SUNSHINE BIOPHARMA INC. FORM 10-Q
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2025
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission File Number: 001-41282
SUNSHINE BIOPHARMA INC.
(Exact name of registrant as specified in its charter)
Colorado
20-5566275
(State of other jurisdiction of incorporation)
(IRS Employer ID No.)
333 Las Olas Way
CU4 Suite 433
Fort Lauderdale , FL 33301
(Address of principal executive offices)
( 954 ) 330-0684
(Issuer’s Telephone Number)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange on Which Registered
Common Stock
Common Stock Purchase Warrants
SBFM
SBFMW
The NASDAQ Stock Market LLC
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days: Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See
the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and
“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer ☒
Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
The number of shares of the registrant’s
common stock, par value $0.001, issued and outstanding as of May 15, 2025, was 4,555,945 shares.
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements
3
Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024
3
Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 (Unaudited)
4
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (Unaudited)
5
Consolidated Statement of Shareholders' Equity for the Three Months Ended March 31, 2025 and 2024 (Unaudited)
6
Notes to Unaudited Consolidated Financial Statements
7
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
16
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
22
Item 4.
Controls and Procedures
22
PART II. OTHER INFORMATION
Item 1.
Legal Proceedings
23
Item 1A.
Risk Factors
23
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
23
Item 3.
Defaults Upon Senior Securities
23
Item 4.
Mine Safety Disclosures
23
Item 5.
Other Information
23
Item 6.
Exhibits
23
Signatures
24
2
PART I. FINANCIAL
INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Sunshine Biopharma Inc.
Consolidated Balance Sheets
March 31,
December 31,
2025
2024
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$ 8,124,610
$ 9,686,529
Accounts receivable
3,445,242
3,868,418
Inventory
11,857,135
11,278,105
Deposits
70,457
–
Prepaid expenses
983,536
1,133,297
Total Current Assets
24,480,980
25,966,349
Long-Term Assets:
Property & equipment
519,787
546,055
Intangible assets
3,193,214
3,019,717
Deferred tax asset
92,234
92,234
Right-of-use-asset
900,890
936,037
Total Long-Term Assets
4,706,125
4,594,043
TOTAL ASSETS
$ 29,187,105
$ 30,560,392
LIABILITIES
Current Liabilities:
Accounts payable & accrued expenses
$ 5,024,541
$ 5,543,085
Earnout payable
295,797
295,797
Income tax payable
228,115
268,276
Right-of-use-liability
213,983
207,756
Total Current Liabilities
5,762,436
6,314,914
Long-Term Liabilities:
Right-of-use-liability
722,199
744,724
Total Long-Term Liabilities
722,199
744,724
TOTAL LIABILITIES
6,484,635
7,059,638
SHAREHOLDERS' EQUITY
Preferred Stock Series B $ 0.10 par value per share; 1,000,000 shares authorized; 130,000 shares issued and outstanding
13,000
13,000
Common Stock $ 0.001 par value per share; 3,000,000,000 shares authorized; 2,707,541 and 2,580,098 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively
2,707
2,580
Capital paid in excess of par value
93,710,078
93,354,907
Accumulated comprehensive income
( 803,770 )
( 829,959 )
Accumulated (Deficit)
( 70,219,545 )
( 69,039,774 )
TOTAL SHAREHOLDERS' EQUITY
22,702,470
23,500,754
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 29,187,105
$ 30,560,392
See Accompanying Notes To These
Financial Statements
3
Sunshine Biopharma Inc.
Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
March 31,
March 31,
2025
2024
Sales
$ 8,901,341
$ 7,541,046
Cost of sales
6,170,915
5,186,709
Gross profit
2,730,426
2,354,337
General & Administrative Expenses:
Accounting
293,759
352,006
Consulting
365,287
47,401
Director fees
100,000
100,000
Legal
27,199
221,998
Marketing
398,361
198,046
Office
925,878
911,211
R&D
215,277
222,033
Salaries
1,525,446
1,533,712
Taxes
110,176
75,901
Depreciation & amortization
64,793
42,618
Total General & Administrative Expenses
4,026,176
3,704,926
(Loss) From Operations
( 1,295,750 )
( 1,350,589 )
Other Income:
Foreign exchange
451
( 5,767 )
Interest income
75,367
144,089
Interest expense
–
( 49,181 )
Total Other Income
75,818
89,141
Net (loss) before income taxes
( 1,219,932 )
( 1,261,448 )
Provision for income taxes
( 40,161 )
22,353
Net (Loss)
$ ( 1,179,771 )
$ ( 1,283,801 )
Foreign exchange translation
26,189 )
( 543,705 )
Comprehensive (Loss)
$ ( 1,153,582 )
$ ( 1,827,506 )
Basic and diluted (Loss) per common share
$ ( 0.44 )
$ ( 2.00 )
Weighted average common shares outstanding (basic & diluted)
2,703,293
641,310
See Accompanying Notes To These
Financial Statements
4
Sunshine Biopharma Inc.
