UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
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 November 13, 2023, was shares.
TABLE OF CONTENTS
| PART II. OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 25 |
| Item 1A. | Risk Factors | 25 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 25 |
| Item 3. | Defaults Upon Senior Securities | 25 |
| Item 4. | Mine Safety Disclosures | 25 |
| Item 5. | Other Information | 25 |
| Item 6. | Exhibits | 25 |
| Signatures | 26 | |
| 2 |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Sunshine Biopharma, Inc.
Consolidated Balance Sheets
| September 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Property and equipment | ||||||||
| Intangible assets | ||||||||
| Right-of-use-asset | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Earnout payable | ||||||||
| Income tax payable | ||||||||
| 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; Shares issued and outstanding | ||||||||
| Common Stock, $ par value per share; shares authorized; and shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | ||||||||
| Capital paid in excess of par value | ||||||||
| Accumulated comprehensive income | ||||||||
| Accumulated (Deficit) | ( | ) | ( | ) | ||||
| TOTAL SHAREHOLDERS' EQUITY | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited financial statements
| 3 |
Sunshine Biopharma, Inc.
Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
| 3 Months Ended September 30, | 9 Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||
| Cost of sales | ||||||||||||||||
| Gross profit | ||||||||||||||||
| General and Administrative Expenses: | ||||||||||||||||
| Accounting | ||||||||||||||||
| Consulting | ||||||||||||||||
| Director fees | ||||||||||||||||
| Legal | ||||||||||||||||
| Marketing | ||||||||||||||||
| Office | ||||||||||||||||
| R&D | ||||||||||||||||
| Salaries | ||||||||||||||||
| Taxes | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Total General and Administrative Expenses: | ||||||||||||||||
| (Loss) from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expense): | ||||||||||||||||
| Foreign exchange | ( | ) | ||||||||||||||
| Interest income | ||||||||||||||||
| Debt release | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total Other Income (Expense) | ||||||||||||||||
| Net (loss) before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ( | ) | ( | ) | ||||||||||||
| Net (Loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Gain (Loss) from foreign exchange translation | ( | ) | ( | ) | ( | ) | ||||||||||
| Comprehensive (Loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic (Loss) per common share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted Average Common Shares Outstanding (Basic and Diluted) | ||||||||||||||||
The accompanying notes are an integral part of these unaudited financial statements
| 4 |
Sunshine Biopharma, Inc.
Consolidated Statements of Cash Flows (Unaudited)
| September 30, | September 30, | |||||||
| 2023 | 2022 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net (Loss) | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Foreign exchange | ( | ) | ||||||
| Debt release | ( | ) | ||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ( | ) | ( | ) | ||||
| Prepaid expenses | ||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Income tax payable | ( | ) | ||||||
| Interest payable | ( | ) | ( | ) | ||||
| Net Cash Flows (Used) in Operations | ( | ) | ( | ) | ||||
| 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: | ||||||||
| Common stock issued | ||||||||
| Exercise of warrants | ||||||||
| Purchase of treasury stock | ( | ) | ( | ) | ||||
| Lease liability | ( | ) | ||||||
| Payments of notes payable | ( | ) | ||||||
| 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 interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited financial statements
| 5 |
Sunshine Biopharma, Inc.
Consolidated Statement of Shareholders' Equity (Unaudited)
| Number Of Common Shares | Common | Capital Paid in Excess of Par | Number Of Preferred Shares | Preferred | Comprehensive | Accumulated | ||||||||||||||||||||||||||
| Issued | Stock | Value | Issued | Stock | Income | Deficit | Total | |||||||||||||||||||||||||
| Three Month Period Ended September 30, 2023 | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Repurchase stock | ( | ) | ( | ) | ( | ) | – | |||||||||||||||||||||||||
| Net (loss) | – | – | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balance at September 30, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Nine Month Period Ended September 30, 2023 | ||||||||||||||||||||||||||||||||
| Balance December 31, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Repurchase of common stock | ( | ) | ( | ) | ( | ) | – | |||||||||||||||||||||||||
| Common stock and pre-funded warrants issued in a private offering | – | |||||||||||||||||||||||||||||||
| Exercise of warrants | – | |||||||||||||||||||||||||||||||
| Net (loss) | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at September 30, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Three Month Period Ended September 30, 2022 | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Net (loss) | – | – | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balance at September 30, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Nine Month Period Ended September 30, 2022 | ||||||||||||||||||||||||||||||||
| Balance December 31, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Common stock and pre-funded warrants issued in public offering | – | |||||||||||||||||||||||||||||||
| Exercise of warrants | – | |||||||||||||||||||||||||||||||
| Preferred stock purchased from related party | – | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Net (loss) | – | – | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balance at September 30, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited financial statements
| 6 |
Sunshine Biopharma, Inc.
