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 x☒ No o☐

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

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”, “smaller reporting company”, and “emerging growth company”, in Rule 12b-2 of the Exchange Act.

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. o☐

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~120,096,866~~123,366,102 shares of common stock outstanding at ~~November~~August 16, ~~2020.~~ 2021.

	Page
PART I - FINANCIAL INFORMATION

Cautionary Note Regarding Forward-Looking Statements	4
ITEM 1.	Financial Statements	5
Condensed Consolidated Balance Sheets (Unaudited)	6
Condensed Consolidated Statements of ~~Operations~~Comprehensive Loss (Unaudited)	7
Condensed Consolidated Statements of Changes in Stockholders’ Deficit (Unaudited)	8
Condensed Consolidated Statements of Cash Flows (Unaudited)	9
Notes to Condensed Consolidated Financial Statements (Unaudited)	10
~~ITEM 2.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	25
~~ITEM 3.~~	~~Quantitative and Qualitative Disclosures about Market Risk~~	31
~~ITEM 4.~~	~~Controls and Procedures~~	31

~~PART II - OTHER INFORMATION~~

~~ITEM 1.~~	~~Legal Proceedings~~	32
~~ITEM 1A.~~	~~Risk Factors~~	32
~~ITEM 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	32
~~ITEM 3.~~	~~Defaults Upon Senior Securities~~	32
~~ITEM 4.~~	~~Mine Safety Disclosures~~	32
~~ITEM 5.~~	~~Other Information~~	32
~~ITEM 6.~~	~~Exhibits~~	33
~~SIGNATURES~~	34

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts included or incorporated by reference in this Quarterly Report on Form 10-Q, including without limitation, statements regarding our future financial position, business strategy, budgets, projected revenues, projected costs and plans and objectives of management for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expects,” “intends,” “plans,” “projects,” “estimates,” “anticipates,” “believes,” “contemplates,” “targets,” “could,” “would” or “should” or the negative thereof or any variation thereon or similar terminology or expressions. Management cautions readers not to place undue reliance on any of the Company’s forward-looking statements, which speak only as of the date made.

We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are not guarantees and are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to: our ability to raise additional capital, the absence of any material operating history or revenue, our ability to attract and retain qualified personnel, our ability to develop and introduce a new service and products to the market in a timely manner, market acceptance of our services and products, our limited experience in the industry, the ability to successfully develop licensing programs and generate business, rapid technological change in relevant markets, unexpected network interruptions or security breaches, changes in demand for current and future intellectual property rights, legislative, regulatory and competitive developments, intense competition with larger companies, general economic conditions, the impact of the current COVID-19 pandemic, and other risks discussed in Part I – Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 as filed with the Securities and Exchange Commission (the “SEC”), and the Company’s other subsequent filings with the SEC.

All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the foregoing. The Company has no obligation to and does not undertake to update, revise, or correct any of these forward-looking statements after the date of this report.

~~Table of Contents~~

Table of Contents

~~Rego Payment Architectures, Inc.~~

~~Condensed Consolidated Balance Sheets~~

~~September 30, 2020 and December 31, 2019~~

September 30, 2020 December 31, 2019
(Unaudited) (Audited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents $ 1,012,628 $ 430,076
Prepaid expenses 213,905 -
Deposits 341 341

TOTAL CURRENT ASSETS 1,226,874 430,417

PROPERTY AND EQUIPMENT
Computer equipment 5,129 5,129
Less: accumulated depreciation (5,129 ) (5,129 )
- -

OTHER ASSETS
Patents and trademarks, net of accumulated
amortization of $214,566 and $192,558 333,501 354,624
333,501 354,624

TOTAL ASSETS $ 1,560,375 $ 785,041

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued expenses $ 5,515,982 $ 4,961,827
Accounts payable and accrued expenses - related parties 314,575 701,187
Embedded derivative liability 232,600 -
Paycheck protection program loan payable 81,500 -
Loans payable 85,600 85,600
Deferred revenue 200,000 200,000
10% Secured convertible notes payable - stockholders 2,813,157 2,813,157
Notes payable - stockholders, net of discount of $0 and $40,031 1,095,000 1,161,969
4% Secured convertible notes payable - stockholders 9,399,250 7,432,250
Preferred stock dividend liability 6,923,463 6,108,122

TOTAL CURRENT LIABILITIES 26,661,127 23,464,112

CONTINGENCIES

STOCKHOLDERS' DEFICIT

Preferred stock, $.0001 par value; 2,000,000 preferred shares
authorized; 195,500 preferred shares Series A authorized; 107,850 shares
issued and outstanding at September 30, 2020 and December 31, 2019 11 11

Preferred stock, $.0001 par value; 2,000,000 preferred shares
authorized; 222,222 preferred shares Series B authorized; 28,378 shares
issued and outstanding at September 30, 2020 and December 31, 2019 3 3

Preferred stock, $.0001 par value; 2,000,000 preferred shares
authorized; 150,000 preferred shares Series C authorized; 0 shares
issued and outstanding at September 30, 2020 and December 31, 2019 - -

Common stock, $ .0001 par value; 230,000,000 shares authorized;
120,096,866 and 119,596,866 shares issued and outstanding at September 30, 2020 and
December 31, 2019 12,010 11,960

Additional paid in capital 61,324,464 60,233,849

Accumulated deficit (86,627,250 ) (83,130,943 )

Noncontrolling interests 190,010 206,049

STOCKHOLDERS' DEFICIT (25,100,752 ) (22,679,071 )

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,560,375 $ 785,041

~~See the accompanying notes to the condensed consolidated financial statements.~~

~~Table of Contents~~

Rego Payment Architectures, Inc.

Condensed Consolidated ~~Statements of Operations~~Balance Sheets

~~For the Three~~June 30, 2021 and ~~Nine Months Ended September 30,~~December 31, 2020 ~~and 2019~~

~~(Unaudited)~~

For the Three Months For the Nine Months Ended
Ended September 30, September 30,
2020 2019 2020 2019

SALES $ - $ - $ - $ 34,485

OPERATING EXPENSES
Sales and marketing 22,784 9,371 41,123 37,836
Product development 474,151 33,806 667,604 275,202
General and administrative 928,181 522,589 1,605,535 1,612,291
Total operating expenses 1,425,116 565,766 2,314,262 1,925,329

NET OPERATING LOSS (1,425,116 ) (565,766 ) (2,314,262 ) (1,890,844 )

OTHER INCOME (EXPENSE)
Interest expense (192,216 ) (176,413 ) (572,563 ) (492,759 )
Forgiveness of debt 422,419 - 422,419 -
Change in fair value of embedded derivative liability (232,600 ) - (232,600 ) -
(2,397 ) (176,413 ) (382,744 ) (492,759 )

NET LOSS (1,427,513 ) (742,179 ) (2,697,006 ) (2,383,603 )

LESS: Accrued preferred dividends (271,780 ) (271,780 ) (815,340 ) (815,342 )
Net loss attributable to noncontrolling interests 313 461 1,039 6,942

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (1,698,980 ) $ (1,013,498 ) $ (3,511,307 ) $ (3,192,003 )

BASIC AND DILUTED NET LOSS PER
COMMON SHARE $ (0.01 ) $ (0.01 ) $ (0.03 ) $ (0.03 )

BASIC AND DILUTED WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING 119,805,199 119,596,866 119,666,310 119,596,866

	June 30, 2021			December 31, 2020
ASSETS	(Unaudited)			(Audited)

CURRENT ASSETS
Cash and cash equivalents	$	2,658,122		$	273,176
Prepaid expenses		14,283			162,840
Deposits		341			341

TOTAL CURRENT ASSETS		2,672,746			436,357

OTHER ASSETS
Patents and trademarks, net of accumulated amortization of $236,703 and $221,925		315,839			328,486
		315,839			328,486

TOTAL ASSETS	$	2,988,585		$	764,843


LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	5,754,930		$	5,631,518
Accounts payable and accrued expenses - related parties		205,368			289,704
Embedded derivative liability		0-			10,987,578
Paycheck protection program loan payable		0-			81,500
Loans payable		42,600			42,600
Deferred revenue		0-			200,000
10% secured convertible notes payable - stockholders		3,316,357			3,116,357
Notes payable - stockholders, net of discount of $0 and $40,031		595,000			1,095,000
4% secured convertible notes payable - stockholders		14,781,250			9,494,250
Preferred stock dividend liability		7,729,471			7,195,243

TOTAL CURRENT LIABILITIES		32,424,976			38,133,750

CONTINGENCIES

STOCKHOLDERS' DEFICIT

Preferred stock, $.0001 par value; 2,000,000 preferred shares authorized; 195,500 preferred shares Series A authorized; 102,350 shares issued and outstanding at June 30, 2021 and 107,850 issued and outstanding at December 31, 2020		10			11

Preferred stock, $.0001 par value; 2,000,000 preferred shares authorized; 222,222 preferred shares Series B authorized; 28,378 shares issued and outstanding at June 30, 2021 and December 31, 2020		3			3

Preferred stock, $.0001 par value; 2,000,000 preferred shares authorized; 150,000 preferred shares Series C authorized; 0 shares issued and outstanding at June 30, 2021 and December 31, 2020		0-			0-

Common stock, $ .0001 par value; 230,000,000 shares authorized; 123,366,102 shares issued and outstanding at June 30, 2021 and 120,096,866 shares issued and outstanding at December 31, 2020		12,337			12,010

Additional paid in capital		66,843,437			61,447,232

Accumulated deficit		(96,224,575	)		(98,770,661	)

Noncontrolling interests		(67,603	)		(57,502	)

STOCKHOLDERS' DEFICIT		(29,436,391	)		(37,368,907	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	2,988,585		$	764,843

See the accompanying notes to the condensed consolidated financial statements.

~~Table of Contents~~

Table of Contents

Rego Payment Architectures, Inc.

Condensed Consolidated ~~Statement~~Statements of ~~Changes in Stockholders’ Deficit~~Comprehensive Loss

For the Three and ~~Nine Month Periods~~Six Months Ended ~~September~~June 30, 2021 and 2020

Preferred Preferred Preferred Common
Stock Series A Stock Series B Stock Series C Stock Additional
Number of Number of Number of Number of Paid-In Accumulated Noncontrolling
Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Interests Total
Balance, December 31, 2019 (Audited) 107,850 $ 11 28,378 $ 3 - $ - 119,596,866 $ 11,960 $ 60,233,849 $ (83,130,943 ) $ 206,049 $ (22,679,071 )

Issuance of warrants for services - - - - - - - - 74,886 - - 74,886
Fair value of options for services - - - - - - - - 25,663 - - 25,663
Accrued preferred dividends - - - - - - - - - (266,780 ) (5,000 ) (271,780 )
Net loss - - - - - - - - - (746,535 ) (257 ) (746,792 )

Balance, March 31, 2020 (Unaudited) 107,850 11 28,378 3 - - 119,596,866 11,960 60,334,398 (84,144,258 ) 200,792 (23,597,094 )

Issuance of warrants for services - - - - - - - - 49,599 - - 49,599
Fair value of options for services - - - - - - - - 21,314 - - 21,314
Fair value of options for interest - - - - - - - - 4,470 - - 4,470
Accrued preferred dividends - - - - - - - - - (266,780 ) (5,000 ) (271,780 )
Net loss - - - - - - - - - (522,232 ) (469 ) (522,701 )

Balance, June 30, 2020 (Unaudited) 107,850 11 28,378 3 - - 119,596,866 11,960 60,409,781 (84,933,270 ) 195,323 (24,316,192 )

Fair value of common stock issued for services - - - - - - 750,000 75 187,425 - - 187,500
Common stock forfeited - - - - - - (250,000 ) (25 ) 25 - - -
Fair value of warrants for services - - - - - - - - 59,563 - - 59,563
Fair value of options for services - - - - - - - - 629,690 - - 629,690
Fair value of options issued for forgiveness of debt - - - - - - - - 27,690 - - 27,690
Fair value of options for interest - - - - - - - - 10,290 - - 10,290
Accrued preferred dividends - - - - - - - - - (266,780 ) (5,000 ) (271,780 )
Net loss - - - - - - - - - (1,427,200 ) (313 ) (1,427,513 )

Balance, September 30, 2020 (Unaudited) 107,850 $ 11 28,378 $ 3 - $ - 120,096,866 $ 12,010 $ 61,324,464 $ (86,627,250 ) $ 190,010 $ (25,100,752 )

~~Condensed Consolidated Statement of Changes in Stockholders’ Deficit~~(Unaudited)

~~For the Three and Nine Month Periods Ended September 30, 2019~~

Preferred Preferred Preferred Common
Stock Series A Stock Series B Stock Series C Stock Additional
Number of Number of Number of Number of Paid-In Accumulated Noncontrolling
Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Interests Total

Balance, December 31, 2018 (Audited) 107,850 $ 11 28,378 $ 3 - $ - 119,596,866 $ 11,960 $ 59,548,971 $ (78,880,134 ) 233,278 $ (19,085,911 )

Issuance of warrants with notes payable - - - - - - - - 21,305 - - 21,305
Fair value of options for services - - - - - - - - 222,766 - - 222,766
Accrued preferred dividends - - - - - - - - - (266,780 ) (5,000 ) (271,780 )
Net loss - - - - - - - - - (906,097 ) (5,757 ) (911,854 )

Balance March 31, 2019 (Unaudited) 107,850 11 28,378 3 - - 119,596,866 11,960 59,793,042 (80,053,011 ) 222,521 (20,025,474 )

Issuance of warrants with notes payable - - - - - - - - 16,437 - - 16,437
Fair value of options for services - - - - - - - - 59,636 - - 59,636
Accrued preferred dividends - - - - - - - - - (266,781 ) (5,000 ) (271,781 )
Net loss - - - - - - - - - (728,846 ) (724 ) (729,570 )

Balance June 30, 2019 (Unaudited) 107,850 11 28,378 3 - - 119,596,866 11,960 59,869,115 (81,048,638 ) 216,797 (20,950,752 )

Issuance of warrants with notes payable - - - - - - - - 7,674 - - 7,674
Fair value of options for services - - - - - - - - 76,743 - - 76,743
Accrued preferred dividends - - - - - - - - - (266,781 ) (5,000 ) (271,781 )
Net loss - - - - - - - - - (741,718 ) (461 ) (742,179 )

Balance September 30, 2019 (Unaudited) 107,850 $ 11 28,378 $ 3 - $ - 119,596,866 $ 11,960 $ 59,953,532 $ (82,057,137 ) $ 211,336 $ (21,880,295 )

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020

NET REVENUE	$	740		$	0-		$	1,273		$	0-

OPERATING EXPENSES
Transaction expense		38,745			0-			76,059			0-
Sales and marketing		166,597			11,506			623,613			18,339
Product development		817,558			119,833			1,647,916			193,453
General and administrative		2,021,831			218,639			5,090,788			677,354
Total operating expenses		3,044,731			349,978			7,438,376			889,146

NET OPERATING LOSS		(3,043,991	)		(349,978	)		(7,437,103	)		(889,146	)

OTHER INCOME (EXPENSE)
Interest income		8			0-			259			0-
Forgiveness of debt		13,925			0-			95,425			0-
Interest expense		(241,507	)		(172,723	)		(575,947	)		(380,347	)
		(227,574	)		(172,723	)		(480,263	)		(380,347	)

NET LOSS		(3,271,565	)		(522,701	)		(7,917,366	)		(1,269,493	)

LESS: Accrued preferred dividends		(267,113	)		(271,781	)		(534,227	)		(543,561	)
Net loss attributable to noncontrolling interests		0-			469			101			726

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(3,538,678	)	$	(794,013	)	$	(8,451,492	)	$	(1,812,328	)

BASIC AND DILUTED NET LOSS PER COMMON SHARE	$	(0.03	)	$	(0.01	)	$	(0.07	)	$	(0.02	)

BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING		123,102,040			119,596,866			122,178,595			119,596,866

See the accompanying notes to the condensed consolidated financial statements.

