What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-13 compared with 2025-08-12 · 136 added, 129 removed, 221 unchanged (55% of the section changed)

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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 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,”

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,”

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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:

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 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 OTC supplements.

(“Nora Pharma”), a Canadian corporation, through which we currently have 76 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

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drugs on the market in Canada:

Reference/Brand

Therapeutic Area

Cardiovascular

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Central nervous system

Docusate Sodium

Gastroenterology

Central nervous system

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Cardiovascular

Reference/Brand

Therapeutic Area

Cardiovascular

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Anticonvulsant

Tramadol Acetaminophen

Central nervous system

Cholelithiasis

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Central nervous system

Central nervous

Central nervous system

Sold through distribution agreements in which we act as distributor

In addition to the 74 drugs currently on the market,

we have 17 additional drugs in our pipeline anticipated to be launched in 2026.

These additional drugs will address various human health

areas including cardiovascular, oncology, gastroenterology, central nervous system, diabetes, urology, endocrinology, anti-infective,

and anti-inflammatory.

In addition to the 76 drugs currently on the market, we have 12 additional

drugs in our pipeline which we anticipate launching in 2026.

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

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drugs in development:

Area/Indication

Drug Candidate

Therapeutic Area/Indication

Development Stage

K1.1 (mRNA LNP)

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Animal Testing

(Small Molecule)

(SARS Coronavirus Infection)

SBFM-PL4 (Small Molecule)

Antiviral (SARS Coronavirus Infection)

Animal Testing

K1.1 Anticancer mRNA

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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.

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.

In February 2022, we expanded our PLpro inhibitors

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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.

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.

2024, 67, 13681−13702 ).

A copy of this article is available on our website at:

A copy of this article is available on our

www.sunshinebiopharma.com/scientific-publications.

A new manuscript describing the latest research results on our lead compound

is currently in preparation.

Intellectual Property

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worldwide licensee of the University of Arizona for three (3) patents related to small molecules which inhibit the Coronavirus protease,

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.

Our wholly owned subsidiary, Nora Pharma,

owns over 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

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Results of Operations

Comparison of results of

operations for the three months ended June 30, 2025 and 2024

During the three months ended June 30, 2025, we

generated $9,410,230 in sales, compared to $9,303,067 for the three months ended June 30, 2024, largely unchanged.

The direct cost for

generating these sales was $5,987,364 (63.6%) for the three months ended June 30, 2025, compared to $6,946,810 (74.7%) for the three months

ended June 30, 2024, a decrease of approximately 11% largely due to procurement of better cost of finished products.

Comparison of results of operations for

the three months ended September 30, 2025 and 2024

During the three months ended September 30, 2025,

we generated $9,417,179 in sales, compared to $8,435,178 for the three months ended September 30, 2024, an increase of $982,001, or 11.6%.

The direct cost for generating these sales was $6,343,639 (67.4%) for the three months ended September 30, 2025, compared to $5,569,027

(66.0%) for the three months ended September 30, 2024, an increase of 1.4% due to increased cost of finished products.

Our gross profit

for the three months ended June 30, 2025 was $3,422,866, compared to $2,356,257 for the three months ended June 30, 2024, an increase

of $1,066,609.

and administrative expenses during the three-month period ended June 30, 2025, were $5,477,521, compared to $3,624,533 during the three-month

period ended June 30, 2024, an increase of $1,852,988.

The significant increase was primarily attributable to a $1,061,809 impairment

of intangible assets resulting from the determination that certain product licenses could not be commercialized.

The other expense categories

which contributed to this increase were consulting fees which increased by $682,679 due to fees paid in connection with warrant exercises

and salaries, which increased by $492,500 due to new hiring.

Overall, we incurred a loss of $2,054,655 from our operations for the three

months ended June 30, 2025, compared to a loss of $1,268,276 from our operations in the three-month period ended June 30, 2024.

had interest income of $72,715 during the three months ended June 30, 2025, compared to interest income of $143,995 during the three

months ended June 30, 2024, as a result of having less cash on hand.

