NUNZIA PHARMACEUTICAL Co - Annual Report: 2020 (Form 10-K)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
☐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 000-22744
NUNZIA PHARMACEUTICAL COMPANY
(Exact name of registrant as specified in its charter)
Utah |
| 87-0442090 |
(State or other jurisdiction of incorporation) |
| (I.R.S. Employer Identification No.) |
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1627 West 14th Street, Long Beach, CA |
| 90813 |
(Address of principal executive offices) |
| (Zip Code) |
(714) 609-9117
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
N/A |
| N/A |
| N/A |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [_] No [x]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
Yes [_] No [x]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [_] No [x]
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [_] No [x]
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [x]
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.
Large accelerated filer [_] |
| Accelerated filer [_] |
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Non-accelerated filer(Do not check if a smaller reporting company) [_] | Smaller reporting company ☒ | |
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Emerging growth company ☐ |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.). Yes ☐ No [x]
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter, based upon the closing sale price of the registrant’s common stock on June 30, 2020, as reported on the OTC Markets Group Inc. Pink tier (the “OTCPink”) was $78,580,000.
As of September 10, 2021 there were 256,119,578 shares of the registrant’s common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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TABLE OF CONTENTS
NUNZIA PHARMACEUTICAL COMPANY | ||
ANNUAL REPORT ON FORM 10-K | ||
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2020 AND 2019 | ||
PART I |
| PAGE |
Item 1. | Business | 5 |
Item 1A. | Risk Factors | 6 |
Item 1B. | Unresolved Staff Comments | 6 |
Item 2. | Properties | 6 |
Item 3. | Legal Proceedings | 6 |
Item 4. | Mine Safety Disclosures | 6 |
PART II |
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Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 7 |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 8 |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 10 |
Item 8. | Financial Statements | 11 |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 26 |
Item 9A. | Controls and Procedures | 26 |
Item 9B. | Other Information | 27 |
PART III |
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Item 10. | Directors, Executive Officers, and Corporate Governance | 27 |
Item 11. | Executive Compensation | 30 |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 31 |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 32 |
Item 14. | Principal Accounting Fees and Services | 33 |
PART IV |
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Item 15. | Exhibits, Financial Statement Schedules | 35 |
SIGNATURES | 38 | |
EXHIBIT INDEX | 35 | |
CERTIFICATIONS |
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PART I
Forward-Looking Statements
This Annual Report on Form 10-K contains forward looking statements. Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements contained in this Report speak only as of the date of this report, may be based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
Although forward-looking statements in this report reflect the good faith judgment of our management, forward-looking statements are inherently subject to known and unknown risks, business, economic and other risks and factors that may cause actual results to be materially different from those discussed in these forward-looking statements. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Accordingly, you are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.
We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, other than as may be required by applicable law or regulation.
All references to “we,” “us,” or “our” refer to Nunzia Pharmaceutical Company and its consolidated subsidiaries.
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ITEM 1. BUSINESS
Background
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 of the MCA Shares due to LionsGate have not been issued as of the date of this report.
Business
The Company owns the rights to Nunzia™, a nutraceutical that treats Autism, Fragile X, ADHD, PTSD and other such disorders. We manufacture, market and distribute Nunzia™, direct to consumers through our website, www.nunziapharma.com, and through wholesalers.
Current drugs that attempt to control the symptoms of autism, fragile X, ADHD and PTSD are largely ineffective. Nunzia™ is the only neutraceutical product on the market designed to treat the symptoms of these wide-ranging medical conditions. Nunzia™ acts to increase sensory, social, and daily living skills, as well as increasing attention span, memory retention, focus, comprehension, and learning while decreasing anxiety, stress, fixations, fidgeting, and outside detractions.
In a healthy person, when there is a rapid firing of synapses and the protein filters of the brain are functional, anxiety occurs, but with little or no affixations. However, if the protein filters (particularly the FXMP protein filter) are not functioning properly (under or over-functioning), then anxiety will also produce affixations and other disorders such as Autism or PTSD. It was previously believed that Fragile X or Autistic people did not have the FXMP protein at all, however, more recent conclusions are that the FXMP protein filter was present but ill-functioning.
Current anti-anxiety drugs such as Valium or Prozac, are broad acting and usually ineffective. Broad blockers, instead of treating the underlying cause of anxiety, act to simply repress every synapse. Nunzia™ acts as a targeted blocker, actively blocking the synapses that are misfiring and causing anxiety. With synapses firing properly, the person suffering from autism, fragile X, ADHD or PTSD experiences no or dramatically less anxiety.
The market for Nunzia™ is immense, and that no other drug can achieve the results of Nunzia™ because no other drug is a targeted blocker of the synapses causing anxiety. To our knowledge, there are no other drugs like Nunzia™ that help so many disorders that are caused or exasperated by anxiety. Finally, Nunzia™ is not a drug, but a nutraceutical allowing the body to absorb healthy nutrients that work to eliminate anxiety.
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Employees
As of December 31, 2020, Charles Strongo, our CEO and Director and Michael Mitsunaga, our President and Director devote as much time as the Board of Directors determine is necessary to carry out the affairs of the Company. Neither officer receives cash compensation. The Company also utilizes independent contractors as needed.
Other Information
Our website address is www.nunziapharma.com. The public may read and copy any materials we file with the United States Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov which site contains reports, proxy and information statements, and other information regarding issuers, such as us, that file electronically with the SEC. All statements made in any of our filings, including all forward-looking statements, are made as of the date of the document(s) in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.
The Company’s executive office is located at 1627 West 14th Street, Long Beach, CA 90813. The Company’s telephone number is (714) 609-9117.
