Amendment: SEC Form 10-Q/A filed by Sunshine Biopharma Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Amendment No. 1)
For the quarterly period
ended:
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State of other jurisdiction of incorporation) | (IRS Employer ID No.) |
(Address of principal executive offices)
(Issuer’s Telephone Number)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||
| The | ||||
| The |
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company
| ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). ☐ Yes
The number of shares of the registrant’s common stock, par value $0.001, issued and outstanding as of August 16, 2024, was shares.
EXPLANATION
This Amendment is being filed because the initial Form 10-Q that was filed with the SEC on August 16, 2024 included an accidentally truncated list of our ”Products on the Market” in PART I, Item 2. This amendment includes all of these products. The Company is also including with this Amendment certain currently dated certifications. Except as otherwise set forth in this Explanatory Note, no other information included in the original Form 10-Q is amended or changed by this Amendment.
TABLE OF CONTENTS
| PART II. OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 23 |
| Item 1A. | Risk Factors | 23 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 23 |
| Item 3. | Defaults Upon Senior Securities | 23 |
| Item 4. | Mine Safety Disclosures | 23 |
| Item 5. | Other Information | 23 |
| Item 6. | Exhibits | 23 |
| Signatures | 24 | |
| 2 |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Sunshine Biopharma, Inc.
Consolidated Balance Sheets
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Long-Term Assets: | ||||||||
| Property & equipment | ||||||||
| Intangible assets | ||||||||
| Right-of-use-asset | ||||||||
| Total Long-Term Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable & accrued expenses | $ | $ | ||||||
| Earnout payable | ||||||||
| Income tax payable | ||||||||
| Current portion - right-of-use-liability | ||||||||
| Total Current Liabilities | ||||||||
| Long-Term Liabilities: | ||||||||
| Deferred tax liability | ||||||||
| Right-of-use-liability | ||||||||
| Total Long-Term Liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Preferred Stock, Series B $ par value per share; shares authorized; and shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively | |
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| Common Stock, $ par value per share; shares authorized; and shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively | |
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| Capital paid in excess of par value | ||||||||
| Accumulated comprehensive income (loss) | ( | ) | ||||||
| Accumulated (Deficit) | ( | ) | ( | ) | ||||
| TOTAL SHAREHOLDERS' EQUITY | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | $ | ||||||
See Accompanying Notes To These Financial Statements
| 3 |
Sunshine Biopharma, Inc.
Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
| 3 Months Ended June 30, | 6 Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||
| Cost of sales | ||||||||||||||||
| Gross profit | ||||||||||||||||
| General & Administrative Expenses: | ||||||||||||||||
| Accounting | ||||||||||||||||
| Consulting | ||||||||||||||||
| Director fees | ||||||||||||||||
| Legal | ||||||||||||||||
| Marketing | ||||||||||||||||
| Office | ||||||||||||||||
| R&D | ||||||||||||||||
| Salaries | ||||||||||||||||
| Taxes | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Total General & Administrative Expenses: | ||||||||||||||||
| (Loss) from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expense): | ||||||||||||||||
| Foreign exchange (loss) | ( | ) | ( | ) | ||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total Other Income (Expense) | ||||||||||||||||
| Net (loss) before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ( | ) | ( | ) | ||||||||||||
| Net (Loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Comprehensive Income (Loss): | ||||||||||||||||
| Gain (Loss) from foreign exchange translation | ( | ) | ( | ) | ||||||||||||
| Comprehensive Income (Loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic (Loss) per common share | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted Average Common Shares Outstanding (Basic) | ||||||||||||||||
See Accompanying Notes To These Financial Statements
| 4 |
Sunshine Biopharma, Inc.
Consolidated Statements of Cash Flows (Unaudited)
| June 30, | June 30, | |||||||
| 2024 | 2023 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net (Loss) | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock issued for services | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ( | ) | ||||
| Prepaid expenses | ( | ) | ||||||
| Accounts Payable & accrued expenses | ( | ) | ||||||
| Earn-out payable | ( | ) | ( | ) | ||||
| Income tax payable | ( | ) | ( | ) | ||||
| Net Cash Flows (Used In) Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities: | ||||||||
| Reduction in right-of-use asset | ||||||||
| Purchase of intangible assets | ( | ) | ( | ) | ||||
| Purchase of equipment | ( | ) | ( | ) | ||||
| Net Cash Flows (Used In) Investing Activities | ( | ) | ( | ) | ||||
| Cash Flows From Financing Activities: | ||||||||
| Proceeds from public offering net (common stock) | ||||||||
| Exercise of warrants | ||||||||
| Purchase of treasury stock | ( | ) | ( | ) | ||||
| Lease liability | ( | ) | ( | ) | ||||
| Net Cash Flows Provided by Financing Activities | ||||||||
| Cash and Cash Equivalents at Beginning of Period | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ( | ) | ||||
| Effect of exchange rate changes on cash | ||||||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Cash and Cash Equivalents at End of Period | $ | $ | ||||||
| Supplementary Disclosure of Cash Flow Information: | ||||||||
| Cash paid for income taxes | $ | $ | ||||||
| Stock issued for services | $ | $ | ||||||
See Accompanying Notes To These Financial Statements
| 5 |
Sunshine Biopharma, Inc.
