UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For
the quarterly period ended:
For the transition period from to
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State of other jurisdiction of incorporation) | (IRS Employer ID No.) |
(Address of principal executive offices)
(
(Issuer’s Telephone Number)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered |
The
The
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Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days:
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company
| ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes
The number of shares of the registrant’s common stock, par value $0.001, issued and outstanding as of May 13, 2026, was shares.
TABLE OF CONTENTS
| PART II. OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 23 |
| Item 1A. | Risk Factors | 23 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 23 |
| Item 3. | Defaults Upon Senior Securities | 23 |
| Item 4. | Mine Safety Disclosures | 23 |
| Item 5. | Other Information | 23 |
| Item 6. | Exhibits | 23 |
| Signatures | 24 | |
| 2 |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Sunshine Biopharma Inc.
Consolidated Balance Sheets
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Deposits | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Long-Term Assets: | ||||||||
| Property & equipment | ||||||||
| Intangible assets | ||||||||
| Right-of-use-asset | ||||||||
| Total Long-Term Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable & accrued expenses | $ | $ | ||||||
| Earnout payable | ||||||||
| Income tax payable | ||||||||
| Right-of-use-liability | ||||||||
| Total Current Liabilities | ||||||||
| Long-Term Liabilities: | ||||||||
| Right-of-use-liability | ||||||||
| Total Long-Term Liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Preferred Stock Series B $ par value per share; shares authorized shares issued and outstanding | ||||||||
| Common Stock $ par value per share; shares authorized shares issued and outstanding at March 31, 2026 and December 31, 2025 | ||||||||
| Capital paid in excess of par value | ||||||||
| Accumulated comprehensive income | ( | ) | ( | ) | ||||
| Accumulated (Deficit) | ( | ) | ( | ) | ||||
| TOTAL SHAREHOLDERS' EQUITY | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | $ | ||||||
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 | $ | $ | ||||||
| Cost of sales | ||||||||
| Gross profit | ||||||||
| General & Administrative Expenses: | ||||||||
| Accounting | ||||||||
| Consulting | ||||||||
| Director fees | ||||||||
| Legal | ||||||||
| Marketing | ||||||||
| Office | ||||||||
| R&D | ||||||||
| Salaries | ||||||||
| Taxes | ||||||||
| Depreciation & amortization | ||||||||
| Total General & Administrative Expenses | ||||||||
| (Loss) From Operations | ( | ) | ( | ) | ||||
| Foreign exchange | ( | ) | ||||||
| Interest income | ||||||||
| Other income | ||||||||
| Total Other Income | ||||||||
| Net (loss) before income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ( | ) | ||||||
| Net (Loss) | $ | ( | ) | $ | ( | ) | ||
| Foreign exchange translation | ( | ) | ||||||
| Comprehensive (Loss) | ( | ) | ( | ) | ||||
| (Loss) per common share (Basic) | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares outstanding (Basic) | ||||||||
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) | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ( | ) | ||||||
| Deposits | ( | ) | ( | ) | ||||
| Prepaid expenses | ||||||||
| Reduction in right-of-use asset | ||||||||
| Accounts Payable & accrued expenses | ( | ) | ( | ) | ||||
| Lease liability | ( | ) | ( | ) | ||||
| Income tax payable | ( | ) | ||||||
| Net Cash Flows (Used In) Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities: | ||||||||
| Purchase of intangible assets | ( | ) | ( | ) | ||||
| Purchase of equipment | ( | ) | ( | ) | ||||
| Net Cash Flows (Used In) Investing Activities | ( | ) | ( | ) | ||||
| Cash Flows From Financing Activities: | ||||||||
| Exercise of warrants | ||||||||
| Net Cash Flows Provided by Financing Activities | ||||||||
| Cash and Cash Equivalents at Beginning of Period | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ( | ) | ||||
| Effect of exchange rate changes on cash | ( | ) | ( | ) | ||||
| 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.