Stockholder Communications
Stockholders who wish to communicate with the Board may do so by addressing their correspondence to the Board at Nunzia Pharmaceutical Company, Attention: Michael Mitsunaga, 1627 West 14th Street, Long Beach, CA 90813. The Board will review and respond to all correspondence received, as appropriate.
ITEM 1A. RISK FACTORS
Smaller reporting companies are not required to provide the information required by this Item 1A.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Smaller reporting companies are not required to provide the information required by this item.
ITEM 2. PROPERTIES
The Company has no principal plants and does not lease office space.
ITEM 3. LEGAL PROCEEDINGS
We are not party to nor are we aware of any material pending lawsuit, litigation or proceeding.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is quoted on the OTC Pink tier (the “OTCPink”) under the symbol “NUNZ”.
The market price of our common stock is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market, and other factors, over many of which we have little or no control. In addition, broad market fluctuations, as well as general economic, business and political conditions, may adversely affect the market for our common stock, regardless of our actual or projected performance.
On February 1, 2018, the Board of Directors authorized a one for seven thousand (1:7000) reverse stock split.
Holders
Our Certificate of Incorporation authorizes the issuance of up to 1,000,000,000 shares of Class A common stock, par value $0.001 per share and 100,000 shares of Class B Common Stock, par value $0.001 per share. As of August 9, 2021, there were 618 stockholders of record holding an aggregate of 256,119,578 shares of Class A Common Stock (this number does not include stockholders who hold their stock through brokers, banks and other nominees) and 51,000 shares of Class B Common Stock.
The Class B shares are the only shares entitled to vote for Board Members. Class A and B shares are entitled to vote on all other matters. All the Class B common stock is held by LionsGate Funding Management LLC, our majority shareholder.
Transfer Agent
The transfer agent of our common stock is Pacific Stock Transfer, having an office at 6725 Via Austi Parkway, Suite 300, Las Vegas, NV 89119; their phone number is (702) 361-3033.
Dividend Policy
We have not paid any dividends on our common stock and our Board of Directors (the “Board”) presently intends to continue a policy of retaining earnings, if any, for use in our operations. The declaration and payment of dividends in the future, of which there can be no assurance, will be determined by the Board in light of conditions then existing, including earnings, financial condition, capital requirements and other factors.
Penny Stock
Our common stock trades at less than $5.00 per share and is therefore subject to the Securities and Exchange Commission’s penny stock rules.
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Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit their market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect the ability of our stockholders to resell our common stock.
Securities Authorized for Issuance under Equity Compensation Plans
None.
Recent Sales of Unregistered Securities
See the Notes to our financial statements for information related to the issuance of common stock.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the consolidated results of operations and financial condition of Nunzia Pharmaceutical Company and its subsidiaries. The MD&A is provided as a supplement to, and should be read in conjunction with financial statements and the accompanying notes to the financial statements included in this Comprehensive Form 10-K.
Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Overview
The Company owns the rights to NunziaTM a nutraceutical that treats autism, fragile X, ADHD, and PTSD. We manufacture, market and distribute NunziaTM direct to consumers through our website, www.nunziapharma.com, and wholesalers. NunziaTM is a targeted Blocker B that acts to increase sensory, social, and daily living skills, as well as attention span, memory retention, focus, comprehension, and learning while decreasing anxiety, stress, fixations, fidgeting, and outside detractions. Current drugs that attempt to control the symptoms of autism, fragile X, ADHD, and PTSD are broad acting, usually ineffective and include such drugs as Valium, Prozac, amphetamines, and anti-psychotics. These drugs are considered “Hit or Miss”, singly or in combination.
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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 and allow it to continue as a going concern.
As of December 31, 2020, we had negative working capital of $36,404 and no assets. Management recognizes that in order for us to meet our capital requirements, and continue to operate, additional financing will be necessary. We expect to raise additional funds through private or public equity investment in order to expand the range and scope of our business operations. We will seek access to private or public equity but there is no assurance that such additional funds will be available for us to finance our operations on acceptable terms, if at all. If we are unable to raise additional capital or generate positive cash flow, it is unlikely that we will be able to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Results of Operations
Year ended December 31, 2020 compared to the year ended December 31, 2019
Revenue
To date the Company has not generated revenue.
Total Operating Expenses
Total operating expenses for the year ended December 31, 2020 was $9,016,327 compared to $33,635 for the year ended December 31, 2019. Expenses are primarily related to professional and outside service fees to maintain our accounting and public disclosures and fluctuate due to the timing of costs.
Other Income (Expense)
Other expense increased $9 million due to the issuance of 3 million shares of common stock to Michael Mitsunaga, our President and Director, pursuant to a License Agreement dated December 21, 2020 under which the Company gained an exclusive license to market the UL and FDA approved device under patent No.6,788,885 B2: IV BLOOD WARMING SYSTEM. For additional information see the notes to our financial statements, “NOTE 5 – Transactions with Related Persons.”
Liquidity and Capital Resources
We have a retained deficit of $9,350,359 through December 31, 2020. As of December 31, 2020, the Company had no cash on hand. All expenses in 2020 and 2019 resulted in a corresponding increase to our liabilities or equity, thus, resulting in no use of cash. Our principal source of liquidity has been advances from certain shareholders.
These conditions raise substantial doubt about our ability to continue as a going concern. Management recognizes that in order for us to meet our capital requirements, and continue to operate, additional financing will be necessary. We expect to raise additional funds through private or public equity investment in order to maintain and/or expand the range and scope of our business operations; however, there is no assurance that such additional funds will be available for us on acceptable terms, if at all. If we are unable to raise additional capital when needed or generate positive cash flow, it is unlikely that we will be able to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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Indebtedness
None.
