Smaller reporting companies are not required to provide the information required by this item.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
NOTE 1 – Organization and Going Concern
Organization
Nunzia Pharmaceutical Company (the “Company”),
was incorporated on November 12, 1986, in the state of Utah under the name of Silver Harvest, Inc. In February 1990, the Company amended
its Articles of Incorporation to change its name to Viking Capital Group, Inc. In June 2010, the Company amended its Articles of Incorporation
to change its name to its name to Arizona Gold and Onyx Mining Company. On February 1, 2018, the Company amended its Articles of Incorporation
to change its name to Nunzia Pharmaceutical Corporation in anticipation of completion of a merger with Cal-Biotech, Inc. (A Wyoming Corporation),
owner of www.NunziaPharmaceutical.com.
On October 22, 2017, the Company and Cal-Biotech,
Inc. (“Cal-Biotech”) entered into a Merger and Consolidation Agreement (the “MCA”). In anticipation
of closing on the MCA, on February 1, 2018, the Board authorized a 7,000:1 reverse stock split, which took effect on December 4, 2019,
and amended its articles changing its name to Nunzia Pharmaceutical Company. On December 13, 2020, the Company agreed to issue 284,500,000
shares pursuant to MCA (the “MCA Shares”). Of the shares issued, 1) 248,270,000 were to be issued to LionsGate Funding
Group LLC (“LionsGate”) (majority owner of Cal-Biotech) in exchange for the all the issued and outstanding stock in
Cal-Biotech and to settle $156,657 of advances from Cal-Biotech to the Company that were originally funded by LionsGate; and 2) 36,230,000
were issued to settle $144,570 of debt and advances recorded as liabilities to related and non-related parties. 31,650,000 MCA Shares
due to LionsGate have not been issued as of the date of this report.
Going Concern
The Company’s financial statements are prepared
using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization
of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues
sufficient to cover its operating costs to allow it to continue as a going concern. As of December 31, 2020, the Company had an accumulated
deficit of $(101,350,359). The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital
to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease
operations.
In view of these conditions, the ability of the
Company to continue as a going concern is in doubt and dependent upon achieving a profitable level of operations and on the ability of
the Company to obtain necessary financing to fund ongoing operations. Historically, the Company has relied upon internally generated funds
and funds from the sale of shares of stock, issuance of promissory notes and loans from its shareholders and private investors to finance
its operations and growth. Management is planning to raise necessary additional funds for working capital through loans and/or additional
sales of its common stock. However, there is no assurance that the Company will be successful in raising additional capital or that such
additional funds will be available on acceptable terms, if at all. Should the Company be unable to raise this amount of capital its operating
plans will be limited to the amount of capital that it can access. These financial statements do not give effect to any adjustments which
will be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge
its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial
statements.
NOTE 2 – Summary of Significant
Accounting Policies
Principles of Consolidation
These consolidated financial statements presented are those of the
Company and its wholly owned subsidiaries, A1 Mining; NIAI Insurance Administrators, Inc. of California; Viking Capital Financial Services,
Inc. of Texas; Viking Insurance Services, Inc. of Texas; Viking Systems, Inc. of Texas; Viking Administrators, Inc. of Texas; Viking Capital
Ventures, Inc. of Texas; and 60% of Brentwood Re, Ltd. of the Island of Nevis. All subsidiaries have had their charters suspended or revoked
and have been inactive for several years.
Accounting estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles (“GAAP”) requires Management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.
Cash and cash equivalents
The Company considers all highly liquid instruments purchased with
an original maturity of three months or less and money market accounts to be cash equivalents.
Income Taxes
The Company accounts for income taxes using the asset and liability
method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed
to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and
tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation
allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company reports a liability
for unrecognized tax benefits resulting from uncertain income tax positions, if any, taken or expected to be taken in an income tax return.
Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively.
Fair Value Measurements
Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. The Company utilizes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and
the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
Level 1, defined as observable
inputs such as quoted prices for identical instruments in active markets;
Level 2, defined as inputs other than
quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active
markets or quoted prices for identical or similar instruments in markets that are not active; and
Level 3, defined as unobservable inputs in which little or no market
data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which
one or more significant inputs or significant value drivers are unobservable.
During the periods covered by this report, the Company did not have
any assets or liabilities that were required to be measured at fair value on a recurring basis or on a non-recurring basis.