| 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 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Net (loss) | – | – | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Balance December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Exercise of warrants | – | |||||||||||||||||||||||||||||||
| Net (loss) | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
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 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
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 $
As
part of the consideration for Nora Pharma, the Company agreed to a $
Note 5 – Intangible Assets
Intangible assets consisted of the following:
| Period Ended | March 31, 2026 | December 31, 2025 | ||||||
| Intangible assets at beginning of period, net | $ | $ | ||||||
| Purchase of additional intangible assets (drug licenses & dossiers) | ||||||||
| Total | ||||||||
| Less impairment* | ( | ) | ||||||
| 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
| 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:
| Period Ended | March 31, 2026 | December 31, 2025 | ||||||
| Equipment | $ | $ | ||||||
| Computer equipment | ||||||||
| Furniture and fixtures | ||||||||
| Leasehold improvements | ||||||||
| Vehicles | ||||||||
| Total | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Plant, property and equipment, net | $ | $ | ||||||
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:
| Period Ended | March 31, 2026 | December 31, 2025 | ||||||
| Finished goods | $ | $ | ||||||
| Allowance for obsolete inventory | ( | ) | ( | ) | ||||
| Total Inventory, net of allowance | $ | $ | ||||||
| 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:
| Operating lease ROU asset | $ | |||
| Operating Lease liability - Short-term | ||||
| Operating lease liability - Long-term | ||||
| Remaining lease term | ||||
| Discount rate | ||||
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:
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| 10 |
Note 9 – Income Taxes
The
Company’s income tax (expense) / benefit of $
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 $
The
Company paid its directors aggregate cash compensation of $
Note 11 – Capital Stock
The Company’s authorized capital is comprised of shares of common stock, par value $, and shares of preferred stock, $ par value. As of March 31, 2026, the Company had authorized 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, shares of Series B Preferred Stock were outstanding and held by the Company’s Chief Executive Officer.
On
January 3, 2025, the Company issued shares of common stock upon the exercise of Series B Warrants and received $
On
April 2, 2025, the Company issued shares of common stock upon the exercise of Series B Warrants and received $
On
April 3, 2025, the Company issued an aggregate of shares of common stock in connection with a registered direct offering and
received $
On
October 16, 2025, the Company issued shares of common stock upon the exercise of Series B Warrants and received net proceeds
of $
As of March 31, 2026 and December 31, 2025, the Company had 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:
| Issuance Date/Type | Number | Exercise Price | Expiry Date | |||||||
| Feb 17, 2022 (“Tradeable Warrants”)* | $ | |||||||||
| 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”) | $ | |||||||||
| Feb 15, 2024 (“2024 Pre-Funded Warrants”) | $ | |||||||||
| Feb 15, 2024 (“Series A Warrants”) | ** | $ | ** | |||||||
| Feb 15, 2024 (“Series B Warrants”) | ** | $ | ** | |||||||
| Apr 3, 2025 (“2025 Pre-Funded Warrants”) | $ | |||||||||
| * | 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 $
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 Tradeable Warrants, Investor Warrants, all of the Series A Warrants, and
Series B Warrants (as adjusted) were exercised resulting in aggregate net proceeds of $
The Company’s outstanding warrants as of March 31, 2026 consisted of the following:
| Type | Number | Exercise Price | Expiry Date | |||||||
| Tradeable Warrants | $ | |||||||||
| Investor Warrants | $ | |||||||||
| Series B Warrants | * | $ | * | |||||||
| * | 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 |
The following table sets forth the computation of basic* net income (loss) per share:
| Quarter Ended March 31, | 2026 | 2025 | ||||||
| Net gain (loss) attributable to common stock | $ | ( | ) | $ | ( | ) | ||
| 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.
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 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included herein. This discussion includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The statements regarding Sunshine Biopharma Inc. contained in this Report that are not historical in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “likely,” “expects,” “anticipates,” “estimates,” “believes” or “plans,” or comparable terminology, are forward-looking statements based on current expectations and assumptions, and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. Important factors known to us that could cause such material differences are identified in this report and in our annual report on Form 10-K for the year ended December 31, 2025. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law. You are advised, however, to consult any future disclosures we make on related subjects in future reports we file with the SEC.