Contractual Obligations
None.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Recently Issued Accounting Pronouncements
See Note 2 to the Notes to the Company’s financial statements.
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based upon our Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and the related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on its historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Due to the level of activity and lack of complex transactions, we believe there are currently no critical accounting policies and estimates that affect the preparation of our financial statements.
New Accounting Standards to be Adopted Subsequent to December 31, 2020
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 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” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company for fiscal years beginning after December 31, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of the Company’s annual fiscal year. The Company adopted ASU 2020-06 beginning with our fiscal year starting on January 1, 2021. We do not expect the adoption of ASU 2020-06 to have a material impact on our consolidated financial statements.
Related Party Transactions
For a discussion of our Related Party Transactions, see “Note 5 - Transactions With Related Persons” to our Financial Statements included elsewhere in this Annual Report on Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Smaller reporting companies are not required to provide the information required by this item.
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ITEM 8. FINANCIAL STATEMENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS | Page |
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Report of Independent Registered Public Accounting Firm | 12 |
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Consolidated Balance Sheets as of December 31, 2020 and 2019 | 13 |
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Consolidated Statements of Operations for the Years Ended December 31, 2020 and 2019 | 14 |
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Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2020 and 2019 | 15 |
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Consolidated Statements of Cash Flows for the Years Ended December 31, 2020 and 2019 | 16 |
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Notes to Consolidated Financial Statements | 17 |
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Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Nunzia Pharmaceutical Company
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Nunzia Pharmaceutical Company (the "Company") as of December 31, 2020 and 2019, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ BF Borgers CPA PC
BF Borgers CPA PC
We have served as the Company's auditor since 2021
Lakewood, CO
September 10, 2021
12
NUNZIA PHARMACEUTICAL COMPANY |
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CONSOLIDATED BALANCE SHEETS |
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| December 31, 2020 |
| December 31, 2019 | |
ASSETS |
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Total assets | $ | - | $ | - |
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
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Current liabilities |
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Accounts payable and accrued liabilities | $ | 25,868 | $ | 21,333 |
Related party advances |
| 10,536 |
| 1,242 |
Total current liabilities |
| 36,404 |
| 22,575 |
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Commitments and contingencies |
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Stockholders' deficit |
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Common stock; Class A, $0.001 par value, 1,000,000,000 shares authorized, 244,369,578 and 234,519,578 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively |
| 244,370 |
| 234,520 |
Common stock; Class B, $0.001 par value, 100,000 shares authorized, 51,000 shares issued and outstanding at December 31, 2020 and 2019, respectively |
| 51 |
| 51 |
Common stock payable |
| 9,040,400 |
| 50,000 |
Additional paid-in capital |
| 29,134 |
| 26,886 |
Retained deficit |
| (9,350,359) |
| (334,032) |
Total stockholders' deficit |
| (36,404) |
| (22,575) |
Total liabilities and stockholders' deficit | $ | - | $ | - |
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(See accompanying notes to unaudited consolidated financial statements) |
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NUNZIA PHARMACEUTICAL COMPANY |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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| Years Ended December 31, | ||
| 2020 |
| 2019 | |
Revenue | $ | - | $ | - |
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Operating expense |
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General and administrative |
| 16,327 |
| 33,635 |
Total operating expense |
| 16,327 |
| 33,635 |
Loss from operations |
| (16,327) |
| (33,635) |
Other income (expense) |
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Loss on related party transfer of intangible assets |
| 9,000,000 |
| - |
Total other income (expense) |
| 9,000,000 |
| - |
Net loss | $ | (9,016,327) | $ | (33,635) |
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Basic and Diluted Loss per Common Share | $ | - | $ | - |
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Weighted average number of common shares outstanding - basic and diluted |
| 284,893,181 |
| 252,528,960 |
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(See accompanying notes to unaudited consolidated financial statements) |
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NUNZIA PHARMACEUTICAL COMPANY |
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT |
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FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 |
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| Class A Common Stock |
| Class B Common Stock |
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| Shares |
| Amount |
| Shares |
| Amount |
| Common Stock Payable |
| Additional Paid-in Capital |
| Retained Deficit |
| Total Stockholders'Deficit |
Balance, December 31, 2018 | 200,022,035 | $ | 200,022 |
| 51,000 | $ | 51 | $ | 50,000 | $ | (243,643) | $ | (300,397) | $ | (293,967) |
Cancellation of returned class A common shares | (2,457) |
| (2) |
| - |
| - |
| - |
| 2 |
| - |
| - |
Common stock issued in Merger with Cal-Biotech used to reduce related party liabilities | - |
| - |
| - |
| - |
| - |
| 156,657 |
| - |
| 156,657 |
Common stock issued to settle outstanding liabilities | 34,500,000 |
| 34,500 |
| - |
| - |
| - |
| 110,070 |
| - |
| 144,570 |
Cal-Biotech net loss for the period ended December 31, 2019 | - |
| - |
| - |
| - |
| - |
| 3,800 |
| (3,800) |
| - |
Net loss for the year ended December 31, 2019 | - |
| - |
| - |
| - |
| - |
| - |
| (33,635) |
| (33,635) |
Balance, December 31, 2019 | 234,519,578 |
| 234,520 |
| 51,000 |
| 51 |
| 50,000 |
| 26,886 |
| (334,032) |
| (22,575) |
Common stock issued for services | 250,000 |
| 250 |
| - |
| - |
| - |
| 2,248 |
| - |
| 2,498 |
Merger shares issued | 9,600,000 |
| 9,600 |
| - |
| - |
| (9,600) |
| - |
| - |
| - |
Common stock to issue for license agreement with Michael Mitsunaga | - |
| - |
| - |
| - |
| 9,000,000 |
| - |
| - |
| 9,000,000 |
Net loss for the year ended December 31, 2020 | - |
| - |
| - |
| - |
| - |
| - |
