TNF Pharmaceuticals, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Discontinued Operations

Discontinued Operations

12 Months Ended

Dec. 31, 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 Consolidated Balance Sheet as of December 31, 2020 and consist of the following:

	As of
	December 31,
	2020
Current Assets:
Prepaid Expenses	$	12,002
Total Assets	$	12,002

Current Liabilities:
Trade and Other Payables of Discontinued Operations	$	59,393
Total Current Liabilities		59,393
Non-Current Liabilities		-
Total Liabilities	$	59,393

Shareholders’ Equity	$	-

Total Liabilities and Shareholders’ Equity	$	59,393

The results from the discontinued operations have been reflected in the Consolidated Statement of Comprehensive Loss for the year ended December 31, 2020 and consist of the following:

	For the
	Year
	Ended
	December 31,
	2020
Product Revenue	$	361,827
Product Cost of Sales		(659,405	)
Gross Loss		(297,578	)

Research and Development Expenses		2,788
Administrative Expenses		417,730
Sales and Marketing Expenses		51,311
Regulatory and Compliance Expenses		197,312
Litigation Settlement Expenses		3,981,131
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	$	(5,428,395	)

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			53,172			334,059
Current Assets – discontinued operations		-			(295,038	)		295,038
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			33,574			-
Intangible assets, net		170,423			170,423			-
Other assets		2,722			-			2,722
Non-current Assets – discontinued operations					(456,305	)		456,305
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			637,882			891,883
Current Liabilities – discontinued operations		-			(637,882	)		637,882
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		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 Consolidated Statement of Comprehensive Loss for the year ended December 31, 2019 were as follows:

	For the Year Ended
	December 31, 2019
	As Previously Reported			Adjusted			As Revised
Product Revenue	$	1,577,033		$	1,577,033		$	-
Product Cost of Sales		(1,098,286	)		(1,098,286	)		-
Gross Income		478,747			478,747			-

Research and Development Expenses		-			-			-
Administrative Expenses		3,728,514			356,411			3,372,103
Sales and Marketing Expenses		238,036			213,036			25,000
Compliance and Regulatory Expenses		276,788			276,788			-
Litigation Settlement Expenses		141,478			66,478			75,000
Amortization of Non-Current Assets		40,008			40,008			-
Impairment of Intangible Assets		32,980			32,980			-

Loss from Operations		(3,979,057	)		(506,954	)		(3,472,103	)

Other (Income) Expense
Loss on Disposal of Non-Current Assets		9,576			-			9,576
Foreign Currency Transaction (Gain) Loss		5,051			-			5,051
Gain on Investments		(3,952	)		-			(3,952	)
Interest and Dividend Income		(101,483	)		-			(101,483	)
Total Other Income		(90,808	)		-			(90,808	)

Loss from Continuing Operations		(3,888,249	)		-			(3,381,295	)

Loss from Discontinued Operations		-			(506,954	)		(506,954	)

Loss Before Income Taxes		(3,888,249	)		-			(3,888,249	)

Income Tax Benefit		-			-			-

Net Loss		(3,888,249	)		-			(3,888,249	)

Other Comprehensive Income
Net Unrealized Gain on Marketable Securities		43,799			-			43,799
Total Other Comprehensive Income		43,799			-			43,799

Comprehensive Loss	$	(3,844,450	)		-		$	(3,844,450	)

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

	For the Year Ended
	December 31,
	2020		2019
Depreciation and amortization	$	29,452	$	74,064
Impairment of Prepaid Royalties		291,442		-
Impairment of intangible assets		152,822		32,980
Impairment of production equipment		18,680		-
Inventory adjustment for net realizable value		197,723		-
Reserve for obsolete inventory		-		371,997
Share based compensation - shares issued to Chubeworkx		2,510,000		-
	$	3,200,119	$	479,041