About Sunshine Biopharma
We are a pharmaceutical company offering and researching life-saving medicines in a wide variety of therapeutic areas, including oncology and antivirals. We have two wholly owned subsidiaries: (i) Nora Pharma Inc. (“Nora Pharma”), a Canadian corporation, through which we currently have 60 generic prescription drugs on the market in Canada, and (ii) Sunshine Biopharma Canada Inc. (“Sunshine Canada”), a Canadian corporation through which we develop and sell OTC supplements.
In addition, we are conducting a proprietary drug development program which is comprised of (i) K1.1 mRNA, an LNP encapsulated mRNA targeted for liver cancer, and (ii) SBFM-PL4, a protease inhibitor for treatment of SARS Coronavirus infections.
Commercial Operations
Our commercial operations are focused on the procurement of rights to generic pharmaceutical products for sale, currently in Canada and ultimately around the world. We seek to secure such rights through various types of strategic arrangements, including:
| · | In-licensing and Supply Agreements: Nora Pharma acquires the rights to import, market, sell and distribute the products in Canada by purchasing the drug dossiers from strategic partners. Nora Pharma then files the dossiers with Health Canada to obtain regulatory approval prior to marketing. The approval process at Health Canada takes on average of 12 months. The products are sold under Nora Pharma label. | |
| · | Cross-licensing: Nora Pharma acquires the rights to import, market, sell and distribute the products in Canada by receiving an authorization letter from pharmaceutical partners. The partners’ products are already approved in Canada but we are still required to obtain our own approval from Health Canada, which takes on average 45-60 days. The products are sold under Nora Pharma label. | |
| · | Distribution Agreements: Nora Pharma acquires the rights to market, sell and distribute the products in Canada by signing distribution agreements with various pharmaceutical partners. The partners’ products are already approved by Health Canada. The products are sold under the partners’ label. |
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Generic drugs are pharmaceutically equivalent to the brand name drugs. They contain identical medicinal ingredients in the same amounts as the brands. Generic medications, however, may have different non-medicinal ingredients than the brand name drugs, but the generic developer must show that these do not affect the safety, efficacy, or quality of the drug compared to the brand. When a generic drugs company wants to sell a generic drug in Canada, it must file a generic drug submission with Health Canada. The submission is called an Abbreviated New Drug Submission (ANDS). The submission is reviewed by scientists and health care experts at Health Products and Food Branch (HPFB) of Health Canada. All generic drug submissions go through the same process as the brand name drug submissions. If the evaluation shows that the generic drug meets all regulatory requirements (including patent and data protection considerations), Health Canada will issue a Notice of Compliance (NOC) and a Drug Identification Number (DIN) to the applicant. The NOC and DIN signal the drug's official approval in Canada and permit the applicant to market the drug in Canada. Once a company obtains the NOC and DIN for a drug, then it begins the process with Pan-Canadian Pharmaceutical Alliance (pCPA) to have the drug listed on the provincial and territorial formularies and federal government drug benefit plans.