Consolidated Statements of Cash Flows (Unaudited)
March 31,
March 31,
2025
2024
Cash Flows From Operating Activities:
Net (Loss)
$ ( 1,179,771 )
$ ( 1,283,801 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
64,793
42,618
Stock issued for services
–
12,000
Accounts receivable
426,673
( 536,261 )
Inventory
( 568,834 )
( 2,100,281 )
Deposits
( 70,457 )
–
Prepaid expenses
139,931
( 568,981 )
Accounts Payable & accrued expenses
( 486,009 )
1,293,372
Income tax payable
( 40,161 )
( 43,824 )
Net Cash Flows (Used In) Operating Activities
( 1,713,835 )
( 3,185,158 )
Cash Flows From Investing Activities:
Reduction in right-of-use asset
35,993
31,066
Purchase of intangible assets
( 204,527 )
( 636,865 )
Purchase of equipment
( 7,490 )
( 62,937 )
Net Cash Flows (Used In) Investing Activities
( 176,024 )
( 668,736 )
Cash Flows From Financing Activities:
Proceeds from public offering net (common stock)
–
8,522,411
Exercise of warrants
355,297
45,000
Purchase of treasury stock
–
( 3,139,651 )
Lease liability
( 17,160 )
( 29,611 )
Net Cash Flows Provided by Financing Activities
338,137
5,398,149
Cash and Cash Equivalents at Beginning of Period
9,686,529
16,292,347
Net increase (decrease) in cash and cash equivalents
( 1,551,722 )
1,544,254
Effect of exchange rate changes on cash
( 10,197 )
141,312
Foreign currency translation adjustment
–
( 543,705 )
Cash and Cash Equivalents at End of Period
$ 8,124,610
$ 17,434,208
Supplementary Disclosure of Cash Flow Information:
Cash paid for income taxes
$ –
$ 956,012
Stock issued for services
$ –
$ 12,000
See Accompanying Notes To These
Financial Statements
5
Sunshine Biopharma Inc.
Consolidated Statements of Shareholders' Equity
(Unaudited)
Three Months
Number Of Common Shares
Common
Capital Paid in Excess of Par
Number Of Preferred Shares
Preferred
Compre- hensive
Accumulated
Periods
Issued
Stock
Value
Issued
Stock
Income
Deficit
Total
Balance December 31, 2024
2,580,098
$ 2,580
$ 93,354,907
130,000
$ 13,000
$ ( 829,959 )
$ ( 69,039,774 )
$ 23,500,754
Exercise of warrants
127,443
127
355,171
–
–
–
–
355,298
Net (loss)
–
–
–
–
–
( 26,189 )
( 1,179,771 )
( 1,153,582 )
Balance at March 31, 2025
2,707,541
$ 2,707
$ 93,710,078
130,000
13,000
$ ( 803,770 )
$ ( 70,219,545 )
$ 22,702,470
Balance December 31, 2023
280,243
$ 280
$ 84,415,634
10,000
$ 1,000
$ 696,105
$ ( 63,905,658 )
$ 21,207,361
Preferred Stock issued to related party
–
–
–
120,000
12,000
12,000
Common stock and pre-funded warrants issued in an underwritten public offering, net of issuance costs
264,286
265
8,522,146
–
–
–
–
8,522,411
Exercise of warrants
450,000
450
44,550
–
–
–
–
45,000
Repurchase of warrants
–
–
( 3,139,651 )
–
–
–
–
( 3,139,651 )
Net (loss)
–
–
–
–
–
( 543,705 )
$ ( 1,283,801 )
( 1,827,506 )
Balance March 31, 2024
994,529
$ 995
$ 89,842,679
130,000
$ 13,000
$ 152,400
$ ( 65,189,459 )
$ 24,819,615
See Accompanying Notes To These
Financial Statements
6
Sunshine Biopharma Inc.
Notes to Unaudited Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
Note 1 – Description
of Business
The Company was 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. Upon completion of the reverse acquisition, the Company changed its
name to Sunshine Biopharma Inc. and began operating as a pharmaceutical company.
Sunshine Biopharma has two wholly owned subsidiaries:
(i) Nora Pharma Inc. (“Nora Pharma”), a Canadian corporation through which we currently have 70 generic prescription drugs
on the market in Canada, and (ii) Sunshine Biopharma Canada Inc. (“Sunshine Canada”), a Canadian corporation through which
we develop and sell nonprescription over-the-counter (“OTC”) supplements. The Company operates the two subsidiaries as a single
business segment.
The Company is not subject to material customer concentration
risks as it sells its products directly to pharmacies in several Canadian Provinces. However, Provincial governments in Canada reimburse
patients for their prescription drug 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 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 10, 2024, the Canadian federal government joined the generic drug reimbursement program as a payor under the Pharmacare
Act. This development further strengthened the Canadian generic drug market, which is the Company’s current focus.
In addition, the Company is engaged in the development
of the following proprietary drugs:
·
K1.1 mRNA, a lipid nano-particle (LNP) targeted for liver cancer
·
SBFM-PL4, a protease inhibitor for treatment of SARS Coronavirus infections
Note 2 – Basis of
Presentation
The unaudited financial statements of the Company for
the three months periods ended March 31, 2025 and 2024 have been prepared in accordance with accounting principles generally accepted
in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation
S-X. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring
adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of
operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The
balance sheet information as of December 31, 2024, was derived from the audited financial statements included in the Company's financial
statements as of and for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the Securities
and Exchange Commission (the “SEC”) on April 1, 2025. These financial statements should be read in conjunction with that report.
7
Note 3 – Reverse Stock
Splits
Effective April 17, 2024 and August 8, 2024, the Company
completed 1-for-100 and 1-for-20
reverse splits of its common stock, respectively. The Company had previously completed three (3) reverse stock splits including a 1-for-200
reverse split on February 9, 2022, and two 1-for-20 reverse splits, one in 2019 and the other in 2020. The Company’s financial
statements included in this report reflect all five (5) reverse stock splits on a retroactive basis for all periods presented and for
all references to common stock, unless specifically stated otherwise.
Note 4 – 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 pharmaceutical company. The purchase
price for the shares was $ 18,860,637 which was paid in cash ($ 14,346,637 ) and by the issuance of 1,850 shares of the Company’s common
stock valued at $ 4,514,000 or $2,440.00 per share. 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
$ 1,358,121
Inventory
3,181,916
Intangible assets
659,571
Equipment & furniture
210,503
Other assets
1,105,093
Total assets
6,515,204
Liabilities assumed
( 5,981,286 )
Net assets
533,918
Goodwill
18,326,719
Total Consideration
$ 18,860,637
The value of the 1,850 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 ($2,440.00 per share).
