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Item 8. Financial Statements and Supplementary Data

2024-03-28 compared with 2023-04-04 · 724 added, 686 removed, 136 unchanged (91% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

of Independent Registered Public Accounting Firm

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

Report of Independent Registered Public Accounting Firm

To 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,

as of December 31, 2023 and 2022, the related statements

of operations, stockholders' equity (deficit), and cash flows for the years then ended, 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, 2023 and 2022, and the results of its operations and its cash flows for the years then ended,

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

21 unchanged sentences

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.

audit matters are matters arising from the current-period audit of the financial statements that were communicated or 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 our especially challenging, subjective, or complex judgments.

determined that there are no critical audit matters.

Borgers CPA PC (PCAOB ID 5041)

Borgers CPA PC

BF Borgers CPA PC (PCAOB ID 5041 )

have served as the Company's auditor since 2013

PCAOB ID 5041

Biopharma, Inc.

Sunshine Biopharma, Inc.

Consolidated Balance Sheets

As of December 31,

Current Assets:

Cash and cash

Cash and cash equivalents

Accounts receivable

5 unchanged sentences

Current Liabilities:

Accounts payable & accrued

Earn-out payable

Interest payable

Accounts payable and accrued expenses

Earnout payable

Income tax payable

portion - Right-of-use-liability

Right-of-use-liability

Total Current Liabilities

Long-Term Liabilities:

Notes payable

Right-of-use-liability

Deferred tax liability

Right-of-use-liability

Total Long-Term Liabilities

1 unchanged sentence

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

Preferred Stock Series B $ 0.10 par value per share;

1,000,000 shares authorized 10,000 shares issued

and outstanding

Common Stock $ 0.001

3 unchanged sentences

and 22,585,632

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

31, 2021, respectively

shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

Capital paid in excess of par value

Accumulated comprehensive

Accumulated comprehensive income

Accumulated (Deficit)

( 63,905,658 )

1 unchanged sentence

TOTAL SHAREHOLDERS' EQUITY

TOTAL LIABILITIES AND

SHAREHOLDERS' EQUITY

Accompanying Notes to These Consolidated Financial Statements.

Biopharma, Inc.

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

See Accompanying Notes To These Financial Statements

Sunshine Biopharma, Inc.

Consolidated Statements of Operations and Comprehensive Loss

Year Ended December 31,

Cost of sales

General and Administrative Expenses:

Directors Fees

and amortization

Director fees

Goodwill impairment

Total General and Administrative

Depreciation & amortization

Total General and Administrative Expenses

(Loss) From Operations

1 unchanged sentence

( 27,000,750 )

Other Income (Expenses):

Loss on debt conversions

( 9,726,485 )

Foreign exchange

Other Income (Expense):

Foreign exchange (loss)

Interest income

Interest expense

Debt forgiveness

Total Other Income (Expenses)

( 9,996,313 )

Total Other Income (Expense)

Net (loss) before income taxes

1 unchanged sentence

( 26,511,136 )

for income taxes

Provision for income taxes

( 4,506,044 )

( 26,744,440 )

Foreign exchange translation

Comprehensive Income (Loss)

(Loss) from foreign exchange translation

Comprehensive (Loss)

$ ( 3,971,786 )

$ ( 26,559,454 )

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

Basic and diluted (Loss) per common share

Weighted average common shares outstanding (basic & diluted)

See Accompanying Notes To These Financial Statements.

Sunshine Biopharma, Inc.

Consolidated Statements of Cash

Year Ended December 31,

Cash Flows From Operating Activities:

1 unchanged sentence

$ ( 26,744,440 )

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:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Goodwill impairment

Foreign exchange

Accounts receivable

( 2,365,549 )

Prepaid expenses

Accounts payable & accrued expenses

Accounts payable and accrued expenses

( 1,364,134 )

Deferred tax liability

Income tax payable

Interest payable

Cash Flows (Used) in Operations

( 5,248,358 )

( 1,829,128 )

From Investing Activities:

in Right of use asset

Net Cash Flows (Used In) Operating Activities

( 8,775,111 )

Nora Pharma Inc.

of intangible assets

Cash Flows (Used) in Investing Activities

( 5,248,358 )