| (9,016,327) |
| (9,016,327) |
Balance, December 31, 2020 | 244,369,578 | $ | 244,370 |
| 51,000 | $ | 51 | $ | 9,040,400 | $ | 29,134 | $ | (9,350,359) | $ | (36,404) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(See accompanying notes to unaudited consolidated financial statements) |
15
NUNZIA PHARMACEUTICAL COMPANY |
|
|
| |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
| |
|
|
| ||
|
| Year Ended December 31, | ||
| 2020 |
| 2019 | |
Cash flows from operating activities |
|
|
|
|
Net loss | $ | (9,016,327) | $ | (33,635) |
Adjustments to reconcile net loss to net cash flows from operating activities |
|
|
|
|
Stock based compensation expense |
| 2,498 |
| - |
Loss on related party transfer of intangible assets |
| 9,000,000 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
Increase (decrease) in accounts payable and accrued expenses |
| 4,535 |
| 8,643 |
Increase in related party advances |
| 9,294 |
| 21,192 |
Net cash flows from operating activities |
| - |
| (3,800) |
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Related party paid-in-capital |
| - |
| 3,800 |
Net cash flows from financing activities |
| - |
| 3,800 |
|
|
|
|
|
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 | $ | - |
|
|
|
| |
(See accompanying notes to unaudited consolidated financial statements) |
16
NUNZIA PHARMACEUTICAL COMPANY
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 $(9,350,359). 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.
17
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.
18
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.
19
NOTE 3 – 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 consumate 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.
20
NOTE 4 – 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:
| 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:
| 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 5 – 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.
21
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 6 - 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.
22
The condensed consolidated pro forma results of operations are as follows:
NUNZIA PHARMACEUTICAL COMPANY |
|
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|
|
Unaudited Consolidated Pro Forma Statements of Operations |
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|
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| |
|
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|
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|
|
|
|
|
|
|
|
| Year Ended December 31, 2019 |
| Year Ended December 31, 2018 |
| From Inception on February 7, 2018 to December 31, 2018 |
|
| ||||
|
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|
|
|
|
|
|
|
|
| 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 | 1) | 250,000,000 |
|
|
| 245,000,000 | 1) | 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 |
|
|
|
| $ | - |
|
|
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
23
The condensed consolidated pro forma financial position as of the date of merger is as follows:
NUNZIA PHARMACEUTICAL COMPANY |
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UNAUDITED CONSOLIDATED PRO FORMA BALANCE SHEETS |
|
|
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|
|
|
|
|
|
| |||
|
| As of December 4, 2019 |
| As of December 31, 2018 | ||||||||||||||
| Nunzia |
| Cal-Biotech |
| Adjustments |
|
| Pro Forma |
| Nunzia |
| Cal-Biotech |
| Adjustments |
|
| Pro Forma | |
ASSETS |
|
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|
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|
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|
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|
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|
|
|
|
Total assets | $ | - | $ | - | $ | - | $ |
| - | $ | - | $ | - | $ | - | $ |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
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|
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|
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|
|
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|
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|
|
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 |
|
|
|
|
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|
Commitments and contingencies |
|
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|
Stockholders' equity (deficit) |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock; Class A, $0.001 par value |
| 20 |
| 245,000 |
| (45,000) |
| 1) | 200,020 |
| 22 |
| 245,000 |
| (45,000) |
| 1) | 200,022 |
Common stock; Class B, $0.001 par value |
| 51 |
| - |
| - |
|
| 51 |
| 51 |
| - |
| - |
|
| 51 |
Common stock payable |
| - |
| - |
| 50,000 |
| 1) | 50,000 |
| - |
| - |
| 50,000 |
| 1) | 50,000 |
Additional paid-in capital |
| 5,962 |
| (238,000) |
| (5,000) |
| 2) | (237,038) |
| 3,157 |
| (241,800) |
| (5,000) |
| 2) | (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 | $ | - | $ | - | $ | - | $ |
| - | $ | - | $ | - | $ | - | $ |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
NOTE 7 – 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 8 – 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.
25
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
(b) Management’s Report on Internal Control over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our management assessed the effectiveness of the Company’s internal control over financial reporting as of the end of the period covered by this report. The framework used by management in making that assessment was the criteria set forth in the document entitled “ Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our CEO and CFO have determined and concluded that, as of the end of the period covered by this report, the Company’s internal control over financial reporting was not effective.
As defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments,” established by the Public Company Accounting Oversight Board ("PCAOB"), a material weakness is a deficiency or combination of deficiencies that result in a more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses as of the end of the period covered by this report:
• | The Company does not have policies and procedures or accounting systems in place to ensure the timely review, disclosure and accurate financial reporting for significant agreements and transactions. |
• | The Company does not have an independent audit committee in place, which would provide oversight of the Company’s officers, operations and financial reporting function. |
Due to our small size, we were not able to immediately take any action to remediate these material weaknesses. Notwithstanding the assessment that our Internal Controls over Financial Reporting was not effective and that there were material weaknesses identified herein, we believe that our financial statements contained in this Annual Report fairly present our financial position, results of operations and cash flows for the years covered thereby in all material respects.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.
26
Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting
In order to remediate the material weaknesses, the Company needs to (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. As of the end of the period covered by this report, we have not been able to remediate the material weaknesses identified above. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts will continue to be delayed.
