Sunshine Biopharma Inc. 10-Q

Item 1. Financial Statements. Sunshine Biopharma, Inc. Condensed Consolidated Balance Sheets September 30, December 31, 2022 2021 Unaudited ASSETS Current Assets: Cash and cash equivalents $ 40,555,931 $ 2,045,167 Accounts receivable 22 7,798 Inventory 269,641 105,650 Prepaid expenses 27,390 29,625 Deposits 7,590 7,590 Total Current Assets 40,860,574 2,195,830 Equipment, net 3,770 7,061 TOTAL ASSETS $ 40,864,344 $ 2,202,891 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued expenses $ 480,209 $ 42,942 Interest payable – 48,287 Total Current Liabilities 480,209 91,229 Long-term portion of notes payable – 1,900,000 TOTAL LIABILITIES 480,209 1,991,229 SHAREHOLDERS' EQUITY Preferred Stock, Series B $ 0.10 par value per share; 1,000,000 shares authorized; 10,000 and 1,000,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively 1,000 100,000 Common Stock, $ 0.001 par value per share; 3,000,000,000 shares authorized; 18,885,632 and 2,591,240 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively 18,886 2,591 Capital paid in excess of par value 76,331,451 32,787,384 Accumulated comprehensive (loss) ( 79,903 ) ( 23,139 ) Accumulated (deficit) ( 35,887,299 ) ( 32,655,174 ) TOTAL SHAREHOLDERS' EQUITY 40,384,135 211,662 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 40,864,344 $ 2,202,891 See Accompanying Notes. 3 Sunshine Biopharma, Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) 3 Months Ended 9 Months Ended September 30, September 30, September 30, September 30, 2022 2021 2022 2021 . . Revenues $ 132,808 $ 50,376 $ 405,760 $ 143,308 Cost of sales 65,783 19,506 200,311 56,541 Gross profit 67,025 30,870 205,449 86,767 General and Administrative Expenses: Accounting 122,913 35,000 237,773 96,200 Advertising and Marketing 217,666 – 400,386 – Consulting 162,852 20,598 270,033 53,168 Legal 142,883 56,923 388,238 159,074 Office 76,818 58,959 449,730 159,762 Officer and director remuneration 695,000 130,000 1,305,000 1,173,927 Patent fees 3,584 1 15,148 14,571 R&D 362,500 222,465 770,095 581,011 Depreciation 789 3,183 6,186 9,557 Total General and Administrative Expenses 1,785,005 527,129 3,842,589 2,247,270 (Loss) from operations ( 1,717,980 ) ( 496,259 ) ( 3,637,140 ) ( 2,160,503 ) Other Income (Expense): Foreign exchange gain 25 37 45 31 Interest income 260,938 – 406,984 – Interest expense ( 2 ) ( 46,849 ) ( 12,866 ) ( 292,188 ) Debt forgiveness – 7,688 10,852 58,940 Loss on debt conversions – ( 3,504,000 ) – ( 10,709,843 ) Total Other Income (Expense) 260,961 ( 3,543,124 ) 405,015 ( 10,943,060 ) Net (loss) before income taxes ( 1,457,019 ) ( 4,039,383 ) ( 3,232,125 ) ( 13,103,563 ) Provision for income taxes – – – – Net (Loss) $ ( 1,457,019 ) $ ( 4,039,383 ) $ ( 3,232,125 ) $ ( 13,103,563 ) (Loss) from foreign exchange translation ( 45,126 ) ( 5,839 ) ( 56,764 ) ( 14,604 ) Comprehensive (Loss) $ ( 1,502,145 ) $ ( 4,045,222 ) $ ( 3,288,889 ) $ ( 13,118,167 ) Basic (loss) per common share $ ( 0.08 ) $ ( 1.59 ) $ ( 0.26 ) $ ( 5.73 ) Weighted Average Common Shares Outstanding (Basic) 18,885,632 2,542,640 12,789,733 2,287,682 See Accompanying Notes. 4 Sunshine Biopharma, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) 9 Months Ended September 30, September 30, 2022 2021 Cash Flows From Operating Activities: Net (Loss) $ ( 3,232,125 ) $ ( 13,103,563 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 6,186 9,557 Foreign exchange (gain) loss 45 ( 31 ) Stock issued for services – 918,000 Stock issued for payment interest – 38,201 Loss on debt conversion – 10,709,843 Debt forgiveness ( 10,852 ) ( 58,940 ) Decrease in accounts receivable 7,776 787 (Increase) in inventory ( 163,991 ) ( 47,539 ) (Increase) decrease in prepaid expenses 2,235 ( 22,268 ) Increase (decrease) in Accounts Payable & accrued expenses 437,267 ( 13,778 ) Increase (decrease) in interest payable ( 48,287 ) 52,716 Net Cash Flows (Used) in Operations ( 3,001,746 ) ( 