From Financing Activities:

public and private offerings of common stock, net

Purchase of preferred shares

in lease liability

Nora Pharma Inc.’s debt

Cash Flows From Investing Activities:

Reduction in Right-of-use asset

Nora Pharma acquisition

( 14,346,637 )

from notes payable

used to pay fees

of notes payable

Cash from Nora Pharma acquisition

Purchase of intangible assets

Purchase of equipment

Net Cash Flows (Used In) Investing Activities

( 14,619,390 )

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

Cash Flows From Financing Activities:

Sale of common stock in private placements

Exercise of warrants

Purchase of treasury stock

Lease liability

Advances to Nora Pharma - pre acquisition

( 2,064,331 )

stock issued for the reduction of debt and payment of interest

stock issued for services

Payments of notes payable

( 1,900,000 )

Net Cash Flows Provided by Financing Activities

Cash and Cash Equivalents at Beginning of Period

Net increase (decrease) in cash and cash equivalents

( 6,005,674 )

at December 31, 2021

Effect of exchange rate changes on cash

Foreign currency translation adjustment

Cash and Cash Equivalents at End of Period

Supplementary Disclosure of Cash Flow Information:

Cash paid for interest

Stock issued for acquisition of Nora Pharma

See Accompanying Notes To These Financial Statements.

Sunshine Biopharma, Inc.

Consolidated Statements of Shareholders' Equity

Number of Common

in Excess of Par

Number of Preferred

Balance at December 31, 2021

( 32,655,174 )

shares issued for reverse stock split

stock and warrants issued in offerings

Exercise of warrants

stock and pre-funded warrants issued in public and private offerings, net of issuance costs

stock purchased from related party

stock issued as part of Nora Pharma Inc.

stock issued as part of Nora Pharma acquisition

( 26,744,440 )

( 26,559,454 )

at December 31, 2022

Balance at December

$ ( 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.

of treasury stock

stock and pre-funded warrants issued in a private offering net of expenses

( 4,506,044 )

( 3,971,786 )

Balance at December

$ ( 63,905,658 )

See Accompanying Notes To These Financial Statements.

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

Note 1 – Description of Business

The Company was originally incorporated under the

name Mountain West Business Solutions, Inc.

on August 31, 2006, in the State of Colorado.

Effective 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.

Upon completion of the reverse acquisition transaction,

the Company changed its name to Sunshine Biopharma, Inc.

and began operating as a pharmaceutical company.

Sunshine Biopharma operates two wholly owned subsidiaries:

(i) Nora Pharma Inc.

(“Nora Pharma”), a Canadian corporation with a portfolio of pharmaceutical products consisting of 52

generic prescription drugs on the market in Canada, and (ii) Sunshine Biopharma Canada Inc.

(“Sunshine Canada”), a Canadian

corporation which develops and sells nonprescription over-the-counter (“OTC”) products.

The Company has determined that it has two reportable

• Prescription Generic Pharmaceuticals (“Generic Pharmaceuticals”)

• Nonprescription Over-The-Counter Products (“OTC Products”)

Through December 31, 2023, sales from the Generic

Pharmaceuticals segment represented approximately 97 % of total revenues of the Company while the remaining approximately 3 % was generated

from the sale of OTC Products.

Based on these results, the Company deems segmentation reporting to be immaterial at December 31, 2023.

The Company is not subject to material customer concentration risks as

it sells its products directly to pharmacies in several Canadian Provinces.

However, in Canada Provincial governments reimburse patients

for their prescription drugs expenditures to various degrees under drug reimbursement programs, making generic drugs prices highly dependent

on governmental policies which may change over time.

The most recent negotiations between the pan-Canadian Pharmaceutical Alliance (“pCPA”)

and the Canadian Generic Pharmaceutical Association have resulted in updated generic pricing for certain products which took effect on

October 1, 2023.

The updated prices are valid for three years and the agreement contains an option to extend for an additional two years.

On February 29, 2024, the Canadian federal government tabled new drug reimbursement legislation, a bill known as PharmaCare which, if

passed, would result in a single-payer program whereby the Canadian federal government would pay for the drugs sold in Canada rather than

the Provinces.

In addition, the Company is engaged in the development

of the following proprietary drugs:

a small chemotherapy molecule for treatment of pancreatic cancer (IND-enabling studies were

paused in November 2023 due to unfavorable results.