~~Table of Contents~~

Table of Contents

Rego Payment Architectures, Inc.

Condensed Consolidated Statements of ~~Cash Flows~~Changes in Stockholders’ Deficit

For the ~~Nine Months~~Three and Six Month Periods Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020

~~(Unaudited)~~

	Preferred						Preferred				Preferred				Common
	Stock Series A						Stock Series B				Stock Series C				Stock
	Number						Number				Number				Number				Additional
	of						of				of				of				Paid-In			Accumulated			Noncontrolling
	Shares			Amount			Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Interests			Total

Balance, December 31, 2020, as previously reported		107,850		$	11			28,378	$	3		0-	$	0-		120,096,866	$	12,010	$	61,447,232		$	(98,770,661	)	$	(57,502	)	$	(37,368,907	)

Adoption of new accounting principle for embedded derivative liabilities		-			-			-		-		-		-		-		-		-			10,987,578			-			10,987,578

Balance, December 31, 2020, as adjusted		107,850			11			28,378		3		0-		0-		120,096,866		12,010		61,447,232			(87,783,083	)		(57,502	)		(26,381,329	)

Conversion of Series A Preferred shares into common stock		(5,500	)		(1	)		-		-		-		-		611,111		61	$	(60	)		-			-			0-
Issuance of common stock to board members and employees		-			-			-		-		-		-		1,800,000		180		1,929,820			-			-			1,930,000
Issuance of common stock for accounts payable		-			-			-		-		-		-		150,000		15		134,985			-			-			135,000
Exercise of options		-			-			-		-		-		-		80,000		8		19,992			-			-			20,000
Fair value of options for software		-			-			-		-		-		-		-		-		111,817			-			-			111,817
Fair value of options for services		-			-			-		-		-		-		-		-		1,417,625			-			-			1,417,625
Accrued preferred dividends		-			-			-		-		-		-		-		-		-			(262,114	)		(5,000	)		(267,114	)
Net loss		-			-			-		-		-		-		-		-		-			(4,645,700	)		(101	)		(4,645,801	)

Balance, March 31, 2021 (Unaudited)		102,350		$	10			28,378	$	3		0-	$	0-		122,737,977	$	12,274	$	65,061,411		$	(92,690,897	)	$	(62,603	)	$	(27,679,802	)

Issuance of common stock to board members and employees		-			-			-		-		-		-		600,000		60		620,940			-			-			621,000
Cashless exercise of options		-			-			-		-		-		-		28,125		3		(3	)		-			-			-
Fair value of options for services		-			-			-		-		-		-		-		-		1,161,089			-			-			1,161,089
Accrued preferred dividends		-			-			-		-		-		-		-		-		-			(262,113	)		(5,000	)		(267,113	)
Net loss		-			-			-		-		-		-		-		-		-			(3,271,565	)		0-			(3,271,565	)

Balance, June 30, 2021 (Unaudited)		102,350		$	10			28,378	$	3		0-	$	0-		123,366,102	$	12,337	$	66,843,437		$	(96,224,575	)	$	(67,603	)	$	(29,436,391	)

For the Nine Months Ended September 30,
2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (2,697,006 ) $ (2,383,603 )
Adjustments to reconcile net loss to net cash used in operating activities:
Fair value of common stock issued in exchange for services 187,500 -
Fair value of options issued for interest on notes payable 14,760 21,305
Fair value of options and warrants issued in exchange for services 888,405 359,145
Change in fair value of embedded derivative liability 232,600 -
Accretion of discount on notes payable 40,031 24,111
Depreciation and amortization 21,123 21,988
Forgiveness of debt 422,419 -
(Increase) decrease in assets
Accounts receivable - 1,923
Prepaid expenses (213,905 ) 8,921
Deposits - 25,000
Increase (decrease) in liabilities
Accounts payable and accrued expenses 131,737 664,092
Accounts payable and accrued expenses - related parties (386,612 ) 379,974

Net cash used in operating activities (1,358,948 ) (877,144 )

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of loans payable - (4,000 )
Proceeds from notes payable - stockholders 15,000 550,000
Repayment of notes payable - stockholders (15,000 ) (7,000 )
Proceeds from convertible notes payable - stockholders 1,860,000 350,000
Proceeds from paycheck protection program loan 81,500 -

Net cash provided by financing activities 1,941,500 889,000

NET INCREASE IN CASH AND CASH EQUIVALENTS 582,552 11,856

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 430,076 10,733

CASH AND CASH EQUIVALENTS - END OF PERIOD $ 1,012,628 $ 22,589

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during year for:
Interest $ - $ -
Income taxes $ - $ -

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:

Accrued preferred dividends $ 815,341 $ 815,341
Exchange of 10% secured convertible notes payable for 4% secured convertible notes payable $ - $ 350,000
Exchange of notes payable - stockholders for 4% secured convertible notes - stockholders $ 107,000 $ -
Accrued interest as discount on notes payable $ - $ 24,111
Forfeited common stock $ 25 $ -

	Preferred				Preferred				Preferred				Common
	Stock Series A				Stock Series B				Stock Series C				Stock
	Number				Number				Number				Number				Additional
	of				of				of				of				Paid-In		Accumulated			Noncontrolling
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Interests			Total

Balance, December 31, 2019 (Audited)		107,850	$	11		28,378	$	3		0-	$	0-		119,596,866	$	11,960	$	60,233,849	$	(83,130,943	)	$	206,049		$	(22,679,071	)

Issuance of warrants for services		-		-		-		-		-		-		-		-		74,886		-			-			74,886
Fair value of options for services		-		-		-		-		-		-		-		-		25,663		-			-			25,663
Accrued preferred dividends		-		-		-		-		-		-		-		-		-		(266,780	)		(5,000	)		(271,780	)
Net loss		-		-		-		-		-		-		-		-		-		(746,535	)		(257	)		(746,792	)

Balance, March 31, 2020 (Unaudited)		107,850	$	11		28,378	$	3		0-	$	0-		119,596,866	$	11,960	$	60,334,398	$	(84,144,258	)	$	200,792		$	(23,597,094	)

Issuance of warrants for services		-		-		-		-		-		-		-		-		49,599		-			-			49,599
Fair value of options for services		-		-		-		-		-		-		-		-		21,314		-			-			21,314
Fair value of options for interest		-		-		-		-		-		-		-		-		4,470		-			-			4,470
Accrued preferred dividends		-		-		-		-		-		-		-		-		-		(266,780	)		(5,000	)		(271,780	)
Net loss		-		-		-		-		-		-		-		-		-		(522,232	)		(469	)		(522,701	)

Balance, June 30, 2020 (Unaudited)		107,850	$	11		28,378	$	3		0-	$	0-		119,596,866	$	11,960	$	60,409,781	$	(84,933,270	)	$	195,323		$	(24,316,192	)

See the accompanying notes to the condensed consolidated financial statements.

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Rego Payment Architectures, Inc.

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2021 and 2020

(Unaudited)

	For the Six Months Ended June 30,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(7,917,366	)	$	(1,269,493	)
Adjustments to reconcile net loss to net cash used in operating activities:
Fair value of options issued for interest on notes payable		0-			4,470
Fair value of common stock issued in exchange for services		2,551,000			0-
Fair value of options and warrants issued in exchange for services		2,578,715			171,463
Accretion of discount on notes payable		0-			40,031
Impairment loss		111,817			0-
Depreciation and amortization		12,647			14,658
Forgiveness of debt		(95,425	)		0-
Decrease in assets
Prepaid expenses		148,557			0-
Increase (decrease) in liabilities
Accounts payable and accrued expenses		339,337			600,633
Accounts payable and accrued expenses - related parties		(84,336	)		(212,840	)

Net cash used in operating activities		(2,355,054	)		(651,078	)

CASH FLOWS FROM FINANCING ACTIVITIES
Exercise of options		20,000			0-
Proceeds from notes payable - stockholders		0-			15,000
Repayment of notes payable - stockholders		(50,000	)		(15,000	)
Proceeds from convertible notes payable - stockholders		4,770,000			160,000
Proceeds from paycheck protection program loan		0-			81,500

Net cash provided by financing activities		4,740,000			241,500

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		2,384,946			(409,578	)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		273,176			430,076

CASH AND CASH EQUIVALENTS - END OF PERIOD	$	2,658,122		$	20,498


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during year for:
Interest	$	576		$	0-

Income taxes	$	0-		$	0-


SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:

Accrued preferred dividends	$	534,227		$	543,561

Options issued for software	$	111,817		$	0-

Issuance of common stock for accounts payable	$	135,000		$	0-

Conversion of Series A Preferred stock to common stock	$	61		$	0-

Adoption of new accounting principle for embedded derivative liabilities affecting accumulated deficit	$	10,987,578		$	0-

Exchange of deferred revenue for 10% convertible notes payable	$	200,000		$	0-

Cashless conversion of options into common stock	$	3		$	0-

Exchange of note payable - stockholder and accrued interest for 4% convertible note payable	$	517,000		$	0-

See the accompanying notes to the condensed consolidated financial statements.

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Rego Payment Architectures, Inc.

Notes to Condensed Consolidated Financial Statements

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of the Business

~~Rego~~REGO Payment Architectures, Inc. (“REGO”) was incorporated in the state of Delaware on February 11, 2008.

~~Rego~~REGO Payment Architectures, Inc. and its subsidiaries (collectively, except where the context requires, the “Company”) is a ~~technology company~~provider of consumer software that will deliver an online and mobile digital wallet solution for the family. The digital wallet platform (“Platform”) will allow parents and their children to manage, allocate funds and track their expenditures, savings and charitable giving on bothdelivers a mobile ~~device and online through the Company’s web portal. The Company’s Platform is designed to allow~~payment platform solution—Mazoola^SM- a ~~minor to transact both online and~~family focused mobile banking solution (the “Platform”). Headquartered in traditional brick and mortar retail outlets using their mobile phone as a payment device. The Platform will automatically monitor regulatory compliance in real-time for all transactions, including protection of vendors from unintended regulatory infractions. In addition, utilizing the same architecture, individual parents will be able to create a contract with each child that sets the rules and parameters of how the child may use the Platform with as much or as little parental oversight as the parent determines is necessary. The Company is including specialized technology that increases and improves the security of the system and protects the user’s identity while in use. While these are the features that separateBlue Bell, Pennsylvania, the Company ~~from other virtual payment platforms, the Company’s Platform may be used~~maintains a portfolio of trade secrets and four US patent awards. REGO offers an all-digital financial payments platform to enable minors, particularly under 13 years old, to purchase goods and services, complete chores and learn in a secure online environment guided by ~~anyone as a digital wallet, adult or child.~~

parental permission, oversight, and control, while remaining Children’s Online Privacy Protection Act (“COPPA”) and General Data Protection Regulation (“GDPR”) compliant.

Management believes that building on its ~~Children’s Online Privacy Protection Act (“COPPA”)~~COPPA advantage, the future of ~~the Company~~REGO Payment Architectures, Inc. will be based on the foundational architecture of the Platform that will allow its use across multiple financial markets where secure controlled payments are needed. ~~For the under seventeen years of age market, the Company will use its own brand.~~ The Company intends to license in each alternative field of use the ability for its partners, distributors and/or ~~value added~~value-added resellers to private label each of the alternative markets. These partners ~~will~~would deploy, customize and support each implementation under their own label, but with acknowledgement of the Company’s proprietary intellectual assets as the base technology. Management believes this approach will enable the Company to reduce expenses while broadening its reach.

Revenues generated from ~~this Platform are anticipated to~~the platform will come from multiple sources depending on the level of service and facilities requested by the parent. There will be levels of subscription revenue paid monthly, service fees, transaction fees and in some cases, revenue sharing and licensing with banking and distribution partners.

ZOOM Solutions, Inc. (“ZS”)

ZS (formerly Zoom Payment Solutions, Inc.) was incorporated in the state of Delaware on February 16, 2018 as a subsidiary of ~~Rego~~REGO Payment Architectures, Inc. ~~Rego Payment Architectures, Inc.~~During the year ended December 31, 2020, the minority common shareholders of ZS exchanged their shares in ZS for REGO 10% secured convertible notes payable. REGO now owns ~~78%~~100% of the common stock of ZS. ZS is the holding company for various subsidiaries that will utilize REGO’s payment platform to address emerging markets.

There were minimal operations at ZS during the three and six months ended June 30, 2021 and 2020.

REGO has licensed its technology to ZS, as REGO determined that to extend the Company’s business runway, the Company needed to adapt its technology to include blockchain, token development and cloud storage. ZS was formed to implement these specified new technologies and growth opportunities in conjunction with other business partners, as appropriate.

