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Item 7. Management’s Discussion and Analysis

2025-04-01 compared with 2024-03-28 · 50 added, 80 removed, 36 unchanged (78% of the section changed)

8 unchanged sentences

Results of Operations

Comparison of Results of Operations for the

fiscal years ended December 31, 2023 and 2022

During our fiscal year ended December 31, 2023,

we generated revenues of $24,092,787, compared to revenues of $4,345,603 in 2022.

The increase was the result of twelve months of Nora

Pharma sales included in the 2023 results compared to only seventy-two days of sales in 2022 (October 20, 2022, the date of acquisition

of Nora Pharma, through December 31, 2022).

Comparison of Results of

Operations for the fiscal years ended December 31, 2024 and 2023

our fiscal year ended December 31, 2024, we generated revenues of $34,874,283, compared to revenues of $24,092,787 in 2023.

of approximately $10.8 million was the result of expansion of Nora Pharma sales efforts in the Province of Quebec as well as entry into

the Provinces of Ontario, Alberta and British Columbia.

Another contributing factor was the increased number of products offered by Nora

Pharma, which increased by 5 during 2024.

The cost of sales in 2024 and 2023 for generating these revenues was $24,204,489 (69.4%) and

$15,753,616 (65.4%), respectively.

General and administrative (“G&A”)

expenses for our fiscal year ended December 31, 2023, were $13,124,470, compared to $28,697,325 during our fiscal year ended December

31, 2022, a decrease of $15,572,855.

However, excluding the one-time impairment of goodwill in the amount of $18,326,719 from the 2022

G&A expenses, reveals an increase in G&A expenses of $2,753,864 in 2023.

This increase is due to G&A expenses incurred by

Nora Pharma during all of 2023, compared to only 72 days of G&A expenses included in 2022.

We had interest income of $811,974 in 2023, compared

to interest income of $518,650 in 2022.

We incurred $137,308 in interest expense in 2023, compared to $39,412 in interest expense in 2022.

As a result, we incurred a net loss of $4,506,044

for the year ended December 31, 2023, compared to a net loss of $26,744,440 for the year ended December 31, 2022.

The 4% increase in the cost of sales in 2024 was due to higher professional allowances incurred on

the sale of products outside the Province of Quebec.

In the Province of Quebec, professional allowances are capped by government regulations.

and administrative (“G&A”) expenses for our fiscal year ended December 31, 2024, were $16,481,915, compared to $13,124,470

during our fiscal year ended December 31, 2023, an increase of $3,357,445.

This relatively modest increase occurred in connection with

Nora Pharma’s expansion of sales operations.

had interest income of $496,003 in 2024, compared to interest income of $811,974 in 2023.

The decrease was due to reduced interest rates

and less cash on hand in 2024.

a result, we incurred a net loss of $5,134,116 for the year ended December 31, 2024, compared to a net loss of $4,506,044 for the year

ended December 31, 2023.

Liquidity and Capital Resources

As of December 31, 2024, we had cash and cash equivalents of $9,686,529.

On February 17, 2022, we completed an underwritten

public offering of common stock and warrants for gross proceeds of $8 million.

We received net proceeds of approximately $6.8 million

from the offering.

On March 14, 2022, we completed a private placement

of common stock and warrants for gross proceeds of $8 million.

We received net proceeds of approximately $6.8 million from the private

On April 28, 2022, we completed a private placement

of common stock and warrants for gross proceeds of approximately $19.5 million.

We received net proceeds of approximately $16.8 million

from the private placement.

During the fiscal years ended December 31, 2022

and 2023, we received aggregate proceeds of $13,196,681 in connection with warrant exercises.

On May 16, 2023, we completed a private placement

of common stock and warrants for gross proceeds of approximately $5 million.

We received net proceeds of approximately $4.1 million from

the private placement.

Cash flows used in investing activities were $656,150

during the year ended December 31, 2023, compared to $14,619,390 during our fiscal year ended December 31, 2022.

The reason for the decrease

was due to the acquisition of Nora Pharma which took place on October 20, 2022.

Net cash flows provided by financing activities were $3,425,587

in 2023, compared to $39,465,107 in 2022.

The decrease was primarily a result of three (3) rounds of financing which took place in February,

March, and April 2022 and only one (1) relatively small financing in 2023.

