Sunshine Biopharma Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS Sunshine Biopharma Inc. Consolidated Balance Sheets June 30, December 31, 2025 2024 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 10,305,320 $ 9,686,529 Accounts receivable 3,587,560 3,868,418 Inventory 13,018,702 11,278,105 Prepaid expenses 939,436 1,133,297 Total Current Assets 27,851,018 25,966,349 Long-Term Assets: Property & equipment 638,354 546,055 Intangible assets 2,490,827 3,019,717 Deferred tax asset 92,234 92,234 Right-of-use-asset 892,817 936,037 Total Long-Term Assets 4,114,232 4,594,043 TOTAL ASSETS $ 31,965,250 $ 30,560,392 LIABILITIES Current Liabilities: Accounts payable & accrued expenses $ 4,797,465 $ 5,543,085 Earnout payable 295,797 295,797 Income tax payable 258,158 268,276 Right-of-use-liability 222,496 207,756 Total Current Liabilities 5,573,916 6,314,914 Long-Term Liabilities: Right-of-use-liability 706,530 744,724 Total Long-Term Liabilities 706,530 744,724 TOTAL LIABILITIES 6,280,446 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, 4,555,945 and 2,580,098 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively 4,555 2,580 Capital paid in excess of par value 97,376,841 93,354,907 Accumulated comprehensive income (loss) 280,787 ( 829,959 ) Accumulated (Deficit) ( 71,990,379 ) ( 69,039,774 ) TOTAL SHAREHOLDERS' EQUITY 25,684,804 23,500,754 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 31,965,250 $ 30,560,392 See Accompanying Notes To These Unaudited Consolidated Financial Statements 3 Sunshine Biopharma Inc. Consolidated Statements of Operations and Comprehensive Loss (Unaudited) 3 Months 3 Months 6 Months 6 Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2025 2024 2025 2024 Revenue: $ 9,410,230 $ 9,303,067 $ 18,311,571 $ 16,844,113 Cost of Sales 5,987,364 6,946,810 12,158,279 12,133,519 Gross profit 3,422,866 2,356,257 6,153,292 4,710,594 General & Administrative Expenses: Accounting 75,611 88,394 369,370 440,400 Consulting 736,727 54,048 1,102,014 101,449 Director fees 100,000 100,000 200,000 200,000 Legal 64,995 223,436 92,194 445,434 Marketing 201,658 256,325 600,019 454,371 Office 806,605 713,245 1,732,483 1,673,636 R&D 196,232 436,235 411,509 658,268 Salaries 2,048,676 1,556,176 3,574,122 3,089,888 Taxes 112,675 145,805 222,851 221,706 Impairment of intangible assets 1,061,809 – 1,061,809 – Depreciation 72,533 50,870 137,326 93,488 Total General & Administrative Expenses 5,477,521 3,624,533 9,503,697 7,378,640 (Loss) from operations ( 2,054,655 ) ( 1,268,276 ) ( 3,350,405 ) ( 2,668,046 ) Other Income (Expense): Foreign exchange gain 1,940 286,535 2,391 280,768 Interest income 72,715 143,995 148,082 288,084 Interest expense – ( 245 ) – ( 245 ) Total Other Income (Expense) 74,655 430,285 150,473 568,607 Net (loss) before income taxes ( 1,980,000 ) ( 837,991 ) ( 3,199,932 ) ( 2,099,439 ) Provision for income taxes 209,166 343,691 249,327 321,338 Net (Loss) $ ( 1,770,834 ) $ ( 494,300 ) $ ( 2,950,605 ) $ ( 1,778,101 ) Other comprehensive income: Gain (Loss) from foreign exchange translation 1,084,557 ( 835,450 ) 1,110,746 ( 1,379,155 ) Comprehensive (Loss) $ ( 686,277 ) $ ( 1,329,750 ) $ ( 1,839,859 ) $ ( 3,157,256 ) Basic (Loss) per common share $ ( 0.39 ) $ ( 9.94 ) $ ( 0.82 ) $ ( 43.48 ) Weighted Average Common Shares Outstanding (Basic ) 4,496,108 49,726 3,604,653 40,896 See Accompanying Notes To These Unaudited Consolidated Financial Statements 4 Sunshine Biopharma Inc. Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, Six Months Ended June 30, 2025 2024 Cash Flows From Operating Activities: Net (Loss) $ ( 2,950,605 ) $ ( 1,778,101 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 137,326 93,494 Intangible asset impairment 1,061,809 – Stock issued for services – 12,000 Accounts receivable 492,384 ( 2,308,159 ) Inventory ( 1,123,909 ) ( 2,949,128 ) Prepaid expenses 255,548 167,656 Accounts Payable & accrued expenses ( 849,702 ) 2,794,798 Earn-out payable – ( 2,547,831 ) Income tax payable ( 10,118 ) ( 1,247,671 ) Net Cash Flows (Used In) Operating Activities ( 2,987,267 ) ( 7,762,942 ) Cash Flows From Investing Activities: Reduction in right-of-use asset 94,402 61,075 Purchase of intangible assets ( 594,714 ) ( 234,569 ) Purchase of equipment ( 167,490 ) ( 1,037,450 ) Net Cash Flows (Used In) Investing Activities ( 667,802 ) ( 1,210,944 ) Cash Flows From Financing Activities: Proceeds from public offering net (common stock) 1,828,596 8,522,411 Exercise of warrants 2,195,312 45,000 Purchase of treasury stock – ( 3,139,651 ) Lease liability ( 75,536 ) ( 58,194 ) Net Cash Flows Provided by Financing Activities 3,948,372 5,369,566 Cash and Cash Equivalents at Beginning of Period 9,686,529 16,292,347 Net increase (decrease) in cash and cash equivalents 293,304 ( 3,604,320 ) Foreign currency translation adjustment 325,487 ( 1,180,282 ) Cash and Cash Equivalents at End of Period $ 10,305,320 $ 11,507,745 Supplementary Disclosure of Cash Flow Information: Cash paid for income taxes $ – $ 956,012 Stock issued for services $ – $ 12,000 See Accompanying Notes To These Unaudited Consolidated Financial Statements 5 Sunshine Biopharma Inc. Consolidated Statements of Shareholders' Equity (Unaudited) Number Of Common Shares Common Capital Paid in Excess of Par Number Of Preferred Shares Preferred Compre- hensive Accumulated Three Months Period Issued Stock Value Issued Stock Income Deficit Total Balance March 31, 2025 2,707,541 $ 2,707 $ 93,710,078 130,000 $ 13,000 $ ( 803,770 ) $ ( 70,219,545 ) $ 22,702,470 Exercise of warrants 660,000 660 1,839,354 – – – – 1,840,014 Common stock and pre-funded warrants issued in an underwritten public offering, net of issuance costs 1,188,404 1,188 1,827,409 – – – – 1,828,597 Net (loss) – – – – – 1,084,557 ( 1,770,834 ) ( 686,277 ) Balance at June 30, 2025 4,555,945 $ 4,555 $ 97,376,841 130,000 13,000 $ 280,787 $ ( 71,990,379 ) $ 25,684,804 Balance March 31, 2024 49,726 $ 50 $ 89,843,624 130,000 $ 13,000 $ 152,400 $ ( 65,189,459 ) $ 24,819,615 Exercise of warrants 1,120,784 1,121 ( 1,121 ) – – – – – Net (loss) – – – – – ( 835,450 ) $ ( 494,300 ) ( 1,329,750 ) Balance June 30, 2024 1,170,510 $ 1,171 $ 89,842,503 130,000 $ 13,000 $ ( 683,050 ) $ ( 65,683,759 ) $ 23,489,865 Six Months Period 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 787,443 787 2,194,525 – – – – 2,195,312 Common stock and pre-funded warrants issued in an underwritten public offering, net of issuance costs 1,188,404 1,188 1,827,409 – – – – 1,828,597 Net (loss) – – – – – 1,110,746 ( 2,950,605 ) ( 1,839,859 ) Balance at June 30, 2025 4,555,945 $ 4,555 $ 97,376,841 130,000 13,000 $ 280,787 $ ( 71,990,379 ) $ 25,684,804 Balance December 31, 2023 14,012 $ 14 $ 84,415,900 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 13,214 13 8,522,398 – – – – 8,522,411 Exercise of warrants 1,143,284 1,144 43,856 – – – – 45,000 Repurchase of warrants – – ( 3,139,651 ) – – – – ( 3,139,651 ) Net (loss) – – – – – ( 1,379,155 ) ( 1,778,101 ) ( 3,157,256 ) Balance at June 30, 2024 1,170,510 $ 1,171 $ 89,842,503 130,000 13,000 $ ( 683,050 ) $ ( 65,683,759 ) 23,489,865 See Accompanying Notes To These Unaudited Consolidated Financial Statements 6 Sunshine Biopharma Inc. Notes to Unaudited Consolidated Financial Statements For the Six Months Ended June 30, 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 74 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 government policies which may change over time. The most recent negotiations between the pan-Canadian Pharmaceutical Alliance (“pCPA”), the entity that negotiates drug prices on behalf of the government, 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 PLpro protease inhibitor for treatment of SARS Coronavirus infections Note 2 – Basis of Presentation The unaudited financial statements of the Company for the six month periods ended June 30, 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 – Registered Direct Offering On April 3, 2025, the Company completed a registered direct offering of 1,188,404 shares of common stock (or pre-funded warrants) at an offering price of $ 2.07 per share (or $ 2.06999 per