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Item 8. Financial Statements and Supplementary Data

2023-04-04 compared with 2022-03-21 · 822 added, 6 removed, 0 unchanged (100% of the section changed)

Financial Statements and Supplementary

Reference is made to the Financial

Statements, the notes thereto, and the Report of Independent Public Accountants thereon commencing at page F-1 of this Report, which Financial

Statements, notes and report are incorporated herein by reference.

Changes in and Disagreements with Accountants

on Accounting and Financial Disclosure.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

of Independent Registered Public Accounting Firm

the shareholders and the board of directors of Sunshine Biopharma, Inc.:

on the Financial Statements

have audited the accompanying consolidated balance sheets of Sunshine Biopharma, Inc.

(the "Company") as of December 31, 2022

and 2021, the related consolidated statements of operations and comprehensive income (loss), shareholders' equity, and cash flows for

each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022,

in conformity with accounting principles generally accepted in the United States.

financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

Audit Matters

audit matters are matters arising from the current period audit of the financial statements that were communicated or are required to

be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements

and (2) involved especially challenging, subjective, or complex judgments.

determined that there are no critical audit matters.

Borgers CPA PC (PCAOB ID 5041)

Borgers CPA PC

have served as the Company's auditor since 2013

PCAOB ID 5041

Biopharma, Inc.

Consolidated Balance Sheets

Current Assets:

Cash and cash

Accounts receivable

Prepaid expenses

Total Current Assets

Property and equipment

Intangible assets

Right-of-use-asset

Current Liabilities:

Accounts payable & accrued

Earn-out payable

Interest payable

Income tax payable

portion - Right-of-use-liability

Total Current Liabilities

Long-Term Liabilities:

Notes payable

Right-of-use-liability

Deferred tax liability

Total Long-Term Liabilities

TOTAL LIABILITIES

SHAREHOLDERS' EQUITY

Preferred Stock, Series

par value per share;

shares authorized;

and 1,000,000

shares issued and outstanding as of December 31, 2022 and December

31, 2021, respectively

Common Stock, $ 0.001

par value per share;

3,000,000,000

shares authorized;

and 2,591,240

shares issued and outstanding as of December 31, 2022 and December

31, 2021, respectively

Capital paid in excess of par value

Accumulated comprehensive

( 59,399,614 )

( 32,655,174 )

TOTAL SHAREHOLDERS' EQUITY

TOTAL LIABILITIES AND

SHAREHOLDERS' EQUITY

Accompanying Notes to These Consolidated Financial Statements.

Biopharma, Inc.

Consolidated Statements of Operations and Comprehensive Loss

Cost of sales

General and Administrative Expenses:

Directors Fees

and amortization

Goodwill impairment

Total General and Administrative

(Loss) from operations

( 27,000,750 )

( 2,440,134 )

Other Income (Expenses):

Loss on debt conversions

( 9,726,485 )

Foreign exchange

Interest income

Interest expense

Debt forgiveness

Total Other Income (Expenses)

( 9,996,313 )

Net (loss) before income taxes

( 26,511,136 )

( 12,436,447 )

for income taxes

( 26,744,440 )

( 12,436,447 )

Comprehensive income (loss):

(Loss) from foreign exchange translation

Comprehensive (Loss)

( 26,559,454 )

( 12,456,715 )

Basic and diluted (Loss)

per common share

Weighted average common shares outstanding

(Basic & Diluted)

Accompanying Notes to These Consolidated Financial Statements.

Biopharma, Inc.

Consolidated Statements of Cash Flows

Cash Flows From Operating Activities:

$ ( 26,744,440 )

$ ( 12,436,447 )

Adjustments to reconcile net

loss to net cash used in operating activities:

and amortization

Goodwilll impairment

exchange (gain)

debt conversion

interest and debt forgiveness

in operating assets and liabilities:

Accounts receivable

Prepaid expenses

Accounts payable & accrued expenses

Deferred tax liability

Interest payable

Cash Flows (Used) in Operations

( 5,248,358 )

( 1,829,128 )

From Investing Activities:

in Right of use asset

( 14,346,637 )

Nora Pharma Inc.

of intangible assets

Cash Flows (Used) in Investing Activities

( 14,619,390 )

From Financing Activities:

public and private offerings of common stock, net

Purchase of preferred shares

in lease liability

Nora Pharma Inc.’s debt

( 2,064,331 )

from notes payable

used to pay fees

of notes payable

( 1,900,000 )

Cash Flows Provided by Financing Activities

Cash Equivalents at Beginning of Period

Net Increase (Decrease) in cash

and cash equivalents

Effect of exchange rate changes

currency translation adjustment

and Cash Equivalents at End of Period

Supplementary

Disclosure of Cash Flow Information:

paid for interest

paid for income taxes

issued for note conversions

issued for acquisition of Nora Pharma, Inc.