~~ZS and its subsidiaries have had minimial operations in 2020 and 2019.~~

ZOOM Payment Solutions, Inc. (“ZPS”)

ZPS (formerly Zoom Payment Solutions USA, Inc.) was incorporated in the state of Nevada on December 6, 2017. ZPS is ~~now~~ a wholly owned subsidiary of ZS with the core focus on providing mobile payments solutions. ZPS has secured a sublicense from ZS for the REGO payment ~~platform~~Platform and access to the patents from REGO.

There were minimal operations at ZPS during the three and six months ended June 30, 2021 and 2020.

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ZOOM Blockchain Solutions, Inc. (“ZBS”)

ZBS was incorporated in the state of Delaware on April 20, 2018 as an 85% owned subsidiary of ZS. This company ~~focuses~~was focused on blockchain as a business solution for the retail and Consumer Packaged Goods (“CPG”) industries.

There were minimal operations at ZBS ~~intends to provide a boutique agency approach to work with companies to build disruptive networks that will provide an enhanced customer experience, drive efficiency~~during the three and ~~build transparency~~six months ended June 30, 2021 and ~~trust from the consumer base.~~2020.

ZOOM Cloud Solutions, Inc. (“ZCS”)

ZCS (formerly Zoom Canada Solutions, Inc.) was incorporated in the state of Delaware on April 20, 2018 as an 85% owned subsidiary of ZS. ZCS ~~is to provide~~was focused on providing a highly secure cloud storage as a ~~service with~~service.

There were minimal operations at ZCS during the ~~following potential benefits:~~three and six months ended June 30, 2021 and 2020.

~~END-TO-END PRIVATE CONNECTIVITY – The network~~10

Table of ~~meshed carrier class private circuits will provide a secure, low latency private cloud experience.~~Contents

UNLIMITED CLOUD CAPABILITES - The data will reside in a dedicated environment called a Hyperscale Converged Cloud Infrastructure, which is a leading-edge technology. Through an intuitive platform interface, the team will design, test, develop, manage, and deploy networks from anywhere. This includes, but is not limited to, virtualized, scalable work environments, scalable storage capabilities, state-of-the-art voice and unified communications solutions, cloud computing, and backup.

SMARTLY DESIGNED - The Cloud platform will be custom-engineered on purpose-built hardware to deliver a highly-efficient and dense infrastructure to the market. Through proprietary Software Defined Distributed Virtual Routing, the consumer will get increased network speeds, agility, scalability and reduced latency as well as application mobility, security, data integrity and, most importantly, control.

ZOOM Auto Solutions, Inc. (“ZAS”)

ZAS (formerly Zoom Mining Solutions) was incorporated in the State of Delaware on February 19, 2018 as a wholly owned subsidiary of ZCS. It is now a wholly owned subsidiary of ~~ZBS~~ZBS.

There were minimal operations at ZAS during the three and ~~will be providing blockchain solutions to~~six months ended June 30, 2021 and 2020.

REGO Data Solutions, Inc. (“RDS”)

RDS was incorporated in the ~~auto industry.~~State of Delaware on February 25, 2021 as a wholly-owned subsidiary of REGO for the purpose of maintaining data collected by Mazoola^SM.

There were minimal operation at RDS during the three and six months ended June 30, 2021.

The Company’s principal office is located in Blue Bell, Pennsylvania.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). These statements include all adjustments (consisting only of normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting policies described in the summary of accounting policies included in the Company’s ~~2019~~2020 Annual Report on Form 10-K ~~as amended~~ (the “Form 10-K”). All significant intercompany transactions and balances have been eliminated in consolidation. Certain information and note disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed, or omitted pursuant to such rules and regulations, although the Company believes that the accompanying disclosures are adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 as filed with the SEC. Operating results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2020.~~

2021.

The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional financing to operationalize the Company’s current technology before another company develops similar technology to compete with the Company.

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Recently Adopted Accounting Pronouncements

AsIn December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. The amendments in this Update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of ~~September 30, 2020~~ and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the ~~period then ended,~~amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted this pronouncement on January 1, 2021, and there ~~were no recently adopted accounting pronouncements that had~~was not a material ~~effect~~impact on the ~~Company’s~~ financial statements.

~~Recently Issued Accounting Pronouncements Not Yet Adopted~~11

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In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments in this Update affect entities that issue convertible instruments and/or contracts in an entity’s own equity. For convertible instruments, the instruments primarily affected are those issued with beneficial conversion features or cash conversion features because the accounting models for those specific features are removed. However, all entities that issue convertible instruments are affected by the amendments to the disclosure requirements in this Update. For contracts in an entity’s own equity, the contracts primarily affected are freestanding instruments and embedded features that are accounted for as derivatives under the ~~current~~prior guidance because of failure to meet the settlement conditions of the derivatives scope exception related to certain requirements of the settlement assessment. ~~The Board~~FASB simplified the settlement assessment by removing the requirements (1) to consider whether the contract would be settled in registered shares, (2) to consider whether collateral is required to be posted, and (3) to assess shareholder rights. Those amendments also affect the assessment of whether an embedded conversion feature in a convertible instrument qualifies for the derivatives scope exception. Additionally, the amendments in this Update affect the diluted EPS calculation for instruments that may be settled in cash or shares and for convertible instruments. The amendments in this Update are effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The ~~Board~~FASB specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The ~~Board~~FASB decided to allow entities to adopt the guidance through either a modified retrospective method of transition or a fully retrospective method of transition. The Company ~~is analyzing~~adopted the modified retrospective transition method of this pronouncement ~~but does~~on January 1, 2021 and as a result reclassifed $10,987,578 between debt and accumulated deficit.

Recently Issued Accounting Pronouncements Not Yet Adopted

As of June 30, 2021, there are no recently issued accounting standards not ~~believe there will be any~~yet adopted which would have a material ~~impact~~effect on the Company’s financial ~~statements at this time.~~statements.

NOTE 2 – MANAGEMENT PLANS

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred significant losses and experienced negative cash flow from operations since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Since inception, the Company has focused on developing and implementing its business plan. The Company believes that its existing cash resources will not be sufficient to sustain operations during the next twelve months. The Company currently needs to generate revenue in order to sustain its operations. In the event that the Company cannot generate sufficient revenue to sustain its operations, the Company will need to reduce expenses or obtain financing through the sale of debt and/or equity securities. The issuance of additional equity would result in dilution to existing shareholders. If the Company is unable to obtain additional funds when they are needed or if such funds cannot be obtained on terms acceptable to the Company, the Company would be unable to execute upon the business plan or pay costs and expenses as they are incurred, which would have a material, adverse effect on the business, financial condition and results of operations.

The Company’s current monetization model is to derive revenues from levels of subscription revenue paid monthly, service fees, transaction fees and in some cases, revenue sharing with banking and distribution partners. As these bases of revenues grow, the Company expects to generate additional revenue to support operations.

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~~In March 2020,~~The Covid-19 pandemic caused a significant economic slowdown that adversely affected the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States. On March 19, 2020, the Governor of Pennsylvania declared a health emergency and issued an order to close all nonessential businesses until further notice. The Company has temporarily curtailed its business operations and has required employees to work from home.demand for services. While the Company expects this matter to negatively impact its results of operations, cash flow and financial position, the ~~related~~future financial impact cannot be reasonably estimated at this time.

As of ~~November~~August 16, ~~2020,~~2021, the Company has a cash position of approximately ~~$825,000.~~$2.5 million. Based upon the current cash position and the Company’s planned expense run rate, management believes the Company has funds currently to finance its operations through January ~~2021.~~2022.

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NOTE 3 – IMPAIRMENT OF LONG-LIVED ASSETS

On January 1, 2021, REGO entered into a Purchase of Business Agreement (“Agreement”) with Chore Check, LLC pursuant to which it purchased the assets of Chore Check, LLC, consisting primarily of a software application, valued at $111,817, fair value. The consideration for the acquisition consisted of the issuance of an option to purchase 100,000 shares of the Company’s common stock, with an exercise price of $0.90, vesting immediately and with a term of three years.

Long-lived assets are tested for impairment by performing a qualitative assessment to determine whether it is more likely than not that the fair value is less than the carrying value. Long-lived assets are considered impaired if the carrying value exceeds its fair value. We determined that the carrying value of the asset acquired from Chore Check, LLC exceeded its fair value and have recorded an impairment loss in the amount of $111,817 as of June 30, 2021, which is included in general and administrative expenses.

NOTE 34 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES - RELATED PARTIES

As of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company owed the Chief Executive Officer, who is also a more than 5% beneficial owner, a total of ~~$162,853~~$160,569 and ~~$158,220,~~$184,507, consisting of ~~$32,308~~$160,569 and $0$78,462 in unpaid salary and consulting fees to a company owned by the Chief Executive Officer ~~consulting fees~~ of ~~$130,545~~$0 and ~~$158,220.~~

$106,045.

Additionally, as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company owed the son of a more than 5% beneficial owner, Chief Executive Officer, President and Board member, ~~$22,550~~$10,349 and ~~$32,000,~~$21,549, pursuant to a consulting agreement.

As of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company owed the Chief Financial Officer ~~$129,173~~$34,450 and ~~$118,596~~$83,648 in unpaid salary.

NOTE 45 – PAYCHECK PROTECTION PROGRAM LOAN PAYABLE

During April 2020, the Company received $2,000 from the Emergency Injury Disaster Loan program and $79,500 from the Paycheck Protection Program. The Company has spent all of the proceeds under these programs for payroll related expenses.

In accordance with FASB ASC 470, Debt, the Company ~~has~~ recorded the loans as a current liability in the amount of $81,500. The Company ~~will record~~recorded derecognition of the liability in accordance with FASB ASC 405-20, Liabilities-Extinguishment of Liabilities, when either (1) the loan is, in part or wholly, forgiven and the Company has been legally released or (2) the Company pays off the loan.

On January 28, 2021, the Company received notification from the lender that its Paycheck Protection Program loan had been forgiven in full by the Small Business Administration in the amount of $79,500, and that no further payments were required. Therefore, the Company recorded derecognition of the liability in accordance with FASB ASC 405-20, Liabilities-Extinguishment of Liabilities, when the loan was, in part or wholly, forgiven and the Company was legally released. The Paycheck Protection Program loan was recognized as forgiveness of debt.

Additionally, the Economic Injury Disaster Loan of $2,000 ($1,000 per employee) does not require repayment and was also recognized as forgiveness of debt.

NOTE 56 – LOANS PAYABLE

During the nine months ended September 30, 2020 and 2019, the Company did not receive any loans with no formal repayment terms and 10% interest. The Company also did not receive any loans with no formal repayment terms and no interest, during the nine months ended September 30, 2020 and 2019. The balance of such loansLoans payable as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019 was $85,600.~~2020 were $42,600. Interest accrued on the loans at 0% and 10% was ~~$19,484~~$3,294 and ~~$15,118~~$2,790 as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019.~~2020. Interest expense related to these loans payable was ~~$1,465~~$253 and ~~$4,366~~$504 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~$1,465~~$1,450 and ~~$4,400~~$2,901 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.

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NOTE 7 – DEFERRED REVENUE

The Company received $200,000 in May 2018 as a down payment to develop software for the automotive industry.

During the three months ended June 30, 2021, the Company exchanged $200,000 of deferred revenue for a 10% Secured Convertible Note Payable in the amount of $200,000 (Note 8).

NOTE 68 – 10% SECURED CONVERTIBLE NOTES PAYABLE - STOCKHOLDERS

On March 6, 2015, the Company, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”), issued $2,000,000 aggregate principal amount of its 10% Secured Convertible Promissory Notes due March 5, 2016 (the “Notes”) to certain stockholders. On May 11, 2015, the Company issued an additional $940,000 of Notes to stockholders. The maturity dates of the Notes have been extended most recently from September 6, 2019 to October 31, 2021, with the consent of the Note holders.

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The Notes are convertible by the holders, at any time, into shares of the Company’s Series B Preferred Stock at a conversion price of $90.00 per share, subject to adjustment for stock splits, stock dividends and similar transactions with respect to the Series B Preferred Stock only. Each share of Series B Preferred Stock is currently convertible into 100 shares of the Company’s common stock at a current conversion price of $0.90 per share, subject to anti-dilution adjustment as described in the Certificate of Designation of the Series B Preferred Stock. In addition, pursuant to the terms of a Security Agreement entered into on May 11, 2015 by and among the Company, the Note holders and a collateral agent acting on behalf of the Note holders (the “Security Agreement”), the Notes are secured by a lien against substantially all of the Company’s business assets. Pursuant to the Purchase Agreement, the Company also granted piggyback registration rights to the holders of the Series B Preferred Stock upon a conversion of the Notes.

During the three months ended June 30, 2021, the Company exchanged $200,000 of deferred revenue for a 10% Secured Convertible Note Payable in the amount of $200,000 (Note 7).

The Notes are recorded as a current liability as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 in the amount of ~~$2,813,157.~~$3,316,357 and 3,116,357. Interest accrued on the Notes was ~~$1,778,569~~$2,013,784 and ~~$1,567,582~~$1,855,368 as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019.~~2020. Interest ~~expense other than the warrant related interest~~ expense related to these Notes payable was ~~$70,329~~$80,507 and ~~$210,987~~$158,416 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~$81,471~~$70,329 and ~~$253,484~~$140,658 for ~~the~~ three and ~~nine~~six months ended ~~September~~June 30, ~~2019.~~ 2020.

NOTE 79 – NOTES PAYABLE -– STOCKHOLDERS

During the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, the Company issued ~~$15,000~~$100,000 and $0 aggregate principal amount of its notes payable - stockholders with no formal repayment terms and 10% interest. ~~These notes in the principal amount of $15,000 were repaid in full by June 30, 2020 and the Company issued~~This loan also included an option to purchase ~~25,000~~100,000 shares of the Company’s common stock with an exercise price of ~~$0.90~~$1.20 and a term of ~~3 years, with a~~two years. The option was valued at $74,518 fair value, using the Black-Scholes option pricing model to calculate the grant-date fair value of ~~$4,470~~the option, with the following assumptions: 0no dividend yield, expected volatility of 124.3%, risk free interest rate of 0.11% and expected life of 2 years. The relative fair value of the option of $42,699 was recorded as a discount to the loan payable in accordance with FASB ASC 835-30-25, Recognition, and was accreted over the term of the note payable for financial statement purposes. The loan payable was repaid in full, plus interest, on March 2, 2021 and the full amount of the discount was accreted to interest expense.

During the six months ended June 30, 2021, the Company repaid $50,000 principal of one of the loans outstanding and then later exchanged the remaining $450,000 principal of that loan for a 4% Secured Convertible Note in the amount of $517,000, which included accrued interest of $67,000 (Note 10). The holder of this Note was given an option to purchase a total of 88,889 shares of the Company’s Series B Preferred Stock, which requires all cash purchases of Series B Preferred Stock at $90.00 per share, as detailed below, to be made to the Company by the due dates in order to prevent the termination of the option as follows:

$200,000 on or before July 20, 2021, unless the option has previously terminated.

$250,000 on or before August 23, 2021, unless the option has previously terminated.

$300,000 on or before October 4, 2021, unless the option has previously terminated.

$350,000 on or before November 5, 2021, unless the option has previously terminated.

$400,000 on or before December 6, 2021, unless the option has previously terminated.

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$500,000 on or before January 3, 2022, unless the option has previously terminated.

In order to prevent the termination of the option, unless it has previously terminated, the Holder of the option must purchase $500,000 of the Company’s Series B Preferred Stock (5,556 shares) on or before February 7, 2022 and continuing on the first Monday of every subsequent month, until a total of $8 million of the Company’s Series B Preferred Stock has been purchased.

In addition to the other termination clauses, the option will terminate and be of no further force or effect ten days after the occurrence of any of the following events, however nothing will prevent the holder from purchasing up to $8 million in the aggregate of the Company’s Series B Preferred Stock during the ten day period:

Execution by the Company of an engagement letter with a “major bracket” investment banking firm.

Upon the Company entering into a definitive agreement with respect to a specified Norway white label transaction.

Upon the MazoolaPay^SM technology becoming integrated and operational on any one of the following websites:

Demandware

ii.

Magento

iii.

WooCommerce

iv.

Shopify

BigCommerce

vi.

Wix

vii.

Squarespace

viii.

Square Online

Upon the Company entering into a definitive agreement to white label the MazoolaPay^SM technology with a banking institution with assets in excess of $1.5 billion, excluding Origin Bank.

The option to purchase $8 million of the Company’s Series B Preferred Stock with an exercise price of $90.00, a term of 1.5 months and fully vested was valued at $0, fair value. The option was valued using the Black-Scholes option pricing model to calculate the grant-date fair value of the option, with the following assumptions: 0no dividend yield, expected volatility of 0%, risk free interest rate of 0.01% and expected life of 1.5 months.

These notes payable are recorded as a current liability as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 in the amount of ~~$1,095,000~~$595,000 and ~~$1,161,969.~~$1,095,000. Interest accrued on the notes, as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 was ~~$94,190~~$153,935 and ~~$29,481.~~$115,917. Interest expense including accretion of discount was ~~$21,727~~$28,361 and ~~$104,740~~$183,566 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~$31,491~~$21,491 and ~~$35,428~~$83,013 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.

~~On September 30, 2020, one of the note holders exchanged his $107,000 note for a 4% Secured Convertible Note, in the principal amount of $107,000.~~

NOTE 810 – 4% SECURED CONVERTIBLE NOTES PAYABLE - STOCKHOLDERS

On August 26, 2016, the Company, pursuant to a Securities Purchase Agreement, issued $600,000 aggregate principal amount of its 4.0% Secured Convertible Promissory Notes due June 30, 2019 (the “New Secured Notes”) to certain accredited investors (“investors”). The Company issued additional New Secured Notes during 2016, 2017, 2018, 2019 and 2020.

The New Secured Notes are convertible by the holders, at any time, into shares of the Company’s authorized Series C Cumulative Convertible Preferred Stock (“Series C Preferred Stock”) at a conversion price of $90.00 per share, subject to adjustment for stock splits, stock dividends and similar transactions with respect to the Series C Preferred Stock only. Each share of Series C Preferred Stock is currently convertible into 100 shares of the Company’s common stock at a current conversion price of $0.90 per share, subject to full ratchet anti-dilution adjustment for one year and weighted average anti-dilution adjustment thereafter, as described in the Certificate of Designation of the Series C Preferred Stock. Upon a liquidation event, the Company shall first pay to the holders of the Series C Preferred Stock, on a pari passu basis with the holders of the Company’s outstanding Series A Preferred Stock and Series B Preferred Stock, an amount per share equal to 700% of the conversion price (i.e., $630.00 per share of Series C Preferred Stock), plus all accrued and unpaid dividends on each share of Series C Preferred Stock (the “Series C Preference Amount”). The Series C Preference Amount shall be paid prior and in preference to payment of any amounts to the Common Stock. After the payment of all preferential amounts required to be paid to the holders of shares of Series C Preferred Stock, Series A Preferred Stock, Series B Preferred Stock and any additional senior preferred stock, the Series C Preferred Stock participates in further distributions subject to an aggregate cap of seven and one-half times (7.5x) the original issue price thereof, plus all accrued and unpaid dividends.

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The maturity dates of the New Secured Notes were extended by the investors to October 31, 2021.

During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Company issued ~~$1,967,000~~$4,770,000 aggregate principal amount of its New Secured Notes to certain ~~investors, of which $107,000 was an exchange~~investors.

In addition, during the six months ended June 30, 2021, the Company exchanged the remaining $450,000 principal of a ~~note from~~Note Payable for a ~~stockholder (see~~for 4% Secured Convertible Note 7)in the amount of $450,000 (Note 9).

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The New Secured Notes are recorded as a current liability in the amount of ~~$9,399,250~~$14,781,250 as of ~~September~~June 30, ~~2020~~2021 and ~~$7,432,250~~$9,494,250 as of December 31, ~~2019.~~2020. Interest accrued on the New Secured Notes was ~~$924,915~~$1,256,671 and ~~$687,204~~$1,019,180 as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019.~~2020. Interest expense related to these notes payable was ~~$88,405~~$136,992 and ~~$237,711~~$237,491 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~$73,873~~$74,983 and ~~$218,034~~$149,305 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.

NOTE 911 – INCOME TAXES

Income tax expense was $0 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~

2020.

As of January 1, ~~2020,~~2021, the Company had no unrecognized tax benefits, and accordingly, the Company did not recognize interest or penalties during ~~2020~~2021 related to unrecognized tax benefits. There has been no change in unrecognized tax benefits during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, and there was no accrual for uncertain tax positions as of ~~September~~June 30, ~~2020.~~2021. Tax years from ~~2016~~2017 through ~~2019~~2020 remain subject to examination by major tax jurisdictions.

There is no income tax benefit for the losses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, since management has determined that the realization of the net tax deferred asset is not assured and has created a valuation allowance for the entire amount of such benefits.

NOTE 1012 – CONVERTIBLE PREFERRED STOCK

Rego Payment Architectures, Inc. Series A Preferred Stock

The Series A Preferred Stock has a preference in liquidation equal to two times its original issue price, or ~~$21,570,000,~~$20,470,000, to be paid out of assets available for distribution prior to holders of common stock and thereafter participates with the holders of common stock in any remaining proceeds subject to an aggregate cap of 2.5 times its original issue price. The Series A Preferred Stockholders may cast the number of votes equal to the number of whole shares of common stock into which the shares of Series A Preferred Stock can be converted. The Series A Preferred Stock also contains customary approval rights with respect to certain matters. The Series A Preferred Stock accrues dividends at the rate of 8% per annum or $8.00 per Series A Preferred Share.

The conversion price of Series A Preferred Stock is currently $0.90 per share. The Series A Preferred Stock is subject to mandatory conversion if certain registration or related requirements are satisfied and the average closing price of the Rego’s common stock exceeds 2.5 times the conversion price over a period of twenty consecutive trading days.

~~The~~On January 1, 2021, upon adoption of FASB ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, the Company reclassified the embedded derivative value of the beneficial conversion feature of the Series A Preferred Stock issued in January 2014 ~~is an~~valued at $3,481,050 as of December 31, 2020, to retained earnings. The Company also reclassified the embedded derivative ~~which is classified as a liability in accordance with FASB ASC 815 and was valued in accordance with FASB ASC 470 as a beneficial conversion feature at a fair market~~ value of ~~$1,648,825 at January 27, 2014, and $0 at September 30, 2020 and December 31, 2019. This was classified as an embedded derivative liability and a discount to Series A Preferred Stock. Since~~ the ~~Series A Preferred Stock can be converted at any time, the full amount of the discount was accreted and reflected as a deemed distribution.~~

~~The~~beneficial conversion feature of the Series A Preferred Stock issued in April 2014 ~~is an embedded derivative, which is classified~~valued at $5,349,800 as ~~a liability in accordance with FASB ASC 815 and was valued in accordance with FASB ASC 470 as a beneficial conversion feature at a fair market value~~ of ~~$3,489,000 at April 30, 2014, and $232,600 at September 30, 2020 and $0 at~~ December 31, ~~2019. This was classified as an embedded derivative liability and a discount~~2020, to ~~Series A Preferred Stock. Since~~accumulated deficit.

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During the six months ended June 30, 2021, certain holders of the Series A Preferred Stock ~~can be~~ converted ~~at any time, the full amount~~5,500 shares of the ~~discount was accreted and reflected as a deemed distribution.~~Series A Preferred Stock into 611,111 shares of the Company’s common stock.

Rego Payment Architectures, Inc. Series B Preferred Stock

The Series B Preferred Stock is pari passu with the Series A Preferred Stock and has a preference in liquidation equal to two times its original issue price, or $5,108,040, to be paid out of assets available for distribution prior to holders of common stock and thereafter participates with the holders of common stock in any remaining proceeds subject to an aggregate cap of 2.5 times its original issue price. The Series B Preferred Stockholders may cast the number of votes equal to the number of whole shares of common stock into which the shares of Series B Preferred Stock can be converted. The Series B Preferred Stock also contains customary approval rights with respect to certain matters. The Series B Preferred Stock accrues dividends at the rate of 8% per annum.

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The conversion price of the Series B Preferred Stock is currently $0.90 per share. The Series B Preferred Stock is subject to mandatory conversion if certain registration or related requirements are satisfied and the average closing price of the Company’s common stock exceeds 2.5 times the conversion price over a period of twenty consecutive trading days.

~~The~~On January 1, 2021, upon adoption of FASB ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, the Company reclassified the embedded derivative liability relative to the beneficial conversion feature of the Series B Preferred Stock ~~is an embedded derivative, which is classified~~issued in October 2014 valued at $2,156,728 as ~~a liability in accordance with FASB ASC 815 and was valued in accordance with FASB ASC 470 as a beneficial conversion feature at a fair market value~~ of ~~$375,841 at October 30, 2014, and $0 at September 30, 2020 and~~ December 31, ~~2019. This was classified as an embedded derivative liability and a discount~~2020, to ~~Series B Preferred Stock. Since the Series B Preferred Stock can be converted at any time, the full amount of the discount was accreted and reflected as a deemed distribution.~~ accumulated deficit.

The warrants associated with the Series B Preferred Stock were also classified as equity, in accordance with FASB ASC 480-10-25. Therefore it is not necessary to bifurcate these warrants from the Series B Preferred Stock.

Rego Payment Architectures, Inc. Series C Preferred Stock

In August 2016, Rego authorized 150,000 shares of Rego’s Series C Cumulative Convertible Preferred Stock (“Series C Preferred Stock”). As of ~~September~~June 30, ~~2020,~~2021, none of the Series C Preferred Stock was issued or outstanding. After the date of issuance of Series C Preferred Stock, dividends at the rate of $7.20 per share will begin accruing and will be cumulative. The Series C Preferred Stock is pari passu with the Series A Preferred Stock and Series B Preferred Stock and has a preference in liquidation equal to seven times its original issue price to be paid out of assets available for distribution prior to holders of common stock and thereafter participates with the holders of common stock in any remaining proceeds subject to an aggregate cap of 7.5 times its original issue price. The Series C Preferred Stockholders may cast the number of votes equal to the number of whole shares of common stock into which the shares of Series C Preferred Stock can be converted. The Series C Preferred Stock also contains customary approval rights with respect to certain matters. There are no outstanding Series C Preferred Shares, therefore the current per annum dividend per share is $0.

As of ~~September~~June 30, ~~2020,~~2021, the value of the cumulative 8% dividends for all Rego preferred stock was ~~$6,885,130~~$7,676,137. Such dividends will be paid when and if declared payable by Rego’s board of directors or upon the occurrence of certain liquidation events. In accordance with FASB ASC 260-10-45-11, the Company has recorded these accrued dividends as a current liability.

ZS Series A Preferred Stock

In November 2018, ZS pursuant to a Securities Purchase Agreement (the “ZS Series A Purchase Agreement”), issued in a private placement to an accredited investor, 83,334 units at an original issue price of $3 per unit (the “ZS Original Series A Issue Price”), which includes one share of ZS’ Series A Cumulative Convertible Preferred Stock (the “ZS Series A Preferred Stock”) and one warrant to purchase one share of ZS’ common stock with an exercise price of $3.00 per share expiring in three years (the “Series A Warrants”). ZS raised $250,000 with respect to this transaction. Dividends on the ZS Series A Preferred Stock accrue at a rate of 8% per annum and are cumulative. The ZS Series A Preferred Stock has a preference in liquidation equal to two times the ZS Original Series A Issue Price to be paid out of assets available for distribution prior to holders of ZS common stock and thereafter participates with the holders of ZS common stock in any remaining proceeds subject to an aggregate cap of 2.5 times the ZS Original Series A Issue Price. The ZS Series A Preferred Stockholders may cast the number of votes equal to the number of whole shares of ZS common stock into which the shares of ZS Series A Preferred Stock can be converted.