Consolidated Statements of Shareholders' Equity (Unaudited)
| Three Months | Number Of Common Shares | Common | Capital Paid in Excess of Par | Treasury | Number Of Preferred Shares | Preferred | Comprehensive | Accumulated | ||||||||||||||||||||||||||||
| Periods | Issued | Stock | Value | Stock | Issued | Stock | Income | Deficit | Total | |||||||||||||||||||||||||||
| Balance March 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Exercise of warrants | ( | ) | – | |||||||||||||||||||||||||||||||||
| Net (loss) | – | – | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||
| Balance March 31, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Common stock and prefunded warrants issued in a private offering | – | |||||||||||||||||||||||||||||||||||
| Exercise of warrants | – | |||||||||||||||||||||||||||||||||||
| Net (loss) | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Six Months Periods | ||||||||||||||||||||||||||||||||||||
| Balance December 31, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Preferred Stock issued to related party | – | |||||||||||||||||||||||||||||||||||
| Common stock and pre-funded warrants issued in an underwritten offering | – | |||||||||||||||||||||||||||||||||||
| Exercise of warrants | – | |||||||||||||||||||||||||||||||||||
| Repurchase of warrants | – | ( | ) | – | ( | |||||||||||||||||||||||||||||||
| Net (loss) | – | – | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||
| Balance December 31, 2022 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Repurchase Stock | ( | ) | ( | ) | – | ( | ) | |||||||||||||||||||||||||||||
| Common stock and prefunded warrants issued in a private offering | – | |||||||||||||||||||||||||||||||||||
| Exercise of warrants | – | |||||||||||||||||||||||||||||||||||
| Net (loss) | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
See Accompanying Notes To These Financial Statements
| 6 |
Sunshine Biopharma, Inc.
Notes to Unaudited Consolidated Financial Statements
For the Six Months Ended June 30, 2024 and 2023
Note 1 – Description of Business
The Company was incorporated under the name Mountain West Business Solutions, Inc. on August 31, 2006, in the State of Colorado. Effective October 15, 2009, the Company acquired Sunshine Biopharma, Inc. in a transaction classified as a reverse acquisition. Upon completion of the reverse acquisition, the Company changed its name to Sunshine Biopharma, Inc. and began operating as a pharmaceutical company.
Sunshine Biopharma operates two wholly owned subsidiaries: (i) Nora Pharma Inc. (“Nora Pharma”), a Canadian corporation with a portfolio of pharmaceutical products consisting of 61 generic prescription drugs on the market in Canada, and (ii) Sunshine Biopharma Canada Inc. (“Sunshine Canada”), a Canadian corporation which develops and sells nonprescription over-the-counter (“OTC”) products.
The Company has determined that it has two reportable segments:
| · | Prescription Generic Pharmaceuticals (“Generic Pharmaceuticals”) | |
| · | Nonprescription Over-The-Counter Products (“OTC Products) |
Through June 30, 2024, sales from the Generic Pharmaceuticals segment
represented approximately
The Company is not subject to material customer concentration risks as it sells its products directly to pharmacies in several Canadian provinces. However, in Canada provincial governments reimburse patients for their prescription drugs expenditures to various degrees under drug reimbursement programs, making generic drugs prices highly dependent on governmental policies which may change over time. The most recent negotiations between the pan-Canadian Pharmaceutical Alliance and the Canadian Generic Pharmaceutical Association have resulted in updated generic pricing for certain products which took effect on October 1, 2023. The updated prices are valid for three years and the agreement may be extended for an additional two years.
In addition, the Company is engaged in the development of the following proprietary drugs:
| · | Adva-27a, a small chemotherapy molecule for treatment of pancreatic cancer (IND-enabling studies were paused on November 2, 2023) | |
| · | K1.1 mRNA, a lipid nano-particle (LNP) targeted for liver cancer | |
| · | SBFM-PL4, a protease inhibitor for treatment of Coronavirus infections |
| 7 |
Note 2 – Basis of Presentation
The unaudited consolidated financial statements of the Company for the three and six months periods ended June 30, 2024 and 2023, have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2023, was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 28, 2024. These financial statements should be read in conjunction with that report.
On April 17, 2024 and August 8, 2024, the Company completed a
Note 3 – Underwritten Public Offering
On February 15, 2024, the Company completed an underwritten public
offering for gross proceeds of approximately $
In addition (effective following the stockholder approval), the Series A Warrants and Series B Warrants included a provision under which, following a reverse split of the common stock, the exercise price will be adjusted to the lowest volume weighted average price (“VWAP”) for the five trading days immediately preceding and immediately following the date of reverse stock split, and the number of shares issuable upon exercise of the Series A Warrants or Series B Warrants will be adjusted such that the aggregate exercise price of the Series A Warrants or Series B Warrants will remain unchanged. The Series B Warrants do not include an alternate cashless exercise provision and can only be exercised for cash so long as the Company’s registration statement for such warrants and underlying shares remains effective.
In addition, the Company granted the underwriter, Aegis Capital Corp. ("Aegis"), a 45-day option to purchase up to an additional 15% of the total number of shares of common stock and/or Pre-Funded Warrants and/or Series A Warrants and/or Series B Warrants sold in the offering, solely to cover overallotments, if any. On February 15, 2024, Aegis partially exercised its over-allotment option for a total of Series A Warrants and Series B Warrants.
On February 13, 2024, the Company obtained stockholder approval for (i) adjustment of the number of underlying shares and exercise price for both the Series A Warrants and the Series B warrants, and (ii) the alternate cashless exercise provision for the Series A warrants.
| 8 |
As of June 30, 2024, all of the Pre-Funded Warrants and all of the
Series A warrants have been exercised resulting in the Company issuing and shares of common stock, respectively. In
connection with such exercises, the Company received net proceeds of $
As of August 16, 2024, the only securities remaining
outstanding in connection with this offering are
Note 4 – Acquisition of Nora Pharma Inc.
