What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-11-09 compared with 2021-08-09 · 167 added, 145 removed, 286 unchanged (52% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion

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We have the right to pay off all or any part of the Promissory Notes at any time without penalty.

30, 2021, the Company has received a total of $2,554,000 in funding under this agreement.

As of September 30, 2021, the total outstanding principal amounts of the Promissory Notes was $3,204,215.

Effective October 6, 2020,

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patent contains new subject matter and extends the proprietary protection of Adva-27a in Canada until 2033.

On February 4, 2021, we entered into an exclusive license agreement with the University of

Georgia (“UGA”) for two Anti-Coronavirus compounds which UGA had previously developed and patented.

In collaboration with

UGA, we are currently advancing the development of these two compounds in parallel with our own Anti-Coronavirus compound, SBFM-PL4.

On February 4, 2021, we entered

into an exclusive license agreement with the University of Georgia (“UGA”) for two Anti-Coronavirus compounds which UGA had

previously developed and patented.

In collaboration with UGA, we are currently advancing the development of these two compounds in parallel

with our own Anti-Coronavirus compound, SBFM-PL4.

On March 9, 2021, we received

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Drug Development Operations

SBFM-PL4 Anti-Coronavirus Treatment

Anti-Coronavirus Treatment

Viruses carry minimal genetic

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Adva-27a has excellent clearance time (half-life = 54 minutes) as indicated by human microsomes stability studies and pharmacokinetics data in rats.

Adva-27a clearance is independent of Cytochrome P450, a mechanism that is less likely to produce toxic

intermediates.

Adva-27a is an excellent inhibitor of Topoisomerase II with an IC50 of only 13.7 micromolar (this number

has recently been reduced to 1.44 micromolar as a result of resolving the two isomeric forms of Adva-27a).

Adva-27a clearance is independent of Cytochrome P450, a mechanism that is less likely to produce toxic intermediates.

Adva-27a is an excellent inhibitor of Topoisomerase II with an IC50 of only 13.7 micromolar (this number has recently been reduced to 1.44 micromolar as a result of resolving the two isomeric forms of Adva-27a).

Adva-27a has shown excellent pharmacokinetics profile as indicated by studies done in rats.

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clinical development program due to lack of funding.

See “Liquidity and

Capital Resources” below for a discussion of our financing requirements.

Our fund raising efforts are continuing and as soon as adequate financing is in place

we will continue our clinical development program of Adva-27a by conducting the following next sequence of steps:

See “Liquidity and Capital Resources” below for a discussion of our financing

requirements.

Our fund raising efforts are

continuing and as soon as adequate financing is in place we will continue our clinical development program of Adva-27a by conducting the

following next sequence of steps:

GMP Manufacturing of 2 kilogram for use in IND-Enabling Studies and Phase I Clinical Trials,

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significant capital in order to manufacture and market our new drug on our own.

The following, Figure 3, is a space-filling molecular model of our Adva-27a.

The following, Figure 3, is

a space-filling molecular model of our Adva-27a.

Generic Pharmaceuticals Operations

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In December 2018, we completed

the development of Essential 9 ™ , the first in a line of essential micronutrients

products that we are planning to launch.

On December 14, 2018, Health Canada issued NPN 80089663 through which it authorized Sunshine

Biopharma Inc.

the development of Essential 9 ™ , the first in a line of essential micronutrients products

that we are planning to launch.

On December 14, 2018, Health Canada issued NPN 80089663 through which it authorized Sunshine Biopharma

to manufacture and sell the Essential 9™ product.

Our Essential 9™ nutritional supplement tablets contain

a balanced formula of the 9 Essential Amino Acids that the human body cannot make.

Essential Amino Acids are 9 out of the 20 amino acids

required for protein synthesis.

Proteins are involved in all body functions – From the musculature and immune system to hormones

and neurotransmitters.

Our Essential 9™ nutritional supplement tablets contain a balanced

formula of the 9 Essential Amino Acids that the human body cannot make.

Essential Amino Acids are 9 out of the 20 amino acids required

for protein synthesis.

Proteins are involved in all body functions – From the musculature and immune system to hormones and neurotransmitters.

Like vitamins, Essential Amino Acids cannot be made by the human body and must be obtained through diet.

in one or more of the 9 Essential Amino Acids can lead to loss of muscle mass, fatigue, weight gain and reduced ability to build muscle

mass in athletes.

Sunshine Biopharma’s Essential 9 ™ provides all 9 Essential

Amino Acids in freeform and in the proportions recommended by Health Canada.

Essential 9 ™

is currently available on Amazon.com and Amazon.ca.