See “Products in Development,”

• K1.1 mRNA, a lipid nano-particle (LNP) targeted for liver cancer

• SBFM-PL4, a protease inhibitor for treatment of Coronavirus infections

Note 2 – Summary of Significant

Accounting Policies

This summary of significant accounting policies

is presented to assist the reader in understanding the Company's financial statements.

The 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.

PRINCIPLES OF CONSOLIDATION

The 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.

USE OF ESTIMATES

The 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.

TRADE ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Trade accounts receivable are stated at net realizable

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

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.

A 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.

INVENTORY VALUATION

Inventory 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.

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.

CASH AND CASH EQUIVALENTS

For 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

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.

$16,292,347 and $21,826,437 as of December 31, 2023 and December 31, 2022, respectively.

At 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.

PROPERTY AND EQUIPMENT

Property 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,

2023 and 2022, the Company had not identified any such impairment.

Repairs and maintenance are charged to operations when incurred and

improvements and renewals are capitalized.

Property and equipment are stated at cost.

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

Schedule of estimated useful lives

Office Equipment:

Straight-line and Declining balance

Straight-line and Declining balance method

5-7 Years / 20%

Computer Equipment:

3 unchanged sentences

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

5 Years / 30%

INTANGIBLE ASSETS

Intangible assets are amortized over their estimated

useful lives according to the following methods at the following annual rates and period:

Schedule of intangible assets estimated

Straight-line method

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.

Intangible 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 AND LICENSES

The cost of patents and licenses acquired is capitalized

and is amortized over the remaining life of the patents or licenses.

The 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.

(i) a significant decrease in the market value of an asset, (ii) a significant adverse

change in the extent or manner in which an asset is used, or (iii) 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.

BASIC AND DILUTED NET GAIN (LOSS) PER SHARE

The Company computes gain or 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.

Basic net income (loss) per share is calculated

by dividing net gain (loss) by the weighted-average common shares outstanding.

Diluted net income (loss) per share is calculated by dividing

net income (loss) 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, 2023, no potentially dilutive securities

were included in the calculation of diluted earnings per share as the impact would have been anti-dilutive.

In 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

The 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, 2023 the Company had no uncertain tax positions.

The Company recognizes

interest and penalties, if any, related to uncertain tax positions as general and administrative expenses.

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.

For Canadian and US tax purposes, the Company’s

2020 through 2022 tax years remain open for examination by the tax authorities under the normal three-year statute of limitations.

FUNCTIONAL CURRENCY

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.

The 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.

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.

The 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.

CONCENTRATION OF CREDIT RISKS

Financial 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.

FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL

The Company applies the provisions of accounting

guidance, 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, 2023 and 2022, 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.

The 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

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.

The carrying value of financial assets and liabilities

recorded at fair value is measured on a recurring or nonrecurring basis.

Financial assets and liabilities measured on a non-recurring

basis are those that are adjusted to fair value when a significant event occurs.

The 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.

NOTES PAYABLE

Borrowings 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.

any 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.

The Company had no notes payable as of December 31, 2023 and 2022.

REVENUE RECOGNITION

Over 97% of the Company’s revenues are derived

from the sale of pharmaceutical products.

Pharmaceutical products can only be sold to a specific customer that is either a registered

pharmacy or a registered wholesaler.

The Company therefore sells only to customers registered with Health Canada, the Canadian equivalent

Contracts are drawn up between the wholesalers and the Company for all indirect sales.

In the case of direct sales to pharmacies,

purchase orders are used instead of contracts.

A purchase order, forecast, or other written instructions to purchase any of the Company’s

products placed by the customer constitutes an irrevocable offer to purchase.

The customer is responsible for ensuring that the terms

of any such order are complete and accurate.

The purchase order is only deemed to be accepted when the Company (in its sole discretion)

accepts the purchase order and delivers on the purchase.

The acceptance of any purchase order can be full or partial, at the sole discretion

of the Company.

No variations to these conditions are binding on the Company unless agreed to in writing between the customer and the

No significant judgments are made in connection

with any contracts as the price is already determined, the collection is reasonably assured, and performance obligation is fulfilled when

the customer receives the goods.