On October 20, 2022, the Company acquired all of the issued and outstanding
shares of Nora Pharma Inc. (“Nora Pharma”), a Canadian privately held pharmaceutical company. The purchase price for the shares
was $
The following table summarizes the allocation of the purchase price as of October 20, 2022, the acquisition date using Nora Pharma’s balance sheet assets and liabilities:
| Accounts receivable | $ | |||
| Inventory | ||||
| Intangible assets | ||||
| Equipment & furniture | ||||
| Other assets | ||||
| Total assets | ||||
| Liabilities assumed | ( | ) | ||
| Net assets | ||||
| Goodwill | ||||
| Total Consideration | $ | |||
The value of the 1,850 common shares issued as part of the consideration paid for Nora Pharma was determined based on the closing market price of the Company’s common shares on the acquisition date, October 20, 2022 ($2,440 per share).
| 9 |
The Company impaired 100% of the goodwill amount in 2022 and plans to depreciate the intangible assets as detailed in Note 5 below.
As part of the consideration paid for Nora
Pharma, the Company agreed to a $
Note 5 – Intangible Assets
Intangible assets, net consisted of the following:
| June 30, 2024 | December 31, 2023 | |||||||
| Balance at beginning of the year | $ | |||||||
| Purchase of additional intangible assets (licenses) | ||||||||
| Total | ||||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||
| Finite-lived intangible assets, net | $ | $ | ||||||
As of June 30, 2024, the estimated amortization amounts of the Company’s intangible assets for each of the next five years are as follows:
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 |
Note 6 – Reverse Stock Splits
Effective April 17, 2024 and August 8, 2024, the Company completed a 1-for-100 and a 1-for-20 reverse split of its common stock (the “Reverse Splits”). The Company had previously completed three (3) reverse stock splits including a 1-for-200 on February 9, 2022, and two 1-for-20 reverse stock splits, one in 2019 and the other in 2020. The Company’s financial statements included in this report reflect all five (5) reverse stock splits on a retroactive basis for all periods presented and for all references to common stock, unless specifically stated otherwise.
| 10 |
Note 7 – Capital Stock
The Company’s authorized capital is comprised of shares of common stock, par value $, and shares of preferred stock, $ par value. As of June 30, 2024, the Company had authorized shares of Series B Preferred Stock. The Series B Preferred Stock is non-convertible and non-redeemable. It has a liquidation preference equal to the stated value of $0.10, relative to the common stock and gives the holder the right to 1,000 votes per share. As of June 30, 2024, shares of Series B Preferred Stock were outstanding and held by the Company’s Chief Executive Officer.
On February 17, 2022, the Company completed a public offering and received
net proceeds of $
On October 12, 2023, the Company held a special meeting of the holders of the outstanding Tradeable Warrants in which the holders of the majority of the outstanding Tradeable Warrants approved an amendment to the Warrant Agent Agreement to eliminate the provision that prohibited the Company’s CEO from exercising his voting rights under the Series B Preferred Stock, as well as to lower the exercise price of the Tradeable Warrants from $4,440 to $220.00. The Company entered into the amendment to the Warrant Agent Agreement on October 18, 2023.
On March 14, 2022, the Company completed a private placement and received
net proceeds of $
On April 28, 2022, the Company completed another private placement
and received net proceeds of $
| 11 |
On October 20, 2022, the Company issued shares of common stock
as part of the acquisition of Nora Pharma. These shares were valued at $
On January 19, 2023, the Company announced a stock repurchase program
of up to $
On May 16, 2023, the Company completed a private placement pursuant
to a securities purchase agreement with an institutional investor for gross proceeds of approximately $
In 2022 and 2023, the Company issued a total of shares of common
stock in connection with warrant exercises for aggregate net proceeds of $
In July 2023, the Company repurchased a total of shares of common
stock under the Stock Repurchase Program announced on January 19, 2023, at an average price of $1,009.20 per share for a total cost of
$
On November 16, 2023, the Company issued shares of common stock
and received net proceeds of $
On February 8, 2024, the Company issued shares of Series B Preferred Stock to the Company’s CEO for a purchase price of $ per share.
On February 15, 2024, the Company completed an underwritten public offering and in connection therewith it issued an aggregate of shares of common stock, of which shares were issued in connection with pre-funded warrant exercises.
On March 4, 2024, the Company issued shares of Series B Preferred Stock to the Company’s CEO for a purchase price of $ per share.
As of June 30, 2024 and December 31, 2023, the Company had a total of and shares of common stock issued and outstanding, respectively.
The Company has declared
| 12 |
Note 8 – Warrants
The Company accounts for issued warrants either as a liability or equity in accordance with ASC 480-10 or ASC 815-40. Under ASC 480-10, warrants are considered a liability if they are mandatorily redeemable and they require settlement in cash, other assets, or a variable number of shares. If warrants do not meet liability classification under ASC 480-10, the Company considers the requirements of ASC 815-40 to determine whether the warrants should be classified as a liability or as equity. Under ASC 815-40, contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event. Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period. Any change in the fair value of the warrants after the issuance date is recorded in the consolidated statements of operations as a gain or loss. If warrants do not require liability classification under ASC 815-40, in order to conclude warrants should be classified as equity, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or other applicable GAAP standard. Equity-classified warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date.
