What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-07 compared with 2022-08-03 · 124 added, 117 removed, 150 unchanged (62% of the section changed)

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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.

The following discussion should

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

This discussion includes forward-looking

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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 anticancer compound Adva-27a,

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

We also, through our wholly

owned Canadian subsidiary, Sunshine Biopharma Canada Inc.

(“Sunshine Canada”), develop science-based nutritional supplements,

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

Proprietary Drug Development

We are a pharmaceutical 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.

In addition, we develop science-based

nutritional supplements through our wholly owned Canadian subsidiary, Sunshine Biopharma Canada Inc.

(“Sunshine Canada”),

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

On October 20, 2022, we completed the acquisition of Nora Pharma Inc.

(“Nora Pharma”), a Canadian generic pharmaceuticals company.

Based in the greater Montreal area, Nora Pharma has 36 employees

and operates in a 15,000 square foot facility certified by Health Canada.

Nora Pharma currently offers over 50 pharmaceutical products,

including generic prescription drugs, over-the-counter products and biosimilars.

Nora Pharma sales were $10.7 million for its fiscal year

ended June 30, 2022 and its net income for this period was $0.3 million (USD).

Proprietary Drug Development Operations

SBFM-PL4 Anti-Coronavirus Treatment

The following is a summary

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).

Both enzymes are essential for viral replication.

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.

The following is a summary 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).

Both enzymes are essential

for viral replication.

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

Slilaty, our chief executive officer.

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In September 2020, we completed the screening of our four compounds and subsequently identified a lead Anti-Coronavirus drug candidate (SBFM-PL4).

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 at the time.

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

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.

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.

Intending to move forward with the technology, we submitted a Notice of Option Exercise to the University of Arizona on September 13, 2022.

Adva-27a Anticancer Compound

In the area of oncology, our

proprietary drug development activities have been focused on the development of a small molecule called Adva-27a 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).

Sunshine Biopharma is direct owner of all issued patents pertaining to Adva-27a including

In the area of oncology, our proprietary

drug development activities have been focused on the development of a small molecule called Adva-27a for the treatment of aggressive forms

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).

Sunshine Biopharma is direct owner of all issued patents pertaining to Adva-27a including U.S.

Patents Number 8,236,935 and 10,272,065.

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(see Figure 2).

The next sequence of steps

in our Adva-27a development program includes:

The next sequence of steps 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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FDA standards at all levels.

According to the American

Cancer Society, nearly 1.5 million new cases of cancer are diagnosed in the U.S.

While particularly effective against Multidrug

Resistant Cancer, we believe Adva-27a can potentially treat all cancer types, particularly those in which Topoisomerase II has been amplified.

We believe that upon successful completion of Phase I Clinical Trials we may receive one or more offers from large pharmaceutical companies

According to the American Cancer

Society, nearly 1.5 million new cases of cancer are diagnosed in the U.S.

While particularly effective against Multidrug Resistant

Cancer, we believe Adva-27a can potentially treat all cancer types, particularly those in which Topoisomerase II has been amplified.

believe that upon successful completion of Phase I Clinical Trials we may receive one or more offers from large pharmaceutical companies

to purchase or license our drug.

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K1.1 Anti-cancer 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).

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).

Other studies using non-transformed

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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

subsidiary, Sunshine Canada, focuses on the development and marketing of science-based nutritional supplements.

In December 2018, we completed

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

We are currently in discussion with several potential partners

for the purposes of formulating our K1.1 mRNA molecules into lipid nanoparticles (K1.1::LNP).

Using the K1.1::LNP formulations, we plan

to commence mice xenograft studies within approximately the next twelve months.

Nutritional Supplements Operations

Our wholly owned Canadian subsidiary,

Sunshine Canada, focuses on the development and marketing of science-based nutritional supplements.

In December 2018, we completed 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™

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We are considering potentially launching this product in 2023.

We are also developing additional

nutritional supplement products.

We may launch additional nutritional supplement products in 2022.