The conversion feature of the ZS Series A Preferred Stock is an embedded derivative, which is classified as equity in accordance with FASB ASC 815 and was valued in accordance with FASB ASC 470 as a beneficial conversion feature at a fair market value of $193,377 at the date of issuance. However in accordance with FASB ASC 470, the value of the beneficial conversion feature is limited to the value of the ZS Series A Preferred Stock of $139,959 at the date of issuance. This was classified as an embedded derivative and a discount to the ZS Series A Preferred Stock. Since the ZS Series A Preferred Stock can be converted at any time, the full amount of the discount was accreted and reflected as a deemed distribution.

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The warrants associated with the ZS Series A Preferred Stock were also classified as equity, in accordance with FASB ASC 480-10-25. Therefore it is not necessary to bifurcate the warrants from the ZS Series A Preferred Stock.

As of ~~September~~June 30, ~~2020,~~2021, the value of the cumulative 8% dividends for ZS preferred stock was ~~$38,333.~~$53,334. Such dividends will be paid when and if declared payable by the ZS’ board of directors or upon the occurrence of certain liquidation events. In accordance with FASB ASC 260-10-45-11, the Company has recorded these accrued dividends as a current liability.

~~NOTE 11 – FAIR VALUE OF FINANCIAL INSTRUMENTS~~

~~Derivative Liabilities~~

For purposes of determining whether certain instruments are derivatives for accounting treatment, the Company follows the accounting standard that provides guidance for determining whether an equity-linked financial instrument, or embedded feature, is indexed to an entity’s own stock. The standard applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative, and to any freestanding financial instruments that are potentially settled in an entity’s own common stock.

~~The Company has identified the following liabilities that are measured at fair value on a recurring basis, summarized as follows:~~

September 30, 2020 Level 1 Level 2 Level 3 Total

Derivative liability related to fair value of beneficial
conversion feature $ - $ 232,600 $ - $ 232,600

Total $ - $ 232,600 $ - $ 232,600

~~The following table details the approximate fair value measurements within the fair value hierarchy of the Company’s derivative liabilities using Level 2 inputs:~~

Total
Balance at December 31, 2019 $ -

Change in fair value of derivative liabilities 232,600

Balance at September 30, 2020 $ 232,600

As of September 30, 2020, the beneficial conversion feature of the Preferred Stock is treated as an embedded derivative liability and changes in the fair value were recognized in earnings. The shares of Preferred Stock are convertible into shares of the Company’s common stock, which did trade in an active securities market; therefore the embedded derivative liability was valued using the following market based inputs:

Closing trading price of Rego common stock $ 0.50

Rego Series A Preferred Stock Effective Conversion Price issued April 30, 2014 0.46

Intrinsic value of conversion warrant per share $ 0.04

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NOTE 1213 – STOCKHOLDERS’ EQUITY

The Company entered into a financial advisory agreement in November 2018 whereby generally the Company will pay the financial advisor a success fee equal to 6% of the capital committed in a capital transaction involving the sale of the Company.

Option Amendments and Adjustments

On June 3, 2021, the Board of Directors approved amendments extending the term of certain outstanding options to purchase in the aggregate 600,000 shares of common stock of the Company at exercise prices of $0.90 per share. These options were scheduled to expire at various dates during 2021 and were each extended to June 15, 2022. The increase in fair value of this term extension was $258,622 which was expensed during the six months ended June 30, 2021. The Company used the Black-Scholes option pricing model to calculate the increase in fair value, with the following assumptions for the extended options: 0no dividend yield, expected volatility of 116.9%, risk free interest rate of 0.04%, and expected option life of 1.03 years.

Issuance of Restricted Shares

A restricted stock award (“RSA”) is an award of common shares that is subject to certain restrictions during a specified period. Restricted stock awards are independent of option grants and are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the shares before the restricted shares vest. Shares of nonvested restricted stock have the same voting rights as common stock, are entitled to receive dividends and other distributions thereon and are considered to be currently issued and outstanding. The Company’s restricted stock awards generally vest over a period of one year. The Company expenses the cost of the restricted stock awards, which is determined to be the fair market value of the shares at the date of grant, straight-line over the period during which the restrictions lapse. For these purposes, the fair market value of the restricted stock is determined based on the closing price of the Company’s common stock on the grant date.

~~On August 13, 2020, in conjunction with~~During the ~~execution of the Chief Executive Officer’s employment agreement,~~three months ended March 31, 2021, the Company issued ~~250,000~~150,000 shares of the Company’s common stock with a value of $0.90 at the time of issuance, with a fair value of $135,000, to a vendor in settlement of $135,000 of accounts payable.

During the three months ended March 31, 2021, the Company issued a Board Member and the Chief Financial Officer 400,000 shares of the Company’s common stock each, with an aggregate fair value of $920,000 upon the launch of the Mazoola^SM app. The Chief Executive Officer, who is also a Board Member, received 500,000 shares of the Company’s common stock, with an aggregate fair value of $575,000.

During the three months ended March 31, 2021, the Company issued the Chief Executive Officer, ~~which vested immediately. The fair value~~who is also a Board Member, 500,000 shares of the ~~issuance of the~~Company’s common stock ~~was $62,500, which was expensed immediately.~~

~~On August 18, 2020, the Company issued 250,000 each to a member of the Board of Directors, and to the Chief Financial Officer, which vested immediately. The~~with an aggregate fair value of $435,000, upon the ~~issuance~~Company raising $2,000,000.

During the three months ended March 31, 2021, an employee exercised an option to purchase 80,000 shares of the Company’s common stock ~~was $125,000, which was expensed immediately.~~at $0.25 per share or $20,000.

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During the three months ended June 30, 2021, the Company issued the Chief Executive Officer, who is also a Board Member, 600,000 shares of the Company’s common stock with an aggregate fair value of $621,000, upon the Company raising funds above the previous $2 million requirement.

During the three months ended June 30, 2021, an employee exercised an option to purchase 37,500 shares of the Company’s common stock at $0.25 per share on a cashless basis. This netted the employee 28,125 shares of the Company’s common stock.

NOTE 1314 – STOCK OPTIONS AND WARRANTS

During 2008, the Board of Directors (“Board”) of the Company adopted the 2008 Equity Incentive Plan (“2008 Plan”) that was approved by the stockholders. Under the 2008 Plan, the Company was authorized to grant options to purchase up to 25,000,000 shares of common stock to any officer, other employee or director of, or any consultant or other independent contractor who provides services to the Company. The 2008 Plan was intended to permit stock options granted to employees under the 2008 Plan to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”). All options granted under the 2008 Plan, which are not intended to qualify as Incentive Stock Options are deemed to be non-qualified options (“Non-Statutory Stock Options”). As of ~~September~~June 30, ~~2020,~~2021, under the 2008 Plan, options to purchase ~~6,900,000~~1,250,000 shares of common stock have been issued and are unexercised, and 0 shares are available for grants under the 2008 Plan. The 2008 Plan expired on March 3, 2019.

During 2013, the Board adopted the 2013 Equity Incentive Plan (“2013 Plan”), which was approved by stockholders at the 2013 annual meeting of stockholders. Under the 2013 Plan, the Company is authorized to grant awards of stock options, restricted stock, restricted stock units and other stock-based awards of up to an aggregate of 5,000,000 shares of common stock to any officer, employee, director or consultant. The 2013 Plan is intended to permit stock options granted to employees under the 2013 Plan to qualify as Incentive Stock Options. All options granted under the 2013 Plan, which are not intended to qualify as Incentive Stock Options are deemed to be Non-Statutory Stock Options. As of ~~September~~June 30, ~~2020,~~2021, under the 2013 Plan, grants of restricted stock and options to purchase ~~4,917,500~~4,700,000 shares of common stock have been issued and are ~~unvested and~~ unexercised, and ~~82,500~~300,000 shares of common stock remain available for grants under the 2013 Plan.

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The 2013 Plan is administered by the Board or its compensation committee, which determines the persons to whom awards will be granted, the number of awards to be granted, and the specific terms of each grant, including the vesting thereof, subject to the terms of the 2013 Plan. In connection with Incentive Stock Options, the exercise price of each option may not be less than 100% of the fair market value of the common stock on the date of the grant (or 110% of the fair market value in the case of a grantee holding more than 10% of the outstanding stock of the Company).

Prior to January 1, 2014, volatility in all instances presented is the Company’s estimate of volatility that is based on the volatility of other public companies that are in closely related industries to the Company. Beginning January 1, 2014, volatility in all instances presented is the Company’s estimate of volatility that is based on the historical volatility of the Company’s common stock.

The following table presents the weighted-average assumptions used to estimate the fair values of the stock options granted by REGO during the ~~nine~~six months ended ~~September~~June 30, ~~2020:~~2021:

Risk Free Interest Rate		0.3	%		0.3	%
Expected Volatility		164.2	%		138.8	%
Expected Life (in years)		4.6			3.1
Dividend Yield		0	%		0	%
Weighted average estimated fair value of options during the period	$	0.21		$	0.75

During the six months ended June 30, 2021, the Company issued options to purchase 3,127,500 shares of the Company’s common stock to various consultants and employees. The options were valued at $2,320,091 fair value, using the Black-Scholes option pricing model to calculate the grant-date fair value of the options. The fair value of options was expensed immediately. The Company also issued an option to purchase 100,000 shares of the Company’s common stock to Chore Check, LLC with a fair value of $111,817. The $111,817 was capitalized as fixed assets and subsequently deemed to be impaired in full and expensed (Note 3).

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The following table summarizes the activities for REGO’s stock options for the ~~nine~~six months ended ~~September~~June 30, ~~2020:~~ 2021:

Options Outstanding
Weighted -
Average
Remaining Aggregate
Weighted- Contractual Intrinsic
Number of Average Term Value
Shares Exercise Price (in years) (in 000's) (1)
Balance December 31, 2019 13,185,000 $ 0.69 2.4 $ -

Granted 3,222,500 0.34 4.5 699
Expired (1,660,000 ) 0.52 - -

Balance September 30, 2020 14,747,500 $ 0.63 2.4 $ 1,517

Exercisable at September 30, 2020 14,747,500 $ 0.63 2.4 $ 1,517

Exercisable at September 30, 2020 and expected to
vest thereafter 14,747,500 $ 0.63 2.4 $ 1,517

	Options Outstanding
						Weighted -
						Average
						Remaining		Aggregate
				Weighted -		Contractual		Intrinsic
	Number of			Average		Term		Value
	Shares			Exercise Price		(in years)		(in 000's) (1)
Balance, December 31, 2020		10,012,500		$	0.50	2.5	$	8,782

Granted		3,227,500			0.93
Exercised		(117,500	)		0.25
Expired		(1,000,000	)		0.71

Balance, June 30, 2021		12,122,500		$	0.59	2.4	$	5,192

Exercisable at June 30, 2021		12,122,500		$	0.59	2.4	$	5,192

Exercisable at June 30, 2021 and expected to vest thereafter		12,122,500		$	0.59	2.4	$	5,192

(1)

~~(1)~~

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the closing stock price of ~~$0.50~~$1.02 for REGO’s common stock on ~~September~~June 30, ~~2020.~~ 2021.

~~For~~Rego expensed $1,161,090 and $2,578,714 for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2020, Rego expensed $667,670~~2021 and ~~$719,117~~$25,785 and $51,447 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019, Rego expensed $76,743 and $331,094~~2020 with respect to options.

As of ~~September~~June 30, ~~2020,~~2021, there was $0 of unrecognized compensation cost related to outstanding stock options. The difference, if any, between the stock options exercisable at ~~September~~June 30, ~~2020~~2021 and the stock options exercisable and expected to vest relates to management’s estimate of options expected to vest in the future.

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~~The following table summarizes the activities for REGO’s unvested stock options for the nine months ended September 30, 2020:~~

Unvested Options
Weighted -
Average
Grant
Number of Date Fair
Shares Value
Balance December 31, 2019 233,333 $ 0.20

Granted 3,222,500 0.21
Expired/cancelled (100,000 ) 0.22
Vested (3,355,833 ) 0.22

Balance September 30, 2020 - -

~~During the nine months ended September 30, 2020, the Company issued warrants to purchase 1,500,000 shares~~Table of common stock commensurate with a consulting agreement. The warrants were valued at $184,048 fair value, using the Black-Scholes option pricing model to calculate the grant-date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 139.0 to 140.8%, risk free interest rate of 0.14% to 0.36% and expected life of 2 years. The fair value of the warrants was $184,048 and was expensed immediately. During the three and nine months ended September 30, 2020, the Company expensed $59,563 and $184,048 and during the three and nine months ended September 30, 2019, the Company expensed $0, relative to warrants.Contents

The following table summarizes the activities for REGO’s warrants for the ~~nine~~six months ended ~~September~~June 30, ~~2020:~~2021:

Weighted -
Average
Remaining Aggregate
Weighted- Contractual Intrinsic
Number of Average Term Value
Shares Exercise Price (in years) (in 000's) (1)
Balance at December 31, 2019 4,427,020 $ 0.90 1.0 $ -

Granted 1,500,000 0.90 1.7 -
Expired (2,227,020 ) 0.90 -

Balance at September 30, 2020 3,700,000 $ 0.90 1.3 $ -

Exercisable at September 30, 2020 3,700,000 $ 0.90 1.3 $ -

Exercisable at September 30, 2020 and expected to
vest thereafter 3,700,000 $ 0.90 1.3 $ -

	Warrants Outstanding
						Weighted -
						Average
						Remaining		Aggregate
				Weighted -		Contractual		Intrinsic
	Number of			Average		Term		Value
	Shares			Exercise Price		(in years)		(in 000's) (1)
Balance, December 31, 2020		3,375,000		$	0.90	1.1	$	1,620

Expired		(175,000	)		0.90	-

Balance, June 30, 2021		3,200,000		$	0.90	0.7	$	384

Exercisable at June 30, 2021		3,200,000		$	0.90	0.7	$	384

Exercisable at June 30, 2021 and expected to vest thereafter		3,200,000		$	0.90	0.7	$	384

(1)

~~(1)~~

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of ~~$0.50~~$1.02 for Rego’s common stock on ~~September~~June 30, ~~2020.~~ 2021.

Rego expensed $0 for the three and six months ended June 30, 2021 and $49,599 and $124,485 for the three and six months ended June 30, 2020 with respect to warrants.

All warrants were vested on the date of grant.