Figure 4 below shows our 60-Tablet Essential 9 ™

Deficiency in one or more of

the 9 Essential Amino Acids can lead to loss of muscle mass, fatigue, weight gain and reduced ability to build muscle mass in athletes.

Sunshine Biopharma’s Essential 9 ™ provides all 9 Essential Amino Acids in freeform

and in the proportions recommended by Health Canada.

Essential 9 ™ is currently available

on Amazon.com and Amazon.ca.

Figure 4 below shows our 60-Tablet Essential 9 ™ product.

Results of Operations

Comparison of Results of Operations for the

Six Months ended June 30, 2021 and 2020

During the six months ended

June 30, 2021, we generated revenues of $92,932 from the sale of products generated by our Science-Based Nutritional Supplements Operations

which we launched in March 2019.

Nine Months ended September 30, 2021 and 2020

During the nine months ended

September 30, 2021, we generated revenues of $143,308 from the sale of products generated by our Science-Based Nutritional Supplements

Operations which we launched in March 2019.

The direct cost for generating these sales was $56,541 (39.5%).

We generated $26,247 in sales revenues

during the comparable period in 2020.

We generated $43,397 in sales

revenues during the comparable period in 2020.

The direct cost for generating these sales was $15,384 (35.4%).

The decrease in our gross margin

during the six months ended June 30, 2021, was due to the introduction of new products that have lower profitability margins.

The decrease in our gross

margin during the nine months ended September 30, 2021, was due to the introduction of new products that have lower profitability margins.

General and administrative

expenses during the six months ended June 30, 2021 was $1,720,141, compared to $183,471 during the six months ended June 30, 2020, an

increase of $1,536,670.

The reason for this relatively large increase was due to a general increase in our business activities as funding

for our drug development projects became available.

Specifically, all of our expense categories saw increases including executive compensation

which increased by $988,097 due to issuance of Common Stock to our Directors.

Similarly, our R&D expenditures increased by $358,546

and our patenting fees by $14,570.

Our other expense categories, including accounting, consulting, legal and office expenses together

increased by a total of $176,085.

expenses during the nine months ended September 30, 2021 was $2,247,270, compared to $261,569 during the nine months ended September 30,

2020, an increase of $1,985,701.

The reason for this relatively large increase was due to a general increase in our business activities

as funding for our drug development projects became available.

Specifically, all of our expense categories saw increases including executive

compensation which increased by $1,093,497 due to issuance of Common Stock to our Directors.

Similarly, our R&D expenditures increased

by $581,011 and our patenting fees by $14,571.

Our other expense categories, including accounting, consulting, legal and office expenses

together increased by a total of $297,591.

We incurred $10,709,843 in

losses arising from debt conversion during the six months ended June 30, 2021, compared to $807,414 in losses from debt conversion during

the similar period in 2020.

This large increase was due to more costly convertible debt financing that we took on in order to fund our

R&D activities.

losses arising from debt conversion during the nine months ended September 30, 2021, compared to $1,416,313 in losses from debt conversion

during the similar period in 2020.

This large increase was due to more costly convertible debt financing that we took on in order to fund

our R&D activities.

The other contributing factor is related to recent volatility in our stock price.

We also incurred $245,341 in interest

expense during the six months ended June 30, 2021, compared to $40,575 in interest expense during the similar period in 2020.

was a result of the aforementioned more costly debt financing we took on.

We also incurred $292,191 in

interest expense during the nine months ended September 30, 2021, compared to $62,669 in interest expense during the similar period in

The increase was a result of the aforementioned more costly debt financing we took on.

As a result, we incurred a

Net Loss of $9,064,180 ($0.02 per share) during the six month period ended June 30, 2021, compared to a net loss of $1,001,703 ($0.01

per share) during the six month period ended June 30, 2020.

Comparison of Results of Operations for the Three Months Ended June

net loss of $13,103,563 ($0.03 per share) during the nine month period ended September 30, 2021, compared to a net loss of $1,700,298

($0.01 per share) during the nine month period ended September 30, 2020.

Comparison of Results of Operations for the Three Months Ended September

30, 2021 and 2020

During the three months ended

June 30, 2021, we generated $52,874 in revenues, compared to $15,145 in revenues for the same three month period in 2020, an increase

September 30, 2021, we generated $50,376 in revenues, compared to $17,150 in revenues for the same three month period in 2020, an increase

The increase is attributable to an enhanced advertising campaign we initiated in 2021.

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The direct cost for generating these revenues

was $18,515 (35%) for the period ended June 30, 2021, compared to $5,161 (34.1%) for the same period in 2020.