As a result of the foregoing, we incurred a net

loss of $1,770,834 ($0.39 per share) for the three months ended June 30, 2025, compared to a net loss of $494,300 ($9.94 per share) for

the three-month period ended June 30, 2024.

Comparison of results of

operations for the six months ended June 30, 2025 and 2024

the six months ended June 30 2025, we generated revenues of $18,311,571, compared to revenue of $16,844,113 for the six months ended

June 30, 2024, an increase of $1,467,458, or 8.7%.

for the three months ended September 30, 2025 was $3,073,540, compared to $2,866,151 for the three months ended September 30, 2024, an

increase of $207,389.

General and administrative expenses during the

three-month period ended September 30, 2025, were $4,160,153, compared to $3,972,504 during the three-month period ended September 30,

2024, an increase of $187,649.

The expense categories that saw an increase were impairment of intangible assets ($554,650) resulting from

the determination that certain product licenses could not be commercialized, accounting fees ($10,641), legal fees ($74,698), and office

expenses ($84,327).

These were offset by a decrease in consulting fees ($316,029), marketing expenses ($47,528), and salaries ($260,678).

Overall, we incurred a loss of $1,086,613 from our operations for the three months ended September 30, 2025, compared to a loss of $1,106,353

from our operations in the three-month period ended September 30, 2024, largely unchanged.

We had interest income of $75,352 during the three

months ended September 30, 2025, compared to interest income of $108,614 during the three months ended September 30, 2024, as a result

of changes in interest rates.

As a result of the foregoing, we incurred a net loss of $883,820 ($0.19 per

share) for the three months ended September 30, 2025, compared to a net loss of $1,197,803 ($0.94 per share) for the three-month period

ended September 30, 2024, a 24.0% decrease.

Comparison of results of operations for

the nine months ended September 30, 2025 and 2024

During the nine months ended September 30, 2025,

we generated revenues of $27,728,750, compared to revenue of $25,279,291 for the nine months ended September 30, 2024, an increase of

$2,449,459, or 9.7%.

The increase is attributable to enhanced marketing efforts in 2025.

The direct cost

for generating these revenues was $12,158,279 for the six months ended June 30, 2025 (66.4%), compared to $12,133,519 (72.0%) for the

six months ended June 30, 2024.

The decrease in the cost of goods sold in 2025 was due to the procurement of better cost of finished

Our gross profit increased by $1,442,698 from $4,710,594 for the six months ended June 30, 2024, to $6,153,292 for the same

period in 2025.

and administrative expenses during the six-month period ended June 30, 2025, were $9,503,697, compared to $7,378,640 during the six-month

period ended June 30, 2024, an increase of $2,125,057.

The significant increase was primarily attributable to a $1,061,809 impairment

of intangible assets resulting from the determination that certain product licenses could not be commercialized.

The other expense categories

which contributed to this increase were consulting fees which increased by $1,000,565 due to fees paid in connection with warrant exercises

and salaries which increased by $484,234 due to new hiring.

These increases were offset to some extent by a decrease in legal fees by

$353,240 and R&D by $246,759.

Overall, we incurred a loss of $3,350,405 from our operations in the six-month period ended June 30,

2025, compared to a loss from operations of $2,668,046 in the similar period of 2024.

had interest income of $148,082 during the six months ended June 30, 2025, compared to interest income of $288,084 during the six months

ended June 30, 2024.

The decrease was a result of having less cash on hand.

a result of the foregoing we incurred a net loss of $2,950,605 ($0.82 per share) for the six-month period ended June 30, 2025, compared

to a net loss of $1,778,101 ($43.48 per share) for the six-month period ended June 30, 2024.

The direct cost for generating these revenues

was $18,501,918 for the nine months ended September 30, 2025 (66.7%), compared to $17,702,546 (70.0%) for the nine months ended September

The decrease in the cost of goods sold in 2025 was due to the procurement of better cost of finished products.

Our gross profit

increased by $1,650,087 from $7,576,745 for the nine months ended September 30, 2024, to $9,226,832 for the same period in 2025.

General and administrative expenses during the

nine-month period ended September 30, 2025, were $13,663,850, compared to $11,351,144 during the nine-month period ended September 30,

2024, an increase of $2,312,706.

The significant increase was primarily attributable to a $1,616,459 impairment of intangible assets resulting

from the determination that certain product licenses could not be commercialized.

The other expense categories which contributed to this

increase were consulting fees which increased by $684,536 due to fees paid in connection with warrant exercises, marketing fees which

increased by $98,120, office expenses which increased by $143,174, and salaries which increased by $223,556 due to new hiring.

These increases

were offset to some extent by a decrease in accounting fees by $60,389, legal fees by $278,542, and R&D by $253,823.

Overall, we incurred

a loss of $4,437,018 from our operations in the nine-month period ended September 30, 2025, compared to a loss from operations of $3,774,399

in the similar period of 2024.

We had interest income of $223,434 during the

nine months ended September 30, 2025, compared to interest income of $396,698 during the nine months ended September 30, 2024.

was a result of having less cash on hand.

As a result of the foregoing, we incurred a

net loss of $3,834,425 ($0.98 per share) for the nine-month period ended September 30, 2025, compared to a net loss of $2,975,904

($13,61 per share) for the nine-month period ended September 30, 2024.

Liquidity and Capital Resources

As of June 30, 2025, we had cash and cash equivalents of $10,305,320.

Net cash used in operating activities was $2,987,267

during the six months ended June 30, 2025, compared to $7,762,942 during the six-month period ended June 30, 2024.

The decrease was a

result of reduced cash required for the operations of Nora Pharma.

Cash flows used in investing activities were $667,802

for the six months ended June 30, 2025, compared to $1,210,944 for the six months ended June 30, 2024.

The decrease was the result of

less cash invested in Nora Pharma.

Cash flows provided by financing activities were

$3,948,372 during the six months ended June 30, 2025, compared to $5,369,566 during the six months ended June 30, 2024.

The decrease was

primarily as a result of a smaller financing event completed during the six months ended June 30, 2025, compared to an offering yielding

net proceeds of $8,522,411 completed during the six months ended June 30, 2024.

We are currently generating revenue of approximately

$9.4 million per quarter and incurring a quarterly deficit of approximately $1.0 million (not including the one-time intangible assets

impairment of $1,061,809 during the three months ended June 30, 2025).

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 65%

to approximately 60%.

We believe these measures could bring us to breakeven and make us less dependent on the capital markets for financing,

although there can be no assurances that we will be successful in achieving these reductions.

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

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

of September 30, 2025, we had cash and cash equivalents of $9,306,438.

cash used in operating activities was $3,715,067 during the nine months ended September 30, 2025, compared to $9,119,519 during the nine-month

period ended September 30, 2024.

The decrease was a result of reduced cash required for the operations of Nora Pharma.

flows used in investing activities were $786,097 for the nine months ended September 30, 2025, compared to $1,881,543 for the nine months

ended September 30, 2024.

The decrease was the result of less cash needed for the Nora Pharma operations.

flows provided by financing activities were $4,023,908 during the nine months ended September 30, 2025, compared to $7,323,370 during

the nine months ended September 30, 2024.

The decrease was primarily as a result of a smaller financing event completed during the nine

months ended September 30, 2025, compared to an offering yielding net proceeds of $8,522,411 completed during the nine months ended September

October 14, 2025, we announced that our Board of Directors had allocated $5 million of our cash on hand for investment in Bitcoin.

further consideration and in light of recent volatility in Bitcoin, we determined that we will not proceed with this investment.

are currently generating revenue of approximately $9.4 million per quarter and incurring a quarterly deficit of approximately $1.0 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 67% to approximately 60%.

We believe these measures could bring us to breakeven

and make us less dependent on the capital markets for financing, although there can be no assurances that we will be successful in achieving

these reductions.

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 pharmaceutical operations.

Additional capital may not be available on terms acceptable to

us, or at all.

Critical Accounting Estimates

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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

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

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis