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.
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