As
part of the consideration 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. The earnout
is payable in the form of twenty (20) payments of $250,000 CAD for every $1,000,000 CAD increase
in gross sales (as defined in the Purchase Agreement) above Nora Pharma’s June 30,
2022 gross sales, provided that his employment with the Company is not terminated pursuant
to the Company’s employment agreement with him. The total earnout amount of $3,632,000
has been recorded as a salary payable. During the fiscal year ended December 31, 2023, the
Company paid an earnout amount of $ 1,426,914 CAD (approximately $ 1,036,500 USD) for the fiscal
year ended December 31, 2022. On April 22, 2024, the Company paid another earnout amount
of $ 3,093,878 CAD (approximately $ 2,247,400 USD) for the fiscal year ended December 31, 2023.
As of March 31, 2025, the remaining earnout balance was $ 479,208 CAD ($ 295,797 USD).
8
Note 5 – Intangible Assets
Intangible assets consisted of the following:
Schedule of intangible assets
March
31,
2025
December
31,
2024
Intangible assets at beginning of
period
$ 3,019,717
$ 1,444,259
Purchase of additional
intangible assets (drug licenses & dossiers)
323,655
1,694,585
Total
3,343,372
3,138,844
Less accumulated amortization
( 150,158 )
( 119,127 )
Intangible assets, net
$ 3,193,214
$ 3,019,717
Note 6 – Plant, Property and Equipment
Property, 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:
Schedule of property and equipment
March 31,
December 31,
2025
2024
Equipment
$ 337,119
$ 336,880
Computer equipment
56,861
53,531
Furniture and fixtures
53,096
50,686
Leasehold improvements
88,386
88,306
Vehicles
353,505
353,185
Total
888,967
882,588
Less: Accumulated depreciation
( 369,180 )
( 336,533 )
Plant, property and equipment,
net
$ 519,787
$ 546,055
Note 7 – Inventory
Inventory is comprised of the following:
Schedule of inventory
March 31,
December 31,
2025
2024
Finished goods
$ 12,127,158
$ 11,352,446
Allowance for obsolete
inventory
$ ( 270,023 )
$ ( 74,341 )
Total Inventory, net
of allowance
$ 11,857,135
$ 11,278,105
9
Note 8 – Leases
The Company has obligations as a lessee for warehouse
and office space with initial non-cancellable terms in excess of one year. The Company classified the lease as an operating lease. The
lease contains a renewal option for a period of five years. Because the Company is certain to exercise the renewal option, the optional
period is included in determining the lease term, and associated payments under the renewal option are included in the lease payments.
The Company’s lease does not include termination options for either party to the lease or restrictive financial or other covenants.
Payments due under the lease contract include fixed payments plus a variable payment. The Company’s office space lease requires
it to make variable payments for the Company’s proportionate share of building’s property taxes, insurance, and common area
maintenance. These variable lease payments are not included in lease payments used to determine lease liability and are recognized as
variable costs when incurred.
Amounts reported on the balance sheet as of March
31, 2025 were as follows:
Schedule of lease information
Operating lease ROU asset
900,890
Operating Lease liability - Short-term
213,983
Operating lease liability - Long-term
722,199
Remaining lease term
4 Years 9 Months
Discount rate
6 %
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 March 31, 2025 are as follows:
Schedule of maturities of lease liabilities
2025
$
161,623
2026
$
205,587
2027
$
203,930
2028
$
184,762
2029
$
175,144
Thereafter
$
14,166
Note 9 – Income Taxes
The Company’s income tax (expense) /
benefit of $ 40,161
and $ 22,353
for the three months ended March 31, 2025 and March 31, 2024, respectively, is primarily due to operations outside of the United
States and changes in valuation allowance related to certain deferred tax assets generated or utilized in the applicable period.
Deferred tax assets are regularly reviewed for
recoverability by jurisdiction and valuation allowances are established based on historical and projected future taxable losses and the
expected timing of the reversal of existing temporary differences. The Company has recorded valuation allowances against the majority
of its deferred tax assets of March 31, 2025, and the Company expects to maintain these valuation allowances until there is sufficient
evidence that future earnings can be achieved, which is uncertain at this time.
The Company's consolidated financial statements
contain various tax related entries as a result of operations of the two Canadian subsidiaries and are in compliance with Canadian tax
laws.
The Company only recognizes tax benefits from an
uncertain tax position if it is more likely than not that the tax position will be sustained on examination by the taxing authorities,
based on the technical merits of the position. The tax benefits recognized in the financial statement from such a position are measured
based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. To date, the
Company has not recognized such tax benefits in its financial statements.
10
Note 10 – Management
and Director Compensation
The
Company paid its officers aggregate cash compensation of $ 269,496 and $ 262,486 for the three-month periods ended March 31, 2025 and 2024,
respectively.
The
Company paid its directors aggregate cash compensation of $ 100,000
for each of the three-month periods ended March 31, 2025 and
2024 ($20,000 per director).
Note 11 – 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 par value. As of March 31,
2025, 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 equal to the stated value of $0.10 per share, relative to the common stock and gives the holder the right
to 1,000 votes per share. As of March 31, 2025, 130,000 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 . Pursuant to the public offering, the Company issued and sold an aggregate of 941 shares
of common stock and 2,051 warrants to purchase shares of common stock (the “Tradeable Warrants”).
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) 1,150 shares of its
common stock together with investor warrants (“Investor Warrants”) to purchase up to 1,150 shares of common stock, and (ii)
651 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 651 shares of common stock. Each share of common stock and accompanying Investor Warrant was
sold together at a combined offering price of $4,440 and each Pre-Funded Warrant and accompanying Investor Warrant were sold together
at a combined offering price of $4,438. The Pre-Funded Warrants were immediately exercisable, at an exercise price of $2.00, and could
be exercised at any time until all of the Pre-Funded Warrants were exercised in full. The Investor Warrants have an initial exercise price
of $4,440 per share (subject to adjustment), 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) 1,236 shares of
common stock together with warrants (“April Warrants”) to purchase up to 2,472 shares of common stock, and (ii) 1,195 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 2,390 shares of common stock. Each share of common stock and accompanying two April Warrants were sold together
at a combined offering price of $8,020 and each Pre-Funded Warrant and accompanying two April Warrants were sold together at a combined
offering price of $8,018. The Pre-Funded Warrants were immediately exercisable at an exercise price of $2.00, 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 $7,520 per share (subject
to adjustment), are exercisable upon issuance and will expire five years from the date of issuance.
On October 20, 2022, the Company issued 1,850 shares
of common stock as part of the acquisition of Nora Pharma. These shares were valued at $ 4,514,000 , or $2,440 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 2,228 shares of common stock at an average price of $2,274.20 per share for a total cost of $ 506,822 . The 2,228
repurchased shares were cancelled and returned to treasury, reducing the number of issued and outstanding shares from 11,292 to 9,064.
11
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) 1,225 shares of common stock, (ii) 1,751 pre-funded warrants (the “May
Pre-Funded Warrants”), and (iii) investor warrants (the “May Warrants”) to purchase up to 5,952 shares of common stock.
Each share of common stock and accompanying two May Warrants were sold together at a combined offering price of $1,680 and each May Pre-Funded
Warrant and accompanying two May Warrants were sold together at a combined offering price of $1,678. The May Pre-Funded Warrants are immediately
exercisable, at an exercise price of $2.00, 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 $1,180 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 5,396
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 34
shares of common stock under the Stock Repurchase Program announced on January 19, 2023, at an average price of $1,009.20 per share for
a total cost of $ 34,321 . In October 2023, the 34 repurchased shares were cancelled and returned to treasury reducing the number of issued
and outstanding shares from 12,873 to 12,839.
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 from $4,440 to $220. The Company
entered into the amendment to the Warrant Agent Agreement on October 18, 2023.
On November 16, 2023, the Company issued 1,173 shares
of common stock and received net proceeds of $ 2,346 in connection with the exercise of all 1,173 remaining May Pre-Funded Warrants at
an exercise price of $2.00 per share.
On
February 8, 2024, the Company issued 20,000 shares of Series B Preferred Stock to the Company’s CEO for a purchase price of $ 0.10
per share.
On
February 15, 2024, the Company completed an underwritten public offering and in connection therewith it issued an aggregate of 35,714
shares of common stock and received $ 8,522,411 in net proceeds. In connection with this offering, the Company issued 22,500 pre-funded
warrants (the “2024 Pre-Funded Warrants”) exercisable at $2.00 per share, 3,986 Series A Warrants exercisable at $4,200.00
per share (subject to adjustment), or pursuant to an alternative cashless exercise provision, and 7,973 Series B Warrants exercisable
at $4,760.00 per share, subject to adjustment. As of March 31, 2025, (i) all of the 2024 Pre-Funded Warrants have been exercised resulting
in the Company receiving net proceeds of $45,000, (ii) all of the Series A Warrants have been exercised pursuant to the alternative cashless
provision resulting in the Company receiving $0 in net proceeds, and (iii) 11,566,549 Series B Warrants remained outstanding and their
exercise price had been adjusted to $2.7879 as a result of two reverse stock splits which were conducted subsequent to their issuance.
The Series B Warrants expire in February 2029.
On
March 4, 2024, the Company issued 100,000 shares of Series B Preferred Stock to the Company’s CEO for a purchase price of $ 0.10
per share.
12
In April and May 2024, the Company issued 1,120,784
shares of common stock in connection with the cashless exercise of all of the Series A Warrants and received $ 0 in net proceeds.
On August 16, 2024, the Company issued 150,285 shares
of common stock in connection with the rounding up of fractional shares following the reverse stock splits of April 17, 2024 and August
8, 2024.
In August and September 2024, the Company issued 678,865
shares of common stock in connection with the exercise of 678,865 Series B Warrants and received aggregate net proceed of $ 1,895,610 .
In November and December 2024, the Company issued 580,438
shares of common stock in connection with the exercise of 580,438 Series B Warrants and received aggregate net proceed of $ 1,618,203 .
On January 3, 2025, the Company issued 127,443 shares
of common stock upon the exercise of 127,443 Series B Warrants and received $ 355,298 in net proceeds.
As of March 31, 2025 and December 31, 2024, the
Company had 2,707,541 and 2,580,098 shares of common stock issued and outstanding, respectively.
The Company has declared no dividends since inception.
Note 12 – 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.
13
In 2022, 2023, and 2024, the Company completed five
(5) financing events, and in connection therewith, it issued warrants as follows:
Schedule of warrants
issued with financing
Type
Number
Exercise
Price
Expiry
Date
2022 Pre-Funded Warrants
1,846
$ 2.00
Unlimited
Tradeable Warrants
2,051
$ 4,440.00
February
2027
Investor Warrants
1,801
$ 4,440.00 **
March
2027
April Warrants
4,862
$ 7,520.00
April
2027
May Pre-Funded Warrants
1,751
$ 2.00
Unlimited
May Investor Warrants
5,952
$ 1,180.00
November
2028
2024 Pre-Funded Warrants
22,500
$ 2.00
Unlimited
Series A Warrants
3,986 *
$ 4,200.00 *
August
2026
Series
B Warrants
7,973 *
$ 4,760.00 *
February
2029
*
Subject to adjustment.