Notes to Unaudited Consolidated Financial Statements
For the Nine Months Ended September 30, 2023 and 2022
Note 1 – Description of Business
The Company was originally 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 transaction, the Company changed its name to Sunshine Biopharma, Inc. and began operating as a pharmaceutical company.
In addition to conducting its own drug development activities, Sunshine Biopharma operates two wholly owned subsidiaries: (i) Nora Pharma Inc. (“Nora Pharma”), a Canadian corporation with a portfolio of pharmaceutical products consisting of 51 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 to the 51 generic prescription drugs currently on the market in Canada, the Company has 32 additional generic prescription drugs scheduled to be launched in 2024 and 2025 in Canada.
The Company has determined that it has two reportable segments:
| · | Prescription Generic Pharmaceuticals (“Generic Pharmaceuticals”) | |
| · | Nonprescription Over-The-Counter Products (“OTC Products) |
Through December 31, 2022 and as of September
30, 2023, 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. Provincial governments in Canada reimburse patients for their prescription drugs expenditures to various degrees under drug reimbursement programs, making generic drugs prices highly dependent on government regulations 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 contains an option to extend 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 due to unfavorable results. See Note 13 – Subsequent Events) | |
| · | 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 financial statements of the Company for the nine months periods ended September 30, 2023 and 2022 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, 2022, was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 4, 2023. These financial statements should be read in conjunction with that report.
Note 3 – Private Placement
On
May 16, 2023, the Company completed a private placement pursuant to a securities purchase agreement with a single institutional investor for gross proceeds of approximately $
In
connection with the private placement, the Company issued (i) shares of common stock, (ii) pre-funded warrants (the “May Pre-Funded Warrants”),
and (iii) investor warrants (the “May Investor Warrants”) to purchase up to 11,904,762 shares of common stock at
$0.59 per share. Each share of common stock and accompanying two May Investor Warrants were sold together at a combined offering price
of $0.84 and each May Pre-Funded Warrant and accompanying two May Investor Warrants were sold together at a combined offering price of
$0.839. The May Pre-Funded Warrants are immediately exercisable at a nominal exercise price of $0.001, and may be exercised at any time
until all of the May Pre-Funded Warrants are exercised in full. The May Investor Warrants which have an exercise price of $0.59 per share
(subject to adjustment as set forth therein), are exercisable upon issuance and will expire five and a half years from the date of issuance.
As of September 30, 2023, a total of May Pre-Funded Warrants and no May Investor Warrants have been exercised. The net proceeds received from the exercise of May Pre-Funded
Warrants were $
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. The purchase price for the
shares was $
| 8 |
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 3,700,000 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 ($1.22 per share).
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 $
The unaudited financial information in the table below summarizes the combined results of operations of the Company and Nora Pharma for the years ended December 31, 2022 and 2021, on a pro forma basis, as though the two companies had been combined as of January 1, 2021. The unaudited pro forma financial information does not purport to be indicative of the Company's combined results of operations which would have been obtained had the acquisition taken place on January 1, 2021, nor should it be taken as indicative of future consolidated results of operations:
| Pro Forma Results From Acquisition | December
31, 2022 | December
31, 2021 | ||||||
| Total revenues | $ | $ | ||||||
| Net (loss) from operations | $ | ( | ) | $ | ( | ) | ||
| Net (loss) | $ | ( | ) | $ | ( | ) | ||
| Basic and fully diluted (loss) per share | $ | ) | $ | ) | ||||
| Weighted average number of shares outstanding | ||||||||
| 9 |
Note 5 – Intangible Assets
Intangible assets, net, consisted of the following at September 30, 2023:
| Balance June 30, 2023 | $ | |||
| Dossier fee additions | ||||
| Balance at September 30, 2023 | ||||
| Less accumulated amortization | ( | ) | ||
| Finite-lived intangible assets, net, at September 30, 2023 | $ | |||
| Balance December 31, 2022 | $ | |||
| Dossier fee additions | ||||
| Balance at September 30, 2023 | ||||
| Less accumulated amortization | ( | ) | ||
| Finite-lived intangible assets, net, at September 30, 2023 | $ |
Amortization
expense for the three months period ended September 30, 2023, and the nine months period ended September 30, 2023, amounted to $
As of September 30, 2023, estimated amortization expense of the Company’s intangible assets for each of the next five years is as follows:
| 2024 | $ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 |
Note 6 – Reverse Stock Splits
Effective
February 9, 2022, the Company completed a
| 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 December 31, 2022 and September 30, 2023, the Company had authorized shares of Series B Preferred Stock. The Series B Preferred Stock is non-convertible, non-redeemable and non-retractable. It has superior liquidation rights to the common stock at $0.10 per share and gives the holder the right to 1,000 votes per share. As of September 30, 2023 and December 31, 2022, shares of Series B Preferred Stock are 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
February 22, 2022, the Company redeemed
shares of Series B Preferred Stock from the CEO of the Company at a redemption price equal to the stated value of $0.10 per share.