(c) Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and ages of all of our directors and executive officers as of the date of this report. We have a Board comprised of three members. Each director holds office until a successor is duly elected or appointed. Executive officers serve at the discretion of the Board and are appointed by the Board. Also provided herein are brief descriptions of the business experience of each of the directors and officers during the past five years, and an indication of directorships held by each director in other companies subject to the reporting requirements under the Federal securities law.
Name |
| Age |
| Current Position With Us |
| Director or Officer Since |
Michael Mitsunaga |
| 65 |
| President, Treasurer, Secretary and Director |
| June 28, 2010 |
Charles Strongo |
| 57 |
| Chief Executive Officer and Director |
| December 5, 2019 |
Dr. Shujie Cui |
| 57 |
| Chief Medical Officer and Director |
| December 5, 2019 |
Biographical Information
Set forth below are the names of all of our directors and executive officers, all positions and offices held by each person, the period during which each has served as such, and the principal occupations and employment of such persons during at least the last five years, and other director positions held currently or during the last five years:
27
Current Directors and Officers
Michael Mitsunaga. Since 2009, Mr. Mitsunaga has served as the President, CEO and Director of the Company. Mr. Mitsunaga also currently serves as president of TSM Trading Import/Export Company and consultant to TSM Recovery and Recycling, Inc. Both companies were founded by Mr. Mitsunaga in the 1980’s. TSM Recovery and Recycling specializes in the treatment and disposal of hazardous and biomedical waste. From 1999 to 2005, Mr. Mitsunaga served as CEO/President for Automatic Medical Technologies, Inc. where he was responsible for Developing new product lines, International and National Sale and Marketing. From 1991 – 1996, Mr. Mitsunaga became the President of North America for Union Pacific Foods and was responsible for the sale of products to National Distributors, Brokers and International Trading Companies. Mr. Mitsunaga continues to provide consulting and advisory services to businesses. Over the course of his entrepreneurial career, Mr. Mitsunaga has earned a wealth of international and public company business experience through the myriad of business dealings in Asia and the Pacific.
Charles Strongo, MBA. Mr. Strongo currently serves as the Company’s CEO and Director since December 5, 2019. Mr. Strongo has 30 years’ experience in business management and operations with a proven track record of increasing profitability in the health care industry and particularly in the in-vitro diagnostic industry. Mr. Strongo has been in the in vitro diagnostic business for the past Twenty-Four years, having begun in 1995, the beginning of the “over-the counter” in-vitro diagnostic industry and has managed annual budgets exceeding $500 million. Mr. Strongo currently serves as CEO and Chairman of Global Whole Health Partners Corporation since August 1, 2019. Mr. Strongo has served as President and Chief Executive Officer of EarlyDETECT, Inc. (EDI) since March, 2004. He was a member of the EDI Board of Directors from June 2002 until June 2009. Prior to that, Mr. Strongo served as the Chief Financial Officer for two years. Mr Strongo has owned and operated his own successful FDA Approved diagnostic manufacturing facility. Mr. Strongo has a comprehensive knowledge of ISO and FDA regulations and has prepared several companies for the ISO inspections. Mr. Strongo has filed more than twenty FDA 510K filings; he has also worked on countless pharmaceutical filings. Mr. Strongo has prepared several companies for FDA inspections, under FDA regulatory GMP guidelines. Mr. Strongo has cleared companies for ISO 13485 CDM in less than 6 months, a process that usually takes a year. Mr. Strongo’s dynamic personality, keen understanding and extensive professional expertise, have enabled Mr. Strongo to increase profitability for multiple companies domestically and internationally. Mr. Strongo established businesses in foreign countries, including Canada, Brazil, China, South Africa, Russia, Taiwan, Mexico, Malaysia, Thailand, and the Philippines. Mr. Strongo holds a BA/MBA in Business Management from National University.
Kim Halvorson. Ms. Halvorson is seasoned Business Development and Marketing professional that thrives in new and innovative environments. Over her 25 year healthcare career, she has contributed to all spectrums of the business continuum. She started in medical practice management software systems and then moved to holding strategic roles in large corporate structures such as Dell Computer Corporation, and other successful healthcare startups like SCI Solutions (complex hospital scheduling). After leaving Dell she went on to be a founding partner at Triage VC, were she worked with several startup ventures leveraging her vast industry connections. Her expertise helped to accelerate early stage startups in the areas of investment banking, marketing and business development. While at Dell she reported to the Director of Dell Healthcare with revenues in excess of one billion dollars annually. Responsibilities included all commercial E-Health strategies and corporate partnerships within the Healthcare Division. Kim also worked with Dell Direct Invest with regard to the Healthcare Division’s strategic investments.
Shujie Cui. Mr. Cui served as a post doctorate Fellow in the Ob/Gyn and Reproductive Biology department of The University of Texas Medical School at Houston. Mr. Cui also served as a post doctorate Fellow in the Division of Laboratory Medicine, M.D. Anderson Cancer Center at The University of Texas, Houston. Dr. Cui is known as the father of Strep A Tests. Dr. Cui worked with the Chinese Government on the testing and vaccine for SARS. Dr. Dr. Cui also serves as the Chief Science Officer and Director of Global Whole Health Partners Corporation since August 1, 2019.
All of our directors are elected annually to serve for one year or until their successors are duly elected and qualified.
28
Family Relationships and Other Matters
There are no family relationships among or between any of our officers and directors.
Legal Proceedings
None of or directors or officers are involved in any legal proceedings as described in Regulation S-K (§229.401(f)).