Our gross profit increased

to $34,359 for the period ended June 30, 2021, compared to a gross profit of $9,984 for the same period in 2020.

was $19,506 (38.7%) for the period ended September 30, 2021, compared to $6,340 (37.0%) for the same period in 2020.

Our gross profit

increased to $30,870 for the period ended September 30, 2021, compared to a gross profit of $10,810 for the same period in 2020.

General and administrative

expenses during the three month period ended June 30, 2021 were $422,957, compared to general and administrative expenses of $138,553

incurred during the three month period ended June 30, 2020, an increase of $284,404.

expenses during the three month period ended September 30, 2021 were $527,120, compared to general and administrative expenses of $78,098

incurred during the three month period ended September 30, 2020, an increase of $449,031.

Nearly all categories of our general and administrative

expenses saw an increase during the three month period ended June 30, 2021, compared to the same period in 2020.

Specifically, the increases

included R&D expenditures by $191,760, consulting fees by $19,493, office expenses by $37,790, patenting fees by $8,377, and legal

fees by $74,683.

expenses saw an increase during the three month period ended September 30, 2021, compared to the same period in 2020.

Specifically, the

increases included R&D expenditures by $222,465, consulting fees by $16,775, office expenses by $38,993, and legal fees by $50,028.

These increases were due to expansion of our drug development and nutritional supplements operations.

Overall, we incurred

a loss of $388,598 from our operations in the three month period ended June 30, 2021, compared to a loss of $128,569 in the similar period

Overall, we incurred a loss of $496,259

from our operations in the three month period ended September 30, 2021, compared to a loss of $67,288 in the similar period of 2020.

In addition, we incurred $46,850

in interest expense during the three months ended June 30, 2021, compared to $24,219 in interest expense during the similar period in

We also incurred $2,295,057 in losses arising from debt conversion during the three months ended June 30, 2021, compared to $756,021

in losses from debt conversion during the similar period in 2020.

These increases were due to increased, more costly borrowings to fund

our expanded drug development and nutritional supplements operations.

in interest expense during the three months ended September 30, 2021, compared to $22,094 in interest expense during the similar period

We also incurred $3,504,000 in losses arising from debt conversion during the three months ended September 30, 2021, compared

to $608,899 in losses from debt conversion during the similar period in 2020.

These increases were due to increased, more costly borrowings

to fund our expanded drug development and nutritional supplements operations.

As a result, we incurred a

net loss of $2,879,054 ($0.01 per share) for the three month period ended June 30, 2021, compared to a net loss of $907,444 ($0.00 per

share) during the three month period ended June 30, 2020.

net loss of $4,039,383 ($0.01 per share) for the three month period ended September 30, 2021, compared to a net loss of $698,595 ($0.00

per share) during the three month period ended September 30, 2020.

Liquidity and Capital Resources

As of June 30, 2021, we had cash or cash equivalents

As of September 30, 2021, we had cash and cash equivalents

of $2,386,608.

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the consolidated financial statements included in this Report for going concern, we have incurred significant continuing losses in 2021

Our total accumulated deficits as of June 30, 2021 and December 31, 2020 were $29.3 million and $20.2 million, respectively.

Our ability to continue operating is highly dependent upon continued funding from the debt and equity markets.

Based on past experience,

we believe that we will be able to raise the necessary capital to continue operations.

Our historical and ongoing dependence on proceeds

from debt and/or equity issuances to fund operating expenses could raise substantial doubt about our ability to continue as a going concern.

The consolidated financial statements included in this Report have been prepared assuming that our Company will continue as a going concern

and, accordingly, do not include any adjustments that may result from the outcome of this uncertainty.

Our total accumulated deficits as of September 30, 2021 and December 31, 2020 were $33.3 million and $20.2 million, respectively.

Our ability to continue operating is highly dependent upon continued funding from the debt and/or equity markets.

Our historical and ongoing

dependence on proceeds from debt and/or equity issuances to fund operating expenses could raise substantial doubt about our ability to

continue as a going concern.

On June 25, 2021, the Company entered into an engagement agreement with Aegis Capital Corp.

pursuant to which we engaged Aegis to act as lead underwriter in connection with a proposed public offering (the “Offering”)

of approximately $10 million of common stock and warrants by the Company.

The Offering is contingent on satisfaction of various conditions,

including Aegis’s due diligence examination of the Company, Nasdaq approval of the listing of the Company’s Common Stock,

and successful completion of a reverse stock split.

If successful, of which there can be no assurance, we believe that this financing

will fully mitigate the afore expressed doubt about our ability to continue as a going concern.

