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Item 1. Financial Statements

2026-08-13 compared with 2026-05-13 · 430 added, 345 removed, 93 unchanged (89% of the section changed)

FINANCIAL STATEMENTS

Biopharma Inc.

Balance Sheets

Sunshine Biopharma Inc.

Consolidated Balance Sheets

Current Assets:

Cash and cash

and cash equivalents

Accounts receivable

Total Current Assets

Current Assets

Long-Term Assets:

2 unchanged sentences

Right-of-use-asset

Total Long-Term Assets

Long-Term Assets

Current Liabilities:

3 unchanged sentences

Right-of-use-liability

Total Current Liabilities

Current Liabilities

Long-Term Liabilities:

Right-of-use-liability

Total Long-Term Liabilities

SHAREHOLDERS' EQUITY

Stock Series B $ 0.10 par value per share;

1,000,000 shares authorized 130,000 shares issued and outstanding

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

paid in excess of par value

comprehensive income

Long-Term Liabilities

SHAREHOLDERS'

Preferred Stock Series B $ 0.10 par value per share;

1,000,000 shares authorized 130,000 shares issued

and outstanding

Common Stock $ 0.001 par value per share;

3,000,000,000

shares authorized 2,388,516 shares issued and

outstanding at June 30, 2026 and 490,595 shares

issued and outstanding at December 31, 2025

Capital paid in excess of par value

Accumulated comprehensive income

( 77,823,043 )

( 75,015,126 )

SHAREHOLDERS' EQUITY

LIABILITIES AND SHAREHOLDERS' EQUITY

Accompanying Notes To These Financial Statements.

Biopharma Inc.

Statements of Operations and Comprehensive Loss (Unaudited)

See Accompanying Notes To These Financial Statements.

Sunshine Biopharma Inc.

Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

Cost of Sales

1 unchanged sentence

Director fees

& amortization

Total General & Administrative

Impairment of intangible assets

Depreciation and amortization

Total General & Administrative Expenses

(Loss) from operations

1 unchanged sentence

( 2,054,655 )

Foreign exchange

( 3,008,455 )

( 3,350,405 )

Other Income (Expense):

Foreign exchange gain (loss)

Interest income

Settlement proceeds

Total Other Income

2 unchanged sentences

( 1,980,000 )

for income taxes

( 2,807,917 )

( 3,199,932 )

Foreign exchange translation

Provision for income taxes

$ ( 1,564,048 )

$ ( 1,770,834 )

$ ( 2,807,917 )

$ ( 2,950,605 )

Other comprehensive income:

Gain (Loss) from foreign exchange translation

Comprehensive (Loss)

1 unchanged sentence

$ ( 686,277 )

(Loss) per common share (Basic)

Weighted average common shares outstanding

Accompanying Notes To These Financial Statements.

Biopharma Inc.

Statements of Cash Flows (Unaudited)

From Operating Activities:

$ ( 3,401,543 )

$ ( 1,839,859 )

Adjustments to reconcile net

loss to net cash used in operating activities:

and amortization

in right-of-use asset

Payable & accrued expenses

Lease liability

Cash Flows (Used In) Operating Activities

Basic (Loss) per common share

Weighted Average Common Shares Outstanding (Basic)

See Accompanying Notes To These Financial Statements.

Sunshine Biopharma Inc.

Consolidated Statements of Cash Flows (Unaudited)

Cash Flows From Operating Activities:

$ ( 2,807,917 )

$ ( 2,950,605 )

From Investing Activities:

of intangible assets

Cash Flows (Used In) Investing Activities

From Financing Activities:

Net Cash Flows Provided by Financing Activities

Cash Equivalents at Beginning of Period

(decrease) in cash and cash equivalents

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Intangible asset impairment

Stock issued for services

Accounts receivable

( 1,123,909 )

Prepaid expenses

Reduction in right-of-use asset

Accounts Payable & accrued expenses

Lease liability

Income tax payable

Net Cash (Used In) Operating Activities

( 2,990,077 )

of exchange rate changes on cash

and Cash Equivalents at End of Period

Supplementary

Disclosure of Cash Flow Information:

paid for interest

paid for income taxes

Accompanying Notes To These Financial Statements.

Biopharma Inc.

Statements of Shareholders' Equity (Unaudited)

Common Shares

Preferred Shares

( 2,968,400 )

Cash Flows From Investing Activities:

Purchase of intangible assets

Purchase of equipment

Net Cash (Used In) Investing Activities

Cash Flows From Financing Activities:

Proceeds from public offering

Exercise of warrants

Net Cash Provided by Financing Activities

Cash and Cash Equivalents at Beginning of Period

Net increase (decrease) in cash and cash equivalents

Foreign currency translation adjustment

Cash and Cash Equivalents at End of Period

Supplementary Disclosure of Cash Flow Information:

Cash paid for interest

Cash paid for income taxes

See Accompanying Notes To These Financial Statements.