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Because we do not have a class of equity securities registered pursuant to section 12 of the Exchange Act we are not required to make the disclosures required by Item 405 of Regulation SK.
CODE OF ETHICS
We have not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions, because of the small number of persons involved in the management of the Company.
CORPORATE GOVERNANCE
Director Independence
We are not listed on a major U.S. securities exchange and, therefore, are not subject to the corporate governance requirements of any such exchange, including those related to the independence of directors. At this time, after considering all of the relevant facts and circumstances, our Board has determined that we do not have any director that qualifies as an “independent director” under the standards of independence of the FINRA listing standards. We do not currently have a majority of independent directors as required by the FINRA listing standards. Upon our listing on any national securities exchange or any inter-dealer quotation system, we will elect such independent directors as is necessary under the rules of any such securities exchange.
Board Leadership Structure
We currently have three (3) executive officers and three (3) directors. Our Board has reviewed our current Board leadership structure — which consists of a Chief Executive Officer and no Chairman of the Board — in light of the composition of the Board, our size, the nature of our business, the regulatory framework under which we operate, our stockholder base, our peer group and other relevant factors, and has determined that this structure is currently the most appropriate Board leadership structure for our company. Nevertheless, the Board intends to carefully evaluate from time to time whether our Chief Executive Officer and Chairman positions should be combined based on what the Board believes is best for us and our stockholders.
Board Role in Risk Oversight
Risk is inherent in every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including strategic risks, enterprise risks, financial risks, and regulatory risks. While our management is responsible for day to day management of various risks we face, the Board, as a whole, is responsible for evaluating our exposure to risk and to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. The Board reviews and discusses policies with respect to risk assessment and risk management. The Board also has oversight responsibility with respect to the integrity of our financial reporting process and systems of internal control regarding finance and accounting, as well as its financial statements.
29
Board of Directors Meetings, Committees of the Board of Directors, and Annual Meeting Attendance
We did not have an annual meeting of shareholders during the fiscal year ended December 31, 20 or 2019 .
We do not currently have any standing committees of the Board. The full Board is responsible for performing the functions of: (i) the Audit Committee, (ii) the Compensation Committee and (iii) the Nominating Committee.
Stockholder Communications
Stockholders who wish to communicate with the Board may do so by addressing their correspondence to the Board at Nunzia Pharmaceutical Company, Attention: Michael Mitsunaga, 1627 West 14th Street, Long Beach, CA 90813. The Board will review and respond to all correspondence received, as appropriate.
ITEM 11. EXECUTIVE COMPENSATION
Our Board is responsible for establishing the compensation and benefits for our executive officers. The Board reviews the performance and total compensation package for our executive officers, and considers the modification of existing compensation and the adoption of new compensation plans. The board has not retained any compensation consultants.
Summary Compensation Table
The following table sets forth information concerning compensation earned for services rendered to us by our executive officers who were serving as executive officers during the fiscal year ended December 31, 2020 and 2019:
Name and Principal Position | Year Ended December 31, |
Salary ($) |
Bonus ($) |
Stock Awards ($) | Option Awards ($) |
All Other Compensation ($) | Total ($) |
Michael Mitsunaga (1) President, Treasurer, Secretary and Director | 2019 to 2020 | - | - | - | - | - | - |
Charles Strongo (2) Chief Executive officer and Director | 2019 to 2020 | - | - | - | - | - | - |
Dr. Shujie Cui (3) Chief Medical Officer and Director | 2019 to 2020 | - | - | - | - | - | - |
Richard Johnson (4) Former Treasurer, Chief Financial Officer and Director | 2019 to 2020 | - | - | - | - | - | - |
Kim Halvorson (5) former Secretary and Director | 2019 | - | - | - | - | - | - |
30
(1) Mr. Mitsunaga was appointed as President, Chief Executive Officer and Director on June 28, 2010. Mr. Mitsunaga did not earn and was not paid any compensation for the years Ended December 31, 2019 through December 31, 2020.
(2) Mr. Strongo was appointed as Chief Executive Officer and Director on December 5, 2019. Mr. Strongo did not earn and was not paid any compensation for the years Ended December 31, 2019 through December 31, 2020.
(3) Dr. Cui was appointed as Chief Medical Officer and Director on December 5, 2019. Dr. Cui did not earn and was not paid any compensation for the years Ended December 31, 2019 through December 31, 2020.
(4)Mr. Johnson was appointed as Treasurer, Chief Financial Officer and Director on July 1, 2010. Mr. Johnson did not earn and was not paid any compensation for the years Ended December 31, 2019 through December 31, 2020. Mr. Johnson resigned on August 21, 2020.
(5) Mrs. Halvorson was appointed as Secretary and Director on February 1, 2018. Mrs. Halvorson did not earn and was not paid any compensation for the year Ended December 31, 2019. Mrs. Halvorsen was terminated on December 5, 2019.
Employment Agreements
We currently have no employment agreements in place.
Outstanding Equity Awards as Fiscal Year-End
None.
Payments Upon Termination of Change in Control
There are no understandings or agreements known by management at this time which would result in a change in control.