The Series B Warrants adjusted to a total of 13,613,297 warrants exercisable at $2.7879 per share following the Company’s 1-for-20
reverse stock split on August 8, 2024.
**
Subject to adjustment.
As of March 31, 2025, all of the 2022 Pre-Funded Warrants,
all of the May Pre-Funded Warrants, all of the 2024 Pre-Funded Warrants, a total of 1,569 Tradeable Warrants, 1,401 Investor Warrants,
all of the Series A Warrants, and 1,259,303 Series B Warrants (as adjusted) were exercised resulting in aggregate net proceeds of $ 16,752,492
received by the Company.
On February 11, 2024, the Company redeemed all of the
April Warrants and all of the May Investor Warrants for an aggregate purchase price of $ 3,139,651 .
On January 3, 2025, the Company issued 127,443 shares
of common stock upon the exercise of 127,443 Series B Warrants and received $ 355,298 in net proceeds.
The Company’s outstanding warrants as of March
31, 2025 consisted of the following:
Schedule of warrants outstanding
Type
Number
Exercise
Price
Expiry
Date
Tradeable Warrants
482
$ 220.00
February
2027
Investor Warrants
400
$ 4,000.00 **
March
2027
Series B Warrants
12,226,549 *
$ 2.7879 *
February
2029
*
As adjusted and subject to further adjustments. In a subsequent event on April 2, 2025, 660,000 Series B Warrants were exercised leaving 11,566,549 warrants remaining outstanding.
**
As adjusted.
14
Note 13 – Earnings
Per Share
The following table sets forth the computation of basic
and diluted net income per share for the quarters ended March 31:
Schedule of computation of basic and diluted net income per share
2025
2024
Net gain (loss)
attributable to common stock
$ ( 1,179,771 )
$ ( 1,283,801 )
Weighted average common
shares outstanding (basic & diluted)
2,703,293
641,310
Basic
and diluted gain (loss) per share attributable to common stock
$ ( 0.44 )
$ ( 2.00 )
Note 14 – Subsequent
Events
On
April 2, 2025, the Company issued 660,000 shares of common stock upon the exercise of 660,000 Series B Warrants and received $1,840,014
in net proceeds.
On
April 3, 2025, the Company completed a registered direct offering at $2.07 per common share
(or pre-funded warrant) for gross proceeds of approximately $2.46 million, before deducting
fees to the placement agent and other offering expenses payable by the Company. The net proceeds
received by the Company were $1,828,596.
As
a result of the financing event of April 3, 2025, the number of outstanding Series B Warrants and the exercise price thereof were adjusted
from 11,566,549 warrants at an exercise price of $2.7879 to 15,577,962 warrants with an exercise price of $2.07 per share, in accordance
with the terms of the Series B Warrants.
On
April 14, 2025, the Company terminated the employment of Mr. Malek Chamoun, president of
the Company’s wholly owned Canadian subsidiary, Nora Pharma Inc., and appointed Ms.
Catherine Peloquin as the new president of Nora Pharma. On April 17, 2025, the Company received
a demand letter (the “Demand Letter”) from the attorneys of Mr. Chamoun requesting
that the Company pay to Mr. Chamoun $7,307,025 CAD (approximately $5,300,000 USD) within
five (5) days. The Company believes that the demands contained in the Demand Letter, including
the sum of $7,307,025 CAD (approximately $5,300,000 USD) are unfounded and intends to defend
itself vigorously.
15
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction
with our consolidated financial statements and notes thereto included herein. This discussion includes forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended, or the Exchange Act. The statements regarding Sunshine Biopharma Inc. contained in this Report that
are not historical in nature, particularly those that utilize terminology such as “may,” “will,” “should,”
“likely,” “expects,” “anticipates,” “estimates,” “believes” or “plans,”
or comparable terminology, are forward-looking statements based on current expectations and assumptions, and entail various risks and
uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. Important
factors known to us that could cause such material differences are identified in this report and in our annual report on Form 10-K for
the year ended December 31, 2024. We undertake no obligation to correct or update any forward-looking statements, whether as a result
of new information, future events or otherwise, except as may be required under applicable law. You are advised, however, to consult any
future disclosures we make on related subjects in future reports we file with the SEC .
About Sunshine Biopharma
We
are a pharmaceutical company offering and researching life-saving medicines in a wide variety
of therapeutic areas, including oncology and antivirals. We have two wholly owned subsidiaries:
(i) Nora Pharma Inc. (“Nora Pharma”), a Canadian corporation, through which we
currently have 70 generic prescription drugs on the market in Canada, and (ii) Sunshine Biopharma
Canada Inc. (“Sunshine Canada”), a Canadian corporation through which we develop
and sell OTC supplements.
In addition, we are conducting a proprietary drug development
program which is comprised of (i) K1.1 mRNA, an LNP encapsulated mRNA targeted for liver cancer, and (ii) SBFM-PL4, a protease inhibitor
for treatment of SARS Coronavirus infections.
Commercial Operations
Our commercial operations are focused on the
procurement of rights to generic pharmaceutical products for sale, currently in Canada and ultimately around the world. We seek to
secure such rights through various types of strategic arrangements, including:
·
In-licensing and Supply Agreements: Nora Pharma acquires the rights to import, market, sell and distribute the products in Canada by purchasing the drug dossiers from strategic partners. Nora Pharma then files the dossiers with Health Canada to obtain regulatory approval prior to marketing. The approval process at Health Canada takes on average of 12 months. The products are sold under Nora Pharma label.