We currently have the following generic prescription drugs on the market in Canada:
| Drug* | Therapeutic Area | Brand |
| Alendronate | Osteoporosis | Fosamax® |
| Amlodipine | Cardiovascular | Norvasc® |
| Apixaban | Cardiovascular | Eliquis® |
| Aripiprazole | Antipsychotic | Abilify® |
| Atorvastatin | Cardiovascular | Lipitor® |
| Azithromycin | Antibacterial | Zithromax® |
| Betahistine | Vertigo | Serc® |
| Bilastine | Allergy | Blexten® |
| Candesartan | Hypertension | Atacand® |
| Candesartan HCTZ | Hypertension | Atacand Plus® |
| Celecoxib | Anti-inflammatory | Celebrex® |
| Cetirizine | Allergy | Reactine® |
| Ciprofloxacin | Antibiotic | Cipro® |
| Citalopram | Central nervous system | Celexa® |
| Clindamycin | Antibiotic | Dalacin® |
| Clopidogrel | Cardiovascular | Plavix® |
| Dapagliflozin | Diabetes | Forxiga® |
| Docusate | Gastrointestinal | Colace® |
| Donepezil | Central nervous system | Aricept® |
| Doxycycline | Antibacterial | Vibramycin® |
| Duloxetine | Central nervous system | Cymbalta® |
| Dutasteride | Urology | Avodart® |
| Escitalopram | Central nervous system | Cipralex® |
| Ezetimibe | Cardiovascular | Ezetrol® |
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| Finasteride | Urology | Proscar® |
| Fluconazole | Antifungal | Diflucan® |
| Fluoxetine | Central nervous system | Prozac® |
| Gabapentin | Central nervous system | Neurontin® |
| Hydroxychloroquine | Antimalarial | Plaquenil® |
| Letrozole | Oncology | Femara® |
| Levetiracetam | Central nervous system | Keppra® |
| Lurasidone | Antipsychotic | Latuda® |
| Metformin | Diabetes | Glucophage® |
| Mirtazapine | Central nervous system | Remeron® |
| Montelukast | Allergy | Singulair® |
| Olanzapine | Central nervous system | Zyprexa® |
| Olanzapine ODT | Central nervous system | Zyprexa® |
| Olmesartan | Cardiovascular | Olmetec® |
| Olmesartan HCTZ | Cardiovascular | Olmetec Plus® |
| Pantoprazole | Gastroenterology | Pantoloc® |
| Paroxetine | Central nervous system | Paxil® |
| Perindopril | Cardiovascular | Coversyl® |
| Pravastatin | Cardiovascular | Pravachol® |
| Pregabalin | Central nervous system | Lyrica® |
| Prucalopride | Women's Health | Resotran® |
| Quetiapine | Central nervous system | Seroquel® |
| Quetiapine XR | Central nervous system | Seroquel XR® |
| Ramipril | Cardiovascular | Altace® |
| Rizatriptan ODT | Central nervous system | Maxalt® ODT |
| Rosuvastatin | Cardiovascular | Crestor® |
| Sertraline | Central nervous system | Zoloft® |
| Sildenafil | Urology | Viagra® |
| Tadalafil | Urology | Cialis® |
| Telmisartan | Cardiovascular | Micardis® |
| Telmisartan HCTZ | Cardiovascular | Micardis Plus® |
| Topiramate | Anticonvulsant | Topamax® |
| Ursodiol | Cholelithiasis | Urso® |
| Varenicline | Smoking cessation | Champix® |
| Zolmitriptan | Central nervous system | Zomig® |
| Zopiclone | Central nervous system | Imovane® |
* Our distribution agreements were terminated effective December 31, 2025, reducing the drugs we have on the market from 71 to 60.
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In addition to the 60 drugs currently on the market, we have 22 additional drugs in our pipeline including 12 we anticipate launching during the remainder of 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 existing portfolio will strengthen our presence in the Canadian $11.2 billion a year generic drug market (IMARC Group) and provide us with greater access to pharmacies as we become more of a go-to supplier for every-day and specialty medicines.
Research and Development
The following table summarizes our proprietary drugs in development:
| Drug Candidate | Therapeutic Area/Indication | Development Stage | ||
| K1.1 (mRNA LNP) | Oncology (Liver Cancer) | Animal Testing | ||
| SBFM-PL4 (Small Molecule) | Antiviral (SARS Coronavirus Infections) | Animal Testing |
K1.1 Anticancer mRNA
In June 2021, we initiated a new research project in which we set out to determine if certain mRNA molecules can be used as anti-cancer agents. The data collected to date have shown that a selected group of mRNA molecules are capable of destroying cancer cells in vitro including multidrug resistant breast cancer cells (MCF-7/MDR), ovarian adenocarcinoma cells (OVCAR-3), and pancreatic cancer cells (SUIT-2). Studies using non-transformed (normal) human cells (HMEC cells) showed that these mRNA molecules had little cytotoxic side effects. These new mRNA molecules, bearing the laboratory name K1.1, were adapted for delivery into patients using a lipid nanoparticle (LNP) technology similar to the one employed in the COVID-19 mRNA vaccines. On April 20, 2022, we filed a provisional patent application in the United States covering our K1.1 mRNA molecules. The patent application was converted into a PCT Application on October 18, 2024 and published by the United States Patent and Trademark Office (“USPTO”) on September 4, 2025.