1,517,015 ) Cash Flows From Financing Activities: Proceeds public offerings, net 43,560,363 3,318,500 Purchase of preferred shares ( 99,000 ) 61,500 Payments of notes payable ( 1,900,000 ) ( 451,661 ) Net Cash Flows Provided by Financing Activities 41,561,363 2,928,339 Cash and Cash Equivalents at Beginning of Period 2,045,167 989,888 Net increase in cash and cash equivalents 38,559,617 1,411,324 Effect of exchange rate changes on cash ( 105,617 ) – Foreign currency translation adjustment 56,764 ( 14,604 ) Cash and Cash Equivalents at End of Period $ 40,555,931 $ 2,386,608 Supplementary Disclosure of Cash Flow Information: Stock issued for note conversions including interest $ – $ 11,981,072 Cash paid for interest $ 61,151 $ 155,081 Cash paid for income taxes $ – $ – See Accompanying Notes. 5 Sunshine Biopharma, Inc. Condensed Consolidated Statement of Shareholders' Equity (Unaudited) Number Of Common Capital Paid in Excess Number Of Preferred Shares Common of Par Shares Preferred Comprehensive Accumulated Issued Stock Value Issued Stock Income Deficit Total Three Month Period Balance at June 30, 2022 18,885,632 $ 18,886 $ 76,331,451 10,000 $ 1,000 $ ( 34,777 ) $ ( 34,430,280 ) $ 41,886,280 Net (loss) – – – – – ( 45,126 ) ( 1,457,019 ) ( 1,502,145 ) Balance at September 30, 2022 18,885,632 $ 18,886 $ 76,331,451 10,000 1,000 $ ( 79,903 ) $ ( 35,887,299 ) 40,384,135 Nine Month Period Balance December 31, 2021 2,595,620 $ 2,596 $ 32,787,379 1,000,000 $ 100,000 $ ( 23,139 ) $ ( 32,655,174 ) $ 211,662 Common stock and pre-funded warrants issued in an underwritten public and private offerings, net of issuance costs 6,656,526 6,657 30,360,528 – – – – 30,367,185 Exercise of warrants 9,633,486 9,633 13,183,544 – – – – 13,193,177 Preferred stock purchased from related party – – – ( 990,000 ) ( 99,000 ) – – ( 99,000 ) Net (loss) – – – – – ( 56,764 ) ( 3,232,125 ) ( 3,288,889 ) Balance at September 30, 2022 18,885,632 $ 18,886 $ 76,331,451 10,000 $ 1,000 $ ( 79,903 ) $ ( 35,887,299 ) $ 40,384,135 Three Month Period Balance June 30, 2021 2,430,466 $ 2,430 $ 28,319,403 1,000,000 $ 100,000 $ ( 11,636 ) $ ( 29,282,907 ) $ ( 872,710 ) Common stock issued for the reduction of notes payable and payment of interest 120,000 120 3,743,880 – – – – 3,744,000 Net (loss) – – – – – ( 5,839 ) ( 4,039,383 ) ( 4,045,222 ) Balance at September 30, 2021 2,550,466 $ 2,550 $ 32,063,283 1,000,000 $ 100,000 $ ( 17,475 ) $ ( 33,322,290 ) $ ( 1,173,932 ) Nine Month Period Balance December 31, 2020 1,732,096 $ 1,732 $ 19,165,029 1,000,000 $ 100,000 $ ( 2,871 ) $ ( 20,218,727 ) $ ( 954,837 ) Common stock issued for the reduction of note payable and payment of interest 518,370 518 11,980,554 – – – – 11,981,072 Common stock issued for services 300,000 300 917,700 – – – – 918,000 Net (loss) – – – – – ( 14,604 ) ( 13,103,563 ) ( 13,118,167 ) Balance at September 30, 2021 (unaudited) 2,550,466 $ 2,550 $ 32,063,283 1,000,000 $ 100,000 $ ( 17,475 ) $ ( 33,322,290 ) $ ( 1,173,932 ) See Accompanying Notes. 6 Sunshine Biopharma, Inc. Notes to Unaudited Condensed Consolidated Financial Statements For the Three and Nine Month Interim Periods Ended September 30, 2022 and 2021 Note 1 – Nature of Business Sunshine Biopharma, Inc. (the “Company”) was originally incorporated under the name Mountain West Business Solutions, Inc. on August 31, 2006, in the State of Colorado. Until October 2009, the Company was operating as a business consultancy firm. Effective October 15, 2009, the Company 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, the Company changed its name to Sunshine Biopharma, Inc. and began operating as a pharmaceutical company focusing on the development of the licensed Adva-27a anticancer drug. In December 2015, the Company acquired all 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 from Advanomics Corporation, a related party, and terminated the License Agreement. In 2016, the remaining value of these