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The following table summarizes the activities for ZS’s stock options for the ~~nine~~six months ended ~~September~~June 30, ~~2020:~~2021:

Options Outstanding
Weighted -
Average
Remaining Aggregate
Weighted- Contractual Intrinsic
Number of Average Term Value
Shares Exercise Price (in years) (in 000's) (1)
Balance December 31, 2019 2,400,000 $ 5.00 3.6 $ -

Expired (100,000 ) $ 5.00 - -

Balance September 30, 2020 2,300,000 $ 5.00 3.0 $ -

Exercisable at September 30, 2020 2,300,000 $ 5.00 3.0 $ -

Exercisable at September 30, 2020 and expected to
vest thereafter 2,300,000 $ 5.00 3.0 $ -

	ZS Options Outstanding
					Weighted -
					Average
					Remaining		Aggregate
			Weighted -		Contractual		Intrinsic
	Number of		Average		Term		Value
	Shares		Exercise Price		(in years)		(in 000's) (1)
Balance, December 31, 2020		1,600,000	$	5.00	3.0	$	0-

Balance, June 30, 2021		1,600,000	$	5.00	2.5	$	0-

Exercisable at June 30, 2021		1,600,000	$	5.00	2.5	$	0-

Exercisable at June 30, 2021 and expected to vest thereafter		1,600,000	$	5.00	2.5	$	0-

(1)

~~(1)~~

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the value of $4.00 for ZS’s common stock on ~~September~~June 30, ~~2020.~~ 2021.

For the three and ~~nine~~six months ended ~~September~~June 30, 2021 and 2020, ZS expensed $0 with respect to ~~options and for the three and nine months ended September 30, 2019, ZS expensed $0 and $28,051 with respect to~~ options.

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The following table summarizes the activities for ZS’s warrants for the ~~nine~~three and six months ended ~~September~~June 30, ~~2020:~~2021:

Warrants Outstanding
Weighted -
Average
Remaining Aggregate
Weighted - Contractual Intrinsic
Number of Average Term Value
Shares Exercise Price (in years) (in 000's) (1)
Balance December 31, 2019 83,334 $ 3.00 1.8 $ 83

Balance September 30, 2020 83,334 $ 3.00 1.1 $ 83

Exercisable at September 30, 2020 83,334 $ 3.00 1.1 $ 83

Exercisable at September 30, 2020 and expected to
vest thereafter 83,334 $ 3.00 1.1 $ 83

	ZS Warrants Outstanding
					Weighted -
					Average
					Remaining		Aggregate
					Contractual		Intrinsic
	Number of		Average		Term		Value
	Shares		Exercise Price		(in years)		(in 000's) (1)
Balance, December 31, 2020		83,334	$	3.00	0.9	$	83

Balance, June 30, 2021		83,334	$	3.00	0.4	$	83

Exercisable at June 30, 2021		83,334	$	3.00	0.4	$	83

Exercisable at June 30, 2021 and expected to vest thereafter		83,334	$	3.00	0.4	$	83

(1)

~~(1)~~

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the value of $4.00 for ZS’s common stock on ~~September~~June 30, ~~2020.~~ 2021.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, ZS expensed $0 with respect to warrants.

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~~The following table summarizes the activities for ZBS’s stock options for the three and nine months ended September 30, 2020:~~

Options Outstanding
Weighted -
Average
Remaining Aggregate
Weighted - Contractual Intrinsic
Number of Average Term Value
Shares Exercise Price (in years) (in 000's) (1)
Balance December 31, 2019 100,000 $ 5.00 0.7 $ -

Expired (100,000 ) $ 5.00 - -

Balance September 30, 2020 - $ - - $ -

Exercisable at September 30, 2020 - $ - - $ -

Exercisable at September 30, 2020 and expected to
vest thereafter - $ - - $ -

~~(1)~~

~~The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the value of $0.01 for ZBS’s common stock on September 30, 2020.~~

~~For the three and nine months ended September 30, 2020 and 2019, ZBS expensed $0 with respect to options.~~

The following table summarizes the activities for ZCS’s stock options for the ~~three and nine~~six months ended ~~September~~June 30, ~~2020:~~2021:

Options Outstanding
Weighted -
Average
Remaining Aggregate
Weighted- Contractual Intrinsic
Number of Average Term Value
Shares Exercise Price (in years) (in 000's) (1)
Balance December 31, 2019 2,200,000 $ 5.00 3.8 $ -

Expired (100,000 ) $ 5.00 - -

Balance September 30, 2020 2,100,000 $ 5.00 3.2 $ -

Exercisable at September 30, 2020 2,100,000 $ 5.00 3.2 $ -

Exercisable at September 30, 2020 and expected to
vest thereafter 2,100,000 $ 5.00 3.2 $ -

	ZCS Options Outstanding
					Weighted -
					Average
					Remaining		Aggregate
			Weighted -		Contractual		Intrinsic
	Number of		Average		Term		Value
	Shares		Exercise Price		(in years)		(in 000's) (1)
Balance, December 31, 2020		1,600,000	$	5.00	3.0	$	0-

Balance, June 30, 2021		1,600,000	$	5.00	2.5	$	0-

Exercisable at June 30, 2021		1,600,000	$	5.00	2.5	$	0-

Exercisable at June 30, 2021 and expected to vest thereafter		1,600,000	$	5.00	2.5	$	0-

(1)

~~(1)~~

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the value of $0.01 for ZCS’s common stock on ~~September~~June 30, ~~2020.~~2021.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, ZCS expensed $0 with respect to options.

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~~The following table summarizes the activities for ZPS’s stock options for the three and nine months ended September 30, 2020:~~

Options Outstanding
Weighted -
Average
Remaining Aggregate
Weighted - Contractual Intrinsic
Number of Average Term Value
Shares Exercise Price (in years) (in 000's) (1)
Balance December 31, 2019 100,000 $ 5.00 0.7 $ -

Expired (100,000 ) $ 5.00 - -

Balance September 30, 2020 - $ - - $ -

Exercisable at September 30, 2020 - $ - - $ -

Exercisable at September 30, 2020 and expected to
vest thereafter - $ - - $ -

~~(1)~~

~~The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the value of $0.01 for ZPS’s common stock on September 30, 2020.~~

~~For the three and nine months ended September 30, 2020 and 2019, ZPS expensed $0 with respect to options.~~

NOTE 1415 – NONCONTROLLING INTERESTS

Losses incurred by the noncontrolling interests for the three ~~months~~ and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 were ~~$313~~$00 and ~~$1,039~~$101 and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 were ~~$461~~$469 and ~~$6,942.~~$726.

N~~OTE 15~~22

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NOTE 16 – OPERATING LEASES

For the three and ~~nine~~six months ended ~~September~~June 30, 2021, total rent expense under leases amounted to $1,521 and $2,282 and for the three and six months ended June 30, 2020, total rent expense under leases amounted to ~~$1,130~~$1,639 and ~~$13,116 and for the three and nine months ended September 30, 2019, total rent expense under leases amounted to $6,364 and $20,046.~~$11,986. The Company has elected not to recognize right-of-use assets and lease liabilities arising from short-term leases. The Company has no long-term lease obligations as of ~~September 30, 2020.~~

~~NOTE 16 – RELATED PARTY TRANSACTIONS~~

During the three and nine months ended September 30, 2019, the Company received revenue from a technology company for the outsourcing of the Company’s engineers for development. In addition, the Company paid this technology company $45,000 as a deposit for technical assistance with the Platform when it becomes necessary. The deposit was fully refunded as of June 30, ~~2019. As of September 30, 2020, the technology company is no longer a related party.~~2021.

NOTE 17 – SUBSEQUENT EVENTS

~~On October 20, 2020,~~From July 1, 2021 through August 16, 2021, the Company ~~issued a consultant, an option to purchase 500,000~~sold 5,000 shares of the Company’s ~~common~~Series B Preferred stock ~~for every $1 million~~in a private placement to an accredited investor and received proceeds of ~~capital raised, with an exercise price of $0.90 and a term of 2 years.~~

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$450,000.

On ~~October 27, 2020,~~July 16, 2021, the Company ~~issued a consultant an option~~authorized the issuance of options to purchase ~~50,000~~10,000 shares of the Company’s common stock with an exercise price of the higher of $0.90 or the closing stock price on the date of issuance and a term of 2 years ~~for assisting in raising up~~ to ~~$3 million~~each of ~~capital. The options were valued at $18,302, fair market value and will be expensed immediately.~~four developers. They are also to receive a cash bonus of $2,500 each. Both of these are contingent on the completion of version 3.0 of the Mazoola^SM app.

~~On October 27, 2020,~~Also on July 16, 2021, the Company ~~issued a consultant~~authorized the issuance of an option to purchase 25,000 shares of the Company’s common stock with an exercise price of the higher of $0.90 or the closing stock price on the date of issuance and a term of 2 years ~~for assisting~~to a development consultant contingent on the completion of version 3.0 of the Mazoola^SM app.

On August 3, 2021, the Company authorized the issuance of cash fees and stock options to a consultant as follows:

Consultant to receive $25 per each retail store that adopts Mazoola Kid Pay Button.

Consultant to receive $5,000 per online site with ~~a marketing campaign. The consultant will also~~between one hundred thousand and below one million users active users that adopts Mazoola Kid Pay Button.

Consultant to receive $25,000 per online site with at least one million active users that adopts Mazoola Pay Kid Button.

Consultant to receive an option to purchase ~~an additional 20,000~~25,000 shares of the Company’s common stock ~~with an exercise~~at the close of business strike price ~~of $0.90 and~~with a term of 2two years ~~each month for eight months. The initial options issued were valued at $9,151, fair market value and will be expensed immediately. The fair value~~on the day of ~~each additional 20,000 options issued monthly over eight months will expensed upon issuance.~~activation of the Mazoola Pay Button by a retail entity.

~~Also on October 27, 2020, the Board of Directors approved the issuance of 250,000~~Consultant to receive an option to purchase 25,000 shares of the Company’s common stock ~~each for~~at the close of business strike price with a ~~total~~term of ~~750,000 shares to~~two years on the ~~Chief Executive Officer, a Board Member and the Chief Financial Officer upon launching the Beta test and commercial launch~~day of activation of the ~~digital wallet platform. Additionally, the Board approved the issuance of 250,000~~Mazoola Pay Button by a social networking site with active users between one hundred thousand and one million.

Consultant to receive an option to purchase 50,000 shares of the Company’s common stock toat the ~~Chief Executive Officer, if he is successful in rasing an additional $2 million by December 31, 2020.~~

~~During October and November 2020, Shareholders owning an aggregate~~close of ~~23,833 common shares~~business strike price with a term of two years on the day of activation of the ~~outstanding 10,023,929 common shares of ZS and notes payable have agreed to exchange their shares of common stock of ZS for 10% Secured Convertible Notes of Rego Payment Architectures, Inc. on~~Mazoola Pay Button by a ~~dollar for dollar exchange based on the original investment of $195,250 in ZS.~~social networking site with active users over one million.

~~In November 2020, the Company received $20,000 through the issuance of our 4% secured convertible notes payable-stockholders.~~

2423

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

Overview

Rego Payment Architectures, Inc. (the “Company,” “we”, or “us”) was incorporated in Delaware on February 11, 2008 under the name Chimera International Group, Inc. On April 4, 2008, we amended our certificate of incorporation and changed our name to Moggle, Inc. On August 22, 2011, we filed a Certificate of Ownership with the Secretary of State of Delaware, pursuant to which the Company’s newly-formed wholly-owned subsidiary, Virtual Piggy Incorporated was merged into and with the Company (the “Merger”). In connection with the Merger and in accordance with Section 253 of the Delaware General Corporation Law, the name of the Company was changed from “Moggle, Inc.” to “Virtual Piggy, Inc.” On February 28, 2017, we amended our certificate of incorporation and changed our name to Rego Payment Architectures, Inc. Our principal offices are located at 325 Sentry Parkway, Suite 200, Blue Bell , PA 19422 and our telephone number is (267) 465-7530.

As of the date of this report, we have not generated significant revenues. Our initial business plan was to develop an online game platform to allow game companies to create, monetize and distribute massive multiplayer online games (MMOG). The Company technology was the monetization component of this overall software platform (our “Platform”). During 2010, we analyzed the market potential for an expanded Company solution and decided to concentrate our efforts on the delivery of a full-featured Company solution that was not restricted to online gaming. The expanded Company solution is designed to provide a complete online solution for families and parents to teach their children about financial management and spending on gaming, retail, music and entertainment. In late 2013, we rebranded our Company product under the name “Oink®”. In March 2016, we discontinued our prior Oink product offering.

Our current focus is monetizing the Mazoola^SMDigital Wallet Platform in the ~~FinTech~~Financial Technology (“FinTech”) industry through ~~technology~~white label, licensing and ~~similar partnerships.~~partnership agreements. We have successfully launched the Mazoola^SMApp and are focused on ~~building~~improving and ~~improving~~monetizing the existing Platform and App that will act as the foundation for the strategic alignment with the ~~Financial Technology (“FinTech”)~~FinTech industry. The FinTech industry is composed primarily of startup companies that use software to provide financial services more efficiently and less costly than traditional financial service companies. With our Children’s Online Privacy Protection Act (“COPPA”) and GDPRkids^TM Trustmark compliant technology as an added feature, we believe we may have better market success.

Strategic Outlook

We believe that the virtual goods market and the FinTech industry will continue to grow over the long term. Within the market and industry, we intend to provide services to allow transactions with children in compliance with COPPA and similar international privacy laws. We believe that this particular opportunity is relatively untapped and intend to be a leading provider of online transactions for children.

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Sustained spending on technology, our ability to raise additional financing, our ability to successfully implement technology partnerships or joint ventures, the continued growth of the FinTech industry, and compliance with regulatory and reporting requirements are all external conditions that may affect our ability to execute our business plan. In addition, the FinTech industry is intensely competitive, and most participants have longer operating histories, significantly greater financial, technical, marketing, customer service and other resources, and greater name recognition. In addition, certain potential customers, particularly large organizations, may view our small size and limited financial resources as a negative even if they prefer our offering to those of our competitors.

Our goal, moving forward is to enable both incumbent and new FinTech participants, as well as key verticals with a large base of ‘family accounts,’ to provide their consumers with safe and empowering youth money management and financial literacy content and tools via the mobile payment platform.