In November 2022, we concluded an agreement with a specialized commercial partner for the purposes of formulating our K1.1 mRNA molecules into specific lipid nanoparticles for use in test animals including xenograft mice. The initial results of our animal testing indicated that our K1.1 mRNA-LNP constructs were effective at reducing the size of liver cancer tumors in xenograft mice. We are currently seeking to confirm these results by conducting additional xenograft experiments on a broader scale and in more detailed dose-response studies.
SBFM-PL4 SARS Coronavirus Treatment
The initial genome expression products following infection by Betacoronavirus, the causative agent of COVID-19, are two large polyproteins, referred to as pp1a and pp1ab. These two polyproteins are cleaved at 15 specific sites by two virus encoded proteases, called Mpro and PLpro, to generate 16 different non-structural proteins essential for viral replication. Mpro and PLpro represent attractive anti-viral drug development targets as they play a central role in the early stages of viral replication. PLpro is of particular interest as a therapeutic target in that, in addition to processing essential viral proteins, it is also responsible for suppression of the human immune system making the virus more life-threatening. PLpro is present only in Betacoronaviruses, the subgroup of Coronaviruses represented by the highly pathogenic SARS-CoV, MERS-CoV, and SARS-CoV-2.
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Our Anti-Coronavirus research effort has been focused on developing an inhibitor of PLpro and, on May 22, 2020, we filed a provisional 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 provisional patent application, entitled Inhibitors of Coronavirus Protease, was converted into a PCT patent application on April 30, 2021. On December 23, 2025, we received a Notice of Allowance from the USPTO for our PCT patent application. On May 7, 2026, we received an Issue Notification from the USPTO indicating that the patent will be issued on May 12, 2026. In addition, the Issue Notification confirms that the patent is eligible for an extension of 706 days and will therefore expire on April 6, 2043.
In February 2022, we expanded our PLpro inhibitors research effort by entering into a research agreement with the University of Arizona for the purposes of conducting research focused on determining the in vivo safety, pharmacokinetics, and dose selection properties of three University of Arizona owned PLpro inhibitors, to be followed by efficacy testing in mice infected with SARS-CoV-2 (the “Research Project”). Under the agreement, the University of Arizona granted us a first option to negotiate a commercial, royalty-bearing license for all intellectual property developed by University of Arizona under the Research Project. In addition, we and the University of Arizona have entered into an option agreement (the “Option Agreement”) whereby we were granted a first option to negotiate a royalty-bearing commercial license for the underlying technology of the Research Project. On September 13, 2022, we exercised our options, and on February 24, 2023, we entered into an exclusive worldwide license agreement with the University of Arizona for all of the technology related to the Research Project.
We have since broadened our objective to include the development of a first-in-class PLpro inhibitor to treat SARS-CoV2 and potentially SARS-CoV and MERS-CoV infection in patients who could not use Paxlovid, Molnupiravir, or Remdesivir, due to concerns about drug interactions and possible rebound infections and other side effects.
Our current lead compound has been found to be active at sub micromolar concentrations against PLpro and exhibited antiviral activity in SRAS-CoV-2 infected cells as well as in cells infected with several different variants of concern. In addition, our compound had favorable pharmacokinetics properties in rodent species and exhibited preferred drug accumulation in the lungs over plasma. The compound was found to be orally active in a K18-human-ACE2 transgenic mouse model and to significantly reduce virus load in the lungs of infected animals in a dose-dependent manner without gross toxicities. In August 2024, we published these and other research results related to this project in the Journal of Medicinal Chemistry (J. Med. Chem. 2024, 67, 13681−13702). A copy of this article is available on our website at: www.sunshinebiopharma.com/scientific-publications. Additional research results on our lead compound have recently been submitted for publication in the Journal of Medicinal Chemistry and the research article has been peer-reviewed and is currently in press.