The remaining 10,000 shares of Series B Preferred Stock could not be voted pursuant to a warrant agent agreement relating to the
Tradeable Warrants (the “Warrant Agent Agreement”). 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 to $
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 $
On
October 20, 2022, the Company issued shares of common stock as part of the acquisition of Nora Pharma. These shares were valued
at $
| 11 |
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 a single institutional investor
for gross proceeds of approximately $
In
2022 and the first six months of 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 on the open market under the Stock Repurchase Program announced
on January 19, 2023, at an average price of $0.5046 per share for a total cost of $
As of September 30, 2023 and December 31, 2022, the Company has a total of and shares of common stock issued and outstanding, respectively.
The
Company has declared
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.
| 12 |
In 2022 and during the first nine months of 2023, the Company completed four financing events, and in connection therewith, it issued warrants as follows:
| Type | Number | Exercise Price | Expiry Date | |||
| Pre-Funded Warrants | $ |
|||||
| Tradeable Warrants | $ |
|||||
| Investor Warrants | $ |
|||||
| April Warrants | $ |
|||||
| May Pre-Funded Warrants | $ |
|||||
| May Investor Warrants | $ |
| * |
As
of September 30, 2023, all of the Pre-Funded Warrants and a total of Tradeable Warrants, Investor Warrants, and
May Pre-Funded Warrants were exercised resulting in aggregate proceeds of $
The Company’s outstanding warrants at September 30, 2023 consisted of the following:
| Type | Number | Exercise Price | Expiry Date | |||
| Pre-Funded Warrants | $ |
|||||
| Tradeable Warrants | $ |
|||||
| Investor Warrants | $ |
|||||
| April Warrants | $ |
|||||
| May Pre-Funded Warrants | $ |
|||||
| May Investor Warrants | $ |
| * |
Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents.
Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, taking into consideration common stock equivalents.
| 13 |
In
February 2022, the Company issued Tradeable Warrants pursuant to the Company’s Public Offering. In March and April 2022,
the Company issued Investor Warrants and April Warrants pursuant to two private placements. In May 2023, the Company
issued May Investor Warrants pursuant to two private placements. As of September 30, 2023, Tradeable Warrants and
Investor Warrants were exercised, leaving
In March and April 2022, the Company issued and sold Pre-Funded Warrants to purchase an aggregate of shares of common stock at a nominal exercise price of $0.001 per share. During the nine months ended September 30, 2023, all of these warrants were exercised and therefore had no remaining dilutive effect.
In May 2023, the Company issued and sold May Pre-Funded Warrants to purchase an aggregate of shares of common stock at a nominal exercise price of $0.001 per share. During the nine months ended September 30, 2023, of these warrants were exercised leaving outstanding. These warrants were not included in the calculation of weighted average outstanding shares as they would be ant-dilutive.
Note 10 – Lease
The Company has obligations as a lessee for office 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 contract include fixed payments plus a variable Payment. The Company’s office space 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 September 30, 2023 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 September 30, 2023 are as follows:
| 2023 | $ | |
| 2024 | ||
| 2025 | ||
| 2026 | ||
| 2027 | ||
| Thereafter |
Note 11 – Management and Director Compensation
The
Company paid its officers cash compensation totaling $
The
Company paid its directors 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.