Accompanying Notes to These Consolidated Financial Statements.

Biopharma, Inc.

Consolidated Statement of Shareholders' Equity

Number Of Common Shares

Capital Paid in Excess of Par

Number Of Preferred Shares

Balance December

( 20,218,727 )

stock issued for the reduction of debt and payment of interest

stock issued for services

( 12,436,447 )

( 12,456,715 )

at December 31, 2021

$ ( 32,655,174 )

shares issued for reverse stock split

stock and warrants issued in offerings

Exercise of warrants

stock purchased from related party

stock issued as part of Nora Pharma Inc.

( 26,744,440 )

( 26,559,454 )

at December 31, 2022

$ ( 59,399,614 )

Accompanying Notes to These Consolidated Financial Statements.

Biopharma, Inc.

to Consolidated Financial Statements

31, 2022 and 2021

1 – Description of Business

Biopharma, Inc.

(the “Company”) was originally incorporated under the name Mountain West Business Solutions, Inc.

31, 2006, in the State of Colorado.

October 15, 2009, the Company acquired Sunshine Biopharma, Inc.

in a transaction classified as a reverse acquisition.

Sunshine Biopharma,

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 rights to Adva-27a by purchasing PCT/FR2007/000697 and PCT/CA2014/000029 and terminated the License Agreement.

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.

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.

April 20, 2022, the Company filed a provisional patent application in the United States covering mRNA molecules capable of destroying

cancer cells in vitro.

The patent application contains composition and utility subject matter pertaining to the structure and sequence

of such mRNA molecules.

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.

Encouraged by the results to date, the Company submitted a Notice of Option

Exercise to the University of Arizona on September 13, 2022.

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

Nora Pharma currently

offers 60 products, including 49 generic prescription drugs, and 11 OTC products.

Nora Pharma sales were $10.7 million USD during its

fiscal year ended June 30, 2022.

The consolidated financial statements contained in this report include the results of operations of

Nora Pharma from October 20, 2022 through December 31, 2022.

2 – Summary of Significant Accounting Policies

summary of significant accounting policies is presented to assist the reader in understanding the Company's financial statements.

consolidated financial statements and notes are representations of the Company's management, which is responsible for their integrity

and objectivity.

These accounting policies conform to Generally Accepted Accounting Principles and have been consistently applied in

the preparation of the financial statements.

OF CORONAVIRUS (COVID-19) PANDEMIC

March 2020, the World Health Organization declared Coronavirus and its associated disease, COVID-19, a global pandemic.

Conditions surrounding

the Coronavirus outbreak are continuing to evolve and government authorities around the world have and continue to implement various

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.

adjustments have been made to the amounts reported in the Company's financial statements as a result of this matter.

OF CONSOLIDATION

accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, all wholly owned.

All intercompany

accounts and transactions have been eliminated in consolidation.

preparation of financial statements in conformity with US Generally Accepted Accounting Principles requires management to make estimates

and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the

date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The more significant

estimates and assumptions made by management are valuation of equity instruments, depreciation of property and equipment, and deferred

tax asset valuation.

Actual results could differ from those estimates as the current economic environment has increased the degree of

uncertainty inherent in these estimates and assumptions.

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Trade accounts

receivable are stated at net realizable value.

The majority of customers are not extended credit and therefore time to maturity for receivables

On a periodic basis, management evaluates its trade accounts receivable and determines whether to record an allowance for doubtful

accounts or if any accounts should be written off based on a past history of write-offs, collections and current credit conditions.

receivable is considered past due if the Company has not received payments based on agreed-upon terms.

The Company generally does not

require any security or collateral to support its receivables.

is valued at the lower of cost and net realizable value.