Sunshine Biopharma Inc.

Consolidated Statements of Shareholders' Equity (Unaudited)

Number of Common Shares

Capital Paid in Excess

Comprehensive

Months Period

Balance December 31, 2025

Three Months Period

Balance March 31, 2026

$ ( 343,306 )

$ ( 76,258,995 )

Exercise of Series B Warrants

Exercise of Series C Warrants

Public offering, net of issuance costs

Common stock issued for services

Reverse split share adjustment

( 1,564,048 )

Balance at March 31,

( 1,879,677 )

Balance at June 30, 2026

$ 106,004,591

$ ( 658,935 )

$ ( 77,823,043 )

Balance March 31, 2025

$ ( 803,770 )

$ ( 70,219,545 )

Exercise of Series B Warrants

Public offering, net of issuance costs

( 1,770,834 )

Balance at June 30, 2025

$ ( 71,990,379 )

Six Months Period

Balance December 31, 2025

$ ( 75,015,126 )

Exercise of Series B Warrants

Exercise of Series C Warrants

Public offering, net of issuance costs

Common stock issued for services

Reverse split share adjustment

( 2,807,917 )

Exercise of warrants

( 3,401,543 )

Balance at June 30, 2026

$ 106,004,591

Balance at March 31,

$ ( 658,935 )

$ ( 77,823,043 )

Accompanying Notes To These Financial Statements.

Sunshine Biopharma

Notes to Unaudited

Consolidated Financial Statements

For the Three

Months Ended March 31, 2026 and 2025

1 – Description of Business

Company was incorporated under the name Mountain West Business Solutions, Inc.

Balance December 31, 2024

$ ( 829,959 )

$ ( 69,039,774 )

Exercise of Series B Warrants

Public offering, net of issuance costs

( 2,950,605 )

( 1,839,859 )

Balance at June 30, 2025

$ ( 71,990,379 )

See Accompanying Notes To These Financial Statements.

Sunshine Biopharma Inc.

Notes to Unaudited Consolidated Financial Statements

For the Three and Six Months Ended June 30, 2026 and 2025

Note 1 – Description of

The Company was incorporated under the name Mountain West Business

Solutions, Inc.

on August 31, 2006, in the State of Colorado.

October 15, 2009, the Company acquired Sunshine Biopharma Inc.

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

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”)

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:

(“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., 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.

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

On February 10, 2024, the Canadian federal government joined the generic drug reimbursement program as a payor under the Pharmacare

This development further strengthened the Canadian generic drug market, which is the Company’s current focus.

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

2 – Basis of Presentation

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.

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

The unaudited financial statements of the Company for the

three and six month periods ended June 30, 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.

3 – Reverse Stock Splits

April 17, 2024 and August 8, 2024, the Company completed 1-for-100 and 1-for-20 reverse splits of its common stock, respectively.

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.

February 18, 2026, Dr.

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).

4 – Acquisition of Nora Pharma Inc.

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.

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.

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

Chamoun by the Company on April 14, 2025 (See Note 15).

5 – Intangible Assets

Intangible assets

consisted of the following:

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.

Note 3 – Reverse Stock

Effective June 1, 2026, April 17, 2024, and August 8, 2024,

the Company completed 1-for-10 , 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 six (6) 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

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.

price for the shares was $ 18,860,637 which was paid in cash ($ 14,346,637 ) and by the issuance of 185 shares of the Company’s common

stock valued at $ 4,514,000 or $24,400.00 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 was 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 would not be 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.

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, 2026, the remaining earnout balance was $ 479,208

CAD ($ 295,797

This remaining earnout amount was paid by the Company following settlement of the dispute between the Company and Mr.

on July 8, 2026 (See Note 15).

Note 5 – Intangible Assets

Intangible assets consisted of the following:

Schedule of intangible assets

March 31, 2026

December 31, 2025

Intangible assets at beginning of period, net

Purchase of additional intangible assets (drug licenses & dossiers)

Intangible assets at beginning

of period, net

additional intangible assets (drug licenses & dossiers)

Less impairment*

( 1,748,247 )

Less accumulated amortization

Intangible assets, net

The impairment was a result of the determination by the Company that certain product licenses could not be commercialized

6 – Plant, Property and Equipment

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.

Less accumulated

impairment was a result of determination by the Company that certain product licenses could

not be commercialized

Note 6 – Plant, Property and Equipment

Property, plant and equipment are stated at cost.

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:

of plant property and equipment

March 31, 2026

December 31, 2025

Schedule of plant property and equipment

Computer equipment

1 unchanged sentence

Leasehold improvements

Less accumulated depreciation

Plant, property and equipment, net

7 – Inventory

consists solely of finished goods purchased for resale.