The Company’s
interim effective tax rate, inclusive of discrete items, for the nine-month periods ended September 30, 2023 and 2022 was
Note 13 – Subsequent Events
On October 12, 2023, the Company held a special meeting of the holders of its outstanding Tradeable Warrants in which the holders of the majority of the outstanding Tradeable Warrants approved an amendment to the Warrant Agent Agreement to (i) reduce the exercise price of the Tradeable Warrants to $0.11, subject to further adjustment as provided therein, and (ii) eliminate the provision that prohibits the Company’s CEO from exercising his voting rights under his Series B Preferred Stock.
In December 2022, the Company had entered into a research agreement with the Jewish General Hospital (“JGH”), Montreal, Canada to conduct IND-enabling studies of the Company’s anticancer drug candidate, Adva-27a (the “Research Agreement”). In August 2023, the Company was advised by JGH that the lab results on testing of the Adva-27a molecule were not favorable. After conclusion of an internal review of the lab results on November 2, 2023, the Company provided notice of termination of the Research Agreement, which will become effective on December 2, 2023, pursuant to the terms of the Research Agreement. The Company has now paused the IND-enabling studies of Adva-27a pending a review of the possibility of chemical modification of the compound to address the suboptimal performance of the molecule in certain studies.
| 15 |
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, 2022. 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 to 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. In addition to pursuing our own drug development program, we operate two wholly owned subsidiaries: (i) Nora Pharma Inc. (“Nora Pharma”), a Canadian corporation with a portfolio consisting of 51 generic prescription drugs on the market in Canada and 32 additional drugs scheduled to be launched in Canada in 2024 and 2025, and (ii) Sunshine Biopharma Canada Inc. (“Sunshine Canada”), a Canadian corporation which develops and sells nonprescription over-the-counter (“OTC”) products.
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 transaction, 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.
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.
In October 2022, we acquired Nora Pharma, a Canadian generic pharmaceuticals company based in the greater Montreal area. Nora Pharma has 41 employees and operates in a 15,000 square foot facility certified by Health Canada. Nora Pharma currently sells 51 generic prescription drugs in Canada. The consolidated financial statements contained in this report include the results of operations of Nora Pharma and Sunshine Canada.
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Generic Prescription Drugs on the Market
As a result of the acquisition of Nora Pharma we now have the following generic prescription drugs on the market in Canada:
| Drug | Action/Indication | Reference Brand | ||
| Alendronate | Osteoporosis | Fosamax® | ||
| Amlodipine | Cardiovascular | Norvasc® | ||
| Apixaban | Cardiovascular | Eliquis® | ||
| Atorvastatin | Cardiovascular | Lipitor® | ||
| Azithromycin | Antibacterial | Zithromax® | ||
| Candesartan | Hypertension | Atacand® | ||
| Candesartan HCTZ | Hypertension | Atacand Plus® | ||
| Celecoxib | Anti-inflammatory | Celebrex® | ||
| Cetirizine | Allergy | Reactine® | ||
| Ciprofloxacin | Antibiotic | Cipro® | ||
| Citalopram | Central nervous system | Celexa® | ||
| Clindamycin | Antibiotic | Dalacin® | ||
| Clopidogrel | Cardiovascular | Plavix® | ||
| Dapagliflozin | Diabetes | Forxiga® | ||
| Donepezil | Central nervous system | Aricept® | ||
| Duloxetine | Central nervous system | Cymbalta® | ||
| Dutasteride | Urology | Avodart® | ||
| Escitalopram | Central nervous system | Cipralex® | ||
| Ezetimibe | Cardiovascular | Ezetrol® | ||
| Finasteride | Urology | Proscar® | ||
| Flecainide | Cardiovascular | Tambocor® | ||
| Fluconazole | Antifungal | Diflucan® | ||
| Fluoxetine | Central nervous system | Prozac® | ||
| 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® | ||
| Quetiapine | Central nervous system | Seroquel® | ||
| Quetiapine XR | Central nervous system | Seroquel XR® | ||
| Ramipril | Cardiovascular | Altace® | ||
| 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® | ||
| Zolmitriptan | Central nervous system | Zomig® | ||
| Zopiclone | Central nervous system | Imovane® |
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Generic Prescription Drugs Pipeline
In addition to the 51 drugs on the market, we currently have the following roster of generic prescription drugs scheduled to be launched in 2024 and 2025:
| Generic Drugs | Therapeutic Area(s) | Development Stage | Launch Date | |||
| Group A (2 Products) | Cardiovascular, CNS* | Under manufacturing | 2024Q1 | |||
| Group B (6 Products) | Oncology, Gastroenterology, CNS* | Under regulatory review | 2024Q2 | |||
| Group C (3 Products) | Central Nervous System, Diabetes, CNS* | Under regulatory review | 2024Q3 | |||
| Group D (5 Products) | Cardiovascular, Urology, Endocrinology | Under regulatory review | 2024Q4 | |||
| Group E (16 Products) | Cardiovascular, Oncology, Anti-infectives, Anti-inflammatory, Diabetes, Gastroenterology, CNS* | Soon to be under regulatory review | 2025 |
* Central Nervous System
We believe the addition of these products to our existing portfolio will strengthen our presence in the Canadian generic drugs marketplace and provide us with greater access to pharmacies as we become more of a go-to supplier for every-day and specialty medicines.