Cost is determined using the first in, first out method.

Net realizable value

is the estimated selling price in the ordinary course of business, less the costs of completion and costs necessary to make the sale.

The cost of inventory includes the purchase price and other costs directly attributable to the acquisition of finished goods.

AND CASH EQUIVALENTS

the Balance Sheets and Statements of Cash Flows, all highly liquid investments with maturity of 90 days or less are considered to be

cash equivalents.

The Company had a cash balance of $ 21,826,437

and $ 2,045,167

as of December 31, 2022 and December 31, 2021, respectively.

times such cash balances may be in excess of the FDIC limit of $250,000 in the U.S.

or the equivalent in Canada.

AND EQUIPMENT

and equipment are reviewed for recoverability when events or changes in circumstances indicate that its carrying value may exceed future

undiscounted cash inflows.

As of December 31, 2022 and 2021, the Company had not identified any such impairment.

Repairs and maintenance

are charged to operations when incurred and improvements and renewals are capitalized.

and equipment are stated at cost.

Depreciation is calculated according to the following methods at the following annual rates and period

for financial reporting purposes and accelerated methods for tax purposes.

Their estimated useful lives are as follows:

estimated useful lives

Office Equipment:

Straight-line and Declining balance

Computer Equipment:

Declining balance method

Laboratory Equipment:

Straight-line method

Straight-line and Declining balance method

assets are amortized over their estimated useful lives according to the following methods at the following annual rates and period:

Straight-line

Declining balance method

assets are tested for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable.

The carrying amount of a long-lived asset is not recoverable when it exceeds the sum of the undiscounted cash flows expected to result

from its use and eventual disposal.

In such a case, an impairment loss must be recognized and is equivalent to the excess of the carrying

amount of a long-lived asset over its fair value.

PROPERTY RIGHTS - PATENTS

cost of patents acquired is capitalized and is amortized over the remaining life of the patents.

Company evaluates recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that intangible

assets carrying amount may not be recoverable.

Such circumstances include but are not limited to:

(1) a significant decrease in the market

value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of cost

significantly in excess of the amount originally expected for the acquisition of an asset.

The Company measures the carrying amount of

such assets against the estimated undiscounted future cash flows associated with it.

AND DILUTED NET GAIN (LOSS) PER SHARE

Company computes loss per share in accordance with ASC 260, Earnings per Share.

ASC 260 requires presentation of both basic and diluted

earnings per share (“EPS”) on the face of the income statement.

net income (loss) per share is calculated by dividing net (loss) by the weighted-average common shares outstanding.

Diluted net income

per share is calculated by dividing net income by the weighted-average common shares outstanding during the period using the treasury

stock method or the two-class method, whichever is more dilutive.

As the Company incurred net losses for the year ended December 31,

potentially dilutive securities were included in the calculation

of diluted earnings per share as the impact would have been anti-dilutive.

accordance with ASC 740 – Income Taxes , the provision for income taxes is computed using the asset and liability method.

The liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences

between the tax basis of assets and liabilities and their reported amounts on the financial statements.

The resulting deferred tax assets

or liabilities have been adjusted to reflect changes in tax laws as they occur.

A valuation allowance is provided when it is more likely

than not that a deferred tax asset will not be realized.

Company expects to recognize the financial statement benefit of an uncertain tax position only after considering the probability that

a tax authority would sustain the position in an examination.

For tax positions meeting a "more-likely-than-not" threshold, the

amount to be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority.

For tax positions not meeting the threshold, no financial statement benefit is recognized.

As of December 31, 2022 the Company had no

uncertain tax positions.

The Company recognizes interest and penalties, if any, related to uncertain tax positions as general and administrative

The Company currently has no federal or state tax examinations nor has it had any federal or state examinations since its inception.

To date, the Company has not incurred any interest or tax penalties.

Canadian and US tax purposes, the Company’s 2019 through 2021 tax years remain open for examination by the tax authorities under

the normal three-year statute of limitations.

dollar is the functional currency of the Company which is operating in the United States.

The functional currency for the Company's

Canadian subsidiaries is the Canadian dollar.

Company translates its Canadian subsidiaries' financial statements into U.S.

dollars as follows:

Assets and liabilities are

translated at the exchange rate in effect as of the financial statement date.

