What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-03 compared with 2022-05-06 · 176 added, 150 removed, 91 unchanged (78% of the section changed)

1 unchanged sentence

of Financial Condition and Results of Operations.

following discussion should be read in conjunction with our consolidated financial statements and notes thereto included herein.

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, 2021.

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.

advised, however, to consult any future disclosures we make on related subjects in future reports to the SEC .

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.

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, 2021.

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 .

We are a pharmaceutical and

nutritional supplement company focusing on the research and development of proprietary drugs including our anti-cancer compound Adva-27a,

and anti-coronavirus lead compound, SBFM-PL4.

In addition, we are engaged in the development of specific mRNA molecules for cancer therapy.

nutritional supplement company focusing on the research and development of proprietary drugs including our anticancer compound Adva-27a,

our anticancer K1.1 mRNA molecules, and anti-coronavirus lead compound, SBFM-PL4.

We also, through our wholly

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and currently sell one nutritional supplement product, Essential 9 tm .

Proprietary Drug Development Operations

Proprietary Drug Development

SBFM-PL4 Anti-Coronavirus Treatment

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of the development to date of our coronavirus treatment project:

On May 22, 2020, we filed a 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

Coronavirus main protease (Mpro) and papain-like protease (PLpro).

On May 22, 2020, we filed a 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 Coronavirus main protease (Mpro) and papain-like protease (PLpro).

Both enzymes are essential for viral replication.

addition to being involved in maturation of specific viral proteins, PLpro is responsible for suppression of the human immune system

making the virus more virulent.

In addition to being involved in maturation of specific viral proteins, PLpro is responsible for suppression of the human immune system making the virus more virulent.

The small molecules covered by the patent application were designed by Dr.

chief executive officer.

Slilaty, our chief executive officer.

The patent application has a priority date of May 22, 2020.

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The screening which pinpointed the lead compound was performed at the University of Georgia, College of Pharmacy under the leadership of Dr.

Pegan, Director of the Center for Drug Discovery and Interim Associate Head of Pharmaceutical and Biomedical Sciences.

The next steps in our SBFM-PL4 drug development plan will involve

conducting in

vitro studies followed by cell culture assays and assessment in Coronavirus infected mice before entering human clinical

In February 2022, we expanded our search for additional PLpro inhibitors by entering into a research agreement with the University of Arizona.

Pursuant to the research agreement, the University of Arizona agreed to perform a research project focused on determining the in vivo safety, pharmacokinetics, and dose selection properties of three University of Arizona owned PLpro inhibitors, followed by efficacy testing in mice infected with SARS-CoV-2.

Under the research agreement, the University of Arizona granted us a first option to negotiate for a commercial, royalty-bearing license for all intellectual property invented or authored by University of Arizona personnel under the research project.

Adva-27a Anticancer Drug

Pegan, Director of the Center for Drug Discovery at the time.

The next steps in our SBFM-PL4 drug development plan will involve conducting additional in vitro studies followed by cell culture assays and assessment in Coronavirus infected mice before entering human clinical trials.

In February 2022, we expanded our search for additional PLpro inhibitors 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 personnel under the Research Project.

In addition, the Company and the University of Arizona entered into an 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.

Adva-27a Anticancer Compound

In the area of oncology, our

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The next sequence of steps

in our Adva-27a development program include:

in our Adva-27a development program includes:

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

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Phase I Clinical Trials (Pancreatic Cancer indication)

Adva-27a’s initial

indication will be pancreatic cancer for which there are currently little or no treatment options available.

We are planning to conduct

our clinical trials at McGill University’s Jewish General Hospital in Montreal, Canada.

All aspects of the clinical trials in Canada

will employ FDA standards at all levels.

Adva-27a’s initial indication

will be pancreatic cancer for which there are currently little or no treatment options available.

We are planning to conduct our clinical

trials at McGill University’s Jewish General Hospital in Montreal, Canada.

All aspects of the clinical trials in Canada will employ

FDA standards at all levels.

According to the American

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capital in order to secure regulatory approval, manufacture and market our new drug on our own.

mRNA Molecules as Anti-Cancer Agents

K1.1 Anti-cancer mRNA

In June 2021, we initiated

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The data collected

to date have shown that certain 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).