Compensation of Directors
We have provided no compensation to our directors for their services provided as directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information as of the date of this report by (i) all persons who are known by us to beneficially own more than 5% of our outstanding shares of common stock, (ii) each director, director nominee, and Named Executive Officer; and (iii) all executive officers and directors as a group:
Name and Address of Beneficial Owner (1) | Number of shares Beneficially Owned (2) | Percent of Class Owned (2) |
Directors and Officers |
|
|
Michael Mitsunaga | 15,976,274 | 5.46% |
Charles Strongo | 12,975,040 | 4.43% |
Dr. Shujie Cui | 2,500,000 | 0.85% |
All Directors and Officers as a Group | 31,451,314 | 10.74% |
|
|
|
5% shareholders |
|
|
LionsGate Funding Group (3) | 222,510,000 | 75.99% |
2227 Avenida Oliva, San Clemente, CA 92673 | ||
Michael Mitsunaga | 15,976,274 | 5.46% |
5% shareholders as a group | 238,486,274 | 81.44% |
Total Directors and Officers and 5% Shareholders | 253,961,314 | 86.73% |
* less than 1% |
|
|
31
(1) Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. Each of the beneficial owners listed above has direct ownership of and sole voting power and investment power with respect to the shares of our common stock and except as indicated the address of each beneficial owner is 1627 West 14th Street, Long Beach, CA 90813.
(2) Calculated pursuant to rule 13d-3(d) of the Exchange Act. Beneficial ownership is calculated based on 292,820,578 shares of Class A Common Stock and 51,000 shares of Class B Common Stock issued and outstanding on a fully diluted basis as of the date of this report. Under Rule 13d-3(d) of the Exchange Act, shares not outstanding which are subject to options, warrants, rights or conversion privileges exercisable within 60 days are deemed outstanding for the purpose of calculating the number and percentage owned by such person, but are not deemed outstanding for the purpose of calculating the percentage owned by each other person listed.
(3) Lionsgate Funding Group LLC, a Wyoming Limited Liability Corporation, is controlled by Sara Gonzales. In such capacity, Mrs. Gonzales may be deemed to have beneficial ownership of these shares. The number of shares reflected above is as of the date of this report based upon the review of our transfer records and includes (a) 190,809,000 shares owned by LionsGate; (b) 31,650,000 shares owned by LionsGate pursuant to the Merger that have not been issued; (c) 51,000 shares of Class B common stock owned by LionsGate; and (d) 5,000,000 shares owned by Sara Gonzales.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
We do not have a formal written policy for the review and approval of transactions with related parties; however, our Corporate Governance Principles require actual or potential conflict of interest to be reported to the Board. Our employees are expected to disclose personal interests that may conflict with ours and they may not engage in personal activities that conflict with their responsibilities and obligations to us. Periodically, we inquire as to whether or not any of our Directors have entered into any transactions, arrangements or relationships that constitute related party transactions. If any actual or potential conflict of interest is reported, our entire Board and outside legal counsel review the transaction and relationship disclosed and the Board makes a formal determination regarding each Director's independence. If the transaction is deemed to present a conflict of interest, the Board will determine the appropriate action to be taken.
Transactions with Related Persons
The Board is responsible for review, approval, or ratification of “related-person transactions” involving Nunzia Pharmaceutical Company or its subsidiaries and related persons. Under SEC rules (Section 404 (a) of Regulation S-K), a related person is a director, officer, nominee for director, or 5% stockholder of our outstanding shares of common stock since the beginning of the previous fiscal year, and their immediate family members. Immediate family members include spouses, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such person’s home (other than a tenant)
The Board has determined that, barring additional facts or circumstances, a related person does not have a direct or indirect material interest in the following categories of transactions:
·any transaction with another company for which a related person’s only relationship is as an employee (other than an executive officer), director, or beneficial owner of less than 10% of that company’s shares, if the amount involved does not exceed the greater of $1 million or 2% of that company’s total annual revenue;
·compensation to executive officers determined by the Board;
·compensation to directors determined by the Board;
32
·transactions in which all security holders receive proportional benefits; and
banking-related services involving a bank depository of funds, transfer agent, registrar, trustee under a trust indenture, or similar service.
Review, Approval or Ratification of Transactions with Related Persons
The Board reviews transactions involving related persons who are not included in one of the above categories and makes a determination whether the related person has a material interest in a transaction and may approve, ratify, rescind, or take other action with respect to the transaction in its discretion. An interested related party who serves on the Board shall recuse their self from the review and approval of a related party transaction in which they have an interest in the transaction. In the event of a potential conflict of interest, the Board will generally evaluate the transaction in terms of the following standards: (i) the benefits to us; (ii) the impact on a director’s independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer; (iii) the availability of other sources for comparable products or services; (iv) the terms and conditions of the transaction; and (v) the terms available to unrelated parties or the employees generally.
The following is a description of each transaction since the beginning of 2019, and each currently proposed transaction, in which:
| • | we have been or are to be a participant; |
| • | the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets for the last two completed fiscal years; and |
| • | any of our directors, executive officers or holders of more than 5% of any class of our capital stock at the time of the transactions in issue, or any immediate family member of or person sharing the household with any of these individuals, had or will have a direct or indirect material interest. |
For additional information, please refer to see “NOTE 5 – Transactions with Related Persons” under the Notes to Financial Statements for the Years Ended August 31, 2020 and 2019.
Director Independence
Please refer to “Director Independence” under the section titled “CORPORATE GOVERNANCE” in “ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.”
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Independent Public Accountants
BFBorgers CPA PC currently serves as our independent registered public accounting firm to audit our financial statements for the fiscal year ended December 31, 2020 and 2019. To the knowledge of management, neither such firm nor any of its members has any direct or material indirect financial interest in us or any connection with us in any capacity otherwise than as independent accountants.
Our Board, in its discretion, may direct the appointment of different public accountants at any time during the year, if the Board believes that a change would be in the best interests of the stockholders. The Board has considered the audit fees, audit-related fees, tax fees and other fees paid to our auditors, as disclosed below, and has determined that the payment of such fees is compatible with maintaining the independence of the accountants.