The consolidated financial statements

included in this Report have been prepared assuming that we will continue as a going concern and, accordingly, do not include any adjustments

relating to any going concern uncertainty.

Net cash used in operating

activities was $916,207 during the six month period ended June 30, 2021, compared to $113,050 for the six month period ended June 30,

activities was $1,517,015 during the nine month period ended September 30, 2021, compared to $233,627 for the nine month period ended

September 30, 2020.

We anticipate that overhead costs and other expenses will increase in the future as we move forward with our Proprietary

Drug Development activities and our Science-Based Nutritional Supplements operations discussed above.

Cash flows provided by

financing activities were $1,652,648 for the six month periods ended June 30, 2021, compared to $159,007 during the six months ended

June 30, 2020.

Cash flows used in investing activities were $-0- for both, the six month period ended June 30, 2021 and the same six

Cash flows provided by financing

activities were $2,928,339 for the nine month periods ended September 30, 2021, compared to $683,643 during the nine months ended September

Cash flows used in investing activities were $-0- for both, the nine month period ended September 30, 2021 and the same nine

month period ended in 2020.

During the six month period

ended June 30, 2021, we issued a total of 79,673,969 shares of our Common Stock valued at $8,237,072 for the conversion of outstanding

During the nine month period

ended September 30, 2021, we issued a total of 103,673,969 shares of our Common Stock valued at $11,981,072 for the conversion of outstanding

notes payable, reducing debt by $1,233,028 and interest payable by $38,201 and generating a loss on conversion of $10,709,843.

During the six months ended

June 30, 2020, we issued a total of 234,501,258 shares of our Common Stock valued at $1,160,690 for the conversion of outstanding notes

payable, reducing the debt by $324,769 and interest payable by $28,507 and generating a loss on conversion of $807,414.

During the six months ended

June 30, 2021, we did not sell any of our capital stock for cash;

During the nine months ended

September 30, 2020, we issued a total of 269,099,306 shares of our Common Stock valued at $1,831,816 for the conversion of outstanding

notes payable, reducing the debt by $373,269 and interest payable by $42,233 and generating a loss on conversion of $1,416,314.

During the nine months ended

September 30, 2021, we did not sell any of our capital stock for cash;

however we entered into the following new debt arrangements:

On January 12, 2021, we received monies in exchange for a Note Payable having a Face Value of $150,000 with interest accruing at 5% is

due January 12, 2023.

The Note is convertible after 180 days from issuance into Common Stock at a price equal to $0.30 per share.

On January 27, 2021, we received monies in exchange for a Note Payable having a Face Value of $300,000 with interest accruing at 5% is

due January 27, 2023.

The Note is convertible after 180 days from issuance into Common Stock at a price equal to $0.50 per share.

On February 12, 2021, we received monies in exchange for a Note Payable having a Face Value of $700,000 with interest accruing at 5%

is due February 12, 2023.

The Note is convertible after 180 days from issuance into Common Stock at a price equal to $0.60 per share.

On April 5, 2021, we received monies in exchange for a Note Payable having a Face Value of $330,000 with interest accruing at 10% is due January 5, 2022.

The Note is convertible after 180 days from issuance into Common Stock at a price 35% below market value.

On April 20, 2021, we received monies in exchange for a Note Payable having a Face Value of $500,000 with interest accruing at 5% is due February April 20, 2023.

The Note is convertible after 180 days from issuance into Common Stock at a price equal to $0.30 per share.

On September 8, 2020, we executed a financing

agreement with RB Capital Partners, Inc., La Jolla, CA, who agreed to provide us with a minimum of $2 million in convertible debt financing

during the ensuing three to six month period pursuant to the terms and conditions included in relevant Promissory Notes (the “Promissory

The Promissory Notes bear interest at the rate of 5% per annum and have a maturity date of two years from the date of issuance.

On January 12, 2021, we received monies in exchange for a Note

Payable having a Face Value of $150,000 with interest accruing at 5% is due January 12, 2023.

The Note is convertible after 180 days

from issuance into Common Stock at a price equal to $0.30 per share.

On January 27, 2021, we received monies in exchange for a Note

Payable having a Face Value of $300,000 with interest accruing at 5% is due January 27, 2023.

The Note is convertible after 180 days

from issuance into Common Stock at a price equal to $0.50 per share.

On February 12, 2021, we received monies in exchange for a

Note Payable having a Face Value of $700,000 with interest accruing at 5% is due February 12, 2023.

The Note is convertible after 180

days from issuance into Common Stock at a price equal to $0.60 per share.