Results of Operations

Comparison of results of operations for

the three months ended June 30, 2022 and 2021

Comparison of results of operations for the

three months ended September 30, 2022 and 2021

During the three months ended

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

September 30, 2022, we generated revenues of $132,808, compared to revenue of $50,376 for the three months ended September 30, 2021.

increase is attributable to increased marketing efforts.

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

The direct cost for generating these revenues was $65,783 for the three months ended September 30, 2022 (49.5%), compared

to $19,506 (38.7%) for the three months ended September 30, 2021.

The increase in cost of sales in 2022 is due to increases in manufacturing

Our gross profit increased to $67,025 for the three months ended September 30, 2022, compared to a gross profit of $30,870 for the

same period in 2021.

General and administrative expenses

during the three month period ended September 30, 2022 were $1,785,005 compared to $527,129 during the three month period ended September

30, 2021, an increase of $1,257,876.

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

Overall, we incurred a loss of $1,717,980 from our operations in the three month period ended September

30, 2022, compared to a loss from operations of $496,259 in the similar period of 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.

In addition, we had interest income of $260,938, interest expense of

$2, and debt forgiveness of $0, during the three months ended September 30, 2022, compared to interest income of $0, interest expense

of $46,849, and debt forgiveness of $7,688, during the three months ended September 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 September

30, 2022, compared to $3,504,000 in losses arising from debt conversion during the three months ended September 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 $1,457,019 for the three month period ended September 30, 2022, compared to a net loss of $4,039,383 for the three month period

ended September 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.

nine months ended September 30, 2022 and 2021

During the nine months ended September

30, 2022, we generated revenues of $405,760, compared to revenue of $143,308 for the nine months ended September 30, 2021.

is attributable to increased marketing efforts.

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

The direct cost for generating these revenues was $200,311 for the nine months ended September 30, 2022 (49.4%), compared to $56,541 (39.5%)

for the nine months ended September 30, 2021.

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

profit increased to $205,449 for the nine months ended September 30, 2022, compared to a gross profit of $86,767 for the same period in

General and administrative expenses

during the nine month period ended September 30, 2022 were $3,842,589 compared to $2,247,270 during the nine month period ended September

30, 2021, an increase of $1,595,319.

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

Overall, we incurred a loss of $3,637,140 from our operations in the nine month period ended September

30, 2022, compared to a loss from operations of $2,160,503 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.

income of $406,984, interest expense of $12,866, and debt forgiveness of $10,852 during the nine months ended September 30, 2022, compared

to interest income of $0, interest expense of $292,188, and debt forgiveness of $58,940 during the nine months ended September 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 nine months ended September 30, 2022, compared to $10,709,843 in losses arising from debt conversion during the nine months

ended September 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.

As a result, we incurred a net

loss of $3,232,125 for the nine month period ended September 30, 2022, compared to a net loss of $13,103,563 for the nine month period

ended September 30, 2021.

Liquidity and Capital Resources

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

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

of $40,555,931.

Net cash used in operating

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.

Net cash used in operating activities

was $3,001,746 during the nine months ended September 30, 2022, compared to $1,517,015 during the nine month period ended September 30,

The increase was a result of increased marketing and R&D activities as well as increases in professional fees related to becoming

a Nasdaq listed company.

Cash flows provided by financing

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

activities were $41,561,363 for the nine months ended September 30, 2022, compared to $2,928,339 for the nine month period ended September

The increase was a result of three financing events completed in February, March and April 2022, as well as warrant exercises.

Cash flows used in investing activities

were $0 for the nine months ended September 30, 2022 and September 30, 2021.

We are not generating adequate

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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.

activities and possibly clinical trials, as well as expansion of our generic pharmaceutical operations arising from the Nora Pharma acquisition.

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

Critical Accounting Policies and

Critical Accounting Policies and Estimates

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

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.

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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.

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.

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About Market Risk.

We are a smaller reporting

company and are not required to provide the information under this item.

We are a smaller reporting company

and are not required to provide the information under this item.

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