In 2022, 2023, and during the six months ended June 30, 2024, the Company completed five (5) financing events, and in connection therewith, it issued warrants as follows:
| Schedule of warrants issued with financing | ||||||
| Type | Number | Exercise Price | Expiry Date | |||
| 2022 Pre-Funded Warrants | $ |
|||||
| Tradeable Warrants | $ |
|||||
| Investor Warrants | $ |
|||||
| April Warrants | $ |
|||||
| May Pre-Funded Warrants | $ |
|||||
| May Investor Warrants | $ |
|||||
| 2024 Pre-Funded Warrants | $ |
|||||
| Series A Warrants | * | $ |
||||
| Series B Warrants | * | $ |
_______________________
| * |
As of June 30, 2024, all of the 2022 Pre-Funded Warrants, all of the
May Pre-Funded Warrants, all of the 2024 Pre-Funded Warrants, a total of Tradeable Warrants, Investor Warrants, and all of
the Series A Warrants were exercised resulting in aggregate proceeds of $
| 13 |
On February 11, 2024, the Company redeemed all of the April Warrants
and all of the May Investor Warrants for an aggregate purchase price of $
The Company’s outstanding warrants as of August 16, 2024 consisted of the following:
| Schedule of warrants outstanding | ||||||
| Type | Number | Exercise Price | Expiry Date | |||
| Tradeable Warrants | $ |
|||||
| Investor Warrants | $ |
|||||
| Series B Warrants | $ |
_____________________
| * | As adjusted and subject to further adjustments per the Series B Warrant Agreements. |
The following table sets forth the computation of basic and diluted net income per share for the quarters ended June 30:
| 2024 | 2023 | |||||||
| Net gain (loss) attributable to common stock | $ | ( | ) | $ | ( | ) | ||
| Basic weighted average outstanding shares of common stock | ||||||||
| Dilutive common share equivalents | ||||||||
| Dilutive weighted average outstanding shares of common stock | ||||||||
| Net gain (loss) per share attributable to common stock | $ | ( | ) | $ | ( | ) | ||
Note 10 – Lease
The Company has obligations as a lessee for office and warehouse space with initial non-cancellable terms in excess of one year. The Company classified the lease as an operating lease. The lease contains a renewal option for a period of five years. Because the Company is certain to exercise the renewal option, the optional period is included in determining the lease term, and associated payments under the renewal option are included in the lease payments. The Company’s lease does not include termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease include fixed payments plus a variable payment. The Company’s lease requires it to make variable payments for the Company’s proportionate share of building’s property taxes, insurance, and common area maintenance. These variable lease payments are not included in lease payments used to determine lease liability and are recognized as variable costs when incurred.
Amounts reported on the balance sheet as of June 30, 2024, were as follows:
| Operating lease ROU asset | $ | |
| Operating lease liability - Short-term | $ | |
| Operating lease liability - Long-term | $ | |
| Remaining lease term | ||
| Discount rate |
Amounts disclosed for ROU assets obtained in exchange for lease obligations and reductions of ROU assets resulting from reductions of lease obligations include amounts reduced from the carrying amount of ROU assets resulting from deferred rent.
| 14 |
Maturities of lease liabilities under non-cancellable operating leases at June 30, 2024 are as follows:
| 2024 | $ | ||||
| 2025 | $ | ||||
| 2026 | $ | ||||
| 2027 | $ | ||||
| 2028 | $ | ||||
| Thereafter | $ |
Note 11 – Management and Director Compensation
The Company paid its officers cash compensation
totaling $
The Company paid its directors aggregate cash
compensation totaling $
Note 12 – Income Taxes
In calculating the provision for income taxes on an interim basis, the Company uses an estimate of the annual effective tax rate based upon currently known facts and circumstances and applies that rate to its year-to-date earnings or losses. The Company’s effective tax rate is based on expected income and statutory tax rates and takes into consideration permanent differences between financial statement and tax return income applicable to the Company in the various jurisdictions in which the Company operates. The effect of discrete items, such as changes in estimates, changes in rates or tax status, and unusual or infrequently occurring events, is recognized in the interim period in which the discrete item occurs. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the result of new judicial interpretations or regulatory or tax law changes.
Our
income tax (expense) / benefit of $
Our
income tax (expense) / benefit $(
Deferred tax assets are regularly reviewed for recoverability by jurisdiction and valuation allowances are established based on historical and projected future taxable losses and the expected timing of the reversal of existing temporary differences. The Company as recorded valuation allowances against the majority of its deferred tax assets of June 30, 2024, and the Company expects to maintain these valuation allowances until there is sufficient evidence that future earnings can be achieved, which is uncertain at this time.
The Company's consolidated financial statements contain various tax related entries the same being due to the operations of the two Canadian subsidiaries and are in compliance with Canadian tax laws.
Note 13 – Subsequent Events
Effective August 8, 2024, the Company completed a 1-for-20 reverse split of its common stock (the “Reverse Split”). As a result of the Reverse Split, the exercise price of Series B Warrants adjusted to $2.7879 per share and the number of Series B Warrants adjusted to 13,612,927. All share amounts, warrants, and related parameters specified in this report have been adjusted to reflect the Reverse Split.