·
Cross-licensing: Nora Pharma acquires the rights to import, market, sell and distribute the products in Canada by receiving an authorization letter from pharmaceutical partners. The partners’ products are already approved in Canada but we are still required to obtain our own approval from Health Canada, which takes on average 45-60 days. The products are sold under Nora Pharma label.
·
Distribution Agreements: Nora Pharma acquires the rights to market, sell and distribute the products in Canada by signing a distribution agreement with pharmaceutical partners. The partners’ products are already approved by Health Canada. The products are sold under the partners’ label.
16
Generic drugs are pharmaceutically equivalent to the
brand name drugs. They contain identical medicinal ingredients in the same amounts as the brands. Generic medications, however, may have
different non-medicinal ingredients than the brand name drugs, but the generic developer must show that these do not affect the safety,
efficacy, or quality of the drug compared to the brand. When a generic drugs company wants to sell a generic drug in Canada, it must file
a generic drug submission with Health Canada. The submission is called an Abbreviated New Drug Submission (ANDS). The submission is reviewed
by scientists and health care experts at Health Products and Food Branch (HPFB) of Health Canada. All generic drug submissions go through
the same process as the brand name drug submissions. If the evaluation shows that the generic drug meets all regulatory requirements (including
patent and data protection considerations), Health Canada will issue a Notice of Compliance (NOC) and a Drug Identification Number (DIN)
to the applicant. The NOC and DIN signal the drug's official approval in Canada and permit the applicant to market the drug in Canada.
Once a company obtains the NOC and DIN for a drug, then it begins the process with Pan-Canadian Pharmaceutical Alliance (pCPA) in order
to have the drug listed on the provincial and territorial formularies and federal government drug benefit plans.
We currently have the following generic prescription
drugs on the market in Canada:
Drug
Action/Indication/Therapeutic
Area
Reference/Brand
Abiraterone*
Oncology
Zytiga®
Alendronate
Osteoporosis
Fosamax®
Amlodipine
Cardiovascular
Norvasc®
Apixaban
Cardiovascular
Eliquis®
Aripiprazole
Antipsychotic
Abilify®
Atorvastatin
Cardiovascular
Lipitor®
Azithromycin
Antibacterial
Zithromax®
Betahistine
Vertigo
Serc®
Bilastine
Allergy
Blexten®
Candesartan
Hypertension
Atacand®
Candesartan HCTZ
Hypertension
Atacand Plus®
Celecoxib
Anti-inflammatory
Celebrex®
Cetirizine
Allergy
Reactine®
Ciprofloxacin
Antibiotic
Cipro®
Citalopram
Central nervous system
Celexa®
Clindamycin
Antibiotic
Dalacin®
Clobetasol*
Anti-inflammatory
Clobex®
Clopidogrel
Cardiovascular
Plavix®
Dapagliflozin
Diabetes
Forxiga®
Daptomycin*
Antibacterial
Cubicin®
Dasatinib*
Oncology
Sprycel®
Donepezil
Central nervous system
Aricept®
Duloxetine
Central nervous system
Cymbalta®
Dutasteride
Urology
Avodart®
Ertapenem*
Antibacterial
Invanz®
Escitalopram
Central nervous system
Cipralex®
Everolimus*
Oncology
Afinitor®
Ezetimibe
Cardiovascular
Ezetrol®
17
Drug
Action/Indication/Therapeutic Area
Reference/Brand
Finasteride
Urology
Proscar®
Flecainide
Cardiovascular
Tambocor®
Fluconazole
Antifungal
Diflucan®
Fluoxetine
Central nervous system
Prozac®
Hanzema®*
Dermatology
Toctino®
Hydroxychloroquine
Antimalarial
Plaquenil®
Lacosamide
Central nervous system
Vimpat®
Letrozole
Oncology
Femara®
Levetiracetam
Central nervous system
Keppra®
Lurasidone
Antipsychotic
Latuda®
Metformin
Diabetes
Glucophage®
Mirtazapine
Central nervous system
Remeron®
Montelukast
Allergy
Singulair®
Olanzapine
Central nervous system
Zyprexa®
Olanzapine ODT
Central nervous system
Zyprexa®
Olmesartan
Cardiovascular
Olmetec®
Olmesartan HCTZ
Cardiovascular
Olmetec Plus®
Pantoprazole
Gastroenterology
Pantoloc®
Paroxetine
Central nervous system
Paxil®
Perindopril
Cardiovascular
Coversyl®
Pravastatin
Cardiovascular
Pravachol®
Pregabalin
Central nervous system
Lyrica®
Progesterone*
Women's Health
Prometrium®
Prucalopride
Women's Health
Resotran®
Quetiapine
Central nervous system
Seroquel®
Quetiapine XR
Central nervous system
Seroquel XR®
Ramipril
Cardiovascular
Altace®
Rivaroxaban*
Cardiovascular
Xarelto®
Rizatriptan ODT
Central nervous system
Maxalt® ODT
Rosuvastatin
Cardiovascular
Crestor®
Sertraline
Central nervous system
Zoloft®
Sildenafil
Urology
Viagra®
Tadalafil
Urology
Cialis®
Telmisartan
Cardiovascular
Micardis®
Telmisartan HCTZ
Cardiovascular
Micardis Plus®
Topiramate
Anticonvulsant
Topamax®
Tramadol Acetaminophen
Central nervous system
Tramacet®
Ursodiol
Cholelithiasis
Urso®
Varenicline
Smoking cessation
Champix®
Zoledronic Acid*
Osteoporosis
Aclasta®
Zolmitriptan
Central nervous system
Zomig®
Zopiclone
Central nervous
system
Imovane®
* Sold through distribution agreements in
which we act as distributor.