Income statement accounts

are translated using the weighted average exchange rate for the period.

Company includes translation adjustments from currency exchange and the effect of exchange rate changes on intercompany transactions

of a long-term investment nature as a separate component of shareholders’ equity.

There are currently no transactions of a long-term

investment nature, nor any gains or losses from non U.S.

currency transactions.

CONCENTRATION

OF CREDIT RISKS

instruments that potentially subject the Company to concentrations of credit risk consist principally of cash equivalents and trade receivables.

The Company places its cash equivalents with high credit quality financial institutions.

INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

Company applies the provisions of accounting guidance, FASB Topic ASC 825, Financial Instruments.

ASC 825 requires all entities to disclose

the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it

is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be

exchanged in a current transaction between willing parties.

As of December 31, 2022 and 2021, the fair value of cash, accounts receivable

and notes receivable, accounts payable, accrued expenses, and other payables approximated carrying value due to the short maturity of

the instruments, quoted market prices or interest rates which fluctuate with market rates.

Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction

between market participants at the measurement date.

The Company applies the following fair value hierarchy, which prioritizes the inputs

used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is

available and significant to the fair value measurement.

The hierarchy gives the highest priority to unadjusted quoted prices in active

markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Level 1 – Level 1

inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability

to access at the measurement date.

Level 2 – Level 2

inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly

or indirectly.

If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially

the full term of the asset or liability.

Level 3 – Level 3

inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability

at the measurement date.

carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis.

assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs.

Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods.

Financial assets

and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared.

are recognized initially at fair value, net of transaction costs incurred.

Borrowings are subsequently carried at amortized cost;

difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period

of the borrowings using the effective interest method.

FOR DERIVATIVES LIABILITIES

Company evaluates stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts

qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging:

Contracts in Entity’s Own Equity.

The result of this accounting treatment could be that the fair value of a financial instrument

is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability.

that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or

other expense.

conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value

is reclassified to equity.

Financial instruments that are initially classified as equity that become subject to reclassification under

ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date.

determined that none of the Company’s financial instruments meet the criteria for derivative accounting as of December 31, 2022

INSTRUMENTS ISSUED TO EMPLOYEES OR NON-EMPLOYEES FOR ACQUIRING GOODS OR SERVICES

stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis over the

requisite service period of the award.

The Company accounts for stock-based compensation to employees in conformity with the provisions

of ASC Topic 718, Stock Based Compensation.

Stock-based compensation to employees consisting of stock option grants and restricted shares

are recognized in the statement of operations based on their fair values at the date of grant.

The Company accounts for equity instruments

issued to non-employees in accordance with the provisions of ASC Topic 718, based upon the fair-value of the underlying instrument.

generates sales from three revenue streams:

(1) Generic Drugs, (2) OTC Supplements, and (3) Commissions Income.

Canada, governmental regulations require that companies recognize revenues upon completion of the work by issuing an invoice and remitting

the applicable sales taxes (GST and QST) to the appropriate government agency.

The Company’s wholly owned Canadian subsidiaries'

revenue recognition policy is in compliance with these local regulations.

Company recognizes revenues for product sales and commissions when title and risk of loss has passed to the customer, which is typically

upon delivery to the customer, when estimated rebates are reasonably determinable, and when collectability is reasonably assured.

sales and commissions are accounted for when persuasive evidence of an arrangement exists, the goods have been received by the client,

the price is fixed or determinable and collection is reasonably assured.

Company recognizes and measures its leases in accordance with FASB ASC 842, Leases.

The Company is a lessee in a non-cancellable operating

lease for office space.

The Company determines if an arrangement is a lease, or contains a lease, at inception of a contract and when

the terms of an existing contract are changed.

The Company recognizes a lease liability and a right-of-use (ROU) asset at the commencement

The lease liability is initially and subsequently recognized based on the present value of its future lease payments.

payments are included in the future lease payments when those variable payments depend on an index or a rate.

The discount rate is the

implicit rate if it is readily determinable or otherwise the Company uses its incremental borrowing rate.

The implicit rates of the Company's

lease are not readily determinable and accordingly, the Company uses its incremental borrowing rate based on the information available

at the commencement date for all leases.