Intellectual Property
On May 22, 2020, we filed a provisional patent application in the United States for a new treatment for Coronavirus infections. Our patent application, entitled Inhibitors of Coronavirus Protease, covers composition subject matter pertaining to small molecules for inhibition of the main Coronavirus protease, Mpro, an enzyme that is essential for viral replication. The patent application has a priority date of May 22, 2020. On April 30, 2021, we filed a PCT application containing new research results and extending coverage to include the Coronavirus Papain-Like protease, PLpro. The priority date of May 22, 2020 has been maintained in the newly filed PCT application. On December 23, 2025, we received a Notice of Allowance from the USPTO for our PCT patent application. On May 7, 2026, we received an Issue Notification from the USPTO indicating that the patent will be issued on May 12, 2026. In addition, the Issue Notification confirms that the patent is eligible for an extension of 706 days and will therefore expire on April 6, 2043.
On April 20, 2022, we filed a provisional patent application in the United States covering mRNA molecules capable of destroying cancer cells in vitro. The patent application contains composition and utility subject matter pertaining to the structure and sequence of the relevant mRNA molecules. The patent application was converted into a PCT Application on October 18, 2024 and published by the USPTO on September 4, 2025.
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Effective February 24, 2023, we became the exclusive, worldwide licensee of the University of Arizona for three (3) patents related to small molecules which inhibit the Coronavirus protease, PLpro.
Our wholly owned subsidiary, Nora Pharma, owns 200 DIN’s issued by Health Canada for prescription drugs currently on the market in Canada. These DIN’s were secured through in-licenses or cross-licenses from international manufacturers of generic pharmaceutical products. Nora Pharma also owns the rights to sell 10 generic prescription drugs in Canada through distribution agreements with various international partners under which Nora Pharma acts as distributor and receives a percentage of sales.
In addition, we own four (4) NPN’s issued by Health Canada including (i) NPN 80089663 which authorizes us to manufacture and sell our in-house developed OTC product, Essential•9™, (ii) NPN 80093432 which authorizes us to manufacture and sell the OTC product, Calcium-Vitamin D, (iii) NPN 80125047 which authorizes us to manufacture and sell the OTC product, L-Citrulline, and (iv) NPN 80127436 which authorizes us to manufacture and sell the OTC product, Taurine.
On September 30, 2025, we received official trademark registration from the United States Patent and Trademark Office (Registration No. 7,963,385) for “Sunshine Biopharma Inc.” and Design.
On April 15, 2026, we received official trademark registration from the Canadian Intellectual Property Office of Canadian trademark registration (Registration No. LMC/TMA 1,402,862) for “Sunshine Biopharma Inc.” and Design.
Results of Operations
Comparison of results of operations for the three months ended March 31, 2026 and 2025
During the three months ended March 31, 2026, we generated $8,088,765 in sales, compared to $8,901,341 for the three months ended March 31, 2025, a decrease of $812,576 (9.1%). The decrease is largely a result of termination of our distribution agreements effective December 31, 2025. The direct cost for generating these sales was $5,907,775 (73.0%) for the three months ended March 31, 2026, compared to $6,170,915 (69.3%) for the three months ended March 31, 2025. Our gross profit for the three months ended March 31, 2026 was $2,180,990 (27.0%), compared to $2,730,426 (30.7%) for the three months ended March 31, 2025, a decrease of $549,436.