Subsequent to June 30, 2024, the Company issued 53,831 shares of common stock upon the exercise of 53,831 Series B Warrants and received $150,075 in net proceeds.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included herein. This discussion includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The statements regarding Sunshine Biopharma, Inc. contained in this Report that are not historical in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “likely,” “expects,” “anticipates,” “estimates,” “believes” or “plans,” or comparable terminology, are forward-looking statements based on current expectations and assumptions, and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. Important factors known to us that could cause such material differences are identified in this report and in our annual report on Form 10-K for the year ended December 31, 2023. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law. You are advised, however, to consult any future disclosures we make on related subjects in future reports we file with the SEC.
About Sunshine Biopharma
We are a pharmaceutical company offering and researching life-saving medicines in a wide variety of therapeutic areas, including oncology and antivirals. We operate two wholly owned subsidiaries: (i) Nora Pharma Inc. (“Nora Pharma”), a Canadian corporation with a portfolio consisting of 61 generic prescription drugs on the market in Canada, and (ii) Sunshine Biopharma Canada Inc. (“Sunshine Canada”), a Canadian corporation which develops and sells nonprescription over-the-counter (“OTC”) products.
In addition, we are conducting a proprietary drug development program which is comprised of (i) K1.1 mRNA targeted for liver cancer, (ii) SBFM-PL4, PLpro protease inhibitor for SARS Coronavirus infections, and (iii) Adva-27a for pancreatic cancer. Development of the latter has been paused pending further analysis of unfavorable in vitro results obtained in the second half of 2023. See “Drugs in Development” below.
History
We were incorporated in the State of Colorado on August 31, 2006, and on October 15, 2009, we acquired Sunshine Biopharma, Inc. in a transaction classified as a reverse acquisition. Sunshine Biopharma, Inc. held an exclusive license to a new anticancer drug bearing the laboratory name, Adva-27a (the “License Agreement”). Upon completion of the reverse acquisition, we changed our name to Sunshine Biopharma, Inc. and began operating as a pharmaceutical company.
In December 2015, we acquired all worldwide issued (US Patent Number 8,236,935, and 10,272,065) and pending patents under PCT/FR2007/000697 and PCT/CA2014/000029 for the Adva-27a anticancer compound and terminated the License Agreement. Development of Adva-27a has recently been paused pending further analysis of unexpected in vitro results obtained in the latter part of 2023. See “Drugs in Development” below.
In early 2020, we initiated a new R&D project focused on the development of a treatment for COVID-19 and on May 22, 2020, we filed a provisional patent application in the United States for the new coronavirus treatment. The patent application covers composition subject matter pertaining to small molecules for inhibition of the main Coronavirus protease, Mpro. On April 30, 2021, we filed a PCT application containing new research results and extending coverage to include the Coronavirus Papain-Like protease, PLpro.
In June 2021, we initiated another R&D project in which we set out to determine if certain mRNA molecules can be used as anticancer agents. The data obtained for mRNA molecules bearing the laboratory name K1.1 became the subject of a new patent application filed in April 2022.
On October 20, 2022, we acquired Nora Pharma Inc. (“Nora Pharma”), a Canadian generic pharmaceuticals company based in the greater Montreal area. Nora Pharma has 46 employees and operates in a 23,500 square foot facility certified by Health Canada. Nora Pharma currently has 61 generic prescription drugs on the market in Canada and is planning to launch 32 additional generic prescription drugs in 2024 and 2025.
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Products on the Market
Through Nora Pharma we currently have the following generic prescription drugs on the market in Canada:
| Drug | Action/Indication | Reference Brand | ||
| Abiraterone* | Oncology | Zytiga® | ||
| Alendronate | Osteoporosis | Fosamax® | ||
| Amlodipine | Cardiovascular | Norvasc® | ||
| Apixaban | Cardiovascular | Eliquis® | ||
| Aripiprazole | Antipsychotic | Abilify® | ||
| Atorvastatin | Cardiovascular | Lipitor® | ||
| Azithromycin | Antibacterial | Zithromax® | ||
| Candesartan | Hypertension | Atacand® | ||
| Candesartan HCTZ | Hypertension | Atacand Plus® | ||
| Celecoxib | Anti-inflammatory | Celebrex® | ||
| Cetirizine | Allergy | Reactine® | ||
| Clobetasol* | Anti-inflammatory | Clobex® | ||
| Ciprofloxacin | Antibiotic | Cipro® | ||
| Citalopram | Central nervous system | Celexa® | ||
| Clindamycin | Antibiotic | Dalacin® | ||
| Clopidogrel | Cardiovascular | Plavix® | ||
| Dapagliflozin | Diabetes | Forxiga® | ||
| Daptomycin* | Antibacterial | Cubicin® | ||
| Dasatinib* | Oncology | Sprycel® | ||
| Donepezil | Central nervous system | Aricept® | ||
| Duloxetine | Central nervous system | Cymbalta® | ||
| Dutasteride | Urology | Avodart® | ||
| Ertapenem* | Antibacterial | Invanz® | ||
| Escitalopram | Central nervous system | Cipralex® | ||
| Ezetimibe | Cardiovascular | Ezetrol® | ||
| Finasteride | Urology | Proscar® | ||
| Flecainide | Cardiovascular | Tambocor® | ||
| Fluconazole | Antifungal | Diflucan® | ||
| Fluoxetine | Central nervous system | Prozac® | ||
| Hanzema®* | Dermatology | Toctino® | ||