The Company’s incremental borrowing rate for a lease is the 6% interest it would have

to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment.

The ROU asset is subsequently measured throughout the lease term at the remaining amount (i.e., present value of the remaining lease

payments), plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of

lease incentives received, and any impairment recognized.

Lease cost for lease payments is recognized on a straight-line basis over the

Company has elected, for all underlying classes of assets, not to recognize ROU assets and lease liabilities for short-term leases that

have a lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the

Company is reasonably certain to exercise.

The Company recognizes the lease cost associated with its short-term leases on a straight-line

basis over the lease term.

the available practical expedient, we account for the lease and non-lease components as a single lease component for all classes of underlying

assets as both a lessee and lessor.

Further, we elected a short-term lease exception policy on all classes of underlying assets, permitting

us to not apply the recognition requirements of this standard to short-term leases (i.e.

leases with terms of 12 months or less).

the years ended December 31, 2022 and 2021, the legal fees incurred were related to services provided to the Company in connection with

the Securities and Exchange Commission requirements and other regulatory and contracts matters.

ISSUED ACCOUNTING PRONOUNCEMENTS

Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not

believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position

or results of operations.

3 – Acquisition of Nora Pharma Inc.

On October 20, 2022 the Company acquired all of

the issued and outstanding shares of Nora Pharma Inc.

(“Nora” Pharma), a Canadian privately held company.

The purchase price

for the shares was $ 18,860,637 which was paid in cash ($ 14,346,637 ) and by the issuance of 3,700,000 shares of the Company’s common

stock valued at $ 4,514,000 or $1.22 per share.

Nora Pharma is a certified company offering generic pharmaceutical products in Canada.

Nora Pharma’s operations are authorized by a Drug Establishment License issued by Health Canada.

Nora Pharma is also registered

with the FDA.

The following table summarizes the allocation of the purchase price as of October 20, 2022, the acquisition date using Nora

Pharma’s balance sheet assets and liabilities:

Schedule of allocation of the purchase price

Accounts receivable

Intangible assets

Equipment & furniture

( 5,981,286 )

Consideration

has determined that going forward it is in the best interest of the Company to impair 100% of the goodwill in the

current, 2022 fiscal year.

The Company will review the value of the intangible and other assets on an annual basis and make

adjustments to the carrying amounts as necessary.

fair value of the 3,700,000 common shares issued as part of the consideration paid for Nora Pharma was determined on the basis of

the closing market price of the Company’s common shares on the acquisition date, October 20, 2022 ($1.22 per

fair value of the financial assets acquired includes receivables, Inventory, furniture, fixtures, and processing equipment, and right

to use assets was $5,858,369.

unaudited financial information in the table below summarizes the combined results of operations of the Company (Sunshine Biopharma and

Nora Pharma) for the years ended December 31, 2022 and 2021, on a pro forma basis, as though the companies had been combined as of January

The unaudited pro forma financial information does not purport to be indicative of the Company's combined results of operations

which would actually have been obtained had the acquisition taken place on January 1, 2021, nor should it be taken as indicative of future

consolidated results of operations.

Forma results from acquisition

from operations

$ ( 26,192,503 )

$ ( 2,224,253 )

$ ( 26,164,764 )

$ ( 12,289,655 )

Basic and fully

(loss) per share

Weighted average shares outstanding

addition, the Company paid off Nora Pharma’s debt by making cash payments totaling $ 2,064,331 directly to Nora Pharma creditors

at or before closing in order to secure creditor consent for the acquisition transaction.

Note 4 – Earnout

As part of the Nora Pharma acquisition the Company

agreed to an earnout of $ 5,000,000 CAD ($ 3,632,000 USD) payable to Mr.

Chamoun, the Seller.

The earnout is payable in the form of twenty

(20) payments of $250,000 CAD for every $1,000,000 CAD increase in gross sales (as defined in the Purchase Agreement) 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.

The total earnout amount of $3,632,000 has been recorded as a salary payable.

Note 5 – Goodwill and Intangible Assets

result of the Nora Pharma acquisition the Company now has goodwill of $ 18,226,881 and

intangible assets of $ 659,571

on its balance sheet.