Inventory is stated at cost which represents the amount paid to acquire the finished

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

Inventory is comprised

of the following:

Less accumulated

property and equipment, net

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

March 31, 2026

December 31, 2025

Finished goods

Allowance for obsolete inventory

Total Inventory, net of allowance

Company has obligations as a lessee for warehouse and office space with initial non-cancellable terms in excess of one year.

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.

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.

reported on the balance sheet as of March 31, 2026 were as follows:

for obsolete inventory

Inventory, net of allowance

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.

variable lease payments are not included in lease payments used to determine lease liability and are recognized as variable costs when

Amounts reported on the balance sheet as of June 30, 2026 were

Schedule of lease information

5 unchanged sentences

Discount rate

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.

of lease liabilities under non-cancellable operating leases at March 31, 2026 are as follows:

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, 2026 are as follows:

Schedule of maturities of lease liabilities

9 – Income Taxes

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.

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.

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.

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.

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.

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

10 – Management and Director Compensation

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.

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).

11 – Capital Stock

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.

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.

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.

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.

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 .

of March 31, 2026 and December 31, 2025, the Company had 4,905,945 shares of common stock issued and outstanding.

Company has declared no dividends since inception.

12 – Warrants

Company accounts for issued warrants either as a liability or equity in accordance with ASC 480-10 or ASC 815-40 .

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.

815-40 , contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering

Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period.

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.

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

Feb 17, 2022 (“Tradeable Warrants”)*

February 2027

Mar 14, 2022 (“2022 Pre-Funded Warrants”)

Mar 14, 2022 (“Investor Warrants”)

Apr 28, 2022 (“April Warrants”)

May 16, 2023 (“May Pre-Funded Warrants”)

May 16, 2023 (“May Investor Warrants”)

November 2028

Feb 15, 2024 (“2024 Pre-Funded Warrants”)

Feb 15, 2024 (“Series A Warrants”)

$ 4,200.00 **

Feb 15, 2024 (“Series B Warrants”)

$ 4,760.00 **

February 2029

Apr 3, 2025 (“2025 Pre-Funded

These warrants trade on Nasdaq

under the symbol SBFMW.

Subject to adjustment.

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 .

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.

Company’s outstanding warrants as of March 31, 2026 consisted of the following:

Schedule of warrants outstanding

Note 9 – Income Taxes

Our Income tax (expense) / benefit of $ 0 and $ 0

for the three and six months ended June 30, 2026, 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.

Our 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.

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 all of its deferred

tax assets of June 30, 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

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.

bringing various changes to 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.

The OBBBA also amended section 951A for taxable years beginning after December 31, 2025, replacing the prior global intangible low-taxed

income regime with a net CFC tested income inclusion framework.

The legislation also modified related provisions, including the deduction

under Section 250 for amounts included under Section 951A.

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 its impact on its Consolidated Financial Statements

but does not believe that the OBBBA will have a material impact on the Company's income tax expense.

Note 10 – Management and

Director Compensation

The Company paid its officers aggregate cash compensation of

$ 593,844 and $ 524,504 for the three-month periods ended June 30, 2026 and 2025, respectively.

For the six-month periods ended June 30,

2026 and 2025, the Company paid its officers aggregate cash compensation of $ 845,004 and $ 988,801 , respectively.

Of the amounts paid

through June 30, 2026, $ 232,000 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, 2026 and 2025, and $ 200,000 for each of the six-month periods ended June

30, 2026 and 2025.

In April 2026, one of the directors of the Company received

a stock award of 10,000 shares of common stock valued at $ 96,900 .

Note 11 – Capital

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 June 30, 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.

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 June 30, 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 12,744 shares of common

stock upon the exercise of 12,744 Series B Warrants and received $ 355,298 in net proceeds.

On April 2, 2025, the Company issued 66,000 shares of common

stock upon the exercise of 66,000 Series B Warrants and received $ 1,840,014 in net proceeds.

On April 3, 2025, the Company issued an aggregate of 118,840

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 35,000 shares of common

stock upon the exercise of 35,000 Series B Warrants and received net proceeds of $ 724,500 .

On May 19, 2026, the Company completed a public offering

and received gross proceeds of approximately $ 6 .0

The offering consisted of 1,200,000

Common Units (or Pre-Funded Units), each

consisting of (i) one (1) share of common stock or one (1) pre-funded warrant and (ii) two (2) Series C Warrants to purchase one (1)

share of common stock per warrant at an initial exercise price of $5.00.

The public offering price per Common Unit was $5.00

(or $4.9999 per Pre-Funded Unit, which is equal to the public offering price per Common Unit sold in the offering minus an exercise

price of $0.0001 per share under the pre-funded warrants).

The pre-funded warrants were immediately exercisable and could be

exercised at any time until exercised in full.

All of the pre-funded warrants have been exercised as of June 30, 2026.

Warrants are exercisable immediately and expire five years after the initial issuance date.

The exercise price and number of shares

issuable under the Series C Warrants are subject to adjustment as described in more detail in the final prospectus filed in

connection with the offering.

As of June 30, 2026 and December 31, 2025, the Company had

2,388,516 and 490,595 shares of common stock issued and outstanding, respectively.

The Company has declared no dividends since inception.

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, 2024, 2025, and 2026, the Company completed

seven (7) financing events, and in connection therewith, it issued warrants as follows:

of warrants issued with financing

17, 2022 (“Tradeable Warrants”)*

February 2027

14, 2022 (“2022 Pre-Funded Warrants”)

14, 2022 (“Investor Warrants”)

28, 2022 (“April Warrants”)

16, 2023 (“May Pre-Funded Warrants”)

16, 2023 (“May Investor Warrants”)

15, 2024 (“2024 Pre-Funded Warrants”)

15, 2024 (“Series A Warrants”)

15, 2024 (“Series B Warrants”)

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 – Earnings Per Share

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,

Net gain (loss) attributable to common stock

3, 2025 (“2025 Pre-Funded Warrants”)

19, 2026 (“Series C Warrants”)

19, 2026 (“2026 Pre-Funded Warrants”)

warrants trade on Nasdaq under the symbol SBFMW.

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 June 30, 2026, all of the pre-funded warrants, a total

of 157 Tradeable Warrants, 141 Investor Warrants, all of the Series A Warrants, 86,937 Series B Warrants (as adjusted), and 382,230

Series C Warrants were exercised resulting in aggregate net proceeds of $ 20,856,176 received by the Company.

The Company’s outstanding warrants as of June 30, 2026

consisted of the following:

of warrants outstanding

and subject to further adjustments.

The Series C Warrants adjusted to 4,035,540 warrants with an exercise price of $2.50 per share on July 6, 2026,

twenty (20) days following the mailing of the Company’s related 14C to the shareholders of record.

Note 13 – Earnings Per

The following table sets forth the computation of basic* net

(loss) per share:

of computation of basic net income per share

Months Ended June 30,

gain (loss) attributable to common stock

$ ( 2,807,917 )

$ ( 2,950,605 )

Weighted average outstanding shares of common stock

Net gain (loss) per share attributable to common stock

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.

average outstanding shares of common stock

gain (loss) per share attributable to common stock

* 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.

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:

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

In accordance with ASU 2023-07 , the Company provides

the following information regarding its single reportable segment:

Measure of Segment Profit (Loss):

6 unchanged sentences

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.

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.

15 – Legal Matters

On April 14, 2025, the Company terminated the

employment of Mr.

Note 15 – Legal Matters

On April 10, 2025, the Company terminated the employment

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.

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.

16 – Subsequent Events

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.

Chamoun $7,307,025 CAD

(approximately $5,300,000 USD) within five (5) days.

On July 8, 2026, the Company entered into an agreement of transaction and

mutual release (the “Release Agreement”) with Mr.

Pursuant to the Release Agreement, the Company agreed to pay

Chamoun $ 1,500,000

CAD (approximately $ 1,058,565

million USD) in full and final settlement of the dispute between the parties.

The total amount of the settlement had been accrued under earnout payable, salaries, and reimbursable employee

The Company paid this amount in accordance with the

Release Agreement on August 10, 2026.

Note 16 – Subsequent

July 20, 2026, the Company entered into an At-The-Market Issuance Sales Agreement (the “Sales

Agreement”) with Aegis Capital Corp.

(the “Agent”), under which the Company may, from time to time, sell shares of

the Company’s common stock, for an aggregate offering price of up to $4,000,000, in “at-the-market” offerings through

or to the Agent, as exclusive sales agent (the “ATM Offering”).

Subject to the terms and conditions of the Sales Agreement

and the applicable placement notice, sales of the Company’s common stock may be made by any method permitted by law deemed to be

an “at-the-market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, including sales made

directly on or through the Nasdaq Capital Market or any other existing trading market for the Company’s common stock.

will receive a commission from the Company of 3.0% of the gross proceeds from the sale of any shares of common stock under the Sales

Agreement, in addition to reimbursement of certain expenses .

July 27, 2026 through August 12, 2026, the Company sold 1,430,521 shares of its common stock under the ATM Offering and received $1,722,555

in net proceeds.

August 3, 2026, the Company’s Series B Warrants were adjusted to 25,477,133 warrants with an exercise price of $1.2202 per share

as a result of sales of common stock by the Company under its ATM Offering .

August 7, 2026, the Company issued 58,300 shares of common stock to one of its directors for services rendered to the Company.

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 1. Financial Statements