form 8-K, filed May 20, 2021)
2.2		Management Agreement, effective as of April 7, 2021, by and among Regnum Corp., and SevenScore Pharmaceuticals LLC. (incorporated by reference to Exhibit 2.1 to the Form 8-K, filed April 9, 2021)
2.3		Form of Consulting Agreement, effective as of April 7, 2021, by and among Regnum Corp., and Robert Stubblefield. (incorporated by reference to Exhibit 2.2 to the Form 8-K, filed April 9, 2021)
21.1*		Subsidiaries of the Registrant
31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002

 

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