10-Q: Nika Pharma Q3 2025: Reduced Losses, Factory Progress

Nika Pharmaceuticals reports reduced net losses and cash burn in Q3 2025, alongside ongoing pharmaceutical factory development and significant related party transactions.

Summary

• Nika Pharmaceuticals, Inc. reported a net loss of $7,999 for the three months ended September 30, 2025, an improvement from $8,367 for the same period in 2024.
• For the nine months ended September 30, 2025, the net loss was $39,309, significantly lower than the $83,340 loss reported for the nine months ended September 30, 2024.
• The company generated no revenue during the reported periods.
• Cash used in operating activities for the nine months ended September 30, 2025, decreased to $40,796 from $126,629 in the prior year.
• Cash balance increased to $6,287 as of September 30, 2025, from $2,083 at December 31, 2024.
• Total liabilities increased to $284,164 as of September 30, 2025, primarily due to increased amounts owed to related parties.
• The company continues to operate with an accumulated deficit of $8,966,920 as of September 30, 2025, raising substantial doubt about its ability to continue as a going concern.
• Nika Europe, Ltd. is preparing for the construction of a pharmaceutical factory in Bulgaria, with equipment scheduled for delivery and installation by the end of Q4 2024.
• The acquisition of Nika Pharmaceuticals, Ltd., which would have given Nika Pharmaceuticals, Inc. 99.99% control of Nika Europe and beneficial ownership of a factory building and land valued at $2,016,562 USD, was cancelled on August 23, 2024.

Sentiment

Score: 4

Explanation: While the company showed improved net loss and reduced cash burn, the lack of revenue, significant accumulated deficit, ongoing going concern doubt, and the cancellation of a key asset acquisition (Nika Pharmaceuticals, Ltd. and its associated factory/land ownership) present substantial concerns. The ineffective disclosure controls also weigh negatively. The progress on the Nika Europe factory is a positive, but its full operational status and revenue generation remain future events.

Positives

• Net loss for the three months ended September 30, 2025, improved to $7,999 from $8,367 in the prior year.
• Net loss for the nine months ended September 30, 2025, significantly improved to $39,309 from $83,340 in the prior year.
• Cash used in operating activities for the nine months ended September 30, 2025, decreased substantially to $40,796 from $126,629.
• Cash balance increased to $6,287 as of September 30, 2025, from $2,083 at December 31, 2024.
• General and administrative expenses decreased for both the three-month ($3,901 vs $6,302) and nine-month ($20,003 vs $28,817) periods compared to the prior year.
• Engaged Velikov Accounting Services LTD, a competent accounting firm with expertise in both US GAAP and IFRS, to cater to international accounting needs.

Negatives

• The company has generated no revenue to date.
• Accumulated deficit increased to $8,966,920 as of September 30, 2025, from $8,927,612 at December 31, 2024.
• Total current liabilities increased to $284,164 from $239,164, primarily due to increased amounts owed to related parties.
• Disclosure controls and procedures were deemed not effective as of September 30, 2025, due to a lack of an audit committee and separation of duties.
• The acquisition of Nika Pharmaceuticals, Ltd., which included beneficial ownership of a factory building and land valued at $2,016,562 USD, was cancelled, meaning Nika Pharmaceuticals, Inc. no longer holds this asset or the 99.99% controlling interest in Nika Europe, Ltd. through this entity.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern due to an accumulated deficit of $8,966,920 and no generated income to date.
• Reliance on related party financing for operating expenses, with loans being non-interest bearing and due on demand.
• Ineffective disclosure controls and procedures due to the lack of an audit committee and separation of duties, which could lead to financial reporting inaccuracies.
• The company's business plan relies on the successful construction and operation of a pharmaceutical factory by Nika Europe, Ltd., which is still in preparation.
• The company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain, subject to changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, and competition.

Future Outlook

The company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain, subject to changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. The company may raise additional capital through the sale of its equity securities, debt securities, or borrowings from financial institutions. Nika Europe, Ltd. is preparing for the construction of a pharmaceutical factory, with equipment scheduled for production, delivery, and installation by the end of Q4 2024. A production agreement with Nika Europe, Ltd. for ITV-1 is in place, with Nika Pharmaceuticals, Inc. expecting a profit of around $1,120 per set once the factory is completed.

Management Comments

• Management believes that the unaudited consolidated financial statements reflect all adjustments, consisting of only normal recurring items, necessary for a fair statement of the results of operations.
• Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives.
• Our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective for the quarterly period ended September 30, 2025.