| Hydroxychloroquine | Antimalarial | Plaquenil® | ||
| Lacosamide | Central nervous system | Vimpat® | ||
| Letrozole | Oncology | Femara® | ||
| Levetiracetam | Central nervous system | Keppra® | ||
| Mirtazapine | Central nervous system | Remeron® | ||
| Metformin | Diabetes | Glucophage® | ||
| Montelukast | Allergy | Singulair® | ||
| Olmesartan | Cardiovascular | Olmetec® | ||
| Olmesartan HCTZ | Cardiovascular | Olmetec Plus® | ||
| Pantoprazole | Gastroenterology | Pantoloc® | ||
| Paroxetine | Central nervous system | Paxil® | ||
| Perindopril | Cardiovascular | Coversyl® | ||
| Pravastatin | Cardiovascular | Pravachol® | ||
| Pregabalin | Central nervous system | Lyrica® | ||
| Progesterone* | Women's Health | Prometrium® | ||
| Quetiapine | Central nervous system | Seroquel® | ||
| Quetiapine XR | Central nervous system | Seroquel XR® | ||
| Ramipril | Cardiovascular | Altace® | ||
| Rivaroxaban* | Cardiovascular | Xarelto® | ||
| Rizatriptan ODT | Central nervous system | Maxalt® ODT | ||
| Rosuvastatin | Cardiovascular | Crestor® | ||
| Sertraline | Central nervous system | Zoloft® | ||
| Sildenafil | Urology | Viagra® | ||
| Tadalafil | Urology | Cialis® | ||
| Telmisartan | Cardiovascular | Micardis® | ||
| Telmisartan HCTZ | Cardiovascular | Micardis Plus® | ||
| Topiramate | Anticonvulsant | Topamax® | ||
| Tramadol Acetaminophen | Central nervous system | Tramacet® | ||
| Zoledronic Acid* | Osteoporosis | Aclasta® | ||
| Zolmitriptan | Central nervous system | Zomig® | ||
| Zopiclone | Central nervous system | Imovane® | ||
________________
*Sold through distribution agreements
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In addition to the 61 drugs currently on the market, we have 32 additional drugs scheduled to be launched in 2024 and 2025. These new drugs will address various human health areas including cardiovascular, oncology, gastroenterology, central nervous system, diabetes, urology, endocrinology, anti-infective, and anti-inflammatory. Among the new drugs to be launched in 2024 is NIOPEG®, a biosimilar of NEULASTA®. Like NEULASTA®, NIOPEG® is a long-acting form of recombinant human granulocyte colony-stimulating factor (filgrastim). It is indicated to decrease the incidence of infection in patients with non-myeloid malignancies receiving anti-neoplastic therapy. Nora Pharma received Health Canada marketing approval for NIOPEG® on April 17, 2024. NIOPEG® is anticipated to be on the market in Canada in October 2024.
We believe the addition of these new products to our existing portfolio will strengthen our presence in the Canadian $9.7 billion a year generic drugs market and provide us with greater access to pharmacies as we become more of a go-to supplier for every-day and specialty medicines.
Drugs in Development
The following table summarizes our proprietary drugs in development:
| Drug Candidate | Therapeutic Area | Development Stage | ||
| Adva-27a (Small Molecule) | Oncology (Pancreatic Cancer) | Paused* | ||
| K1.1 (mRNA LNP) | Oncology (Liver Cancer) | Animal Testing | ||
| SBFM-PL4 (Small Molecule) | Antiviral (SARS Coronavirus) | Animal Testing |
_____________
*See “Adva-27a Anticancer Compound” below
Adva-27a Anticancer Compound
Adva-27a is a small molecule designed for the treatment of aggressive forms of cancer. A Topoisomerase II inhibitor, Adva-27a has been shown to be effective at destroying Multidrug Resistant Cancer cells including Pancreatic Cancer cells, Breast Cancer cells, Small-Cell Lung Cancer cells and Uterine Sarcoma cells (Published in ANTICANCER RESEARCH, Volume 32, Pages 4423-4432, October 2012). We are the direct owner of all patents pertaining to Adva-27a including U.S. Patents Number 8,236,935 and 10,272,065.
In December 2022, we entered into a research agreement with the Jewish General Hospital (“JGH”), to conduct the IND-enabling studies of Adva-27a (the “Research Agreement”). In August 2023, we were informed by the JGH that the laboratory test results of the Adva-27a molecule were not favorable. After conclusion of an internal review of the laboratory results on November 2, 2023, we provided notice to JGH of termination of the Research Agreement. We have paused the IND-enabling studies of Adva-27a pending a review of the results and the possibility of chemical modification of the compound to address the suboptimal performance of the molecule in certain studies.
K1.1 Anticancer mRNA
In June 2021, we initiated a new research project in which we set out to determine if certain mRNA molecules can be used as anti-cancer agents. The data collected to date have shown that a selected group of mRNA molecules are capable of destroying cancer cells in vitro including multidrug resistant breast cancer cells (MCF-7/MDR), ovarian adenocarcinoma cells (OVCAR-3), and pancreatic cancer cells (SUIT-2). Studies using non-transformed (normal) human cells (HMEC cells) showed that these mRNA molecules had little cytotoxic effects. These new mRNA molecules, bearing the laboratory name K1.1, are readily adaptable for delivery into patients using the mRNA vaccine technology. In April 2022, we filed a provisional patent application in the United States covering the subject mRNA molecules.
In November 2022, we concluded an agreement with a specialized commercial partner for the purposes of formulating our K1.1 mRNA molecules into lipid nanoparticles (“LNP”) for use to conduct xenograft mice studies. The initial results of our xenograft mice studies indicate that our K1.1 mRNA-LNP is effective at reducing the size of liver cancer xenograft tumors in mice. We are currently seeking to confirm these results by conducting additional xenograft experiments on a broader scale and in more detailed dose-response studies.
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SBFM-PL4 SARS Coronavirus Treatment
The initial genome expression products following infection by Betacoronavirus, the causative agent of COVID-19, are two large polyproteins, referred to as pp1a and pp1ab. These two polyproteins are cleaved at 15 specific sites by two virus encoded proteases, called Mpro and PLpro, to generate 16 different non-structural proteins essential for viral replication. Mpro and PLpro represent attractive anti-viral drug development targets as they play a central role in the early stages of viral replication. PLpro is of particular interest as a therapeutic target in that, in addition to processing essential viral proteins, it is also responsible for suppression of the human immune system making the virus more life-threatening. PLpro is present only in Betacoronaviruses, the subgroup of Coronaviruses represented by the highly pathogenic SARS-CoV, MERS-CoV, and SARS-CoV-2.
Our Anti-Coronavirus research effort has been focused on developing an inhibitor of PLpro and, on May 22, 2020, we filed a patent application in the United States covering composition subject matter pertaining to small molecules for inhibition of the Coronavirus PLpro as well as Mpro.
In February 2022, we expanded our PLpro inhibitors research effort by entering into a research agreement with the University of Arizona for the purposes of conducting research focused on determining the in vivo safety, pharmacokinetics, and dose selection properties of three University of Arizona owned PLpro inhibitors, to be followed by efficacy testing in mice infected with SARS-CoV-2 (the “Research Project”). Under the agreement, the University of Arizona granted us a first option to negotiate a commercial, royalty-bearing license for all intellectual property developed by University of Arizona under the Research Project. In addition, we and the University of Arizona have entered into an option agreement (the “Option Agreement”) whereby we were granted a first option to negotiate a royalty-bearing commercial license for the underlying technology of the Research Project. On September 13, 2022, we exercised our options, and on February 24, 2023, we entered into an exclusive worldwide license agreement with the University of Arizona for all of the technology related to the Research Project.
We have recently broadened our objective to include the development of an injectable drug candidate of first-in-class PLpro inhibitor to treat SARS-CoV2 and potentially SARS-CoV and MERS-CoV infection in patients who could not use Paxlovid, Molnupiravir, or Remdesivir, due to concerns about drug interactions and possible ‘rebound’ infections and other side effects.
Intellectual Property
We are the sole owner of all rights pertaining to Adva-27a. These patent rights are covered by PCT/FR2007/000697 and PCT/CA2014/000029. The patent applications filed under these two PCT's have been issued in the United States under US Patent Number 8,236,935 and 10,272,065.
On May 22, 2020, we filed a provisional patent application in the United States for a new treatment for Coronavirus infections. Our patent application covers composition subject matter pertaining to small molecules for inhibition of the main Coronavirus protease, Mpro, an enzyme that is essential for viral replication. The patent application has a priority date of May 22, 2020. On April 30, 2021, we filed a PCT application containing new research results and extending coverage to include the Coronavirus Papain-Like protease, PLpro. The priority date of May 22, 2020 has been maintained in the newly filed PCT application.
On April 20, 2022, we filed a provisional patent application in the United States covering mRNA molecules capable of destroying cancer cells in vitro. The patent application contains composition and utility subject matter pertaining to the structure and sequence of the relevant mRNA molecules.
Effective February 24, 2023, we became the exclusive, worldwide licensee of the University of Arizona for three (3) patents related to small molecules which inhibit the Coronavirus protease, PLpro.
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Our wholly owned subsidiary, Nora Pharma, owns 152 DIN’s issued by Health Canada for prescription drugs currently on the market in Canada. These DIN’s were secured through in-licenses or cross-licenses from international manufacturers of generic pharmaceutical products.
In addition, we are the owner of four (4) NPN’s issued by Health Canada including (i) NPN 80089663 which authorizes us to manufacture and sell our in-house developed OTC product, Essential•9, (ii) NPN 80093432 which authorizes us to manufacture and sell the OTC product, Calcium-Vitamin D under the brand name Essential Calcium-Vitamin D, (iii) NPN 80125047 which authorizes us to manufacture and sell the OTC product, L-Citrulline, and (iv) NPN 80127436 which authorizes us to manufacture and sell the OTC product, Taurine.
Results of Operations
Comparison of results of operations for the three months ended June 30, 2024 and 2023
During the three months ended June 30, 2024, we generated $9,303,067 in sales, compared to $5,560,865 for the three months ended June 30, 2023, an increase of $3,742,202, or 67%. The increase is attributable to expanded marketing and sales efforts by our wholly owned subsidiary, Nora Pharma. The direct cost for generating these sales was $6,946,810 (75%) for the three months ended June 30, 2024, compared to $3,608,118 (65%) for the three months ended June 30, 2023. The increase in the cost of goods sold in 2024 is due to increased cost of manufacturing of the generic prescription drugs. Our gross profit grew to $2,356,257 for the three months ended June 30, 2024, compared to $1,952,747 for the three months ended June 30, 2023.
General and administrative expenses during the three-month period ended June 30, 2024, were $3,624,533, compared to $2,966,635 during the three-month period ended June 30, 2023, an increase of $657,898. The increase was due to increases in legal fees ($77,621), marketing ($123,148), office expense ($293,595), R&D ($67,670), and salaries ($356,009). The increase in salaries was due to the hiring of two (2) new employees and a bonus paid to the CEO of the Company. The only expense category that saw a decrease was consulting, which was reduced by $338,406. Overall, we incurred a loss of $1,268,276 from our operations for the three months ended June 30, 2024, compared to a loss of $1,013,888 from our operations in the three-month period ended June 30, 2023.