Fair Value of Financial Instruments
The Company’s financial instruments consist of accounts payable
and accrued expenses. The carrying amounts of the Company’s financial instruments approximate fair value because of the short-term
maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment
and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect those estimates. We do not hold
or issue financial instruments for trading purposes, nor do we utilize derivative instruments.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with
Accounting Standards Codification (“ASC”) 718, Stock Based Compensation. ASC 718 requires all stock-based payments to
directors, employees and consultants, including grants of stock options, to be recognized in the consolidated statements of operations
based on their fair values. If a stock-based award contains performance-based conditions, at the point that it becomes probable that the
performance conditions will be met, the Company records a cumulative catch-up of the expense from the grant date to the current date,
and then amortizes the remainder of the expense over the remaining service period. Management evaluates when the achievement of a performance-based
condition is probable based on the expected satisfaction of the performance conditions as of the reporting date.
Net Income (Loss) Per Share
The computation of basic earnings per share (“EPS”) is
based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable
at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding
plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using
the treasury stock method. The Company had no potentially dilutive securities as of December 31, 2020 and 2019.
Recent accounting pronouncements not yet adopted
In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting
Standards Update (ASU) 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The guidance removes
certain exceptions for recognizing deferred taxes for equity method investments, performing intra period allocation, and calculating income
taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill
and allocating taxes to members of a consolidated group, among others. This guidance is effective for interim and annual reporting
periods beginning after December 15, 2020. Early adoption of the standard is permitted, including adoption in interim or annual periods
for which financial statements have not yet been issued. The transition requirements are dependent upon each amendment within this update
and will be applied either prospectively or retrospectively. The adoption of ASU 2019-12 is not expected to have a material impact on
the Company’s consolidated financial position, results of operations, or cash flows.
Recent Adopted Accounting Pronouncements
The Company reviews new accounting standards as issued. Although some
of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable, the Company
has not identified any standards that the Company believes merit further discussion. The Company believes that none of the new standards
will have a significant impact on the financial statements.
NOTE 3 – Restatement
NUNZIA PHARMACEUTICAL
COMPANY
Schedule of Balance Sheets | |
| | | |
| | | |
| | |
CONSOLIDATED BALANCE SHEETS | |
As Reported | |
Restatement
Adjustments | |
|
| |
December 31, 2020 | |
| |
December 31, 2020 (Restated) |
ASSETS | |
| | | |
| | | |
| | |
Current Assets | |
| | | |
| | | |
| | |
Cash | |
$ | – | | |
$ | – | | |
$ | – | |
Prepaid expenses | |
| – | | |
| – | | |
| – | |
Total current assets | |
| – | | |
| – | | |
| – | |
Investment in related party | |
| – | | |
| – | | |
| – | |
Total assets | |
$ | – | | |
$ | – | | |
$ | – | |
| |
| | | |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
Current liabilities | |
| | | |
| | | |
| | |
Accounts payable and accrued liabilities | |
$ | 25,868 | | |
$ | – | | |
$ | 25,868 | |
Related party advances | |
| 10,536 | | |
| – | | |
| 10,536 | |
Total current liabilities | |
| 36,404 | | |
| – | | |
| 36,404 | |
| |
| | | |
| | | |
| | |
Commitments and contingencies | |
| | | |
| | | |
| | |
Notes Payable | |
| – | | |
| 23,000 | | |
| 23,000 | |
Total Liabilities | |
| 36,404 | | |
| – | | |
| 59,404 | |
| |
| | | |
| | | |
| | |