The Company is not required to apply any specific judgments, estimations, or assumptions to determine

the price of its products.

Taxes assessed by a governmental authority that

are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are

excluded from revenue.

Shipping and handling costs associated with outbound freight after control over a product has been transferred

to a customer are accounted for as a fulfillment cost and are included in cost of revenues.

The amount invoiced for each product is fixed

at the Company’s current price list on the date of shipping and known in advance by the customer and does not vary.

The Company is involved in a singular activity

which is to sell pharmaceutical finished goods.

The Company fulfills its performance obligation when the customer receives the requested

When the products leave the Company's warehouse, the transport to the customer is insured and the transfer of ownership to

the customer takes place when the customer receives goods.

At this point, the Company issues an invoice for the products and remits the

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

It is when the invoice is issued that the revenue is recognized.

Unless otherwise agreed to and signed by both parties, payment terms are within 30 days of the date of the invoice.

The collection is

reasonably assured because of the nature of the Company’s customers.

The Company is conducting sales only in Canada.

listed in Canadian dollars and may vary from one Province or Territory to another within Canada.

All products sold by the Company are

labelled and approved for sale in Canada only and are not intended for export outside of Canada.

In the event of any breach by the Company of any

product warranty (whether by reason of defective materials, production faults or otherwise), the Company’s liability shall be limited

to, at Company’s option, (i) replacement of the product(s) in question, or (ii) reimbursement of the purchase price.

carries product insurance and is not liable for products’ failure to comply with the warranty of products if the failure or damage

arises because of the customer’s negligence, deliberate damage, misuse or failure to store the products in conditions per Health

Canada specifications.

The Company is not liable (whether in contract, in tort or otherwise) for any (i) indirect, special or consequential

loss or damage, or (ii) loss of profit, goodwill, business or revenue (in each case whether direct or indirect).

These conditions also

apply to any replacement products supplied by the Company.

The Company warrants to the customer that, at

the time of delivery, the products are compliant with all mandatory quality standards required by applicable regulatory and legal

requirements.

In return, the customer is required to warrant to the Company that it holds all relevant permits and approvals

required under applicable laws to purchase, store, distribute, sell and use the Company’s products.

Visible defects or damages

must be reported to the Company in writing immediately, but no later than five (5) business days after receipt of the products.

Hidden defects must be reported to the Company in writing immediately, but no later than five (5) business days after the customer

becomes aware of such defects.

The Company shall not be deemed to be in breach of the terms or otherwise liable to customer for any

delay in performance or non-performance of its obligations due to circumstances beyond its control, including but not limited to,

acts of God, floods, droughts, earthquakes or other natural disasters, terrorist attacks, wars, preparations for war, armed

conflicts, civil commotions or riots, epidemics or pandemics, fires, strikes, lockouts, shortages of material or labor, breakdown or

damage to machinery or equipment, accidents, any law or governmental order or other regulations or action taken by a governmental

entity, or default of any third party suppliers or provider of services or products, or any causes not within the Company’s

The 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.

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

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

The lease liability is initially

and subsequently recognized based on the present value of its future lease payments.

Variable 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

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

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.

recognizes the lease cost associated with its short-term leases on a straight-line basis over the lease term.

Under 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

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The 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.

Note 3 – Acquisition of Nora Pharma

On October 20, 2022, the Company acquired all

of the issued and outstanding shares of Nora Pharma Inc.

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

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 on the acquisition date.

Nora Pharma sells generic pharmaceutical products in Canada.

Nora Pharma’s operations

are authorized by a Drug Establishment License issued by Health Canada.

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

purchase price

Accounts receivable

1 unchanged sentence

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 )

Liabilities assumed

( 5,981,286 )

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.

Total Consideration

The value of the 3,700,000 common shares issued

as part of the consideration paid for Nora Pharma was determined based on the closing market price of the Company’s common shares

on the acquisition date, October 20, 2022 ($1.22 per share).

As part of the consideration paid for Nora Pharma,

the Company agreed to a $ 5,000,000 CAD ($ 3,632,000 USD) earnout amount payable to Mr.

Malek Chamoun, the seller of Nora Pharma.