Other studies using non-transformed (normal)

human cells (HMEC cells) showed that these mRNA molecules had little cytotoxic effects.

These new mRNA molecules 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 plan to commence mice xenograft studies within approximately the next twelve months.

Nutritional Supplements Operations

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).

Other 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 plan to commence mice xenograft studies within approximately

the next twelve months.

Nutritional Supplements

Our wholly owned Canadian

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In December 2018, we completed

the development of Essential 9 ™ .

On December 14, 2018, Health Canada issued

NPN 80089663 through which it authorized us 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.

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

through diet.

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.

Our 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 3 below shows our 60-Tablet

Essential 9™ product.

the development of our first nutritional supplement product which we named Essential 9 ™ .

On December 14, 2018, Health Canada issued NPN 80089663 through which it authorized us to manufacture and sell the Essential 9™

Our Essential 9™ nutritional supplement product was originally launched as a tablet and has now been reformatted into vegan

Our Essential 9 tm capsules 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.

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.

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.

Our 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 3 below shows our reformatted 60-Capsule Essential 9™ product.

In November 2019, we received

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nutritional supplement products.

We may launch additional nutritional supplement products within approximately 1-2 years.

We may launch additional nutritional supplement products in 2022.

Results of Operations

Comparison of results of operations for the

three months ended March 31, 2022 and 2021

Comparison of results of operations for

the three months ended June 30, 2022 and 2021

During the three months ended

March 31, 20212, we generated $122,645 in revenues, compared to $40,058 for the three months ended March 31, 2021, an increase of $82,587.

The increase is attributable to a slightly widened advertising program.

All of these revenues were generated from our science-based nutritional

supplements operations.

The direct cost for generating these revenues was $59,845 for the three months ended March 31, 2022 (48.8%), compared

to $18,520 (46.2%) for the three months ended March 31, 2021.

The increase in the cost of goods sold in 2022 is due to increased manufacturing

Our gross profit increased to $62,800 for the three months ended March 31, 2022, compared to a gross profit of $21,538 for the same

period in 2021.

June 30 2022, we generated revenues of $150,307, compared to revenue of $52,874 for the three months ended June 30, 2021.

is attributable to new advertising campaigns.

All of these revenues were generated from our science-based nutritional supplements operations.

The direct cost for generating these revenues was $74,683 for the three months ended June 30, 2022 (49.7%), compared to $18,515 (35.0%)

for the three months ended June 30, 2021.

The increase in cost of sales in 2022 is due to increased cost of manufacturing.

Our gross profit

increased to $75,624 for the three months ended June 30, 2022, compared to a gross profit of $34,359 for the same period in 2021.

General and administrative

expenses during the three month period ended March 31, 2022 were $1,286,164 compared to $1,297,184 during the three month period ended

March 31, 2021, a decrease of $10,420.

Overall, we incurred a loss of $1,223,364 from our operations in the three month period ended March

expenses during the three month period ended June 30, 2022 were $771,420 compared to $422,957 during the three month period ended June

30, 2021, an increase of $348,463.

Overall, we incurred a loss of $695,796 from our operations in the three month period ended June 30,

2022, compared to a loss from operations of $388,598 in the similar period of 2021.

In addition, we incurred $12,864

in interest expense during the three months ended March 31, 2022, compared to $49,711 in interest expense during the similar period in

We incurred no losses related to debt conversion during the three months ended March 31, 2022, compared to $4,910,786 in losses

arising from debt conversion during the three months ended March 31, 2021.

This was due to the fact that all of our outstanding debt was

paid during the quarter ended March 31, 2022 prior to the occurrence of any debt conversion events.

As a result, we incurred

a net loss of $1,236,234 for the three month period ended March 31, 2022, compared to a net loss of $6,185,126 for the three month period

ended March 31, 2021.

In addition, we had interest

income of $146,043, interest expense of $0, and debt release of $10,852 during the three months ended June 30, 2022, compared to interest

income of $2, interest expense of $195,630, and debt release of $221 during the three months ended June 30, 2021.

This was primarily due

to the transitioning of our financing from convertible debt to equity.

We incurred no losses related to debt conversion during the three

months ended June 30, 2022, compared to $2,295,057 in losses arising from debt conversion during the three months ended June 30, 2021.

This was also due to the transitioning of our financing from convertible debt to equity.

As a result, we incurred a

net loss of $538,872 for the three month period ended June 30, 2022, compared to a net loss of $2,879,054 for the three month period ended

June 30, 2021.

Comparison of results of operations for the

six months ended June 30, 2022 and 2021

During the six months ended

June 30 2022, we generated revenues of $272,952, compared to revenue of $92,932 for the six months ended June 30, 2021.

The increase is

attributable to new advertising campaigns.

All of these revenues were generated from our science-based nutritional supplements operations.

The direct cost for generating these revenues was $134,528 for the six months ended June 30, 2022 (49.3%), compared to $37,035 (39.9%)

for the six months ended June 30, 2021.

The increase in cost of sales in 2022 is due to increased cost of manufacturing.

Our gross profit

increased to $138,424 for the six months ended June 30, 2022, compared to a gross profit of $55,897 for the same period in 2021.

General and administrative

expenses during the six month period ended June 30, 2022 were $2,057,584 compared to $1,720,141 during the six month period ended June

30, 2021, an increase of $337,443.

Overall, we incurred a loss of $1,919,160 from our operations in the six month period ended June 30,

2022, compared to a loss from operations of $1,664,244 in the similar period of 2021.

In addition, we had interest

income of $146,046, interest expense of $12,864, and debt release of $10,852 during the six months ended June 30, 2022, compared to interest

income of $2, interest expense of $245,341, and debt release of $51,252 during the six months ended June 30, 2021.

This was primarily

due to the transitioning of our financing from convertible debt to equity.

We incurred no losses related to debt conversion during the

six months ended June 30, 2022, compared to $7,205,843 in losses arising from debt conversion during the six months ended June 30, 2021.

This was also due to the transitioning of our financing from convertible debt to equity.

As a result, we incurred a

net loss of $1,775,106 for the six month period ended June 30, 2022, compared to a net loss of $9,064,180 for the six month period ended

June 30, 2021.

Liquidity and Capital Resources

As of March 31, 2022, we had cash or cash equivalents

As of June 30, 2022, we had cash and cash equivalents

of $41,727,775.

Net cash used in operating

activities was $1,304,208 during the three months ended March 31, 2022, compared to $297,355 during the three month period ended March

The increase was a result of increased business activities including expenses related to the two financing transactions

completed during the quarter ended March 31, 2022.

activities was $1,878,010 during the six months ended June 30, 2022, compared to $916,207 during the six month period ended June 30, 2021.

The increase was a result of expenses related to the three equity financings we completed in February, March and April 2022.

Cash flows provided by financing

activities were $12,437,673 for the three months ended March 31, 2022, compared to $1,102,000 for the three month periods ended March

The increase was a result of the two financing transactions completed on February 17 and March 14, 2022.

activities were $41,561,363 for the six months ended June 30, 2022, compared to $1,652,648 for the six month period ended June 30, 2021.

The increase was a result of the three equity financings we completed in February, March and April 2022.

Cash flows used in investing

activities were $0 for the three months ended March 31, 2022, compared to $0 for the three month period ended March 31, 2021.

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

We believe our existing cash will be sufficient to fund our operations, including general and administrative expenses, expanded

research and development activities, and nutritional supplement business, for the next 24 months.

There is no assurance our estimates

will be accurate.

We 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.

Additional capital may not be available on terms

acceptable to us, or at all.

Critical Accounting

Policies and Estimates

Critical Accounting

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.

activities were $0 for the six months ended June 30, 2022, compared to $0 for the six month period ended June 30, 2021.

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.

We believe our existing

cash will be sufficient to fund our operations, including general and administrative expenses, expanded research and development activities,

and nutritional supplement business, for the next 24 months.

There is no assurance our estimates will be accurate.

We 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.

Additional capital may not be available on terms acceptable to us, or at all.

Critical Accounting Policies and

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

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and notes thereto included therein as filed with the SEC on March 21, 2022,

Adopted Accounting Standards

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

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.

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.

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.

Leases (Topic 842) which amends the effective date of the original pronouncement for smaller reporting companies.

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

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

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

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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