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 Nunzia™, a nutraceutical that treats Autism,
Fragile X, ADHD, PTSD and other such disorders. We manufacture, market and plan
to distribute Nunzia™, direct to consumers through our website,
www.nunziapharma.com, and through wholesalers. We did not generate any revenue
from our products in 2021 or 2020.
Current drugs that attempt to control the symptoms of autism, fragile X, ADHD
and PTSD are largely ineffective. Nunzia™ is nutraceutical product is designed
to treat the symptoms of these wide-ranging medical conditions. Nunzia™ product
is intended 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.
We expect to begin generating revenue from our products in 2022, however, there
can be no assurance that we will be able to bring our products to market, or
whether they will be effective.
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, 2021, we had negative working capital of $99,174, $131 in
cash on hand and we had an accumulated deficit of $179,413,129. 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.
5
Results of Operations
Year ended December 31, 2021 compared to the year ended December 31, 2020
Revenue
To date the Company has not generated revenue.
Total Operating Expenses
Total operating expenses for the year ended December 31, 2021 were $78,060,908
compared to $39,327 for the year ended December 31, 2020. Expenses are primarily
related to share based compensation and 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 decreased approximately $101,000,000 due $1,862 of interest
expense on related party advances compared to the issuance of common stock to
related parties.. For additional information see the notes to our financial
statements, "NOTE 5 - Transactions with Related Persons."
Liquidity and Capital Resources
We have an accumulated deficit of $179,413,129 through December 31, 2021. As of
December 31, 2021, the Company had $131 of cash on hand. All expenses in 2021
and 2020 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.
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.
6
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, 2021
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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