Proprietary Drugs in Development
We are currently developing the following drug candidates:
| Proprietary Drugs | Therapeutic Area | Development Stage | Launch Date | |||
| Adva-27a (Small Molecule) | Oncology (Pancreatic Cancer) | See Note 9 - Subsequent Events | TBD* | |||
| K1.1 (mRNA LNP) | Oncology (Liver Cancer) | Preclinical | TBD* | |||
| SBFM-PL4 (Small Molecule) | Antiviral (COVID-19) | Preclinical | TBD* |
* To be determined
Adva-27a Anticancer Drug
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 lab results on testing of the Adva-27a molecule were not favorable. After conclusion of an internal review of the lab results on November 2, 2023, we provided notice to JGH of termination of the Research Agreement. We have now paused the IND-enabling studies of Adva-27a pending a review of the possibility of chemical modification of the compound to address the suboptimal performance of the molecule in certain studies.
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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.
We recently concluded an agreement with a specialized partner for the purposes of formulating our K1.1 mRNA molecules into lipid nanoparticles, ready for use to conduct studies in xenograft mice. We anticipate commencing such studies later this year.
SBFM-PL4 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 the Company 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, the Company and the University of Arizona entered into an option agreement (the “Option Agreement”) whereby the Company was 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 expanded our objective to include the development of an injectable 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 interaction and possible ‘rebound’ infections and other side effects.
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Intellectual Property
We are the sole owner of all worldwide 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 (US Patent Number 8,236,935 and 10,272,065), Europe, and Canada.
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.
Our wholly owned subsidiary, Nora Pharma, owns 180 Drug Identification Numbers (“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 two Natural Product Numbers (“NPN’s”) issued by Health Canada: NPN 80089663 authorizes us to manufacture and sell our in-house developed OTC product, Essential 9™, and NPN 80093432 authorizes us to manufacture and sell the OTC product, Calcium-Vitamin D under the brand name Essential Calcium-Vitamin D™.
Results of Operations
Comparison of results of operations for the three months ended September 30, 2023 and 2022
During the three months ended September 30, 2023, we generated $5,957,668 in sales, compared to $132,808 for the three months ended September 30, 2022, an increase of $5,824,860. The increase is attributable to sales generated by our wholly owned subsidiary, Nora Pharma. The direct cost for generating these sales was $3,967,412 (66.6%) for the three months ended September 30, 2023, compared to $65,783 (49.5%) for the three months ended September 30, 2022. The increase in the cost of goods sold in 2023 is due to increased cost of manufacturing of the generic prescription drugs sold by Nora Pharma. Our gross profit grew to $1,990,256 for the three months ended September 30, 2023, compared to $67,025 for the three months ended September 30, 2022.
General and administrative expenses during the three-month period ended September 30, 2023, were $2,769,730, compared to $1,785,005 during the three-month period ended September 30, 2022, an increase of $984,725. This increase was the result of increased overhead associated with being a Nasdaq listed company and expenses related to Nora Pharma operations. Specifically, we incurred increased costs in consulting ($58,929), office ($467,397), salaries ($549,377) and taxes ($52,586). Overall, we incurred a loss of $779,474 from our operations for the three months ended September 30, 2023, compared to a loss of $1,717,980 from our operations in the three-month period ended September 30, 2022.
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In addition, we had net interest income of $168,904 during the three months ended September 30, 2023, compared to a net interest income of approximately $260,936 during the three months ended September 30, 2022, as a result of interest earned on cash on hand.
