10-K: Nika Pharmaceuticals Faces Going Concern, Governance Woes

Nika Pharmaceuticals' latest 10-K filing reveals significant financial distress, including a going concern warning and ineffective internal controls, despite a reduced net loss.

Summary

• Nika Pharmaceuticals, Inc. reported a net loss of $76,398 for the fiscal year ended December 31, 2025, an improvement from the $95,792 net loss in 2024.
• The company's independent accountants issued a 'going concern' opinion due to an accumulated deficit of $9,004,009 and negative working capital of $297,628 as of December 31, 2025.
• Operating activities used $79,654 in cash during 2025, a decrease from $154,932 used in 2024.
• The company relies heavily on related-party financing, receiving $79,460 in loan proceeds from a related party in 2025, with total amounts due to related parties reaching $318,624.
• Management concluded that disclosure controls and procedures were ineffective, and internal control over financial reporting was not effective due to material weaknesses, including a lack of an audit committee and segregation of duties.
• Nika Pharmaceuticals is an emerging growth company, availing itself of exemptions from certain disclosure requirements and extended accounting standard transition periods.
• The company's business strategy focuses on developing and distributing Thymus Nuclear Glycoprotein (TNG), dietary supplements (Carotilen, Physiolong, Hypocholestin, Biodetoxin, Dry Boza, Fructin, Anthocylen C, Silymaron), and products based on the Inactivated Pepsin Fraction (IPF) platform.
• As of December 31, 2025, there were 1,047,549,224 shares of common stock and 15,000,000 shares of preferred stock outstanding, with CEO Dimitar Slavchev Savov holding 42.54% of common stock and 100% of preferred stock, representing 51.87% of total voting power.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing with a highly negative sentiment due to the explicit going concern warning, severe internal control deficiencies, and heavy reliance on related-party financing, which collectively present substantial risks to investors.

Positives

• Net loss decreased to $76,398 in 2025 from $95,792 in 2024, indicating a reduction in losses.
• Cash used in operating activities significantly decreased to $79,654 in 2025 from $154,932 in 2024, suggesting improved operational cash efficiency.
• The company successfully uplisted its common stock to OTCQB on December 9, 2024, potentially increasing visibility and liquidity.
• Nika Pharmaceuticals has secured exclusive rights for several pharmaceutical technologies and dietary supplements, establishing a diverse product pipeline.

Negatives

• The company has an accumulated deficit of $9,004,009 as of December 31, 2025, and has not yet generated sustained profits.
• Independent accountants issued a 'going concern' opinion, raising substantial doubt about the company's ability to continue operations.
• Disclosure controls and procedures were deemed ineffective, and material weaknesses exist in internal control over financial reporting, including a lack of an audit committee and segregation of duties.
• The company is heavily reliant on related-party loans for financing operations, with $318,624 due to related parties as of December 31, 2025.
• No formal written insider trading policies or cybersecurity threat management processes are in place.
• No compensation was paid to officers or directors in 2025 or 2024, which could impact long-term management retention or motivation.

Risks

• Substantial doubt about the company's ability to continue as a going concern due to accumulated deficit, net losses, and negative cash flows from operations.
• Inability to obtain additional equity or debt financing on acceptable terms to sustain operations and achieve profitability.
• Heavy reliance on current management and affiliates to advance funds, with no assurance of continued support.
• Lack of formal processes for identifying and managing material risks from cybersecurity threats, potentially exposing the company to significant vulnerabilities.
• Absence of formal written insider trading policies and procedures, increasing regulatory compliance risk.
• Material weaknesses in internal control over financial reporting, including lack of an audit committee and segregation of duties, which could lead to financial misstatements.
• The going concern qualification from auditors may make it more difficult to raise necessary funds.
• Uncertainty regarding the successful registration, production, and distribution of medicinal products and dietary supplements.

Future Outlook

Management believes the company will continue to incur losses and negative cash flows from operating activities for the foreseeable future and will need additional equity or debt financing to sustain its operations until it can achieve profitability and positive cash flows, if ever. Current management has agreed to advance funds on an as-needed basis, but there is no assurance that external financing will be available on acceptable terms.

Management Comments

• "Management believes the Company will continue to incur losses and negative cash flows from operating activities for the foreseeable future and will need additional equity or debt financing to sustain its operations until it can achieve profitability and positive cash flows, if ever."
• "Our current management has agreed to advance funds to the Company on an as needed basis."
• "The Company recognizes that as it continues to grow and expand its operations and personnel, the adoption of formal written insider trading policies and procedures will become appropriate and necessary."
• "We intend to recruit additional professionals, as our business conditions warrant, to ensure that we include all necessary disclosure in our filings with the Securities and Exchange Commission."