patents was impaired. The Company is however continuing development of the Adva-27a anticancer drug covered by these patents. In December 2018, the Company launched a Science-Based Nutritional Supplements product, Essential 9 ™ , an over-the-counter capsule comprised of the nine (9) essential amino acids that the human body cannot make. Essential 9 ™ has been authorized for marketing by Health Canada under NPN 80089663. On May 22, 2020, the Company filed a provisional patent application in the United States for a new treatment for Coronavirus infections. The Company’s 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, the Company 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. The Company’s lead Anti-Coronavirus compound arising from these patents bears the laboratory name SBFM-PL4. On January 26, 2021, the Company received a Notice of Allowances from the Canadian Intellectual Property Office for a new patent application covering Adva-27a. The newly issued patent contains new subject matter and extends the proprietary protection of Adva-27a in Canada until 2033. On March 9, 2021, the Company received a Notice of Allowance from the European Patent Office for a new patent application covering Adva-27a. The newly issued patent contains new subject matter and extends the proprietary protection of Adva-27a in Europe until 2033. The equivalent patent in the United States was issued in 2019 (US Patent Number 10,272,065). On February 15, 2022, the Company entered into an underwriting agreement with Aegis Capital Corp. as underwriter, for the issuance and sale in an underwritten public offering of 1,882,353 Units, each consisting of one share of common stock and two warrants (“Tradeable Warrants”) to purchase shares of common stock at a public offering price of $4.25 per Unit for total gross proceeds of $8,000,000 (“Public Offering”). On February 17, 2022, the Public Offering closed and the Company received net proceeds of $ 6,833,071 . Pursuant to the Public Offering, the Company issued and sold an aggregate of 1,882,353 shares of common stock and 4,102,200 Tradeable Warrants (including 337,494 Tradeable Warrants purchased at $0.01 per warrant resulting from partial exercise of the overallotment option granted to the underwriter). In connection with these transactions, the Company’s shares of common stock and Tradeable Warrants began trading on Nasdaq under the symbol “SBFM” for the common stock and “SBFMW” for the Tradeable Warrants. 7 On February 18, 2022, the Company entered into a research agreement (the “SRA”) 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 SRA, 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, the Company submitted a Notice of Option Exercise to the University of Arizona on September 13, 2022. On February 22, 2022, the Company redeemed 990,000 shares of the Series B Preferred Stock from the CEO of the Company at a redemption price equal to the stated value of $0.10 per share. On March 14, 2022, the Company completed a private placement wherein the Company sold (i) 2,301,353 shares of its common stock together with warrants (the “Investor Warrants”) to purchase up to 2,301,353 shares of common stock, and (ii) 1,302,251 pre-funded warrants (“Pre-Funded Warrants”) with each Pre-Funded Warrant exercisable for one share of common stock, together with Investor Warrants to purchase up to 1,302,251 shares of common stock. Each share of common stock and accompanying Investor Warrant were sold together at a combined offering price of $2.22, and each Pre-Funded Warrant and accompanying Investor Warrant were sold together at a combined offering price of $2.219. The Company received approximately $8 million in gross proceeds, and $ 6,781,199 in net proceeds in this offering. On April 28, 2022, the Company completed another private placement and received net proceeds of $ 16,752,915 . In connection with this private placement, the Company issued (i) 