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 .

the twelve-month period ended December 31, 2023, the Company paid an earn-out amount of $ 1,084,169 leaving a balance earn-out to be paid

of $ 2,547,831 at December 31, 2023.

Note 4 – Goodwill

The Company acquired Nora Pharma on October 20,

Allocation of the purchase price per ASC 805-20-25-1 yielded a goodwill amount of $ 18,326,719 .

The Company’s used a discounted

cash flow model which requires estimating future cash flows expected to be generated from the acquired entity, discounted to their present

value using a risk-adjusted discount rate and terminal values.

Assessing the recoverability of goodwill requires

the Company to make estimates and assumptions about sales, operating margins, growth rates and discount rates based on its budgets, business

plans, economic projections, anticipated future cash flows and marketplace data.

Management determined that there are inherent uncertainties

related to these factors as well as significant risks to cash flows due to ongoing geopolitical and geo-economics conflicts, making the

discounted cash flow model unreliable.

The following table presents the changes in the

carrying amount of goodwill of the Company as of December 31, 2022 and 2023.

The provisions of ASC 350-20-50-1 require the disclosure

of cumulative impairment.

As a result of the acquisition, a new basis in goodwill was recorded in accordance with ASC 805-10.

All impairments

shown in the table below have been recorded subsequent to the acquisition.

The Company had no goodwill on its balance sheet prior to

the acquisition:

Schedule of goodwill

Balance as of December 31, 2021

Acquisition of Nora Pharma (October 20, 2022)

( 18,326,719 )

Balance as of December 31, 2022

Additions in 2023

Balance as of December 31, 2023

Note 5 – Intangible Assets

Intangible assets, net, consisted of the following at December 31, 2022 and 2023:

Schedule of intangible assets

Balance as of December 31, 2021

Finite-Lived intangible assets

Dossier fee additions

Balance at December 31, 2022

Less accumulated amortization

Finite-lived intangible assets, net at December

Balance as of December 31, 2022

Dossier fee additions

Balance at December 31, 2023

Less accumulated amortization

Finite-lived intangible

assets, net at December 31, 2023

As of December 31, 2023, the estimated amortization expense of the

Company’s intangible assets for each of the next five years is as follows:

Schedule of estimated amortization

6 – Plant, Property and Equipment

plant and equipment are stated at cost.

Depreciation of property, plant and equipment begins in the month when the asset is placed into

service and is provided using the straight-line method for financial reporting purposes at rates based on the estimated useful lives

of the assets.

Estimated useful lives range from three to twenty years.

Property, plant and equipment consist of the following:

of property and equipment

Ended December 31,

Accumulated depreciation

property and equipment, net

Depreciation expense for the years ended December 31, 2023 and 2022

amounted to $ 110,701 and $ 20,641 , respectively.

Note 7 – Reverse Stock Splits

Effective February 9, 2022, the Company completed

a 1 for 200 reverse split of its common stock.

The Company had previously completed two 20 to 1 reverse stock splits, one in 2019 and

the other in 2020.

The Company’s financial statements reflect all three reverse stock splits on a retroactive basis for all periods

presented and for all references to common stock, unless specifically stated otherwise.

Note 8 – Capital Stock

The Company’s authorized capital is

comprised of 3,000,000,000

shares of common stock, par value $ 0.001 ,

and 30,000,000

shares of preferred stock, $ 0.10

As of December 31, 2023, the Company had authorized 1,000,000

shares of Series B Preferred Stock.

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

It has a liquidation

preference to the common stock equal to the stated value of $0.10, relative to the rights to the common stock, and gives the holder

the right to 1,000 votes per share.

As of December 31, 2023, 10,000

shares of Series B Preferred Stock were outstanding and held by the Company’s Chief Executive Officer.

On February 17, 2022, the Company completed a public

offering and 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”).

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.

remaining 10,000 shares of Series B Preferred Stock could not be voted pursuant to a warrant agent agreement relating to the Tradeable

Warrants (the “Warrant Agent Agreement”).

On October 12, 2023, the Company held a special meeting of the holders of the outstanding

Tradeable Warrants in which the holders of the majority of the outstanding Tradeable Warrants approved an amendment to the Warrant Agent

Agreement to eliminate the provision that prohibited the Company’s CEO from exercising his voting rights under the Series B Preferred

Stock, as well as to lower the exercise price of the Tradeable Warrants to $ 0.11 .