Principle Accounting Fees and Services
We have incurred fees totalling $20,000 for professional services related to the audit of our financial statements for the fiscal years ended December 31, 2020 and 2019.
33
Audit-Related Fees
None.
Tax Fees
The Company did not pay an outside accountant to prepare tax returns for the year ended December 31, 2020 and 2019.
34
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) The following documents are filed as a part of this Comprehensive Form 10-K:
(a)1. Financial Statements
The following financial statements, notes related thereto and report of independent auditors, are included in Part II, Item 8 of this Form 10-K:
·Report of Independent Registered Public Accounting Firm;
·Consolidated Balance Sheets as of December 31, 2020 and 2019;
·Consolidated Statements of Operations for the years ended December 31, 2020 and 2019;
·Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2020 and 2019;
·Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019; and
·Notes to Consolidated Financial Statements
(a)(2)Financial Statement Schedules:
All schedules have been omitted since they are either not applicable or the information is contained within the accompanying financial statements.
(b)Exhibit Index
The following is a list of exhibits filed as part of this Annual Report on Form 10-K.
35
Exhibit Index
Exhibit No.Description of Exhibit
3.1 Amended and Restated Articles of Incorporation of Viking Capital Group, Inc. (Incorporated by reference pursuant to Exchange Act Rule 12b-23 to the Registrant's Form 14A (File No. 0-22744) for 1996)
3.2 Amendment to Amended and Restated Articles of Incorporation of Registrant (Incorporated by reference pursuant to Exchange Act Rule 12b-23 to the Registrant's Form 10-KSB for the fiscal year ended December 31, 2001)
3.3 Bylaws of Viking Capital Group, Inc. as amended (Incorporated by reference pursuant to Exchange Act Rule 12b-23 to the Registrant's Form 10-SB (File No. 0-22744) effective December 27, 1993)
3.4 Articles of Amendment to the Articles of Incorporation dated May 20, 2010 changing the Company’s name to Arizona Gold & Onyx Mining Company (1)
3.5 Written Consent of the Court-Appointed Custodian of Viking Capital Group, Inc. dated October 5, 2009 relating to the one-for-ten, Class B Common Stock reverse split and the issuance of 51,000 shares of Class B Common Stock to Joseph Arcaro (1)
3.6 Corporate Resolution of the Board of Directors dated October 6, 2009 relating to the 1-for-300, Class A Common Stock reverse split (1)
3.7 Form 15 (Incorporated by reference to Form 15 filed on April 23, 2010)
3.8 Certificate of Registration to the Articles of Incorporation dated November 10, 2010 increasing the authorized shares from 150,000,000 to 500,000,000 (1)
3.9 Certificate of Registration to the Articles of Incorporation dated February 15, 2018 relating to the one-for-seven thousand (1-for-7,000), class A common stock reverse split (1)
3.10 Certificate of Registration to the Articles of Incorporation dated February 15, 2018 changing name to Nunzia Pharmaceutical Corporation (1)
3.11 Certificate of Registration to the Articles of Incorporation dated April 17, 2019 changing name to Arizona Gold and Onyx Company (1)
4.1 Securities Exchange Agreement between Arizona Gold & Onyx Mining Company and Gold & Onyx Mining Company dated June 28, 2010 (1)
4.2 Merger and Consolidation Agreement dated October 22, 2017 between Arizona Gold & Onyx Mining Company and LionsGate Funding Management LLC and California Biotech, Inc. (1)
10.1 IV Warmer License Agreement Dated December 21, 2020 (Incorporated by reference to Form 8-K filed on August 4, 2021)
10.2 Mutual Sales and Marketing Agreement dated April 12, 2021 (Incorporated by reference to the Form 8-K filed on May 7, 2021)
36
31.1Certification of Principal Executive Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2Certification of Principal Financial Officer and Principal Accounting Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101.INS |
| XBRL Instance Document** |
101.SCH |
| XBRL Taxonomy Extension - Schema Document** |
101.CAL |
| XBRL Taxonomy Extension - Calculation Linkbase Document** |
101.DEF |
| XBRL Taxonomy Extension - Definition Linkbase Document** |
101.LAB |
| XBRL Taxonomy Extension - Label Linkbase Document** |
101.PRE |
| XBRL Taxonomy Extension - Presentation Linkbase Document** |
*Filed herewith.
(1)Incorporated by reference to the Form 10-K filed on May 31, 2019.
§ Management contract or compensatory plan.
** Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
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SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Nunzia Pharmaceutical Company
(Registrant)
Date: September 16, 2021 |
| By: /s/ Charles Strongo |
|
| Name: Charles Strongo |
|
| Title: Chief Executive Officer and Director |
|
| (Principal Executive Officer) |
|
|
|
Date: September 16, 2021 |
| By: /s/ Michael Mitsunaga |
|
| Name: Michael Mitsunaga |
|
| Title: President, Chief Financial Officer, Treasurer, Secretary and Director |
|
| (Principal Financial Officer and Principal Accounting Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in capacities and on the dates indicated.
Signature | Title | Date |
/s/ Michael Mitsunaga | Chief Executive Officer and Director | September 16, 2021 |
Michael Mitsunaga | (Principal Executive Officer) |
|
|
|
|
/s/ Michael Mitsunaga | President, Chief Financial Officer, | September 16, 2021 |
Michael Mitsunaga | Treasurer, Secretary and Director |
|
| (Principal Financial Officer and |
|
| Principal Accounting Officer) |
|
|
|
|
/s/ Dr. Shujie Cui | Chief Science Officer and Director | September 16, 2021 |
Dr. Shujie Cui |
|
|
38