Management has determined that it is in the best interest of the Company to (i) impair 100% of the goodwill in

the current, 2022 fiscal year, and (ii) review the intangible assets for amortization or possible partial of full impairment on an

annual basis.

6 – Patents and Other Intellectual Property

The following

is a list of the patents and other intellectual property held by the Company at December 31, 2022:

December 2015, the Company acquired all worldwide issued (US Patent Number 8,236,935, and US Patent Number 10,272,065) and pending patents

under PCT/FR2007/000697 and PCT/CA2014/000029 for the Adva-27a anticancer compound.

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.

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.

April 20, 2022, the Company filed a provisional patent application in the United States covering mRNA molecules capable of destroying

cancer cells in vitro.

The patent application contains composition and utility subject matter pertaining to the structure and sequence

of such mRNA molecules.

In addition, the

Company owns 152 DIN’s issued by Health Canada for prescription drugs currently on the market in Canada.

These DIN’s were

secured through in-licenses or cross-licenses from international manufacturers of generic pharmaceutical products.

The Company also

owns two NPN’s issued by Health Canada:

(i) NPN 80089663 authorizes us to manufacture and sell our in-house developed OTC supplement,

Essential 9™, and (ii) NPN 80093432 authorizes us to manufacture and sell the OTC supplement, Calcium-Vitamin D under the brand

name Essential Calcium-Vitamin D ™ .

7 – Reverse Stock Splits

February 9, 2022, the Company completed a 1

for 200 reverse split of its common stock.

Company had previously completed two 20 to 1 reverse stock splits, one in 2019 and the other in 2020.

The Company’s

financial statements reflects all three reverse stock splits on a retroactive basis for all periods presented and for all references

to common stock, unless specifically stated otherwise.

8 – Capital Stock

The Company’s

authorized capital is comprised of 3,000,000,000

shares of $ 0.001

par value common stock and 30,000,000

shares of $ 0.10

par value preferred stock, to have such rights

and preferences as the Directors of the Company have or may assign from time to time.

Out of the authorized Preferred Stock, the Company

had previously designated 850,000 shares as Series “A” Preferred Stock (“Series A”).

At December 31, 2019, the

Company had no issued and outstanding shares of Series A.

On June 17, 2020, the Company filed an amendment to its Articles of Incorporation

(the “Amendment”) eliminating the Series A shares and the designation thereof, which shares were returned to the status of

undesignated shares of Preferred Stock.

In addition, the Amendment increased the number of authorized Series B Preferred Shares from

five hundred thousand (500,000) to one million (1,000,000) shares.

The Series B Preferred Stock is non-convertible, non-redeemable and

non-retractable.

It has superior liquidation rights to the common stock at $0.10 per share and gives the holder the right to 1,000 votes

As of December 31, 2021, there were 1,000,000

shares of the Series B Preferred Stock held by

the CEO of the Company.

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

warrants to purchase shares of common stock (the “Tradeable

Warrants”) (including 337,494 Tradeable Warrants resulting from partial exercise of the overallotment option granted to the underwriter).

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.

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

Each share of common stock and accompanying Investor Warrant was 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.

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.

October 20, 2022, the Company issued 3,700,000 shares

of Common Stock as part of the acquisition of Nora Pharma.

These shares were valued at $ 4,514,000 ,

or $ 1.22 per

the fiscal year ended December 31, 2021, the Company issued an aggregate of 559,144

shares of its Common Stock valued at $ 12,705,214

in connection with the conversion of $ 2,867,243

in debt and interest of $ 127,986

resulting in a loss of $ 9,726,485

on conversion.

In addition, the Company issued 300,000

shares of its Common Stock valued at $ 918,000

as compensation to its directors.

In total, 859,114

shares of Common Stock were issued during the fiscal year ended

December 31, 2021.

Through December

31, 2022 and December 31, 2021, the Company has issued and outstanding a total of 22,585,632

and 2,591,240

shares of Common Stock, respectively.

Company has declared no dividends since inception.