Industry Context

Nika Pharmaceuticals operates in the highly regulated and capital-intensive pharmaceutical and dietary supplement industries. Its strategy involves acquiring exclusive rights to drug technologies (like TNG for HIV) and dietary supplements, alongside establishing manufacturing capabilities through its subsidiary Nika Europe, Ltd. The focus on generic drugs and dietary supplements suggests a strategy to enter markets with potentially lower R&D costs compared to novel drug discovery, but still requiring significant investment in manufacturing and regulatory approvals. The reliance on related party financing and the 'going concern' warning are common for early-stage biotech/pharma companies that have not yet commercialized products or generated revenue.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• There are no legal proceedings against the company, and the company is unaware of any proceedings contemplated against it.

Related Party Transactions

• Nika Europe, Ltd. (managed by CEO Dimitar Savov, partially owned by Nika Pharmaceuticals, Inc.) advanced the company $45,000 for general operating expenses; this advance is non-interest bearing and due on demand.
• Dimitar Slavchev Savov (CEO) advanced the company $205,164 for general operating expenses; this advance is non-interest bearing and due on demand.
• Nika Pharmaceuticals LTD (wholly-owned and managed by CEO Dimitar Savov) advanced the company $34,000 for general operating expenses; this advance is non-interest bearing and due on demand.
• The company issued 8,000,000 shares of Preferred stock to Dimitar Slavchev Savov (Managing Director and 70% owner of VITAL) for exclusive rights to Thymus Nuclear Glycoprotein (TNG), valued at $2,400,000.
• The company issued 2,000,000 shares of Preferred stock to Dimitar Slavchev Savov (wholly owns MICAR) for exclusive rights to Carotilen and Physiolong dietary supplements, valued at $600,000.
• Dimitar Slavchev Savov paid 75,000 BGN (approximately $42,491 USD) for Nika Europe Ltd.'s acquisition of four technologies (three generic drugs, one dietary supplement).
• Dimitar Slavchev Savov paid an initial down payment of $191,534 from his personal money for Nika Europe, Ltd.'s vial production line equipment.
• Dimitar Slavchev Savov owns 51% of Immunotech Laboratories BG, Ltd., with whom Nika Pharmaceuticals, Inc. has a Joint Business Agreement.
• The acquisition of Nika Pharmaceuticals, Ltd. (wholly owned by Dimitar Slavchev Savov) by Nika Pharmaceuticals, Inc. was cancelled, returning 100% ownership to Dimitar Slavchev Savov.

Stakeholder Impact

• Shareholders face significant risk due to the company's going concern doubt, accumulated deficit, and reliance on related party financing.
• Shareholders experienced dilution through the issuance of 13,230,000 common shares during Q3 2025 as part of the Nika BioTechnology, Inc. merger.
• Creditors (primarily related parties) are exposed to the company's financial instability, as loans are non-interest bearing and due on demand.
• Employees (management) are heavily involved in financing and operational decisions, with the CEO being a significant lender and counterparty in various agreements.
• Future customers could benefit from the potential production of TNG for HIV treatment, Carotilen, Physiolong, and other generic drugs/dietary supplements once the factory is operational and products are commercialized.

Next Steps

• Nika Europe, Ltd. to complete the production, delivery, and installation of the vial production line equipment in the Bulgarian production building (originally targeted by the end of Q4, 2024).
• Nika Europe, Ltd. to organize and bear the costs of production for ITV-1 once the pharmaceuticals factory is completed.
• The company may raise additional capital through equity sales, debt offerings, or borrowings to fund operations and address going concern issues.
• Management needs to address the identified material weaknesses in disclosure controls and procedures, specifically the lack of an audit committee and separation of duties.

Key Dates

Recommendation

Despite a reduction in net loss and cash burn, Nika Pharmaceuticals, Inc. faces severe 'going concern' issues with no revenue and a substantial accumulated deficit. The company's heavy reliance on related party financing, coupled with the cancellation of a significant asset acquisition (Nika Pharmaceuticals, Ltd. and its associated factory/land ownership), indicates high operational and financial instability. Furthermore, the identified material weaknesses in corporate governance (lack of audit committee, separation of duties) raise concerns about internal controls and transparency. While there is progress on a factory, the company's fundamental financial health and governance issues make it a high-risk investment with limited visibility for independent investors.

Keywords

Pharmaceuticals, Biotechnology, SEC Filing, 10-Q, Nika Pharmaceuticals, Financial Results, Net Loss, Going Concern, Related Party Transactions, Corporate Governance, Drug Development, Dietary Supplements, Factory Construction, HIV Treatment, IPF Platform