Stockholders' deficit | |
| | | |
| | | |
| | |
See insert below | |
| 244,370 | | |
| – | | |
| 244,370 | |
Common stock; Class B, $0.001 par value, 100,000 shares
authorized, 51,000 shares issued and outstanding at December 31, 2020 and 2019 | |
| 51 | | |
| – | | |
| 51 | |
Common stock payable | |
| 9,040,400 | | |
| – | | |
| 9,040,400 | |
Additional paid-in capital | |
| 29,134 | | |
| 91,977,000 | | |
| 92,006,134 | |
Retained deficit | |
| (9,350,359 | ) | |
| (92,000,000 | ) | |
| (101,350,359 | ) |
Total stockholders' deficit | |
| (36,404 | ) | |
| – | | |
| (59,404 | ) |
Total liabilities and stockholders' deficit | |
$ | – | | |
$ | – | | |
$ | – | |
NUNZIA PHARMACEUTICAL COMPANY
Schedule of Consolidated Statements of Operations | |
| | | |
| | | |
| | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |
As Reported | |
Restatement
Adjustments | |
|
| |
| |
| |
December 31, |
| |
December 31, 2020 | |
| |
2020 (Restated) |
| |
| |
| |
|
Revenue | |
$ | – | | |
$ | – | | |
$ | – | |
| |
| | | |
| | | |
| | |
Operating expense | |
| | | |
| | | |
| | |
General and administrative | |
| 16,327 | | |
| 23,000 | | |
| 39,327 | |
Total operating expense | |
| 16,327 | | |
| 23,000 | | |
| 39,327 | |
Loss from operations | |
| (16,327 | ) | |
| (23,000 | ) | |
| (39,327 | ) |
Other income (expense) | |
| | | |
| | | |
| | |
Financing Costs | |
| – | | |
| (91,977,000 | ) | |
| (91,977,000 | ) |
Loss on related party transfer of intangible assets | |
| (9,000,000 | ) | |
| – | | |
| (9,000,000 | ) |
Total other income (expense) | |
| (9,000,000 | ) | |
| (91,977,000 | ) | |
| (100,977,000 | ) |
Net loss | |
$ | (9,016,327 | ) | |
$ | (92,000,000 | ) | |
$ | (101,016,327 | ) |
| |
| | | |
| | | |
| | |
Basic and Diluted Loss per Common Share | |
$ | – | | |
$ | – | | |
$ | – | |
| |
| | | |
| | | |
| | |
Weighted average number of common shares outstanding - basic and diluted | |
| 284,893,181 | | |
| – | | |
| 284,893,181 | |
NUNZIA PHARMACEUTICAL
COMPANY
Schedule of Consolidated Statements of Cash Flows | |
| | | |
| | | |
| | |
CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED) | |
As Reported | |
Restatement
Adjustments | |
|
| |
| |
| |
December 31, |
| |
December 31, 2020 | |
| |
2020 (Restated) |
Cash flows from operating activities | |
| | | |
| | | |
| | |
Net loss | |
$ | (9,016,327 | ) | |
$ | (92,000,000 | ) | |
$ | (101,016,327 | ) |
Adjustments to reconcile net loss to net cash flows from operating activities | |
| | | |
| | | |
| | |
Stock based compensation expense | |
| 2,498 | | |
| – | | |
| 2,498 | |
Loss on related party transfer of intangible assets | |
| 9,000,000 | | |
| – | | |
| 9,000,000 | |
Finance Costs | |
| – | | |
| 91,977,000 | | |
| 91,977,000 | |
Changes in operating assets and liabilities: | |
| | | |
| | | |
| | |
(Increase) decrease in prepaid expenses | |
| – | | |
| – | | |
| – | |
Increase (decrease) in accounts payable and accrued expenses | |
| 4,535 | | |
| – | | |
| 4,535 | |
Increase in related party advances | |
| 9,294 | | |
| – | | |
| 9,294 | |
Net cash flows from operating activities | |
| – | | |
| (23,000 | ) | |
| (23,000 | ) |
| |
| | | |
| | | |
| | |
Cash flows from financing activities | |
| | | |
| | | |
| | |
Proceeds From Convertible Debt | |
| – | | |
| 23,000 | | |
| 23,000 | |
Related party paid-in-capital | |
| – | | |
| – | | |
| – | |
Net cash flows from financing activities | |
| – | | |
| 23,000 | | |
| 23,000 | |
| |
| | | |
| | | |
| | |
Change in cash | |
| – | | |
| – | | |
| – | |
Cash at beginning of period | |
| – | | |
| – | | |
| – | |
Cash at end of period | |
$ | – | | |
$ | – | | |
$ | – | |
| |
| | | |
| | | |
| | |
Supplemental disclosure of cash flow information: | |
| | | |
| | | |
| | |
Interest paid in cash | |
$ | – | | |
$ | – | | |
$ | – | |
Income taxes paid in cash | |
$ | – | | |
$ | – | | |
$ | – | |
| |
| | | |
| | | |
| | |
Supplemental disclosure of non-cash transactions: | |
| | | |
| | | |
| | |
Common stock issued as payment for liabilities | |
$ | 2,498 | | |
$ | – | | |
$ | 2,498 | |
NOTE 4 – Preferred and Common Stock
Preferred Stock
The Company has Preferred stock: $1.00 par value; 50,000,000 shares authorized with no shares issued and outstanding.