Net cash used in operations was $8,775,111 in 2023, compared

to $5,248,358 in 2022.

The increase was due to expansion of Nora Pharma drugs portfolio.

We are not generating adequate revenues from our

operations to fully implement our business plan as set forth herein.

the fiscal years ended December 31, 2023 and 2024, we received aggregate proceeds of $3,558,812 in connection with warrant exercises.

May 16, 2023, we completed a private placement of common stock and warrants for gross proceeds of approximately $5 million.

net proceeds of approximately $4.1 million from the private placement.

February 11, 2024, we redeemed all of the April Warrants and all of the May Investor Warrants for an aggregate purchase price of $3,139,651.

February 15, 2024, we completed an underwritten public offering and in connection therewith, we issued an aggregate of 35,714 shares

of common stock and received net proceeds of $8,522,411.

January 3, 2025, we issued 127,443 shares of common stock upon the exercise of 127,443 Series B Warrants and received $355,298 in net

flows used in investing activities were $2,320,847 during the year ended December 31, 2024, compared to $656,150 during our fiscal year

ended December 31, 2023.

The reason for the increase was due to the acquisition of intangible assets and equipment for Nora Pharma operations.

Net cash flows provided by financing activities were $9,289,507 in 2024, compared to $3,425,587 in 2023.

The increase was primarily due

to a larger financing event in 2024 than in 2023 and the exercise of more warrants in 2024 than in 2023.

Net cash used in operations

was $12,531,180 in 2024, compared to $8,775,111 in 2023.

The increase was due to expansion of Nora Pharma’s operations and increase

in inventory.

We believe our existing cash will be sufficient to fund our pharmaceuticals

2 unchanged sentences

We have no committed sources of capital and we anticipate that we will need to raise additional capital in the future, including for further

research and development activities and possibly clinical trials, as well as expansion of our generic pharmaceuticals operations.

research and development activities and possibly clinical trials, as well as expansion of our generic pharmaceutical operations.

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

13 unchanged sentences

operating or capital leases at the inception of the lease.

Our wholly owned subsidiary, Nora Pharma, currently

occupies a 23,500 square foot facility located at 1565 Boulevard Lionel-Boulet, Varennes, Quebec, Canada, J3X 1P7 pursuant to a lease

agreement that expires in January 2030, with an option to extend for 5 years.

This site is composed of 18,500 square feet of warehouse

space and 5,000 square feet of executive office space.

The facility houses all administrative, marketing, quality control, regulatory

affairs, and other operations personal, as well as a Health Canada licensed warehouse space.

We pay a monthly rent of $27,250 CAD (approximately

$19,900 USD), including taxes.

Recently Adopted Accounting Standards

In February 2020, the FASB issued ASU 2020-02, Financial

Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin

119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No.

2016-02, Leases (Topic 842) which amends

the effective date of the original pronouncement for smaller reporting companies.

ASU 2016-13 and its amendments will be effective for

the Company for interim and annual periods in fiscal years beginning after December 15, 2022.

The Company believes the adoption will modify

the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations.

is in the process of determining the effects adoption will have on its consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt

– Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity

(Subtopic 815 – 40) , (“ASU 2020-06”).

ASU 2020-06 simplifies the accounting for certain financial instruments with

characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity.

The ASU2020-06

amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal

The Company is evaluating the impact of this guidance on its unaudited consolidated financial statements.

Off-Balance Sheet Arrangements

Our wholly owned subsidiary, Nora Pharma,

currently occupies a 23,500 square foot facility located at 1565 Boulevard Lionel-Boulet, Varennes, Quebec, Canada, J3X 1P7 pursuant

to a lease agreement that expires in January 2030, with an option to extend for 5 years.

This site is composed of 18,500 square feet

of warehouse space and 5,000 square feet of executive office space.

The facility houses all administrative, marketing, quality

control, regulatory affairs, and other operations personal, as well as a Health Canada licensed warehouse space.

We pay monthly rent

of $27,250 CAD (approximately $19,900 USD), including taxes.

We treat this lease as an operating lease but account for liabilities and benefits resulting therefrom.

Recently Adopted Accounting

have adopted all new accounting standards impacting operations.

Sheet Arrangements

We have not entered into any off-balance sheet

3 unchanged sentences

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 7. Management’s Discussion and Analysis