General and administrative expenses during the three-month period ended March 31, 2026 were $3,576,587, compared to $4,026,176 during the three-month period ended March 31, 2025, a decrease of $449,589. The decrease was the net result of decreases in certain expense categories against modest increases in others. For example, while there was an increase in legal fees by $61,877 and salaries by $183,038, there was a decrease in accounting fees by $117,950, consulting fees by $222,139, marketing expenses by $148,138, office expenses by $54,270, and R&D by $183,038. Overall, we incurred a loss of $1,395,597 from our operations for the three months ended March 31, 2026, compared to a loss of $1,295,750 from our operations in the three-month period ended March 31, 2025.
We had interest income of $48,426 during the three months ended March 31, 2026, compared to interest income of $75,367 during the three months ended March 31, 2025, as a result of having less cash on hand.
In addition, we had a one-time payment of $103,320 in the three months ended March 31, 2026 which we did not have in the three months ended March 31, 2025. This amount was allocated to us as part of a settlement of a class-action lawsuit against BF Borgers CPA PC, our previous auditor whom we terminated in May 2024.
As a result, we incurred a net loss of $1,243,869 ($0.25 per share) for the three months ended March 31, 2026, compared to a net loss of $1,179,771 ($0.44 per share) for the three-month period ended March 31, 2025.
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Liquidity and Capital Resources
As of March 31, 2026, we had cash and cash equivalents of $6,913,013.
Net cash used in operating activities was $2,072,100 during the three months ended March 31, 2026, compared to $1,695,002 during the three-month period ended March 31, 2025. The increase was largely a result of an increase in Nora Pharma’s accounts receivable.
Cash flows used in investing activities were $104,518 for the three months ended March 31, 2026, compared to $212,017 for the three months ended March 31, 2025. The decrease was the result of fewer purchases of equipment and intangible assets (drug licenses) by Nora Pharma.
Cash flows provided by financing activities were $0 during the three months ended March 31, 2026, compared to $355,297 during the three months ended March 31, 2025. The decrease was a result of no warrant exercises taking place during the three months ended March 31, 2026, compared to $355,297 in warrant exercises during the three months ended March 31, 2025.
We are currently generating revenue of approximately $8 million per quarter and incurring a quarterly deficit of approximately $1.2 million. Our attention is currently focused on increasing sales and streamlining operations to reduce expenses. We believe these measures could bring us to breakeven and make us less dependent on the capital markets for financing. Our existing cash on hand together with cash we generate from sales will be sufficient to fund our operations for the next 17 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 for expansion of our generic pharmaceuticals sales operations and further research and development. Additional capital may not be available on terms acceptable to us, or at all.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
For a detailed list of significant accounting policies, please see our annual report on Form 10-K for the fiscal year ended December 31, 2025, including our financial statements and notes thereto included therein as filed with the SEC on April 3, 2026.
Recently Adopted Accounting Standards
We have adopted all new accounting standards impacting operations.
Off Balance-Sheet Arrangements
We have not entered into any off-balance sheet arrangements.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company and are not required to provide the information under this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.
These controls are designed to ensure that information required to be disclosed in the reports we file or submit pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure.
Based on this evaluation, our management, including our CEO and CFO concluded that our disclosure controls and procedures were effective as of March 31, 2026, at reasonable assurance levels.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not party to, and our property is not the subject of, any material legal proceedings.
ITEM 1A. RISK FACTORS
We are a smaller reporting company and are not required to provide the information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
During
the quarter ended March 31, 2026, no Director or Officer of the Company
ITEM 6. EXHIBITS
| Exhibit No. | Description | |
| 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2022* | |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |
| 101 | Inline XBRL Document Set for the financial statements and accompanying notes in Part I, Item 1, of this Quarterly Report on Form 10-Q.* | |
| 104 | Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.* |
| * | Filed herewith. | |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on May 13, 2026.
| SUNSHINE BIOPHARMA INC. | |||
| By: | /s/ Dr. Steve N. Slilaty | ||
| Dr. Steve N. Slilaty | |||
| Chief Executive Officer (principal executive officer) | |||
| By: | /s/ Camille Sebaaly | ||
Camille Sebaaly Chief Financial Officer (principal financial and accounting officer) |
|||
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