Common Stock
The Company has 51,000 shares of Class B Common Stock issued and outstanding as of December 31, 2020. The Class B shares are the only shares eligible to vote for Directors. LionsGate holds all Class B common shares.
The Company has 1,000,000,000 shares of Class A Common Stock authorized of which 244,369,578 and 234,519,578 shares are issued and outstanding as of December 31, 2020 and 2019, respectively. 40,400,000 MCA Shares due to LionsGate have not been issued as of December 31, 2020 and 31,650,000 MCA Shares due to LionsGate have not been issued as of the date of this report.
On December 21, 2020, the Company entered into a License
Agreement (the “License Agreement”) with Michael Mitsunaga, our President and Director. The terms of the
Agreement provide the Company with exclusive license to market the UL and FDA approved device under patent No. 6,788,885 B2: IV
BLOOD WARMING SYSTEM that is a portable AC-powered warmer designed to preheat intravenous solutions at the point of infusion. The
Company agreed to issue 3,000,000 shares of common stock and pay a 2% fee of gross sales. The duration of the Agreement is for an
initial period of five years commencing on August 3, 2021. The shares were issued on July 8, 2021. The Agreement was initially
valued at $3.00 per share (the closing price of our stock on the date of the Agreement) or $9,000,000.
Due to the related party nature of the transfer and the absence of historical cost records, the full $9,000,000
was expensed within “Loss on related party transfer of intangible assets.”
On August 16, 2020, the Board issued 9,600,000 of the MCA shares. 9,000,000 of the shares were issued in error and returned to the Company on June 7, 2021.
On January 15, 2020, the Company issued 250,000 shares of class A common stock to a vendor in exchange for services for which the Company carried a balance in Accounts Payable of $2,498 as of December 31, 2019.
On December 13, 2019, as part of the Cal-Biotech MCA the Company issued 284,500,000 class A common stock in the amount of 1) 230,000 shares to settle $49,800 of AP; 2) 34,500,000 shares to settle the $59,770 owed to Mr. Mitsunaga; 3) 1,500,000 shares to settle $35,000 owed to Mr. Johnson; and 4) 248,270,000 shares to LionsGate to settle $156,657 and consummate the MCA.
On December 4, 2019, the Company affected a 1-for-7,000 reverse stock split reducing the number of shares outstanding from 126,859,077 to 19,578. All per share amounts have been adjusted to reflect the split.
On April 23, 2019, the Board canceled 2,457 Class A common shares that were returned.
The Company has 100,000 shares of Class B Common Stock authorized. On December 5, 2019, Mr. Mitsunaga transferred all 51,000 shares of Class B common stock to LionsGate.
NOTE 5 – Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Company’s deferred tax assets
at December 31, 2020 and 2019 are as follows:
Schedule Of Deferred Tax Assets
| |
| | | |
| | |
| |
2020 | |
2019 |
Deferred tax assets: | |
| | | |
| | |
Net operating loss carryforwards | |
$ | 347,861 | | |
$ | 334,032 | |
Statutory tax rate | |
| 21 | % | |
| 21 | % |
Total deferred tax assets | |
| 73,051 | | |
| 70,147 | |
Less: valuation allowance | |
| (73,051 | ) | |
| (70,147 | ) |
Net deferred tax asset | |
$ | – | | |
$ | – | |
A reconciliation between the amount of income tax benefit determined
by applying the applicable U.S. statutory income tax rate to pre-tax loss for the years ended December 31, 2020 and 2019 is as follows:
Schedule Of Reconciliation Of Provision For Income Taxes
| |
| | | |
| | |
| |
2020 | |
2019 |
Federal Statutory Rate | |
$ | (1,893,429 | ) | |
$ | (7,063 | ) |
Nondeductible expenses | |
| 1,890,525 | | |
| – | |
Change in allowance on deferred tax assets | |
| (2,904 | ) | |
| (7,063 | ) |
| |
$ | – | | |
$ | – | |
The net increase in the valuation allowance for deferred tax assets was $2,904 and $7,063 for the years ended December 31, 2020 and 2019, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Due to the uncertainty of realizing the deferred tax asset, management has recorded a valuation allowance against the entire deferred tax asset.
For federal income tax purposes, the Company has net U.S. operating loss carry forwards at December 31, 2020 available to offset future federal taxable income, if any, of $348,000. The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result of sales of common stock.
