TNF Pharmaceuticals, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations

Discontinued Operations

9 Months Ended

Sep. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Note 6 – Discontinued Operations

The Company conducted a strategic review of the screening and testing products business. Following such review, in early July 2020, the Company ceased the production and sale of its rapid, point-of-care screening and testing products. The Company had been experiencing declining sales revenue and production backlogs for these products and, as it previously reported, had eliminated its sales force for such products.

The assets and liabilities of the discontinued operations have been reflected in the condensed consolidated balance sheet as of September 30, 2020 and consist of the following:

	As of
	September 30,
	2020
Current Assets:	$	-
Non-Current Assets		-
Total Assets	$	-

Current Liabilities:
Trade and Other Payables of Discontinued Operations	$	1,457,671
Total Current Liabilities		1,457,671
Non-Current Liabilities		-
Total Liabilities	$	1,457,671

Shareholder Equity	$	-

Total Liabilities and Shareholder Equity	$	1,457,671

The results from the discontinued operations have been reflected in the condensed consolidated statements of operations for the three and nine months ended September 30, 2020 and consist of the following:

	For the			For the
	Three Months			Nine Months
	Ended			Ended
	September 30,			September 30,
	2020			2020
Product Revenue	$	-		$	361,627
Product Cost of Sales		109,983			660,023
Gross Loss		(109,983	)		(298,396	)

Administrative Expenses		62,550			196,901
Sales and Marketing Expenses		29,300			40,586
Regulatory and Compliance Expenses		59,910			199,668
Litigation Settlement Expenses		3,949,414			4,031,131
Amortization of Non-Current Assets		-			17,601
Impairment of Prepaid Royalties		-			291,442
Impairment of Production Equipment		-			18,680
Impairment of Intangible Assets		-			152,822

Loss from Discontinued Operations	$	(4,211,157	)	$	(5,247,227	)

As a result of the discontinued operations, the previously presented 2019 financial statements have been revised to present the consolidated financial statements of the continuing operations separate from the discontinued operations. The effects on the consolidated balance sheet as of December 31, 2019 were as follows:

	December 31, 2019
	As previously
	Reported			Adjustment			As Revised
ASSETS
Current Assets
Cash	$	517,444		$	-		$	517,444
Marketable Securities		9,164,273			-			9,164,273
Accounts Receivable, net		42,881			42,881			-
Deposits and Other Receivables		-			-			-
Inventories, net		198,985			198,985			-
Prepaid Expenses		387,231			46,260			340,971
Current Assets – discontinued operations		-			(288,126	)		288,126
Total Current Assets		10,310,814			-			10,310,814

Non-Current Assets
Prepaid Expenses, net of current		252,308			252,308			-
Restricted Cash		115,094			-			115,094
Plant, Property and Equipment, net		33,574			23,020			10,554
Intangible assets, net		170,423			170,423			-
Other assets		2,722			-			2,722
Non-current Assets – discontinued operations					(445,751	)		445,751
Total Non-Current Assets		574,121			-			574,121

Total Assets	$	10,884,935		$	-		$	10,884,935

LIABILITIES
Current Liabilities
Trade and Other Payables		1,529,765			628,558			901,207
Current Liabilities – discontinued operations		-			(628,558	)		628,558
Total Current Liabilities		1,529,765			-			1,529,765

Total Liabilities		1,529,765			-			1.529.765

Commitments and Contingencies

SHAREHOLDERS’ EQUITY
Preferred Stock, No par value, 50,000,000 total preferred shares authorized		-			-			-
Common stock, No par value, 100,000,000 shares authorized 1,738,837 issued and outstanding as of December 31, 2019		128,920,414			-			128,920,414
Accumulated Other Comprehensive Income (Loss)		17,886			-			17,886
Accumulated Deficit		(119,583,130	)		-			(119,583,130	)
Total Shareholders’ Equity		9,355,170			-			9,355,170

Total Liabilities and Shareholders’ Equity	$	10,884,935		$	-		$	10,884,935

The effects on the condensed consolidated statement of operations and comprehensive income (loss) for the three and nine months ended September 30, 2019 were as follows:

	For the Three Months Ended									For the Nine Months Ended
	September 30, 2019									September 30, 2019
	As Previously Reported			Adjusted			As Revised			As Previously Reported			Adjusted			As Revised
Product Revenue	$	420,812		$	420,812		$	-		$	1,497,448		$	1,497,448		$	-
Product Cost of Sales		(285,510	)		(285,510	)		-			(751,311	)		(751,311	)		-
Gross Income		135,302			135,302			-			746,137			746,137			-

Research and Development Expenses		-			-			-			-			-			-
Administrative Expenses		895,026			51,882			843,144			2,859,288			171,607			2,687,681
Sales and Marketing Expenses		38,262			32,099			6,163			202,242			183,492			18,750
Compliance and Regulatory Expenses		57,502			57,502			-			206,802			206,802			-
Litigation Settlement Expenses		-			-			-			75,000			-			75,000
Amortization of Non-Current Assets		10,001			10,001			-			30,006			30,006			-
Impairment of Intangible Assets		-			-			-			-			-			-

(Loss) income from Operations		(865,489	)		(16,182	)		(849,307	)		(2,627,201	)		154,230			(2,781,431	)

Other (Income) Expense
Foreign Currency Transaction (Gain) Loss		(32	)		-			(32	)		4,846			-			4,846
Gain on Investments		(6,416	)		-			(6,416	)		(2,155	)		-			(2,155	)
Interest and Dividend Income		(22,015	)		-			(22,015	)		(81,017	)		-			(81,017	)
Total Other Income		(28,463	)		(16,182	)		(28,463	)		(78,326	)		154,230			(78,326	)

Loss from Continuing Operations		(837,026	)		-			(820,844	)		(2,548,875	)		-			(2,703,105	)

Income/(Loss) from Discontinued Operations		-			16,182			(16,182	)		-			(154,230	)		154,230

Loss Before Income Taxes		(837,026	)		-			(837,026	)		(2,548,875	)		-			(2,548,875	)

Income Tax Benefit		-			-			-			-			-			-

Net Loss		(837,026	)		-			(837,026	)		(2,548,875	)		-			(2,548,875	)

Other Comprehensive (Loss) Income
Net Unrealized Gain (Loss) on Marketable Securities		(1,805	)		-			(1,805	)		45,597			-			45,597
Total Other Comprehensive (Loss) Income		(1,805	)		-			(1,805	)		45,597			-			45,597

Comprehensive Loss	$	(838,831	)	$	-		$	(838,831	)	$	(2,503,278	)		-		$	(2,503,278	)

The depreciation, amortization and significant operating noncash items of the discontinued operations were as follows:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Depreciation and amortization	$	-	$	13,087	$	21,941	$	35,156
Impairment of Prepaid Royalties		-		-		291,442		-
Impairment of intangible assets		-		-		152,822		-
Inventory adjustment for net realizable value		-		-		197,723		-
Reserve for obsolete inventory		-		79,413		-		126,422
Share based compensation - shares issued to Chubeworkx		2,510,000		-		2,510,000		-
	$	2,510,000	$	92,500	$	3,173,928	$	161,578