On April 5, 2021, we received monies in exchange for a Note

Payable having a Face Value of $330,000 with interest accruing at 10% is due January 5, 2022.

The Note is convertible after 180 days

from issuance into Common Stock at a price 35% below market value.

On April 20, 2021, we received monies in exchange for a Note

Payable having a Face Value of $500,000 with interest accruing at 5% is due February April 20, 2023.

The Note is convertible after 180

days from issuance into Common Stock at a price equal to $0.30 per share.

· On July 6, 2021, we received monies in exchange

for a Note Payable having a Face Value of $900,000 with interest accruing at 5% is due July 6, 2023.

The Note is convertible after 180

days from issuance into Common Stock at a price equal to $0.30 per share.

· On August 18, 2021, we received monies in exchange

for a Note Payable having a Face Value of $500,000 with interest accruing at 5% is due August 18, 2023.

The Note is convertible after

180 days from issuance into Common Stock at a price equal to $0.30 per share.

On September 8, 2020, we executed

a financing agreement with RB Capital Partners, Inc., La Jolla, CA, who agreed to provide us with a minimum of $2 million in convertible

debt financing during the ensuing three to six month period pursuant to the terms and conditions included in relevant Promissory Notes

(the “Promissory Notes”).

The Promissory Notes bear interest at the rate of 5% per annum and have a maturity date of two years

from the date of issuance.

We have the right to pay off all or any part of the Promissory Notes at any time without penalty.

As of June 30, 2021, we have received

a total of $2,554,000 in funding under this agreement.

As of September

30,, 2021, the total outstanding principal amounts of the Promissory Notes was $3,204,215.

We are not generating adequate

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our Common Stock and/or debt financing.

We estimate that we will require approximately $20 million (approximately $18 million for our

Proprietary Drug Development projects and $2 million for our Science-Based Nutritional Supplements operations) to fully implement our

business plan in the future and there are no assurances that we will be able to raise this capital.

Our inability to obtain sufficient

funds from external sources when needed will have a material adverse effect on our plan of operation, results of operations and financial

We are currently in discussion

with various investment groups for additional financing.

There are no assurances that we will be successful in raising any funds.

We estimate that we will require approximately $10 million (approximately $9 million for our Proprietary

Drug Development projects and $1 million for our Science-Based Nutritional Supplements operations) to fully implement our business plan

in the future and there are no assurances that we will be able to raise this capital.

Our inability to obtain sufficient funds from external

sources when needed will have a material adverse effect on our plan of operation, results of operations and financial condition.

On June 25, 2021, the Company

entered into an engagement agreement with Aegis Capital Corp.

(“Aegis”), pursuant to which we engaged Aegis to act as lead

underwriter in connection with a proposed public offering (the “Offering”) of approximately $10 million of common stock and

warrants by the Company.

The Offering is contingent on satisfaction of various conditions, including Aegis’s due diligence examination

of the Company, Nasdaq approval of the listing of the Company’s Common Stock, and successful completion of a reverse stock split.

While there are no assurances that this financing will successfully close, we believe that this financing, if successfully completed,

will provide us with adequate working capital for the near term.

Our cost of operations is

expected to increase as we move forward with implementation of our business plan.

We do not have sufficient funds to cover the anticipated

increase in the relevant expenses.

We need to raise additional capital in order to continue our existing operations and finance our expansion

plans for the next year.

If we are successful in raising additional funds, we expect our operations and business efforts to continue and

expected to increase as we continue to move forward with implementation of our business plan.

We do not have sufficient funds to cover

the anticipated increase in the relevant expenses.

We need to raise additional capital in order to continue our existing operations and

finance our expansion plans for the next year.

If we are successful in raising additional funds, we expect our operations and business

efforts to continue and expand.

There are no assurances this will occur.

On July 6, 2021, we received

monies in exchange for a Note Payable having a Face Value of $900,000 with interest accruing at 5% is due July 6, 2023.

The Note is convertible

after 180 days from issuance into Common Stock at a price equal to $0.30 per share.

In connection with this debt financing, we agreed

to allow the lender, who is also the holder of a Note Payable dated November 25, 2020, to convert a total of $240,000 in principal into

24,000,000 shares of Common Stock leaving a principal balance of $10,000 and accrued interest of $7,750.

On July 6, 2021, we paid off

the remaining principal balance of this Note and secured forgiveness of the accrued interest.

On October 13, 2021, the holder

of a Note Payable dated April 5, 2021 elected to convert a total of $330,000 in principal and $16,500 in accrued interest into 5,250,000

shares of our Common Stock leaving a principal balance of $-0-.

Balance Sheet Arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis