Sunshine Biopharma Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS Sunshine Biopharma Inc. Consolidated Balance Sheets March 31, December 31, 2026 2025 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 6,913,013 $ 9,123,308 Accounts receivable 4,011,632 3,459,864 Inventory 13,168,430 13,472,025 Deposits 71,740 – Prepaid expenses 618,361 798,384 Total Current Assets 24,783,176 26,853,581 Long-Term Assets: Property & equipment 516,349 557,370 Intangible assets 1,917,812 1,889,370 Right-of-use-asset 713,038 778,846 Total Long-Term Assets 3,147,199 3,225,586 TOTAL ASSETS $ 27,930,375 $ 30,079,167 LIABILITIES Current Liabilities: Accounts payable & accrued expenses $ 5,104,868 $ 5,664,212 Earnout payable 295,797 295,797 Income tax payable 268,276 268,276 Right-of-use-liability 209,226 215,637 Total Current Liabilities 5,878,167 6,443,922 Long-Term Liabilities: Right-of-use-liability 535,614 596,785 Total Long-Term Liabilities 535,614 596,785 TOTAL LIABILITIES 6,413,781 7,040,707 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 4,905,945 shares issued and outstanding at March 31, 2026 and December 31, 2025 4,905 4,905 Capital paid in excess of par value 98,100,990 98,100,990 Accumulated comprehensive income ( 343,306 ) ( 65,309 ) Accumulated (Deficit) ( 76,258,995 ) ( 75,015,126 ) TOTAL SHAREHOLDERS' EQUITY 21,516,594 23,038,460 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 27,930,375 $ 30,079,167 See Accompanying Notes To These Financial Statements. 3 Sunshine Biopharma Inc. Consolidated Statements of Operations and Comprehensive Loss (Unaudited) March 31, March 31, 2026 2025 Sales $ 8,088,765 $ 8,901,341 Cost of sales 5,907,775 6,170,915 Gross profit 2,180,990 2,730,426 General & Administrative Expenses: Accounting 175,809 293,759 Consulting 143,148 365,287 Director fees 100,000 100,000 Legal 89,076 27,199 Marketing 250,223 398,361 Office 871,608 925,878 R&D 31,724 215,277 Salaries 1,708,484 1,525,446 Taxes 129,656 110,176 Depreciation & amortization 76,859 64,793 Total General & Administrative Expenses 3,576,587 4,026,176 (Loss) From Operations ( 1,395,597 ) ( 1,295,750 ) Foreign exchange ( 18 ) 451 Interest income 48,426 75,367 Other income 103,320 – Total Other Income 151,728 75,818 Net (loss) before income taxes ( 1,243,869 ) ( 1,219,932 ) Provision for income taxes – ( 40,161 ) Net (Loss) $ ( 1,243,869 ) $ ( 1,179,771 ) Foreign exchange translation ( 277,997 ) 26,189 Comprehensive (Loss) ( 1,521,866 ) ( 1,153,582 ) (Loss) per common share (Basic) $ ( 0.25 ) $ ( 0.44 ) Weighted average common shares outstanding (Basic) 4,905,945 2,703,293 See Accompanying Notes To These Financial Statements. 4 Sunshine Biopharma Inc. Consolidated Statements of Cash Flows (Unaudited) March 31, March 31, 2026 2025 Cash Flows From Operating Activities: Net (Loss) $ ( 1,243,869 ) $ ( 1,179,771 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 76,859 64,793 Accounts receivable ( 609,601 ) 426,673 Inventory 78,399 ( 568,834 ) Deposits ( 71,740 ) ( 70,457 ) Prepaid expenses 154,726 139,931 Reduction in right-of-use asset 52,788 35,993 Accounts Payable & accrued expenses ( 455,836 ) ( 486,009 ) Lease liability ( 54,001 ) ( 17,160 ) Income tax payable 175 ( 40,161 ) Net Cash Flows (Used In) Operating Activities ( 2,072,100 ) ( 1,695,002 ) Cash Flows From Investing Activities: Purchase of intangible assets ( 99,389 ) ( 204,527 ) Purchase of equipment ( 5,129 ) ( 7,490 ) Net Cash Flows (Used In) Investing Activities ( 104,518 ) ( 212,017 ) Cash Flows From Financing Activities: Exercise of warrants – 355,297 Net Cash Flows Provided by Financing Activities – 355,297 Cash and Cash Equivalents at Beginning of Period 9,123,308 9,686,529 Net increase (decrease) in cash and cash equivalents ( 2,176,618 ) ( 1,551,722 ) Effect of exchange rate changes on cash ( 33,677 ) ( 10,197 ) Cash and Cash Equivalents at End of Period $ 6,913,013 $ 8,124,610 Supplementary Disclosure of Cash Flow Information: Cash paid for interest $ – $ – Cash paid for income taxes $ – $ – See Accompanying Notes To These Financial Statements. 5 Sunshine Biopharma Inc. Consolidated Statements of Shareholders' Equity (Unaudited) Number Of Capital Paid Number Of Common Shares Common in Excess of Par Preferred Shares Preferred Comprehensive Accumulated Three Months Period Issued Stock Value Issued Stock Income Deficit Total Balance December 31, 2025 4,905,945 $ 4,905 $ 98,100,990 130,000 $ 13,000 $ ( 65,309 ) $ ( 75,015,126 ) $ 23,038,460 Net (loss) – – – – – ( 277,997 ) ( 1,243,869 ) ( 1,521,866 ) Balance at March 31, 2026 4,905,945 $ 4,905 $ 98,100,990 130,000 $ 13,000 $ ( 343,306 ) $ ( 76,258,995 ) $ 21,516,594 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 See Accompanying Notes To These Financial Statements. 6 Sunshine Biopharma Inc. Notes to Unaudited Consolidated Financial Statements For the Three Months Ended March 31, 2026 and 2025 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 with a portfolio of pharmaceutical products consisting of 60 generic prescription drugs on the market in Canada, and (ii) Sunshine Biopharma Canada Inc. (“Sunshine Canada”), a Canadian corporation which develops and sells nonprescription, over-the-counter (“OTC”) supplements. The Company operates the two subsidiaries as a single business segment. Sales of the OTC supplements represent less than 3% of the Company’s total annual sales. 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 (“CGPA”) 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 month periods ended March 31, 2026 and 2025 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, 2025, was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 3, 2026. 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. On February 18, 2026, Dr. Steve N. Slilaty, the Company’s chief executive officer and holder of the majority of the voting power of the stockholders of the Company, approved by written consent an authorization of the Company’s board of directors to effect a reverse split of the Company’s issued and outstanding common stock in a ratio of up to 1-for-10, with the board of directors having the discretion as to whether or not to effect the reverse split and at what ratio. The shareholder consent became effective March 23, 2026 (20 days after the definitive information statement relating to such consent was mailed to stockholders). 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. 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 December 31, 2025, the remaining earnout balance was $ 479,208 CAD ($ 295,797 USD). This remaining earnout amount is currently in dispute following dismissal of Mr. Chamoun by the Company on April 14, 2025 (See Note 15). Note 5 – Intangible Assets Intangible assets consisted of the following: Schedule of intangible assets Period Ended March 31, 2026 December 31, 2025 Intangible assets at beginning of period, net $ 1,889,370 $ 3,019,717 Purchase of additional intangible assets (drug licenses & dossiers) 68,147 774,355 Total 1,957,517 3,794,072 Less impairment* – ( 1,748,247 ) Less accumulated amortization ( 39,705 ) ( 156,455 ) Intangible assets, net $ 1,917,812 $ 1,889,370 * The impairment was a result of the determination by the Company that certain product licenses could not be commercialized 8 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 plant property and equipment Period Ended March 31, 2026 December 31, 2025 Equipment $ 352,278 $ 335,464 Computer equipment 79,029 69,139 Furniture and fixtures 44,702 45,462 Leasehold improvements 91,157 92,706 Vehicles 498,995 507,478 Total 1,066,161 1,070,249 Less accumulated depreciation ( 549,812 ) ( 512,879 ) Plant, property and equipment, net $ 516,349 $ 557,370 Note 7 – Inventory Inventory consists solely of finished goods purchased for resale. Inventory is stated at cost which represents the amount paid to acquire the finished goods. The Company evaluates inventory for potential obsolescence based on a combination of factors, including (i) aging, (ii) historical sell-through patterns, and (iii) product-specific considerations. When estimated net realizable value is lower than cost, the Company records an allowance for obsolescence for the difference. Write-downs are recorded within cost of goods sold and are not subsequently reversed. Inventory is comprised of the following: Schedule of inventory Period Ended March 31, 2026 December 31, 2025 Finished goods $ 14,035,748 $ 13,947,178 Allowance for obsolete inventory ( 867,318 ) ( 475,797 ) Total Inventory, net of allowance $ 13,168,430 $ 13,472,025 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, 2026 were as follows: Schedule of lease information Operating lease ROU asset $ 713,038 Operating Lease liability - Short-term 209,226 Operating lease liability - Long-term 535,614 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 March 31, 2026 are as follows: Schedule of maturities of lease liabilities 2026 $ 158,031 2027 201,011 2028 190,554 2029 180,634 Thereafter 14,610 10 Note 9 – Income Taxes The Company’s income tax (expense) / benefit of $ 0 and $ 40,161 for the three months ended March 31, 2026 and March 31, 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. 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, 2026, 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 currently assessing the impact of OBBBA on its Consolidated Financial Statements but does not believe that the OBBBA will have a material impact on the Company's income tax expense. In July 2025, OBBBA amended section 951A for taxable years beginning after December 31, 2025, replacing the prior Global Intangible Low-Taxed Income (“GILTI”) regime with a net Controlled Foreign Corporation (“CFC”) tested income inclusion framework. The legislation also modified related provisions, including the deduction under section 250 for amounts included under section 951A. The Company has evaluated the impact of these changes on its income tax accounting and related disclosures under ASC 740 , including the effect on its estimated annual effective tax rate and taxes on foreign earnings. The Company does not expect the impact of these changes to be material to its financial statements. 11 Note 10 – Management and Director Compensation The Company paid its officers aggregate cash compensation of $ 251,160 and $ 269,496 for the three-month periods ended March 31, 2026 and 2025, respectively. The Company paid its directors aggregate cash compensation of $ 100,000 for each of the three-month periods ended March 31, 2026 and 2025 ($ 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, 2026, 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, 2026, 130,000 shares of Series B Preferred Stock were outstanding and held by the Company’s Chief Executive Officer. 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. On October 16, 2025, the Company issued 350,000 shares of common stock upon the exercise of 350,000 Series B Warrants and received net proceeds of $ 724,500 . As of March 31, 2026 and December 31, 2025, the Company had 4,905,945 shares of common stock issued and outstanding. 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. 12 In 2022, 2023, 2024, and 2025, the Company completed six (6) financing events, and in connection therewith, it issued warrants as follows: Schedule of warrants issued with financing Issuance Date/Type Number Exercise Price Expiry Date Feb 17, 2022 (“Tradeable Warrants”)* 2,051 $ 4,440.00 February 2027 Mar 14, 2022 (“2022 Pre-Funded Warrants”) 1,846 $ 2.00 Unlimited Mar 14, 2022 (“Investor Warrants”) 1,801 $ 4,440.00 March 2027 Apr 28, 2022 (“April Warrants”) 4,862 $ 7,520.00 April 2027 May 16, 2023 (“May Pre-Funded Warrants”) 1,751 $ 2.00 Unlimited May 16, 2023 (“May Investor Warrants”) 5,952 $ 1,180.00 November 2028 Feb 15, 2024 (“2024 Pre-Funded Warrants”) 22,500 $ 2.00 Unlimited Feb 15, 2024 (“Series A Warrants”) 3,986 ** $ 4,200.00 ** August 2026 Feb 15, 2024 (“Series B Warrants”) 7,973 ** $ 4,760.00 ** February 2029 Apr 3, 2025 (“2025 Pre-Funded Warrants”) 260,000 $ 0.001 Unlimited * These warrants trade on Nasdaq under the symbol SBFMW. ** Subject to adjustment. 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 March 31, 2026, all of the 2022 Pre-Funded Warrants, all of the May Pre-Funded Warrants, all of the 2024 Pre-Funded Warrants, all of the 2025 Pre-Funded Warrants, a total of 1,569 Tradeable Warrants, 1,401 Investor Warrants, all of the Series A Warrants, and 2,269,303 Series B Warrants (as adjusted) were exercised resulting in aggregate net proceeds of $ 18,136,992 received by the Company. The Company’s outstanding warrants as of March 31, 2026 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 15,227,962 * $ 2.07 * February 2029 * 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 exercise price of the warrants remains unchanged 13 Note 13 – Earnings Per Share The following table sets forth the computation of basic* net income (loss) per share: Schedule of computation of basic and diluted net income per share Quarter Ended March 31, 2026 2025 Net gain (loss) attributable to common stock $ ( 1,243,869 ) $ ( 1,179,771 ) Weighted average outstanding shares of common stock 4,905,945 2,703,293 Net gain (loss) per share attributable to common stock $ ( 0.25 ) $ ( 0.44 ) * Diluted net income (loss) per share is not included in this table as the Company incurred net losses for the years ended December 31, 2026 and 2025 and inclusion of dilutive instruments would have an anti-dilutive effect. Note 14 – Segment Reporting The Company operates as one operating segment, which is also its one reportable segment, as the Chief Executive Officer, acting as the Chief Operating Decision Maker (“CODM”), evaluates financial performance and allocates resources on a consolidated, enterprise-wide basis. The Company’s operations are managed as an integrated pharmaceutical business focused on the research, development, and commercialization of prescription drugs and supplements. Although the Company conducts activities through multiple legal entities — including Sunshine Biopharma Inc. (U.S.), Sunshine Biopharma Canada Inc. (Canada), and Nora Pharma Inc. (Canada) — these entities operate under a unified management structure with shared economic characteristics, common product development objectives, and centralized decision making. As such, they do not meet the criteria for separate operating segments under ASC 280 – Segment Reporting . In accordance with ASU 2023-07 , the Company provides the following information regarding its single reportable segment: · Measure of Segment Profit (Loss): The CODM evaluates performance using consolidated operating income (loss), which is consistent with the amounts presented in the accompanying consolidated financial statements. · Significant Segment Expenses: Research and development expenses, and supply chain costs, selling and marketing expenses, and general and administrative expenses are all incurred and reviewed on a consolidated basis. · Other Segment Items: Interest income, interest expense, foreign exchange gains and losses, and other non-operating items are also managed and reviewed on a consolidated basis. · Reconciliation: As the Company has only one reportable segment, no additional reconciliation to consolidated totals is required beyond what is presented in the consolidated statements of operations. The Company’s operations are conducted in Canada and substantially all long-lived assets are located in this jurisdiction. Revenues are generated from customers located in Canada. Note 15 – Legal Matters On April 14, 2025, the Company terminated the employment of Mr. Malek Chamoun, president of the Company’s wholly owned Canadian subsidiary, Nora Pharma. On April 17, 2025, the Company received a 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 sent a letter on May 1, 2025 stating 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. Following a series of communications between the parties’ legal counsels, there has been no response to the Company’s letter dated October 14, 2025, nor any action taken by Mr. Chamoun’s attorneys since that date. 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. Note 16 – Subsequent Events On April 14, 2026, the Company issued 100,000 restricted shares of common stock under the Company’s 2023 Equity Incentive Plan to one of its directors for services. 14