The fiscal years 2017 through 2020 remain open to examination by federal authorities and other jurisdictions in which the Company operates.
NOTE 6 – Transactions with Related Persons
Mr. Mitsunaga made non-interest-bearing advances to the Company totaling $4,294 and $0 during the years ended December 31, 2020 and 2019, respectively.
LionsGate made non-interest-bearing advances to the Company totaling $5,000 and $21,192 during the years ended December 31, 2020 and 2019, respectively. All of the 2019 advances from LionsGate were relieved as part of the MCA.
On December 21, 2020, the Company entered into a License
Agreement with Michael Mitsunaga, our President and Director. The terms of the Agreement provide the Company with exclusive license
to market the UL and FDA approved device under patent No. 6,788,885 B2: IV BLOOD WARMING SYSTEM that is a portable AC-powered warmer
designed to preheat intravenous solutions at the point of infusion. The Company agreed to issue 3,000,000
shares of common stock and pay a 2%
fee of gross sales. The duration of the Agreement is for an initial period of five years commencing on August 3, 2021. The shares
were issued on July
8, 2021. The Agreement was initially valued at $3.00
per share (the closing price of our stock on the date of the Agreement) or $9,000,000.
Due to the related party nature of the transfer and the absence of historical cost records, the full $9,000,000
was expensed within “Loss on related party transfer of intangible assets.”
On October 22, 2017, the Company and Cal-Biotech, Inc., a company owned by LionsGate Funding LLC, entered into a Merger and Consolidation Agreement. In anticipation of closing on the MCA, on February 1, 2018, the Board authorized a 7,000:1 reverse stock split, which took effect on December 4, 2019, and amended its articles changing its name to Nunzia Pharmaceutical Company. On December 13, 2020, the Company issued 284,500,000 shares pursuant to MCA. Of the shares issued, 1) 248,270,000 were issued to LionsGate in exchange for the all the issued and outstanding stock in Cal-Biotech and to settle $156,657 of advances from Cal-Biotech to the Company that were originally funded by LionsGate; and 2) 36,230,000 were issued to settle $144,570 of debt and advances recorded as liabilities to related and non-related parties. 31,650,000 shares due to LionsGate as part of the MCA have not been issued as of the date of this report.
NOTE 7 -
Merger
On October 22, 2017, the Company and Cal-Biotech, Inc. entered into the MCA. In anticipation of closing on the MCA, on February 1, 2018, the Board authorized a 7,000:1 reverse stock split, which took effect on December 4, 2019, and amended its articles changing its name to Nunzia Pharmaceutical Corporation. On December 13, 2019, the Company issued 284,500,000 shares pursuant to MCA. Of the shares issued, 1) 248,270,000 were issued to LionsGate Funding Group LLC (“LionsGate”) (majority owner of Cal-Biotech) in exchange for the all the issued and outstanding stock in Cal-Biotech and to settle $156,657 of advances from Cal-Biotech to the Company that were originally funded by LionsGate; and 2) 36,230,000 were issued to settle $144,570 of debt and advances recorded as liabilities to related and non-related parties. 22,650,000 shares due to LionsGate as part of the MCA have not been issued as of the date of this report.
Prior to the close of the MCA, LionsGate held a majority beneficial ownership interest in the Company and Cal-Biotech. Thus, due to the common control of the Company and Cal-Biotech, pursuant to ASC 805-50-25, “Transactions Between Entities Under Common Control”, the MCA was accounted for as a transfer of the carrying amounts of assets and liabilities under the predecessor value method of accounting. The predecessor values method of accounting requires the receiving entity (i.e., the Company) to report the results of operations as if both entities had been combined as of the beginning of the periods presented. The consolidated financial statements above include both entities’ full results, including the financial statements of Cal-Biotech since inception on February 7, 2018.
The following financial information has been developed by application of pro forma adjustments to the historical financial statements of the Company appearing elsewhere in this Current Report. The unaudited pro forma information gives effect to the Merger which has been assumed to have upon inception of Cal-Biotech.
The unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what the results of operations or financial position of the Company would have been had the transactions described above actually occurred on the dates indicated, nor do they purport to project the financial condition of the Company for any future period or as of any future date. The unaudited pro forma financial information should be read in conjunction with the Company's financial statements and notes thereto included elsewhere in this Current Report.
The condensed consolidated
pro forma results of operations are as follows:
NUNZIA PHARMACEUTICAL COMPANY
Unaudited Consolidated Pro Forma Statements of Operations
Schedule of Pro Forma Statements of Operations | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
Year
Ended December 31, 2019 | |
Year
Ended December 31, 2018 | |
From
Inception on February 7, 2018 to December 31, 2018 |
| |
| Nunzia
Actual | | |
| Cal-Biotech
Actual | | |
| Pro
Forma | | |
| Nunzia
Actual | | |
| Cal-Biotech
Actual | | |
| Pro
Forma | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Revenue | |
$ | – | | |
$ | – | | |
$ | – | | |
$ | – | | |
$ | – | | |
$ | – | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Expenses | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Selling, general and administrative | |
| 29,835 | | |
| 3,800 | | |
| 33,635 | | |
| 18,576 | | |
| 3,200 | | |
| 21,776 | |
Total expenses | |
| 29,835 | | |
| 3,800 | | |
| 33,635 | | |
| 18,576 | | |
| 3,200 | | |
| 21,776 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Income (loss) from operations | |
| (29,835 | ) | |
| (3,800 | ) | |
| (33,635 | ) | |
| (18,576 | ) | |
| (3,200 | ) | |
| (21,776 | ) |
Provision for income taxes | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
Net earnings (loss) | |
$ | (29,835 | ) | |
$ | (3,800 | ) | |
$ | (33,635 | ) | |
$ | (18,576 | ) | |
$ | (3,200 | ) | |
$ | (21,776 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock outstanding | |
| 19,578 | | |
| | | |
| 19,578 | | |
| 22,035 | | |
| | | |
| 22,035 | |
Common stock issued in Merger | |
| | | |
| 250,000,000 | | |
| 250,000,000 | | |
| | | |
| 245,000,000 | | |
| 245,000,000 | |
Common stock issued in
exchange for liabilities and debts | |
| | | |
| 34,500,000 | | |
| 34,500,000 | | |
| | | |
| | | |
| – | |
Total common shares
outstanding | |
| | | |
| | | |
| 284,519,578 | | |
| | | |
| | | |
| 245,022,035 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income (loss) per
common share | |
| | | |
| | | |
$ | – | | |
| | | |
| | | |
$ | – | |
1) Includes
50,000,000 shares due to LionsGate Funding that were unissued at the time of the merger and as of year-end.
The condensed consolidated pro forma financial position
as of the date of merger is as follows:
NUNZIA PHARMACEUTICAL COMPANY
UNAUDITED CONSOLIDATED PRO FORMA BALANCE SHEETS
Schedule of Pro Forma Balance Sheets
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
|
|
| |
As
of December 4, 2019 | |
As
of December 31, 2018 |
|
| |
Nunzia | |
Cal-Biotech | |
Adjustments | |
Pro
Forma | |
Nunzia | |
Cal-Biotech | |
Adjustments | |
|
Pro Forma |
|
ASSETS | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
|
|
Total
assets | |
$ | – | | |
$ | – | | |
$ | – | | |
$ | – | | |
$ | – | | |
$ | – | | |
$ | – | | |
$ |
– |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
|
LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
|
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
|
Accounts payable and accrued liabilities | |
$ | 68,447 | | |
$ | | | |
$ | | | |
$ | 68,447 | | |
$ | 62,490 | | |
$ | | | |
$ | | | |
$ |
62,490 |
|
Related party advances | |
| 228,427 | | |
| – | | |
| – | | |
| 228,427 | | |
| 208,477 | | |
| – | | |
| – | | |
|
208,477 |
|
Related party promissory
note | |
| 23,000 | | |
| – | | |
| – | | |
| 23,000 | | |
| 23,000 | | |
| – | | |
| – | | |
|
23,000 |
|
Total current liabilities | |
| 319,874 | | |
| – | | |
| – | | |
| 319,874 | | |
| 293,967 | | |
| – | | |
| – | | |
|
293,967 |
|
Total liabilities | |
| 319,874 | | |
| – | | |
| – | | |
| 319,874 | | |
| 293,967 | | |
| – | | |
| – | | |
|
293,967 |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
|
Commitments and contingencies | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
|
Stockholders' equity (deficit) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
|
|
Common stock; Class A, $0.001 par value | |
| 20 | | |
| 245,000 | | |
| (45,000 | ) | |
| 200,020 | | |
| 22 | | |
| 245,000 | | |
| (45,000 | ) | |
|
200,022 |
|
Common stock; Class B, $0.001 par value | |
| 51 | | |
| – | | |
| – | | |
| 51 | | |
| 51 | | |
| – | | |
| – | | |
|
51 |
|
Common stock payable | |
| – | | |
| – | | |
| 50,000 | | |
| 50,000 | | |
| – | | |
| – | | |
| 50,000 | | |
|
50,000 |
|
Additional paid-in capital | |
| 5,962 | | |
