The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes
are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes
are an integral part of the consolidated financial statements
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – Basis of Presentation, Organization,
Going Concern and Recent Accounting Pronouncements
Basis of Presentation
The accompanying unaudited interim consolidated
financial statements of Nunzia Pharmaceutical Company (the “Company”) as of June 30, 2022 and 2021 have been prepared
in accordance with generally accepted accounting principles in the United States of America (“US GAAP”), for interim financial
information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Certain information or footnote disclosures normally
included in financial statements prepared in accordance with GAAP have been condensed or omitted.
The preparation of consolidated financial statements
in conformity with U.S. 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 consolidated financial statements, and the reported amounts of
expenses during the reporting periods. Actual results may differ from those estimates. The interim financial statements should be read
in conjunction with the unaudited financial statements and notes thereto included in the Company’s Annual Report for the year ended December
31, 2021.
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.
The Company is focused on manufacturing and securing
retail space for its nutraceutical products. It is also working on a product that kills bacteria and viruses. The Company’s efforts
have been delayed due to the onset and lingering impact of Covid -19 as well as the lack of significant available funding.
The Company’s year-end is December 31st.
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 June 30, 2022, the Company had an accumulated
deficit of $198,156,360. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital
to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease
operations.
In view of these conditions, the ability of the
Company to continue as a going concern is in doubt and dependent upon achieving a profitable level of operations and on the ability of
the Company to obtain necessary financing to fund ongoing operations. Historically, the Company has relied upon internally generated funds
and funds from the sale of shares of stock, issuance of promissory notes and loans from its shareholders and private investors to finance
its operations and growth. Management is planning to raise necessary additional funds for working capital through loans and/or additional
sales of its common stock. However, there is no assurance that the Company will be successful in raising additional capital or that such
additional funds will be available on acceptable terms, if at all. Should the Company be unable to raise this amount of capital its operating
plans will be limited to the amount of capital that it can access. These financial statements do not give effect to any adjustments which
will be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge
its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial
statements.
NOTE 2 – Summary of Significant Accounting
Policies
Principles of Consolidation
These consolidated financial statements presented
are those of the Company and its wholly owned subsidiaries, A1 Mining; NIAI Insurance Administrators, Inc. of California; Viking Capital
Financial Services, Inc. of Texas; Viking Insurance Services, Inc. of Texas; Viking Systems, Inc. of Texas; Viking Administrators, Inc.
of Texas; Viking Capital Ventures, Inc. of Texas; and 60% of Brentwood Re, Ltd. of the Island of Nevis. All subsidiaries have had their
charters suspended or revoked and have been inactive for several years.
Management’s Representation of Interim
Financial Statements
The accompanying unaudited consolidated financial
statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission
(“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations,
and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial
statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position
and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of
results for a full year. These consolidated financial statements should be read in conjunction with the audited consolidated financial
statements at and as of December 31, 2021, filed as part of the Company’s Annual Report on Form 10-K with the SEC on April 15, 2022.
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 stock based compensation, 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. As of June 30, 2022 and
December 31, 2021, we had $72 and $131 in cash on hand, respectively.
Income Taxes
The Company accounts for income taxes using the
asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax
consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company
reports a liability for unrecognized tax benefits resulting from uncertain income tax positions, if any, taken or expected to be taken
in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively.
Fair Value Measurements
Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. The Company utilizes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and
the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
Level 1, defined as observable inputs such as
quoted prices for identical instruments in active markets;
Level 2, defined as inputs other than quoted prices
in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or
quoted prices for identical or similar instruments in markets that are not active; and
Level 3, defined as unobservable inputs in which
little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation
techniques in which one or more significant inputs or significant value drivers are unobservable.
During the periods covered by this report, the
Company did not have any assets or liabilities that were required to be measured at fair value on a recurring basis or on a non-recurring
basis.
Fair Value of Financial Instruments
The Company’s financial instruments consist
of accounts payable and accrued expenses. The carrying amounts of the Company’s financial instruments approximate fair value because
of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of
significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect those estimates.
We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments.
Stock-Based Compensation
The Company accounts for stock-based compensation
in accordance with Accounting Standards Codification (“ASC”) 718, Stock Based Compensation. ASC 718 requires all stock-based
payments to directors, employees and consultants, including grants of stock options, to be recognized in the consolidated statements of
operations based on their fair values. If a stock-based award contains performance-based conditions, at the point that it becomes probable
that the performance conditions will be met, the Company records a cumulative catch-up of the expense from the grant date to the current
date, and then amortizes the remainder of the expense over the remaining service period. Management evaluates when the achievement of
a performance-based condition is probable based on the expected satisfaction of the performance conditions as of the reporting date.
Net Income (Loss) Per Share
The computation of basic earnings per share
(“EPS”) is based on the weighted average number of shares that were outstanding during the period, including shares of
common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic
weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially
dilutive common shares outstanding using the treasury stock method. The Company had no potentially dilutive securities as
of June 30, 2021 and December 31, 2021.
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.
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.
Recent Adopted Accounting Pronouncements
The Company reviews new accounting standards as
issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may
be applicable, the Company has not identified any standards that the Company believes merit further discussion. The Company believes that
none of the new standards will have a significant impact on the financial statements.
NOTE 3 – 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 June 30, 2022. The Class B shares are the only shares eligible to vote for Directors. LionsGate, controlled
by the Company’s CEO, holds all Class B common shares.
The Company has 1,000,000,000 shares of Class
A Common Stock authorized of which 434,189,578 and 434,119,578 shares are issued and outstanding as of June 30, 2022 and December 31,
2021, respectively.
NOTE 4 – Commitments and Contingencies
COVID-19 Pandemic and the Coronavirus
Aid, Relief, and Economic Security (“CARES”) Act
On January 30, 2020, the World
Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in
Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally
beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid
increase in exposure globally.
The full impact of the
COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the
pandemic may have on the Company’s financial condition, liquidity, and future results of operations. Management is
actively monitoring the impact of the global situation on its financial condition, liquidity, operations, suppliers, industry, and
workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company
is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or
liquidity for fiscal year 2022.
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.
On March 27, 2020, then President Trump signed
into law the CARES Act. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of
employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to
the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax
depreciation methods for qualified improvement property. The CARES Act also appropriated funds for the SBA Paycheck Protection Program
loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide
liquidity to small businesses harmed by COVID-19.
NOTE 5 – Transactions with Related
Persons
Mr. Michael Mitsunaga, our President and Director,
has made interest-bearing advances to the Company at an interest rate of 8% commencing on October 1, 2021. As of June 30, 2022 and December
31, 2021 the principal balance due to Mr. Mitsunaga was $139,955 and $97,433, respectively. Accrued interest on the same dates was $7,385
and $1,862, respectively. During the three month ended June 30, 2022 pursuant to the terms of a Promissory Note with the Company, Mr.
Mitsunaga advanced $7,512 to the Company to help fund its operation. Mr. Mitsunaga has the right to convert $35,000 of his loan balance
(included in the balance of $139,955 above) in 36,000,000 shares of the Company’s common stock. On March 4, 2022 when the Promissory
Note was executed the trading price of the Company’s common stock was $0.52. As a result the company record stock based compensation,
related party of $18,685,000 on its statement of operations for the excess value included in the conversion right.
NOTE 6 – Subsequent Events
Management has reviewed material events subsequent
of the period ended June 30, 2022 and prior to the filing of financial statements in accordance with FASB ASC 855 “Subsequent Events”.