18
In addition to the 70 drugs currently on the market,
we have 64 additional drugs in our pipeline including 13 we anticipate launching during the remainder of 2025. These additional drugs
will address various human health areas including cardiovascular, oncology, gastroenterology, central nervous system, diabetes, urology,
endocrinology, anti-infective, and anti-inflammatory.
We believe the addition of these products to our existing
portfolio will strengthen our presence in the Canadian $9.7 billion a year generic drugs market ( Research and Markets ) and provide
us with greater access to pharmacies as we become more of a go-to supplier for every-day and specialty medicines.
Research and Development
The following table summarizes our proprietary drugs
in development:
Drug
Candidate
Therapeutic
Area/Indication
Development
Stage
K1.1 (mRNA LNP)
Oncology (Liver Cancer)
Animal Testing
SBFM-PL4
(Small Molecule)
Antiviral
(SARS Coronavirus)
Animal
Testing
K1.1 Anticancer mRNA
In June 2021, we initiated a new research project in
which we set out to determine if certain mRNA molecules can be used as anti-cancer agents. The data collected to date have shown that
a selected group of mRNA molecules are capable of destroying cancer cells in vitro including multidrug resistant breast cancer cells (MCF-7/MDR),
ovarian adenocarcinoma cells (OVCAR-3), and pancreatic cancer cells (SUIT-2). Studies using non-transformed (normal) human cells (HMEC
cells) showed that these mRNA molecules had little cytotoxic side effects. These new mRNA molecules, bearing the laboratory name K1.1,
were adapted for delivery into patients using a lipid nanoparticle (LNP) technology similar to the one employed in the COVID-19 mRNA vaccines.
On April 20, 2022, we filed a provisional patent application in the United States covering our K1.1 mRNA molecules.
In November 2022, we concluded an agreement with a
specialized commercial partner for the purposes of formulating our K1.1 mRNA molecules into specific lipid nanoparticles for use in test
animals including xenograft mice. The initial results of our animal testing indicated that our K1.1 mRNA-LNP constructs were effective
at reducing the size of liver cancer tumors in xenograft mice. We are currently seeking to confirm these results by conducting additional
xenograft experiments on a broader scale and in more detailed dose-response studies.
SBFM-PL4 SARS Coronavirus Treatment
The initial genome expression products following infection
by Betacoronavirus, the causative agent of COVID-19, are two large polyproteins, referred to as pp1a and pp1ab. These two polyproteins
are cleaved at 15 specific sites by two virus encoded proteases, called Mpro and PLpro, to generate 16 different non-structural proteins
essential for viral replication. Mpro and PLpro represent attractive anti-viral drug development targets as they play a central role in
the early stages of viral replication. PLpro is of particular interest as a therapeutic target in that, in addition to processing essential
viral proteins, it is also responsible for suppression of the human immune system making the virus more life-threatening. PLpro is present
only in Betacoronaviruses, the subgroup of Coronaviruses represented by the highly pathogenic SARS-CoV, MERS-CoV, and SARS-CoV-2.
Our Anti-Coronavirus research effort has been focused
on developing an inhibitor of PLpro and, on May 22, 2020, we filed a patent application in the United States covering composition subject
matter pertaining to small molecules for inhibition of the Coronavirus PLpro as well as Mpro.
19
In February 2022, we expanded our PLpro inhibitors
research effort by entering into a research agreement with the University of Arizona for the purposes of conducting research focused on
determining the in vivo safety, pharmacokinetics, and dose selection properties of three University of Arizona owned PLpro inhibitors,
to be followed by efficacy testing in mice infected with SARS-CoV-2 (the “Research Project”). Under the agreement, the University
of Arizona granted us a first option to negotiate a commercial, royalty-bearing license for all intellectual property developed by University
of Arizona under the Research Project. In addition, we and the University of Arizona have entered into an option agreement (the “Option
Agreement”) whereby we were granted a first option to negotiate a royalty-bearing commercial license for the underlying technology
of the Research Project. On September 13, 2022, we exercised our options, and on February 24, 2023, we entered into an exclusive worldwide
license agreement with the University of Arizona for all of the technology related to the Research Project.
We have since broadened our objective to include the
development of a first-in-class PLpro inhibitor to treat SARS-CoV2 and potentially SARS-CoV and MERS-CoV infection in patients who could
not use Paxlovid, Molnupiravir, or Remdesivir, due to concerns about drug interactions and possible rebound infections and other side
effects.
Our current lead compound was recently found to be
active at sub micromolar concentrations against PLpro and exhibited antiviral activity in SRAS-CoV-2 infected cells as well as in cells
infected with several different variants of concern. In addition, our compound had favorable pharmacokinetics properties in rodent species
and exhibited preferred drug accumulation in the lungs over plasma. The compound was found to be orally active in a K18-human-ACE2 transgenic
mouse model and to significantly reduce virus load in the lungs of infected animals in a dose-dependent manner without gross toxicities.
In August 2024, we published these and other research results related to this project in the Journal of Medicinal Chemistry ( J. Med.
Chem. 2024, 67, 13681−13702 ). A copy of this article is available on our website at: www.sunshinebiopharma.com/scientific-publications.
Intellectual Property
On May 22, 2020, we filed a provisional patent application
in the United States for a new treatment for Coronavirus infections. Our patent application covers composition subject matter pertaining
to small molecules for inhibition of the main Coronavirus protease, Mpro, an enzyme that is essential for viral replication. The patent
application has a priority date of May 22, 2020. On April 30, 2021, we 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.
On April 20, 2022, we 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 the relevant mRNA molecules.
Effective February 24, 2023, we became the exclusive,
worldwide licensee of the University of Arizona for three (3) patents related to small molecules which inhibit the Coronavirus protease,
PLpro.