Industry Context

StockSavvy.ai notes that Nika Pharmaceuticals operates in the highly regulated and capital-intensive pharmaceutical and dietary supplement sectors. Its reliance on related-party financing and early-stage product development, coupled with significant governance deficiencies, contrasts sharply with established industry players who typically demonstrate robust internal controls, diversified funding, and clear pathways to commercialization. The company's focus on TNG for HIV, Carotilen, Physiolong, and IPF, alongside generic drugs and other dietary supplements, indicates a broad but nascent portfolio requiring substantial investment and regulatory navigation.

Comparison to Industry Standards

• StockSavvy.ai notes that Nika Pharmaceuticals' explicit statement of 'ineffective disclosure controls and procedures' and 'material weaknesses in internal control over financial reporting' (including lack of an audit committee and segregation of duties) falls significantly below the corporate governance and financial transparency standards expected of publicly traded companies in the pharmaceutical and biotechnology sectors, such as Pfizer or Johnson & Johnson, which maintain robust internal control frameworks and independent oversight bodies.
• The company's complete reliance on related-party loans for operational funding, with no external debt or equity financing mentioned for 2025, is a stark contrast to industry norms where companies typically access diverse capital markets or generate substantial revenue from product sales to fund operations and R&D.
• The absence of formal written insider trading policies and cybersecurity risk management processes is a notable deficiency compared to industry leaders who implement comprehensive policies to mitigate legal, reputational, and operational risks.

Corporate Governance

Related Party Transactions

• Nika Europe LTD advanced the company $79,460 during 2025 for operating expenses; the total amount due to Nika Europe LTD is $79,460 as of December 31, 2025. This advance is non-interest bearing and due on demand. Dimitar Slavchev Savov is the general manager of Nika Europe.
• Dimitar Slavchev Savov, CEO, advanced the company $103,419 during 2024 for operating expenses; the total amount due to Mr. Savov is $205,164 as of December 31, 2025. This advance is non-interest bearing and due on demand.
• Nika Pharmaceuticals LTD advanced the company $34,000 during 2024 for operating expenses; the total amount due to Nika Pharmaceuticals LTD is $34,000 as of December 31, 2025. This advance is non-interest bearing and due on demand. Nika Pharmaceuticals LTD is wholly-owned and managed by CEO Dimitar Slavchev Savov.
• On April 12, 2024, Dimitar Slavchev Savov paid 75,000 BGN (approximately $42,491 USD) for four technologies acquired by Nika Europe Ltd. from Alliance for Intellectual Property in the Field of Pharmacy, Chemistry, and Biology (AIPFPCB).
• On April 23, 2024, Dimitar Savov paid an initial down payment of $191,534 for a vial production line equipment for Nika Europe, Ltd.
• On April 29, 2024, Nika Pharmaceuticals, Ltd. (wholly-owned and managed by Dimitar Savov) made a non-monetary in-kind contribution of a production building and land valued at 3,683,800 BGN (approximately $2,045,209 USD) to Nika Europe, Ltd.
• An acquisition of 100% of Nika Pharmaceuticals, Ltd. by the company, effective May 9, 2024, which would have given the company 99.99% controlling interest in Nika Europe, Ltd. and beneficial ownership of the factory building and land, was cancelled on August 18, 2024 (effective August 23, 2024), returning ownership to Dimitar Slavchev Savov.

Stakeholder Impact

• Shareholders face significant risk of dilution from future equity financing and potential loss of investment due to the company's going concern issues and accumulated deficit.
• Shareholders are exposed to heightened governance risks due to ineffective internal controls, lack of an audit committee, and absence of key policies like insider trading and cybersecurity.
• Creditors, particularly related parties, bear the primary financial risk given the company's reliance on their advances and its negative working capital.
• Employees (if any beyond the executive officers) face job insecurity given the company's financial instability and dependence on external funding.

Next Steps

• Recruit additional professionals to address and strengthen internal control weaknesses and disclosure processes.
• Seek additional equity or debt financing to fund operations and achieve profitability.
• Develop and implement formal written insider trading policies and cybersecurity risk management procedures.

Key Dates

Recommendation

The company faces severe going concern issues, an accumulated deficit of over $9 million, and negative working capital. Operations are entirely funded by related-party loans, indicating a lack of independent financing. Furthermore, the company explicitly states ineffective disclosure controls and material weaknesses in internal control over financial reporting, including a lack of segregation of duties and an audit committee. These fundamental governance and financial health issues present an extremely high risk for investors, making the stock a strong sell.

Keywords

Nika Pharmaceuticals, 10-K, SEC filing, going concern, pharmaceuticals, biotechnology, dietary supplements, TNG, IPF, OTCQB, financial results, corporate governance, internal controls, related party transactions