The Company entered into the amendment to the Warrant

Agent Agreement on October 18, 2023.

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 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

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 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.

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.

On 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 share.

On January 19, 2023, the Company announced a stock

repurchase program of up to $ 2 million (“Stock Repurchase Program”).

During the six months ended June 30, 2023, the Company

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 .

repurchased common shares were cancelled and returned to treasury reducing the number of issued and outstanding shares from 22,585,632

to 22,139,921.

On May 16, 2023, the Company completed a private

placement pursuant to a securities purchase agreement with an institutional investor for gross proceeds of approximately $ 5 million,

before deducting fees to the placement agent and other offering expenses payable by the Company.

The net proceeds received by the Company

were $ 4,089,218 .

In connection with the private placement, the Company issued (i) 2,450,000 shares of common stock, (ii) 3,502,381 pre-funded

warrants (the “May Pre-Funded Warrants”), and (iii) investor warrants (the “May Warrants”) to purchase

up to 11,904,762 shares of common stock at $0.59 per share.

Each share of common stock and accompanying two May Warrants were

sold together at a combined offering price of $0.84 and each May Pre-Funded Warrant and accompanying two May Warrants were sold

together at a combined offering price of $0.839.

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

The May Pre-Funded Warrants are immediately exercisable, at a nominal exercise price

of $0.001, and may be exercised at any time until all of the May Pre-Funded Warrants are exercised in full.

The May Warrants have an exercise price of $0.59 per share (subject to adjustment as set forth therein), are exercisable upon issuance and will expire

five and a half years from the date of issuance.

In 2022 and 2023, the Company issued a total of

10,793,369 shares of common stock in connection with warrant exercises for aggregate net proceeds of $ 13,196,681 .

In July 2023, the Company repurchased a total of

68,012 shares of common stock on the open market under the Stock Repurchase Program announced on January 19, 2023, at an average price

of $0.5046 per share for a total cost of $ 34,321 .

In October 2023, the 68,012 repurchased common shares were cancelled and returned to

treasury reducing the number of issued and outstanding shares from 25,746,302 to 25,678,290.

On November 16, 2023, the Company issued 2,346,000

shares of common stock and received net proceeds of $ 2,346 in connection with the exercise of all 2,346,000 remaining May Pre-Funded Warrants

at the nominal exercise price of $ 0.001 per share.

As of December 31, 2023 and December 31, 2022,

the Company has a total of 28,024,290 and 22,585,632 shares of common stock issued and outstanding, respectively.

The Company has declared no dividends since inception.

Note 9 – 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.

In 2022 and 2023, the Company completed four financing

events, and in connection therewith, it issued warrants as follows:

Schedule of warrants issued with financing

Exercise Price

Pre-Funded Warrants

Tradeable Warrants

February 2027

Investor Warrants

April Warrants

May Pre-Funded Warrants

November 2028

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

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.

As of December 31, 2023, all of the Pre-Funded

Warrants and a total of 3,138,507 Tradeable Warrants, 2,802,703 Investor Warrants, and all of the May Pre-Funded Warrants were exercised

resulting in aggregate proceeds of $ 13,196,681 received by the Company.

The Company’s outstanding warrants at December 31, 2023 consisted

of the following:

Schedule of warrants outstanding

Exercise Price

Tradeable Warrants

February 2027

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

November 2028

October 12, 2023, the Company held a special meeting of the holders of its outstanding Tradeable Warrants in which a majority of

the holders approved an amendment to the Warrant Agent Agreement to reduce the exercise price of the Tradeable Warrants from $2.22

to $0.11 per warrant.

The amendment was executed on October 18, 2023.