| (238,000 | ) | |
| (5,000 | ) | |
| (237,038 | ) | |
| 3,157 | | |
| (241,800 | ) | |
| (5,000 | ) | |
|
(243,643 |
) |
Retained deficit | |
| (325,907 | ) | |
| (7,000 | ) | |
| – | | |
| (332,907 | ) | |
| (297,197 | ) | |
| (3,200 | ) | |
| – | | |
|
(300,397 |
) |
Total stockholders'
deficit | |
| (319,874 | ) | |
| – | | |
| – | | |
| (319,874 | ) | |
| (293,967 | ) | |
| – | | |
| – | | |
|
(293,967 |
) |
Total liabilities
and stockholders' deficit | |
$ | – | | |
$ | – | | |
$ | – | | |
$ | – | | |
$ | – | | |
$ | – | | |
$ | – | | |
$ |
– |
|
________________
1) reduced to reflect 200 million shares issued and allocate 50 million shares as payable.
2) represents the difference of 5 million additional shares issued in the merger that were in excess of outstanding shares of Cal-Biotech.
NOTE 8 – Commitments and Contingencies
COVID-19
In December 2019, an outbreak of the COVID-19 virus was reported in Wuhan, China. On March 11, 2020, the World Health Organization declared the COVID-19 virus a global pandemic and on March 13, 2020, President Donald J. Trump declared the virus a national emergency in the United States. This highly contagious disease has spread to most of the countries in the world and throughout the United States, creating a serious impact on customers, workforces and suppliers, disrupting economies and financial markets, and potentially leading to a world-wide economic downturn. It has caused a disruption of the normal operations of many businesses, including the temporary closure or scale-back of business operations and/or the imposition of either quarantine or remote work or meeting requirements for employees, either by government order or on a voluntary basis. The pandemic may adversely affect our operations, our employees and our employee productivity. It may also impact the ability of our subcontractors, partners, and suppliers to operate and fulfill their contractual obligations, and result in an increase in costs, delays or disruptions in performance. Our employees are working remotely and using various technologies to perform their functions. In reaction to the spread of COVID-19 in the United States, many businesses have instituted social distancing policies, including the closure of offices and worksites and deferring planned business activity. The disruption and volatility in the global and domestic capital markets may increase the cost of capital and limit our ability to access capital. Both the health and economic aspects of the COVID-19 virus are highly fluid and the future course of each is uncertain. For these reasons and other reasons that may come to light if the coronavirus pandemic and associated protective or preventative measures expand, we may experience a material adverse effect on our business operations, revenues and financial condition; however, its ultimate impact is highly uncertain and subject to change.
NOTE 9 – Subsequent Events
Management has reviewed material events subsequent of the period ended December 31, 2020 and prior to the filing of financial statements in accordance with FASB ASC 855 “Subsequent Events”.
On April 12, 2021, the Company and Global WholeHealth Partners Corp. (“Global”) entered into a Mutual Sales and Marketing Agreement (the “MSMA”). Pursuant to the terms of the MSMA, each company has mutual abilities to share their products for sale under nonexclusive but favorable conditions and prices. The duration of the agreement is for an initial period of five years commencing on April 12, 2021. As consideration for the MSMA, the Company agreed to issue 5,000,000 shares of its restricted common stock to Global and Global agreed to issue 5,000,000 shares of its restricted common stock to the Company. The Company received the Global shares on April 22, 2021. The companies are considered related parties as they share the same CEO and significant shareholder, LionsGate.
On April 26, 2021, the Company issued 17,750,000 of the MCA Shares.
On June 7, 2021, 9,000,000 shares of MCA Class A common stock originally issued in error on August 16, 2020, were returned to the Company.
On July 8, 2021, the Company issued 3,000,000 shares to Michael Mitsunaga, our President, pursuant to an exclusive licensing agreement Dated December 21, 2020 for use of an IV blood warming system.