Our wholly owned subsidiary, Nora Pharma, owns 200
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. Nora Pharma also owns the rights to sell 10 generic
prescription drugs in Canada through distribution agreements with various international partners under which Nora Pharma acts as distributor
and receives a percentage of sales.
In addition, we own four (4) NPN’s issued by
Health Canada including (i) NPN 80089663 which authorizes us to manufacture and sell our in-house developed OTC product, Essential•9™,
(ii) NPN 80093432 which authorizes us to manufacture and sell the OTC product, Calcium-Vitamin D, (iii) NPN 80125047 which authorizes
us to manufacture and sell the OTC product, L-Citrulline, and (iv) NPN 80127436 which authorizes us to manufacture and sell the OTC product,
Taurine.
20
Results of Operations
Comparison of results of operations
for the three months ended March 31, 2025 and 2024
During
the three months ended March 31, 2025, we generated $8,901,341 in sales, compared to $7,541,046 for the three months ended March 31,
2024, an increase of $1,360,295, or 18.0%. The increase is attributable to new product launches and expanded marketing and sales efforts.
The direct cost for generating these sales was $6,170,915 (69.3%) for the three months ended March 31, 2025, compared to $5,186,709 (68.8%)
for the three months ended March 31, 2024, largely unchanged. Our gross profit for the three months ended March 31, 2025 was $2,730,426,
compared to $2,354,337 for the three months ended March 31, 2024, an increase of $376,089.
General
and administrative expenses during the three-month period ended March 31, 2025, were $4,026,176, compared to $3,704,926 during the three-month
period ended March 31, 2024, an increase of $321,250. This relatively small increase was the net result of increases and decreases in
specific expense categories. For example, while consulting fees increased by $317,886 and marketing expenses increased by $200,315, there
was a decrease in accounting fees of $58,247 and legal fees of $194,799. Overall, we incurred a loss of $1,295,750 from our operations
for the three months ended March 31, 2025, compared to a loss of $1,350,589 from our operations in the three-month period ended March
31, 2024.
In addition, we had interest income of $75,367 during the three
months ended March 31, 2025, compared to interest income of $144,089 during the three months ended March 31, 2024, as a result of having
less cash on hand.
As a result, we incurred a net loss of $1,179,771
($0.44 per share) for the three months ended March 31, 2025, compared to a net loss of $1,283,801 ($2.00 per share) for the three-month
period ended March 31, 2024.
Liquidity and Capital Resources
As of March 31, 2025, we had cash and cash equivalents of $8,124,610.
Net
cash used in operating activities was $1,713,835 during the three months ended March 31,
2025, compared to $3,185,158 during the three-month period ended March 31, 2024. The decrease
was a result of reduced cash required for the operations of Nora Pharma.
Cash
flows used in investing activities were $176,024 for the three months ended March 31, 2025, compared to $668,736 for the three months
ended March 31, 2024. The decrease was the result of less cash invested in Nora Pharma.
Cash
flows provided by financing activities were $338,137 during the three months ended March 31, 2025, compared to $5,398,149 during the
three months ended March 31, 2024. The decrease was primarily as a result of no financing events completed during the three months ended
March 31, 2025, compared to an offering yielding net proceeds of $8,522,411 completed during the three months ended March 31, 2024.
We
are currently generating revenue of approximately $8.9 million per quarter and incurring a quarterly deficit of approximately $1.2 million.
In addition to increasing sales and streamlining operations to reduce expenses, we are currently focusing our attention on lowering our
cost of goods sold from our current level of approximately 70% to possibly 60%. We believe these measures could bring us to breakeven
and make us less dependent on the capital markets for financing. We believe our existing cash on hand together with cash we generate
from sales will be sufficient to fund our operations for the next 24 months. There is no assurance our estimates will be accurate. 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. Additional
capital may not be available on terms acceptable to us, or at all.
21
Critical Accounting Estimates
The discussion and analysis of our financial condition
and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the
amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis,
we evaluate our estimates based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under different assumptions or conditions.
For a detailed list of significant accounting policies,
please see our annual report on Form 10-K for the fiscal year ended December 31, 2024, including our financial statements and notes thereto
included therein as filed with the SEC on April 1, 2025.
Recently Adopted Accounting Standards
We have adopted all new accounting standards impacting
operations.
Off Balance-Sheet Arrangements
We have not entered into any off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
We are a smaller reporting company and are not required
to provide the information under this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls
and Procedures
Our management, with the participation of our Chief
Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term
is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.
These controls are designed to ensure that information
required to be disclosed in the reports we file or submit pursuant to the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated
and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure.
Based on this evaluation, our management, including
our CEO and CFO concluded that our disclosure controls and procedures were effective as of March 31, 2025, at reasonable assurance levels.
Changes in Internal Control Over
Financial Reporting
There were no changes in our internal control over
financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
22
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not party to, and our property is not the subject of, any material
legal proceedings.
ITEM 1A. RISK FACTORS
We are a smaller reporting company and are not required
to provide the information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
During the quarter ended March 31,
2025, no Director or Officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1
trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
ITEM 6. EXHIBITS
Exhibit No.
Description
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2022 *
32.1
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
101
Inline XBRL Document Set for the financial statements and accompanying notes in Part I, Item 1, of this Quarterly Report on Form 10-Q.*
104
Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.*
*
Filed herewith.
**
Furnished herewith.
23
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on May
15, 2025.
SUNSHINE BIOPHARMA INC.
By:
/s/ Dr. Steve N. Slilaty
Dr. Steve N. Slilaty
Chief Executive Officer (principal executive officer)
By:
/s/ Camille Sebaaly
Camille Sebaaly
Chief Financial Officer (principal financial and accounting officer)
24
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.