2,472,820 shares of its common stock together with warrants (“April Warrants”) to purchase up to 4,945,640 shares of common stock, and (ii) 2,390,025 pre-funded warrants (“Pre-Funded Warrants”) with each Pre-Funded Warrant exercisable for one share of common stock, together with April Warrants to purchase up to 4,780,050 shares of common stock. Each share of common stock and accompanying two April Warrants were sold together at a combined offering price of $4.01, and each Pre-Funded Warrant and accompanying two April Warrants were sold together at a combined offering price of $4.01, and each Pre-Funded Warrant and accompanying two April Warrants were sold together at a combined offering price of $4.009. The Pre-Funded Warrants were immediately exercisable, at a nominal exercise price of $0.001, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The April Warrants have an exercise price of $ 3.76 per share (subject to adjustment as set forth in the warrant), are exercisable upon issuance and will expire five years from the date of issuance. On October 20, 2022, the Company acquired 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 (USD) during its fiscal year ended June 30, 2022. Note 2 – Basis of Presentation The unaudited financial statements of the Company for the nine month periods ended September 30, 2022 and 2021 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, 2021 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 21, 2022. These financial statements should be read in conjunction with that report. Note 3 – Impact of Coronavirus (COVID-19) Pandemic In March 2020, the World Health Organization declared Coronavirus and its associated disease, COVID-19, a global pandemic. Conditions surrounding the Coronavirus outbreak have been and are continuing to evolve rapidly. Government authorities in the U.S. and around the world have implemented emergency measures to mitigate the spread of the virus. The outbreak and related mitigation measures have had and will continue to have a material adverse impact on the world economies and the Company's business activities. It is not possible for the Company to predict the duration or magnitude of the adverse conditions of the outbreak and their effects on the Company’s business or ability to raise funds. No adjustments have been made to the amounts reported in the Company's financial statements as a result of this matter. 8 Note 4 – Reverse Stock Splits Effective February 1, 2019, the Company completed a 20 to 1 reverse split of its common stock (the “First Reverse Stock Split”). Effective April 6, 2020, the Company completed another 20 to 1 reverse split of its common stock (the “Second Reverse Stock Split”). Effective February 9, 2022, the Company completed a 1 for 200 reverse split of its common stock (the “Third Reverse Stock Split”). The Company's financial statements reflect the First, Second, and Third Reverse Stock Split on a retroactive basis for all periods presented and for all references to common stock, unless specifically stated otherwise. Note 5 – Notes Payable As of September 30, 2022 and December 31, 2021, the Company had $ 0 and $ 1,900,000 , respectively in notes payable outstanding. At September 30, 2022 and December 31, 2021, total accrued interest on Notes Payable was $ 0 and $ 48,287 , respectively. The Company’s Notes Payable at December 31, 2021 consisted of the following: On April 20, 2021, the Company received monies in exchange for a Note Payable having a Face Value of $ 500,000 with interest accruing at 5 % due April 20, 2023 . The Note was convertible after 180 days from issuance into common stock at a price equal to $0.30 per share. On February 17, 2022, the Company paid off the entire principal balance of this Note, together with accrued interest of $ 20,753 by making cash payment of $ 520,753 . On July 6, 2021, the Company received monies in exchange for a Note Payable having a Face Value of $ 