In addition, we had interest income of $143,995 during the three months ended June 30, 2024, compared to net interest income of $203,049 during the three months ended June 30, 2023, as a result of less interest earned on cash on hand.
As a result, we incurred a net loss of $494,300 ($9.94 per share) for the three months ended June 30, 2024, compared to a net loss of $902,108 ($71.17 per share) for the three-month period ended June 30, 2023.
Comparison of results of operations for the six months ended June 30, 2024 and 2023
During the six months ended June 30 2024, we generated revenues of $16,844,113, compared to revenue of $10,454,918 for the six months ended June 30, 2023, an increase of $6,389,195, or 61%. The increase is attributable to increased sales generated by our wholly owned subsidiary, Nora Pharma. The direct cost for generating these revenues was $12,133,519 for the six months ended June 30, 2024 (72%), compared to $6,674,049 (64%) for the six months ended June 30, 2023. The increase in the cost of goods sold in 2024 is due to an increase in the cost of manufacturing of generic prescription drugs. Our gross profit increased to $4,710,594 for the six months ended June 30, 2024, compared to a gross profit of $3,780,869 for the same period in 2023.
General and administrative expenses during the six-month period ended June 30, 2024, were $7,378,640, compared to $6,660,398 during the six-month period ended June 30, 2023, an increase of $718,242. The increase was a result of increases in accounting ($195,369), legal ($185,862), marketing ($193,281), and office costs ($734,868). The three expense categories that saw a decrease were salaries ($110,536), consulting ($422,620) and R&D ($143,222). Overall, we incurred a loss of $2,668,046 from our operations in the six-month period ended June 30, 2024, compared to a loss from operations of $2,879,529 in the similar period of 2023.
In addition, we had interest income of $288,084 during the six months ended June 30, 2024, compared to interest income of $416,930 during the six months ended June 30, 2023. The decrease was due to the Company having less cash on hand.
As a result, we incurred a net loss of $1,778,101 ($43.48 per share) for the six-month period ended June 30, 2024, compared to a net loss of $2,604,538 ($218.62 per share) for the six-month period ended June 30, 2023.
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Liquidity and Capital Resources
As of June 30, 2024, we had cash and cash equivalents of $11,507,745.
Net cash used in operating activities was $7,762,942 during the six months ended June 30, 2024, compared to $5,628,146 during the six-month period ended June 30, 2023. The increase was a result of increased business activities by Nora Pharma.
Cash flows used in investing activities were $1,210,944 for the six months ended June 30, 2024, compared to $405,779 for the six months ended June 30, 2023. The increase was the result of cash invested in Nora Pharma to finance increase in inventory and expansion of product line.
Cash flows provided by financing activities were $5,369,566 during the six months ended June 30, 2024, compared to $3,519,672 during the six months ended June 30, 2023. The increase was primarily a result of the approximately $10 million financing event completed in February 2024, compared to an approximately $5 million financing event completed in May 2023.
We are not generating adequate revenues from our operations to fully implement our business plan as set forth herein. We believe our existing cash on hand will be sufficient to fund our pharmaceuticals sales operations and research and development activities for the next 24 months. There is no assurance our estimates will be accurate. We currently have no committed sources of capital and we anticipate that we will need to raise additional capital in the future, including for further research and development activities and possibly clinical trials, as well as expansion of our generic pharmaceuticals operations. Additional capital may not be available on terms acceptable to us, or at all.
Critical Accounting Estimates
The 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. The preparation of these financial statements requires us to make estimates and judgments that affect the amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that we believe 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.
For a detailed list of significant accounting policies, please see our annual report on Form 10-K for the fiscal year ended December 31, 2023, including our financial statements and notes thereto included therein as filed with the SEC on March 28, 2024.
Recently Adopted Accounting Standards
In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations. The Company is in the process of determining the effects adoption will have on its consolidated financial statements.
In August 2020, the FASB issued ASU 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), (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU2020-06 amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is evaluating the impact of this guidance on its unaudited consolidated financial statements.
Off Balance-Sheet Arrangements
None.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company and are not required to provide the information under this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.
These controls are designed to ensure that information required to be disclosed in the reports we file or submit pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure.
Based on this evaluation, our management, including our CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2024, at reasonable assurance levels.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended June 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not party to, and our property is not the subject of, any material legal proceedings.
ITEM 1A. RISK FACTORS
We are a smaller reporting company and are not required to provide the information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
During the quarter ended June 30, 2024,
no director or officer of the Company
ITEM 6. EXHIBITS
| Exhibit No. | Description | |
| 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2022* | |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |
| 101 | Inline XBRL Document Set for the financial statements and accompanying notes in Part I, Item 1, of this Quarterly Report on Form 10-Q.* | |
| 104 | Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.* |
__________________
| * | Filed herewith. | |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on August 20, 2024.
| SUNSHINE BIOPHARMA, INC. | ||
| By: | /s/ Dr. Steve N. Slilaty | |
| Dr. Steve N. Slilaty | ||
| Chief Executive Officer (principal executive officer) | ||
| By: | /s/ Camille Sebaaly | |
| Camille Sebaaly | ||
| Chief Financial Officer (principal financial and accounting officer) | ||
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