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

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.

the fiscal year ended December 31, 2022, the Company completed three financing events, and in connection therewith, it issued warrants

Warrants issued

with financing

Pre-Funded Warrants

Tradeable Warrants

Investor Warrants

April Warrants

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.

the fiscal year ended December 31, 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 fiscal year ended

December 31, 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 December 31, 2022 consisted of the following:

Schedule of outstanding warrants

Pre-Funded Warrants

Tradeable Warrants

Investor Warrants

April Warrants

December 30, 2022, the final trading day of the year, the closing price of the Company’s common stock was $0.64 per share, a value

well below the exercise price of these warrants.

10 – Earnings Per Share

following table sets forth the computation of basic and diluted net income per share for the years ended December 31:

earnings per share computation

Net gain (loss)

attributable to common stock

$ ( 26,744,440 )

$ ( 12,436,447 )

Basic weighted average outstanding

shares of common stock

Dilutive common share equivalents

Dilutive weighted average outstanding

shares of common stock

Net gain (loss) per share attributable

to common stock

11 – Income Taxes

components of the provision for income taxes were as follows:

Provision for income taxes

components of the net deferred tax assets were as follows:

of net deferred tax assets

Deferred Tax Assets:

Operating Loss, Credits and Carryforwards

Lease Liability

( 5,596,431 )

Deferred Tax Assets

Deferred Tax Liabilities

Deferred Tax Liability

12 – Notes Payable

of December 31, 2022 and December 31, 2021, the Company had $ 0

and $ 1,900,000 ,

respectively in notes payable outstanding.

At December 31, 2022 and December 31, 2021, total accrued interest on Notes Payable was $ 0

and $ 48,287 ,

respectively.

Company’s Notes Payable at December 31, 2021 consisted of the following:

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 %

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 .

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 %,

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 .

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 %,

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 .

December 31, 2022 and December 31, 2021, total accrued interest on Notes Payable was $- 0 -

and $ 48,287 ,

respectively.

13 – Notes Payable - Related Party

Note Payable dated December 31, 2019 held by the CEO of the Company having a Face Value of $ 128,269

and accruing interest at 12 %

was due December

On December 31, 2020, the Company renewed the Note together

with accrued interest of $ 15,392

for a 12-month period.

The new Note has a face Value of $ 143,661 ,

accrues interest at 12 %

per annum, and has a maturity date of December

On August 24, 2021, the Company paid off the entire principal

balance of this Note, together with accrued interest of $ 12,929

by issuing cash payment of $ 156,590 .

Company has obligations as a lessee for office space with initial non-cancellable terms in excess of one year.

The Company classified

the lease as an operating lease.

The lease contains a renewal option for a period of five years.

Because the Company is certain to exercise

the renewal option, the optional period is included in determining the lease term, and associated payments under the renewal option are

included in the lease payments.

The Company’s lease does not include termination options for either party to the lease or restrictive

financial or other covenants.

Payments due under the lease contract include fixed payments plus a variable Payment.

The Company’s

office space lease requires it to make variable payments for the Company’s proportionate share of building’s property taxes,

insurance, and common area maintenance.

These variable lease payments are not included in lease payments used to determine lease liability

and are recognized as variable costs when incurred.

reported on the balance sheet as of December 31, 2022 were as follows:

Lease information

Operating lease ROU asset

Operating Lease liability - Short-term

Operating lease liability - Long-term

Remaining lease term

Discount rate

disclosed for ROU assets obtained in exchange for lease obligations and reductions of ROU assets resulting from reductions of lease obligations

include amounts reduced from the carrying amount of ROU assets resulting from deferred rent.

of lease liabilities under non-cancellable operating leases at December 31, 2022 are as follows:

of lease liabilities

15 – Management and Director Compensation

Company paid its officers cash compensation totaling $ 1,785,000

and $ 297,307

for the years ended December 31, 2022 and 2021, respectively.

these amounts attributable to the Company’s CEO, $ 60,000

and $ 110,000 ,

respectively 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 year ended December 31, 2021.

of these shares was based upon the closing price of the Company’s common stock of $3.06 on the issuance date.

Company paid its directors cash compensation totaling $ 300,000

the years ended December 31, 2022 and 2021, respectively.

16 – Subsequent Events

On January 19,

2023, the Company announced a stock repurchase program of up to $2 million.

As of the date of this report, the Company has repurchased

a total of 445,711 shares of Common Stock at an average price of $1.1371 per share for a total cost of $506,822.

As of the date of this

report, the repurchased shares have not been returned to treasury.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data