900,000 with interest accruing at 5 %, due July 6, 2023 . The Note was convertible after 180 days from issuance into common stock at a price equal to $0.30 per share. On February 17, 2022, the Company paid off the entire principal balance of this Note, together with accrued interest of $ 27,863 by making cash payment of $ 927,863 . On August 18, 2021, the Company received monies in exchange for a Note Payable having a Face Value of $ 500,000 with interest accruing at 5 %, due August 18, 2023 . The Note was convertible after 180 days from issuance into common stock at a price equal to $0.30 per share. On February 17, 2022, the Company paid off the entire principal balance of this Note, together with accrued of $ 12,534 by making cash payment of $ 512,534 . Note 6 – Shareholders’ Equity On February 17, 2022, the Company’s Public Offering closed and the Company received net proceeds of $ 6,833,071 from the offering. Pursuant to the Public Offering, the Company issued and sold an aggregate of 1,882,353 shares of common stock and 4,102,200 Tradeable Warrants (including 337,494 Tradeable Warrants resulting from partial exercise of the overallotment option granted to the underwriter). On February 22, 2022, the Company redeemed 990,000 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. On March 14, 2022, the Company completed a private placement and received net proceeds of $ 6,781,199 . In connection with this private placement, the Company issued (i) 2,301,353 shares of its common stock together with investor warrants (“Investor Warrants”) to purchase up to 2,301,353 shares of common stock, and (ii) 1,302,251 pre-funded warrants (“Pre-Funded Warrants”) with each Pre-Funded Warrant exercisable for one share of common stock, together with Investor Warrants to purchase up to 1,302,251 shares of common stock. Each share of common stock and accompanying Investor Warrant were sold together at a combined offering price of $2.22 and each Pre-Funded Warrant and accompanying Investor Warrant were sold together at a combined offering price of $2.219. The Pre-Funded Warrants were immediately exercisable, at a nominal exercise price of $0.001, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The Investor Warrants have an exercise price of $2.22 per share (subject to adjustment as set forth in the warrant), are exercisable upon issuance and will expire five years from the date of issuance. 9 On April 28, 2022, the Company completed another private placement and received net proceeds of $ 16,752,915 . In connection with this private placement, the Company issued (i) 2,472,820 shares of its common stock together with warrants (“April Warrants”) to purchase up to 4,945,640 shares of common stock, and (ii) 2,390,025 pre-funded warrants (“Pre-Funded Warrants”) with each Pre-Funded Warrant exercisable for one share of common stock, together with April Warrants to purchase up to 4,780,050 shares of common stock. Each share of common stock and accompanying two April Warrants were sold together at a combined offering price of $4.01 and each Pre-Funded Warrant and accompanying two April Warrants were sold together at a combined offering price of $4.009. The Pre-Funded Warrants were immediately exercisable, at a nominal exercise price of $0.001, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The April Warrants have an exercise price of $ 3.76 per share (subject to adjustment as set forth in the warrant), are exercisable upon issuance and will expire five years from the date of issuance. The Company declared no dividends through September 30, 2022. Note 7 – 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. During the nine months ended September 30, 2022, the Company completed three financing events, and in connection therewith, it issued warrants as follows: Warrants issued with financing TYPE NUMBER EXERCISE PRICE EXPIRY DATE Pre-Funded Warrants 3,692,276 $ 0.001 Unlimited Tradeable