Note 10 – Earnings Per Share

The following table sets forth the computation

of basic and diluted net income per share for the years ended December 31:

Schedule of earnings per share computation

Net gain (loss) attributable to common stock

$ ( 4,506,044 )

$ ( 26,744,440 )

Basic weighted average outstanding

shares of common stock

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

Dilutive weighted average outstanding shares of common stock

Net gain (loss) per share attributable to common stock

Note 11 – Income Taxes

The components of the provision for income taxes were as follows:

Schedule of provision for income taxes

Company’s effective tax rate differs from the federal statutory rate as follows:

Schedule of income tax expense

Pre-Tax Book Income

$ ( 826,953 )

Permanent Adjustments

Change in Valuation Allowance

Foreign Tax Rate Differential

Provision to Return Adjustments

The components of the net deferred tax assets and liabilitie were

Schedule of components of net deferred tax assets

Deferred Tax Assets:

Operating Loss, Credits and Carryforwards

Net Operating Loss, Credits and Carryforwards

Research and Development

Lease Liability

Valuation Allowance

( 6,397,374 )

1 unchanged sentence

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.

Right-of-Use Asset

Deferred Tax Liabilities

Net Deferred Tax Liability

Note 12 – Leases

The 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

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

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.

variable lease payments are not included in lease payments used to determine lease liability and are recognized as variable costs when

Amounts reported on the balance sheet as of December

31, 2023 were as follows:

Schedule of lease information

Operating lease ROU asset

3 unchanged sentences

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

Amounts 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.

Maturities of lease liabilities under non-cancellable

operating leases at December 31, 2023 are as follows:

Schedule of maturities of lease liabilities

Note 13 – Management and Director

The Company paid its officers cash compensation

totaling $ 1,515,000 and $ 1,785,000 for the years ended December 31, 2023 and 2022, respectively.

Of these amounts attributable to the

Company’s CEO, $ 0 and $ 60,000 , respectively was paid to Advanomics Corporation, a company controlled by the CEO of the Company.

The Company paid its directors cash compensation

totaling $ 400,000 and $ 300,000 for the years ended December 31, 2023 and 2022, respectively.

Note 14 – Subsequent Events

On February 15, 2024, the Company closed a firm commitment underwritten

public offering with gross proceeds to the Company of approximately $10.0 million.

The offering consisted of 71,428,571 Units, consisting

of (a) 26,428,571 Common Units, with each Common Unit consisting of one share of our common stock, one-tenth

(1/10) of a Series A warrant to purchase one share of common stock (“Series A Warrant”) and two-tenths (2/10) of a Series

B warrant to purchase one share of common stock (“Series B Warrant”), and (b) 45,000,000 Pre-Funded Units, with each Pre-Funded

Unit consisting of one pre-funded warrant to purchase one share of common stock, one-tenth of a Series A Warrant and two-tenths of a Series

The Pre-Funded Warrants are immediately exercisable at $0.001 per share and may be exercised at any time until exercised in

The initial exercise price of each Series A Warrant is $2.10 per share of common stock or pursuant to an alternative cashless exercise

The Series A Warrants are exercisable immediately and expire 30 months after the initial issuance date.

The initial exercise price

of each Series B Warrant is $2.38 per share of common stock.

The Series B Warrants are exercisable immediately and expire 60 months after

the initial issuance date.

February 11, 2024, the Company bought back the 11,904,762 May Warrants from the holder, a single entity, for an aggregate purchase price

of $2,361,596.

Upon the closing of the transaction, the May Warrants were deemed cancelled and terminated in all respects.

February 11, 2024, the Company entered into securities purchase agreements (the “April Warrants Purchase Agreements”) with

the holders of warrants, dated April 28, 2022 (the “April Warrants”) to purchase an aggregate of 9,725,690 shares of common

stock of the Company.

Pursuant to the April Warrant Purchase Agreements, the Company bought back from the holders the April Warrants

for a purchase price of $0.08 per April Warrant, for an aggregate purchase price of $778,055.

Upon the closing of the April Warrant Purchase

Agreements, which occurred on February 12, 2024, the Company paid the purchase price to the holders, and the April Warrants were deemed

cancelled and terminated in all respects.

February 8, 2024, the Company sold 20,000 shares of Series B Preferred Stock to its CEO for the stated value of $0.10 per share.

March 4, 2024, the Company sold 100,000 shares of Series B Preferred Stock to its CEO for the stated value of $0.10 per share.

On March 4, 2024, the Company’s board of

directors, and Company’s chief executive officer, as the holder of the majority of the voting power of the Company’s stockholders,

approved an up to 1-for-200 reverse split of the Company’s common stock in order for the Company to become compliant with Nasdaq’s

$1.00 minimum bid price for the listed common shares.

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