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While some of the Rego Platform can be easily duplicated/commoditized, such as the app skin, APIs to retailers, APIs to financial infrastructure and cloud storage, we believe that defending our market position rests on three factors:

The ability to define data control settings from parent to child.

Our approach to this opportunity uses a master account to dictate purchase rules to sub-accounts via a hierarchical architecture. This approach adheres to data flow and privacy policy requirements specifically outlined for COPPA compliance. We believe other approaches based on machine learning, or other artificial intelligence methodologies are potentially viable alternatives but are likely too costly, do not meet current compliance timelines, and may defy the core of COPPA’s “opt-in” parameters. There is considerable room for next-generation automation techniques to be layered on Rego’s hierarchical approach. Given its current stability and scalability metrics, the Rego Platform strongly features these advances in its technical development roadmap without compromising any of its current data control performance.

The ability to (mis)attribute the child’s transaction and personal identification.

Rego has solved this issue by masking user data and maintaining separate identity and financial data flows. As a result, Rego can verify the age of the internet user ~~throught~~through the transaction lifecycle on its Platform. Authenticating and validating the identity of the actual user on the internet is one of the more difficult cybersecurity challenges. Current approaches are mainly not for commercial use; however, there is investment in commercial innovation in this area. Rego’s data control features and its (mis)attribution approach are inextricably linked and a key to its scalability and extensibility.

The ability to disseminate transactional data on minors while remaining COPPA and GDPR compliant.

The highest value data will be that which shows the most nuanced detail afforded under current regulations. Without extreme data control features, such as in the Rego Platform, any lesser data precision will be less valuable.

These three factors are all supported by Rego’s patented technology.

Currently, we are targeting established brands with large family-focused account bases — including banks, telecommunication companies, faith-based organizations, media distributors, mobile device Original Equipment Manufacturers (“OEMs”), and merchants.

~~Our primary strategic objectives over the next 12-18 months are to increase~~We have launched our ~~user base and the engagement level of that base.~~Mazoola^SM app. We plan to ~~achieve that by implementing our partner-first go~~develop additional enhancements to ~~market model in~~the app and develop a web based platform, which established payments market leaders and vertical market participants can incorporate and integrate our platform into co-branded payments solutions targeting youth and family. We are pursuing both domestic and international opportunities for the use of our payment platform. These opportunities have customer bases of their own that they could bring to our platform, thus minimizing the marketing costs for the Company, that would normally needis expected to be ~~incurred. Management~~completed in the third quarter of 2021.

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In addition to expanding the existing payment solution to a growing US and global customer base, management believes ~~this approach will enable the Company to reduce expenses while broadening its reach.~~there is robust demand for:

A digital ecosystem for children embedded within a marketplace of service offerings, delivered via in-house technology and through third party integrations (“super app”). The inherent fenced design and systems architecture of the MazoolaTM digital wallet aligns well with the overall purpose and approach of a “super app”— to offer a wide array of services within a controlled environment on mobile operating systems, such as iOS and Android.

Expanded in-application service modules such as investments, charitable giving, and financial literacy, as well as, the inclusion of new marketplaces, health centers, and logistic/inventory management systems.

Predictive analytic products and services based on REGO’s anonymized data collection techniques.

A two-sided platform of the REGO offering, MazoolaPay, which is currently in later stage development. This provides a way for retailers to offer families a compliant payment offering when engaging in e-commerce transactions.

Within this model, the Company is incorporating licensing fees. This should enable the Company to begin creating shareholder value above and beyond consumer transaction fees. As our service grows, we intend to hire additional information technology staff to maintain our product offerings and develop new products to increase our market share.

We believe that our near-term success will depend particularly on our ability to develop customer awareness and confidence in our service. Since we have extremely limited capital resources, we will need to closely manage our expenses and conserve our cash by continually monitoring any increase in expenses and reducing or eliminating unnecessary expenditures. Our prospects must be considered in light of the risks, expenses and difficulties encountered by companies at an early stage of development, particularly given that we operate in new and rapidly evolving markets, that we have limited financial resources, and face an uncertain economic environment. We may not be successful in addressing such risks and difficulties.

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Results of Operations

Comparison of the Three Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020

The following discussion analyzes our results of operations for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020. The following information should be considered together with our condensed financial statements for such period and the accompanying notes thereto.

Net Revenue

We have not generated significant revenue since our inception. For the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 we generated revenues of $740 and $0.

Net Loss

For the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, we had a net loss of ~~$1,427,513~~$3,271,565 and ~~$742,179.~~$522,701.

Transaction Expense

Transaction expense for the three months ended June 30, 2021 was $38,745 compared to $0 for the three months ended June 30, 2020. These are transactional charges primarily for the operation of the Mazoola^SM app, but also the Chore Check app.

Sales and Marketing

Sales and marketing expenses for the three months ended ~~September~~June 30, ~~2020~~2021 were ~~$22,784~~$166,597 compared to ~~$9,371~~$11,506 for the three months ended ~~September~~June 30, ~~2019,~~2020, an increase of ~~$13,413. The Company continued~~$155,091. This resulted from the issuance of options to ~~spend~~a marketing ~~funds during~~consultant along with the ~~three months ended September 30, 2020 in preparation for the launch of the Platform in order to create market visibility.~~monthly fees.

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Product Development

Product development expenses were ~~$474,151~~$817,558 and ~~$33,806~~$119,833 for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, an increase of ~~$440,345.~~$697,725. The Company continued the process to complete the development of the ~~Platform~~Mazoola^SMapp prior to its launch and ~~move toward~~then began developing further enhancements to the ~~launch of the Platform, which is anticipated in December 2020.~~app to increase its marketability.

General and Administrative Expenses

General and administrative expenses increased ~~$405,592~~$1,803,192 to ~~$928,181~~$2,021,831 for the three months ended ~~September~~June 30, ~~2020~~2021 from ~~$522,589~~$218,639 for the three months ended ~~September~~June 30, ~~2019.~~2020. This resulted from the Company issuing shares of common stock and options to Board members, officers and consultants, an increase of approximately ~~$348,000, an increase in expenses related~~$1,637,000, and fees paid to raise capital amounting to $194,000 for the ~~issuance of common shares to Board members and officers in~~three months ended June 30, 2021 versus $0 for the ~~amount of approximately $180,000, offset by a decrease in consulting expenses of approximately $87,000.~~three months ended June 30, 2020.

Interest Expense

During the three months ended ~~September~~June 30, ~~2020,~~2021, the Company incurred interest expense of ~~$192,216,~~$241,507, compared to ~~$176,413~~$172,723 for the three months ended ~~September~~June 30, ~~2019,~~2020, an increase of ~~$15,803.~~$68,784. The increase in interest expense relates to additional debt outstanding.

Forgiveness of Debt

During the three months ended ~~September~~June 30, ~~2020,~~2021, the Company had ~~$422,419~~$13,925 of debt forgiven compared to $0 for the three months ended ~~September~~June 30, ~~2019, an increase of $422,419. The increase~~2020, related to ~~a settlement of accounts payable and accrued payroll with the former Chief Executive Officer, an employee and a consultant.~~

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~~Change in Fair Value of Embedded Derivative Liability and Preferred Stock Dividends~~

As described in Note 10 to the financial statements, in April 2014, the conversion feature of the Series A Preferred Stock issued in April 2014 is an embedded derivative, which is classified as a liability in accordance with FASB ASC 815 and was valued in accordance with FASB ASC 470 as a beneficial conversion feature at a fair market value of $3,489,000 at April 30, 2014, and $232,600 at September 30, 2020 and $0 at December 31, 2019. This was classified as an embedded derivative liability and a discount to Series A Preferred Stock. Since the Series A Preferred Stock can be converted at any time, the full amount of the discount was accreted and reflected as a deemed distribution in April 2014. The change in value for the three months ended September 30, 2020 was an increase in the liability of $232,600.vendor payables.

Comparison of the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020

The following discussion analyzes our results of operations for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020. The following information should be considered together with our condensed financial statements for such period and the accompanying notes thereto.

Net Revenue

We have not generated significant revenue since our inception. For the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 we generated revenues of $0$1,273 and ~~$34,485.~~$0.

Net Loss

For the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, we had a net loss of ~~$2,697,006~~$7,917,366 and ~~$2,383,604.~~$1,269,493.

Transaction Expense

Transaction expense for the six months ended June 30, 2021 was $76,059 compared to $0 for the six months ended June 30, 2020. These are transactional charges primarily for the operation of the Mazoola^SM app, but also the Chore Check app.

Sales and Marketing

Sales and marketing expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 were ~~$41,123~~$623,613 compared to ~~$37,836~~$18,339 for the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, an increase of ~~$3,287. The Company continued~~$605,274. This resulted from the issuance of options to ~~spend~~consultants involved with the marketing ~~funds during the nine months ended September 30, 2020 to increase visibility~~ of the ~~Platform.~~Mazoola^SMapp and monthly fees.

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Product Development

Product development expenses were ~~$667,604~~$1,647,916 and ~~$275,202~~$193,453 for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, an increase of ~~$392,402.~~$1,454,463. The Company continued the process to complete the development of the ~~Platform~~Mazoola^SMapp prior to its launch and ~~move toward~~then began developing further enhancements to the ~~launch of the Platform, which is anticipated in December 2020.~~app to increase its marketability.

General and Administrative Expenses

General and administrative expenses ~~decreased $6,757~~increased $4,413,434 to ~~$1,605,535~~$5,090,788 for the ~~nine~~six months ended ~~September~~June 30, 2021 from $677,354 for the six months ended June 30, 2020. This resulted from the Company issuing shares of common stock and options to Board members, officers and consultants, an increase of approximately $4,110,000 for the six months ended June 30, 2021 compared to June 30, 2020. Consulting fees increased $104,000 for the six months ended June 30, 2021 compared to June 30, 2020, resulting from ~~$1,612,292~~fees paid to raise capital. Payroll increased $122,000 resulting from the Chief Executive Officer’s salary for the ~~nine~~six months ended ~~September~~June 30, ~~2019. The Company is now focusing on the development~~2021 compared to June 30, 2020. Additionally, impairment of the ~~Platform and has implemented cost containment measures~~Chore Check, LLC assets of $112,000 contributed to ~~fulfill that plan.~~the increase for the six months ended June 30, 2021 compared to June 30, 2020.

Interest Expense

During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Company incurred interest expense of ~~$572,563,~~$575,947, compared to ~~$492,759~~$380,347 for the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, an increase of ~~$79,804.~~$195,600. The increase in interest expense relates to additional debt outstanding.

Forgiveness of Debt

During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Company had ~~$422,419~~$95,425 of debt forgiven compared to $0 for the ~~nine~~six months ended ~~September~~June 30, ~~2019, an increase~~2020. On January 28, 2021, the Company received notification that the Paycheck Protection Plan loan was forgiven in full by the Small Business Administration and therefore $79,500 was recognized as forgiveness of ~~$422,419. The increase related to a settlement of accounts payable and accrued payroll with~~debt during the ~~former Chief Executive Officer, an employee and a consultant.~~six months ended June 30, 2021.

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~~Change in Fair Value~~Additionally, the Economic Injury Disaster Loan of ~~Embedded Derivative Liability~~$2,000 ($1,000 per employee) does not require repayment and ~~Preferred Stock Dividends~~was also recognized as forgiveness of debt.

~~As described in Note 10 to~~The Company also had $13,925 of vendor debt forgiven during the financial statements, in April 2014, the conversion feature of the Series A Preferred Stock issued in April 2014 is an embedded derivative, which is classified as a liability in accordance with FASB ASC 815 and was valued in accordance with FASB ASC 470 as a beneficial conversion feature at a fair market value of $3,489,000 at April 30, 2014, and $232,600 at September 30, 2020 and $0 at December 31, 2019. This was classified as an embedded derivative liability and a discount to Series A Preferred Stock. Since the Series A Preferred Stock can be converted at any time, the full amount of the discount was accreted and reflected as a deemed distribution in April 2014. The change in value for the threesix months ended ~~September~~June 30, ~~2020 was an increase in the liability of $232,600.~~2021.

Liquidity and Capital Resources

As of ~~November~~August 16, ~~2020~~2021 we had cash on hand of approximately ~~$825,000.~~$2.5 million.

Net cash used in operating activities increased ~~$481,804~~$1,703,976 to ~~$1,358,948~~$2,355,054 for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 as compared to ~~$877,144~~$651,078 for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The increase resulted primarily from the increased development costs to launch the Mazoola^SM app and continue enhancements to increase ~~in net loss~~its marketability. Additionally, the Company issued common stock and ~~the decrease accounts payable and accrued expenses partially offset by increased option and warrant expenses and forgiveness~~options with total fair value of ~~debt during the nine months ended September 30, 2020 compared~~$5,376,276 rather than having to ~~the nine months ended September 30, 2019.~~expend cash.

Net cash provided by financing activities increased to ~~$1,941,500~~$4,740,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 from $~~889,000~~ 241,500 for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. Cash provided by financing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, consisted of convertible notes payable to provide capital to continue ~~operations and a loan pursuant to the paycheck protection program.~~operations.

As we have not realized significant revenues since our inception, we have financed our operations through offerings of debt and equity securities. We do not currently maintain a line of credit or term loan with any commercial bank or other financial institution.

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Since our inception, we have focused on developing and implementing our business plan. We believe that our existing cash resources will not be sufficient to sustain our operations during the next twelve months. We currently need to generate sufficient revenues to support our cost structure to enable us to pay ongoing costs and expenses as they are incurred, finance ~~the development of~~enhancements to our Platform, and execute the business plan. If we cannot generate sufficient revenue to fund our business plan, we intend to seek to raise such financing through the sale of debt and/or equity securities. The issuance of additional equity would result in dilution to existing shareholders. The issuance of convertible debt may also result in dilution to existing stockholders. If we are unable to obtain additional funds when they are needed or if such funds cannot be obtained on terms acceptable to us, we will be unable to execute upon the business plan or pay costs and expenses as they are incurred, which would have a material, adverse effect on our business, financial condition and results of operations. See Note 2, to our consolidated financial statements included in ~~our most recent~~this Form ~~10-K.~~10-Q.