pre-funded warrant which is equal to the offering price per share minus an exercise price of $ 0.001 ) 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 . The Pre-Funded Warrants were immediately exercisable and may be exercised at any time until exercised in full. The offering was made pursuant to an effective shelf registration statement on Form S-3 (No. 333-284142) previously filed with the U.S. Securities and Exchange Commission (SEC) and declared effective by the SEC on January 15, 2025. Note 5 – 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 as of the same date: 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). 8 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 June 30, 2025, the remaining earnout balance was $ 479,208 CAD ($ 295,797 USD). Note 6 – Intangible Assets Intangible assets consisted of the following: Schedule of intangible assets June 30, 2025 December 31, 2024 Balance at beginning of the year $ 3,019,717 1,444,259 Purchase of additional intangible assets (licenses) 594,714 1,694,585 Impairment of Intangible assets (licenses)* ( 1,061,809 ) 0 Total 2,671,749 3,138,844 Less accumulated amortization ( 180,922 ) ( 119,127 ) Intangible assets, net $ 2,490,827 $ 3,019,717 ________________________ * The impairment was a result of the determination by the Company that certain product licenses could not be commercialized Note 7 – 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 June 30, December 31, 2025 2024 Equipment $ 354,321 $ 336,880 Computer equipment 56,426 53,531 Furniture and fixtures 45,672 50,686 Leasehold improvements 93,135 88,306 Vehicles 501,426 353,185 Total 1,050,980 882,588 Less: Accumulated depreciation ( 412,625 ) ( 336,533 ) Plant, property and equipment, net $ 638,354 $ 546,055 9 Note 8 – Inventory Inventory is comprised of the following: Schedule of inventory June 30, December 31, 2025 2024 Finished goods $ 13,384,964 $ 11,352,446 Allowance for obsolete inventory $ ( 366,262 ) $ ( 74,341 ) Total Inventory, net of allowance $ 13,018,702 $ 11,278,105 Note 9 – Leases The Company has obligations as a lessee for office and warehouse 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 lease requires the Company to make variable payments for the Company’s proportionate share of the 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 June 30, 2025 were as follows: Schedule of lease information Operating lease ROU asset $ 892,817 Operating Lease liability - Short-term $ 222,496 Operating lease liability - Long-term $ 706,530 Remaining lease term 4 Years 6 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 June 30, 2025 are as follows: Schedule of maturities of lease liabilities 2025 $ 112,853 2026 $ 216,632 2027 $ 205,372 2028 $ 194,689 2029 $ 184,553 Thereafter $ 14,927 10 Note 10 – Income Taxes The Company’s income tax (expense) / benefit of $ 209,166 and $ 249,327 for the three and six months ended June 30, 2025, 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. The Company’s income tax (expense) / benefit of $ 343,691 and $ 321,338 for the three and six months ended June 30, 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 June 30, 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. On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC Topic 740, Income Taxes, requires the tax effects of changes in tax rates and laws to be recognized in the period in which the legislation is enacted. Those effects, both current tax and deferred tax, are reported as part of continuing operations. The Company is assessing OBBBA’s impact on the Company’s Consolidated Financial Statements but currently does not believe that OBBBA will have a material impact on the Company's income tax expense. As the legislation was signed into law after the close of the Company's second quarter, the impact is not included in its operating results for the three and six months ended June 30, 2025. Note 11 – Management and Director Compensation The Company paid its officers aggregate cash compensation of $ 524,504 and $ 1,120,356 for the three-month periods