As a result, we incurred a net loss of $651,482 ($0.04 per share) for the three months ended September 30, 2023, compared to a net loss of $1,457,019 ($0.08 per share) for the three-month period ended September 30, 2022.
Comparison of results of operations for the nine months ended September 30, 2023 and 2022
During the nine months ended September 30 2023, we generated revenues of $16,412,586, compared to revenues of $405,760 for the nine months ended September 30, 2022, an increase of $16,006,826. The increase is attributable to sales generated by our recently acquired wholly owned subsidiary, Nora Pharma. The direct cost for generating these revenues was $10,641,461 (64.8%) for the nine months ended September 30, 2023, compared to $200,311 (49.4%) for the nine months ended September 30, 2022. The increase in the cost of goods sold in 2023 is due to increased cost of manufacturing of the generic prescription drugs sold by Nora Pharma. Our gross profit increased to $5,771,125 for the nine months ended September 30, 2023, compared to a gross profit of $205,449 for the same period in 2022.
General and administrative expenses during the nine-month period ended September 30, 2023 were $9,369,203 compared to $3,842,589 during the nine-month period ended September 30, 2022, an increase of $5,526,614. This increase was the result of increased overhead associated with being a Nasdaq listed company and expenses related to Nora Pharma operations. Specifically, we incurred increased costs in accounting ($63,608), consulting ($475,817), office costs ($972,328), research and development ($269,407), salaries ($3,239,801) and taxes ($212,953). Overall, we incurred a loss of $3,598,078 from our operations in the nine-month period ended September 30, 2023, compared to a loss from operations of $3,637,140 in the similar period of 2022.
In addition, we had net interest income of $517,163 during the nine months ended September 30, 2023, compared to a net interest income of $394,118 during the nine months ended September 30, 2022, as a result of interest earned on cash on hand.
As a result, we incurred a net loss of $3,256,020 ($0.12 per share) for the nine-month period ended September 30, 2023, compared to a net loss of $3,232,125 ($0.26 per share) for the nine-month period ended September 30, 2022.
Liquidity and Capital Resources
As of September 30, 2023, we had cash or cash equivalents of $18,846,140.
Net cash used in operating activities was $6,085,435 during the nine months ended September 30, 2023, compared to $3,001,746 during the nine-month period ended September 30, 2022. The increase was a result of the addition of Nora Pharma’s operations.
Cash flows used in investing activities were $386,920 for the nine months ended September 30, 2023, compared to $0 for the nine months ended September 30, 2022. The increase was the result of cash invested in Nora Pharma.
Cash flows provided by financing activities were $3,456,106 during the nine months ended September 30, 2023, compared to $41,561,363 during the nine months ended September 30, 2022. The decrease was primarily as a result of one offering made during the nine months ended September 30, 2023, compared to three offerings completed in February, March, and April 2022, and due to our repurchase of a total of $540,629 in common stock in the first and third quarter of 2023.
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We are not generating adequate revenues from our operations to fully implement our business plan as set forth herein. On February 17, 2022, we received net proceeds of approximately $6.8 million from the sale of common stock and warrants in an underwritten public offering. On March 14, 2022, we received net proceeds of approximately $6.8 million from the sale of common stock and warrants in a private placement. On April 28, 2022, we received net proceeds of approximately $16.8 million from the sale of common stock and warrants in a private placement. On May 16, 2023, we received net proceeds of approximately $4.1 million from the sale of common stock and warrants in a private placement. We believe our existing cash will be sufficient to fund our operations, including general and administrative expenses, research and development activities, and the generic pharmaceuticals sales business, for the next 18 to 24 months. There is no assurance our estimates will be accurate.
Management estimates that we will need additional capital in the amount of approximately $30 million for expansion of our drug development activities and generic pharmaceuticals operations, including possibly a Phase I clinical trial. Additional capital may not be available on terms acceptable to us, or at all. Currently, we do not have any committed arrangements for financing and can provide no assurance that we will be able to obtain financing when required. No assurance can be given that we will obtain access to capital markets in the future or that financing, adequate to satisfy the cash requirements of implementing our business will be available on acceptable terms. Our inability to obtain acceptable financing could have an adverse effect upon the results of our operations and financial condition.
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 are believed 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, 2022, including our financial statements and notes thereto included therein as filed with the SEC on April 4, 2023.
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 September 30, 2023, 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 September 30, 2023, 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
None.
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 November 13, 2023.
| 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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