Even if we are successful in generating sufficient revenue or in raising sufficient capital in order to complete the Platform, our ability to continue in business as a viable going concern can only be achieved when our revenues reach a level that sustains our business operations. ~~The launch of the Platform is expected in the fourth quarter of 2020, however, we~~We do not project that significant revenue will be developed at the earliest until the fourth quarter of 2021. There can be no assurance that we will raise sufficient proceeds, or any proceeds, for us to implement fully our proposed business plan. Moreover, there can be no assurance that even if the Platform is fully developed and successfully launched, that we will generate revenues sufficient to fund our operations. In either such situation, we may not be able to continue our operations and our business might fail.

Based upon the current cash position and the Company’s planned expense run rate, management believes the Company will not be able to finance its operations beyond January ~~2021.~~2022.

The foregoing forward-looking information was prepared by us in good faith based upon assumptions that we believe to be reasonable. No assurance can be given, however, regarding the attainability of the projections or the reliability of the assumptions on which they are based. The projections are subject to the uncertainties inherent in any attempt to predict the results of our operations, especially where new products and services are involved. Certain of the assumptions used will inevitably not materialize and unanticipated events will occur. Actual results of operations are, therefore, likely to vary from the projections and such variations may be material and adverse to us. Accordingly, no assurance can be given that such results will be achieved. Moreover, due to changes in technology, new product announcements, competitive pressures, system design and/or other specifications we may be required to change the current plans.

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Off-Balance Sheet Arrangements

As of ~~September~~June 30, ~~2020,~~2021, we do not have any off-balance sheet arrangements.

Critical Accounting Policies

Our financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 1 of the Notes to Financial Statements included in the Company’s Form 10-K for the year ended December 31, ~~2019.~~2020. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows and which require the application of significant judgment by management.

Stock-based Compensation

We have adopted the fair value recognition provisions of Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 718. In addition, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107 “Share-Based Payment” (“SAB 107”), which provides supplemental FASB ASC 718 application guidance based on the views of the SEC. Under FASB ASC 718, compensation cost recognized includes compensation cost for all share-based payments granted, based on the grant date fair value estimated in accordance with the provisions of FASB ASC 718.

We have used the Black-Scholes option-pricing model to estimate the option fair values. The option-pricing model requires a number of assumptions, of which the most significant are, expected stock price volatility, the expected pre-vesting forfeiture rate and the expected option term (the amount of time from the grant date until the options are exercised or expire).

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All issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued. Non-employee equity based payments that do not vest immediately upon grant are recorded as an expense over the vesting period.

Revenue Recognition

In accordance with ~~Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 104, Revenue Recognition (Codified in~~ FASB ASC ~~606)~~606, Revenue from Contracts with Customers, ~~we will recognize~~the Company recognizes revenue when ~~(i) persuasive evidence of a customer~~it satisfies performance obligations, by transferring promised goods or ~~distributor arrangement exists or acceptance occurs, (ii) a retailer, distributor or wholesaler receives~~services to customers, in an amount that reflects the ~~goods, (iii)~~consideration to which the ~~price is fixed or determinable, and (iv) collectability of the sales revenues is reasonably assured. Subject~~Company expects to ~~these criteria, we have generally recognized revenue from our prior Oink product at the time of the sale of the associated goods.~~be entitled in exchange for fulfilling those performance obligations.

Recently Issued Accounting Pronouncements

Recently issued accounting pronouncements are discussed in Note 1 of the Notes to Financial Statements contained elsewhere in this report.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required.

ITEM 4. CONTROLS AND PROCEDURES.

As of ~~September~~June 30, ~~2020,~~2021 we carried out the evaluation of the effectiveness of our disclosure controls and procedures required by Rule 13a-15(e) under the Exchange Act under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of ~~September~~June 30, ~~2020,~~2021, our disclosure controls and procedures were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in our internal control over financial reporting that occurred during our fiscal quarter ended ~~September~~June 30, ~~2020~~2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

There have been no material developments since the disclosure provided in the Company’s Form 10-K for the year ended December 31, ~~2019.~~2020.

ITEM 1A. RISK FACTORS.

Not required.

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

~~During the nine months ended September 30, 2020,~~On June 1, 2021, the Company ~~issued $1,967,000 aggregate~~exchanged a note payable in the principal amount of ~~its New~~$450,000, plus accrued interest of $67,000 for a 4% Secured ~~Notes to certain investors.~~Convertible Note in the amount of $517,000.

On October 27, 2020, the Company issued a consultant an option to purchase 50,000 shares of the Company’s common stock with an exercise price of $0.90 and a term of 2 years for assisting in raising up to $3 million of capital. The options were valued at $18,302, fair market value and will be expensed immediately.

On October 27, 2020, the Company issued a consultant an option to purchase 25,000 shares of the Company’s common stock with an exercise price of $0.90 and a term of 2 years for assisting with a marketing campaign. The consultant will also receive an option to purchase an additional 20,000 shares of the Company’s common stock with an exercise price of $0.90 and a term of 2 years, each month for eight months. The initial options issued were valued at $9,151, fair market value and will be expensed immediately. The fair value of each additional 20,000 options issued monthly over eight months will expensed upon issuance.

Also on October 27, 2020, the Board of Directors approved the issuance of 250,000 shares of the Company’s common stock each for a total of 750,000 shares to the Chief Executive Officer, a Board Member and the Chief Financial Officer upon launching the Beta test and commercial launch of the digital wallet platform. Additionally, the Board approved the issuance of 250,000 of the Company’s common stock to the Chief Executive Officer, if he is successful in rasing an additional $2 million by December 31, 2020.

During October and November 2020, Shareholders owning an aggregate of 23,833 common shares of the outstanding 10,023,929 common shares of ZS and notes payable have agreed to exchange their shares of common stock of ZS for 10% Secured Convertible Notes of Rego Payment Architectures, Inc. on a dollar for dollar exchange based on the original investment of $195,250 in ZS.

~~In November 2020, the Company received $20,000 through the issuance of our 4% secured convertible notes payable-stockholders.~~$450,000.

Each of the foregoing issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. See the footnotes to the financial statements contained herein for additional detail on the applicable securities issued.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

The disclosure set forth in Part II – Item 2 above is incorporated by reference.

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ITEM 6. EXHIBITS

~~31.1~~10.1		Settlement Agreement Regarding Convertible Debenture dated June 1, 2021 between the company and Nehemiah Partners I LP.

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101.INS		XBRL Instance ~~Document~~Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Exhibit 101.SCH		Inline XBRL Taxonomy Extension Schema ~~Document~~Document.

Exhibit 101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase ~~Document~~Document.

~~101.DEF~~Exhibit 101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

Exhibit 101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Exhibit 101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase ~~Document~~Document.

~~101.LAB~~Exhibit 104		Cover Page Interactive Data File (formatted as Inline XBRL ~~Taxonomy Extension Label Linkbase Document~~and contained in Exhibit 101).

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	REGO PAYMENT ARCHITECTURES, INC.

	By:	/s/ Scott McPherson
		Scott McPherson
		Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)
Date: ~~November~~August 16, ~~2020~~ 2021

Delaware		35-2327649
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

325 Sentry Parkway, Suite 200
Blue Bell, PA		19422
(Address of Principal Executive Offices)		(Zip Code)

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
None

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

	PAGE

CONDENSED CONSOLIDATED BALANCE SHEETS	6


CONDENSED CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~COMPREHENSIVE LOSS	7


CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT	8


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	9


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	10 to 2423

o For the quarterly period ended June 30, 2021
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from __________ to __________
Commission file number 0-53944


(267) 465-7530
(Registrant’s Telephone Number, Including Area Code)

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

	September 30, 2020			December 31, 2019
	(Unaudited)			(Audited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	1,012,628		$	430,076
Prepaid expenses		213,905			-
Deposits		341			341

TOTAL CURRENT ASSETS		1,226,874			430,417

PROPERTY AND EQUIPMENT
Computer equipment		5,129			5,129
Less: accumulated depreciation		(5,129	)		(5,129	)
		-			-

OTHER ASSETS
Patents and trademarks, net of accumulated
amortization of $214,566 and $192,558		333,501			354,624
		333,501			354,624

TOTAL ASSETS	$	1,560,375		$	785,041

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	5,515,982		$	4,961,827
Accounts payable and accrued expenses - related parties		314,575			701,187
Embedded derivative liability		232,600			-
Paycheck protection program loan payable		81,500			-
Loans payable		85,600			85,600
Deferred revenue		200,000			200,000
10% Secured convertible notes payable - stockholders		2,813,157			2,813,157
Notes payable - stockholders, net of discount of $0 and $40,031		1,095,000			1,161,969
4% Secured convertible notes payable - stockholders		9,399,250			7,432,250
Preferred stock dividend liability		6,923,463			6,108,122

TOTAL CURRENT LIABILITIES		26,661,127			23,464,112

CONTINGENCIES

STOCKHOLDERS' DEFICIT

Preferred stock, $.0001 par value; 2,000,000 preferred shares
authorized; 195,500 preferred shares Series A authorized; 107,850 shares
issued and outstanding at September 30, 2020 and December 31, 2019		11			11

Preferred stock, $.0001 par value; 2,000,000 preferred shares
authorized; 222,222 preferred shares Series B authorized; 28,378 shares
issued and outstanding at September 30, 2020 and December 31, 2019		3			3

Preferred stock, $.0001 par value; 2,000,000 preferred shares
authorized; 150,000 preferred shares Series C authorized; 0 shares
issued and outstanding at September 30, 2020 and December 31, 2019		-			-

Common stock, $ .0001 par value; 230,000,000 shares authorized;
120,096,866 and 119,596,866 shares issued and outstanding at September 30, 2020 and
December 31, 2019		12,010			11,960

Additional paid in capital		61,324,464			60,233,849

Accumulated deficit		(86,627,250	)		(83,130,943	)

Noncontrolling interests		190,010			206,049

STOCKHOLDERS' DEFICIT		(25,100,752	)		(22,679,071	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	1,560,375		$	785,041

	For the Three Months						For the Nine Months Ended
	Ended September 30,						September 30,
	2020			2019			2020			2019

SALES	$	-		$	-		$	-		$	34,485

OPERATING EXPENSES
Sales and marketing		22,784			9,371			41,123			37,836
Product development		474,151			33,806			667,604			275,202
General and administrative		928,181			522,589			1,605,535			1,612,291
Total operating expenses		1,425,116			565,766			2,314,262			1,925,329

NET OPERATING LOSS		(1,425,116	)		(565,766	)		(2,314,262	)		(1,890,844	)

OTHER INCOME (EXPENSE)
Interest expense		(192,216	)		(176,413	)		(572,563	)		(492,759	)
Forgiveness of debt		422,419			-			422,419			-
Change in fair value of embedded derivative liability		(232,600	)		-			(232,600	)		-
		(2,397	)		(176,413	)		(382,744	)		(492,759	)

NET LOSS		(1,427,513	)		(742,179	)		(2,697,006	)		(2,383,603	)

LESS: Accrued preferred dividends		(271,780	)		(271,780	)		(815,340	)		(815,342	)
Net loss attributable to noncontrolling interests		313			461			1,039			6,942

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(1,698,980	)	$	(1,013,498	)	$	(3,511,307	)	$	(3,192,003	)

BASIC AND DILUTED NET LOSS PER
COMMON SHARE	$	(0.01	)	$	(0.01	)	$	(0.03	)	$	(0.03	)

BASIC AND DILUTED WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING		119,805,199			119,596,866			119,666,310			119,596,866

	For the Nine Months Ended September 30,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(2,697,006	)	$	(2,383,603	)
Adjustments to reconcile net loss to net cash used in operating activities:
Fair value of common stock issued in exchange for services		187,500			-
Fair value of options issued for interest on notes payable		14,760			21,305
Fair value of options and warrants issued in exchange for services		888,405			359,145
Change in fair value of embedded derivative liability		232,600			-
Accretion of discount on notes payable		40,031			24,111
Depreciation and amortization		21,123			21,988
Forgiveness of debt		422,419			-
(Increase) decrease in assets
Accounts receivable		-			1,923
Prepaid expenses		(213,905	)		8,921
Deposits		-			25,000
Increase (decrease) in liabilities
Accounts payable and accrued expenses		131,737			664,092
Accounts payable and accrued expenses - related parties		(386,612	)		379,974

Net cash used in operating activities		(1,358,948	)		(877,144	)

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of loans payable		-			(4,000	)
Proceeds from notes payable - stockholders		15,000			550,000
Repayment of notes payable - stockholders		(15,000	)		(7,000	)
Proceeds from convertible notes payable - stockholders		1,860,000			350,000
Proceeds from paycheck protection program loan		81,500			-

Net cash provided by financing activities		1,941,500			889,000

NET INCREASE IN CASH AND CASH EQUIVALENTS		582,552			11,856

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		430,076			10,733

CASH AND CASH EQUIVALENTS - END OF PERIOD	$	1,012,628		$	22,589

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during year for:
Interest	$	-		$	-
Income taxes	$	-		$	-

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:

Accrued preferred dividends	$	815,341		$	815,341
Exchange of 10% secured convertible notes payable for 4% secured convertible notes payable	$	-		$	350,000
Exchange of notes payable - stockholders for 4% secured convertible notes - stockholders	$	107,000		$	-
Accrued interest as discount on notes payable	$	-		$	24,111
Forfeited common stock	$	25		$	-

September 30, 2020	Level 1		Level 2		Level 3		Total

Derivative liability related to fair value of beneficial
conversion feature	$	-	$	232,600	$	-	$	232,600

Total	$	-	$	232,600	$	-	$	232,600

	Total
Balance at December 31, 2019	$	-

Change in fair value of derivative liabilities		232,600

Balance at September 30, 2020	$	232,600

Closing trading price of Rego common stock	$	0.50

Rego Series A Preferred Stock Effective Conversion Price issued April 30, 2014		0.46

Intrinsic value of conversion warrant per share	$	0.04

	Unvested Options
				Weighted -
				Average
				Grant
	Number of			Date Fair
	Shares			Value
Balance December 31, 2019		233,333		$	0.20

Granted		3,222,500			0.21
Expired/cancelled		(100,000	)		0.22
Vested		(3,355,833	)		0.22

Balance September 30, 2020		-			-

~~Delaware~~		~~35-2327649~~