ended June 30, 2025 and 2024, respectively. For the six-month periods ended June 30, 2025 and 2024, the Company paid its officers aggregate cash compensation of $ 988,801 and $ 1,382,842 , respectively. Of the $ 1,382,842 amount, $ 400,000 was paid to Advanomics Corporation, a company controlled by the CEO of the Company. The Company paid its directors aggregate cash compensation of $ 100,000 for each of the three-month periods ended June 30, 2025 and 2024, and $ 200,000 for each of the six-month periods ended June 30, 2025 and 2024. Note 12 – 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 December 31, 2024 and June 30, 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 December 31, 2024 and June 30, 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”). 11 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. 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 . 12 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 June 30, 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 proceeds, and (iii) 15,577,965 Series B Warrants remained outstanding and their exercise price had been adjusted to $2.07 as a result of two reverse stock splits and a financing event 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. 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 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 proceeds of $ 1,618,203 . 13 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. 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 issued an aggregate of 1,188,404 shares of common stock in connection with a registered direct offering and received $ 1,828,596 in net proceeds. As of June 30, 2025 and December 31, 2024, the Company had 4,555,945 and 2,580,098 shares of common stock issued and outstanding, respectively. The Company has declared no dividends since inception. Note 13 – 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, 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 * These warrants trade under the ticker symbol SBFMW. ** Subject to adjustment. 14 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 . As of June 30, 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 1,919,303 Series B Warrants (as adjusted) were exercised resulting in aggregate net proceeds of $ 17,412,492 received by the Company. The Company’s outstanding warrants as of June 30, 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 15,577,965 *** $ 2.07 *** February 2029 * These warrants trade under the ticker symbol SBFMW. ** Subject to adjustment of the number of warrants and exercise price upon certain corporate actions such that the aggregate value of the warrants remains unchanged. *** As adjusted following the financing event of April 3, 2025 and subject to further adjustment of the number of warrants and exercise price upon certain corporate actions such that the aggregate value of the warrants remains unchanged. Note 14 – Earnings Per Share The following table sets forth the computation of basic and diluted net income per share for the six months ended June 30: Schedule of computation of basic and diluted net income per share 2025 2024 Net gain (loss) attributable to common stock $ ( 2,950,605 ) $ ( 1,778,101 ) Weighted average common shares outstanding (basic & diluted) 3,604,653 40,896 Basic and diluted gain (loss) per share attributable to common stock $ ( 0.82 ) $ ( 43.48 ) Note 15 – Employee Termination 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. Mr. Chamoun was terminated for cause. 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. In response to the Demand Letter, the Company issued a letter advising that the demands contained in the Demand Letter, including the sum of $7,307,025 CAD (approximately $5,300,000 USD), are completely unfounded and that it intends to defend itself vigorously. There has been no communications between the parties since June 11, 2025. No provision or accrual was made in the financial statements for any litigation liability or legal expense which the Company may incur in connection with this alleged claim. 15