Warrants 4,102,200 $ 2.22 * February 2027 Investor Warrants 3,603,604 $ 2.22 March 2027 April Warrants 9,725,690 $ 3.76 April 2027 * The Tradeable Warrants had an initial exercise price of $4.25, subject to adjustment. Upon the closing of the Company’s private placement on March 14, 2022, the exercise price of the Tradeable Warrants was reduced to $2.22, in accordance with the terms thereof. During the nine months ended September 30, 2022, all of the Pre-Funded Warrants and a total of 3,138,507 Tradeable Warrants were exercised resulting in aggregate proceeds of $ 6,971,178 received by the Company. In addition, during the nine months ended September 30, 2022, a total of 2,802,703 Investor Warrants were exercised resulting in aggregate proceeds of $ 6,222,001 received by the Company. The Company’s outstanding warrants at September 30, 2022 consisted of the following: Schedule of outstanding warrants TYPE NUMBER EXERCISE PRICE EXPIRY DATE Pre-Funded Warrants None $ 0.001 Unlimited Tradeable Warrants 963,693 $ 2.22 February 2027 Investor Warrants 800,901 $ 2.22 March 2027 April Warrants 9,725,690 $ 3.76 April 2027 10 Note 8 – Net Loss Per Common Share 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. In February 2022, the Company issued 4,102,200 Tradeable Warrants pursuant to the Company’s Public Offering. In March and April 2022, the Company issued 3,603,604 Investor Warrants and 9,725,690 April Warrants pursuant to two private placements. As of September 30, 2022, 3,138,507 Tradeable Warrants, 2,802,703 Investor Warrants, and - 0 - April Warrants were exercised, leaving 963,693 Tradeable Warrants, 800,901 Investor Warrants and 9,725,690 April Warrants outstanding. These warrants are dilutive and were included in the diluted earnings per share. In March and April 2022, the Company issued and sold Pre-Funded Warrants to purchase an aggregate of 3,692,276 shares of common stock at a nominal exercise price of $0.001 per share (see Note 3). During the nine months ended September 30, 2022, all of these warrants were exercised and therefore had no remaining dilutive effect. Note 9 – Management and Director Compensation The Company paid its officers cash compensation totaling $ 595,000 and $ 105,000 and $ 1,095,000 and $ 130,000 for the three and nine month periods ended September 30, 2022 and 2021, respectively. Of these amounts attributable to the Company’s CEO, as of September 30, 2021 $ 110,000 was paid to Advanomics Corporation, a company controlled by the CEO of the Company. In addition, the Company issued 300,000 shares of common stock valued at $ 918,000 to its officers during the three months ended September 30, 2021. The value of these shares was based upon the closing price of the Company’s common stock of $3.06 on the issuance date. The Company paid its directors cash compensation totaling $ 100,000 and $ 200,000 for the three and nine month periods ended September 30, 2022 and 2021, respectively. Note 10 – Subsequent Events On October 20, 2022, the Company acquired all of the outstanding shares of Nora Pharma Inc., a Canadian generic pharmaceuticals company. The total purchase price of $30,000,000 Canadian (approximately $21,900,000 USD) was paid by paying $20,000,000 Canadian (approximately $14,600,000 USD) in cash, issuing 3,700,000 shares of the Company’s Common Stock valued at $5,000,000 Canadian (approximately $3,650,000 USD), and $5,000,000 Canadian (approximately $3,650,000 USD) which may be paid in the future as an earn-out amount based on target sales. Through the contingent earn-out, the seller, Mr. Malek Chamoun, has the opportunity to earn up to $5,000,000 CAD (approximately $3,650,000 USD) in the form of twenty (20) payments of $250,000 CAD for every $1,000,000 CAD increase in gross sales above Nora Pharma’s June 30, 2022 gross sales, provided that his employment with the Company is not terminated pursuant to the Company’s Employment Agreement with him. 11