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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: September 30, 2023

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from           to         

 

Commission File Number: 001-41282

 

SUNSHINE BIOPHARMA, INC.

(Exact name of registrant as specified in its charter)

 

Colorado   20-5566275
(State of other jurisdiction of incorporation)   (IRS Employer ID No.)

 

6500 Trans-Canada Highway

4th Floor

Pointe-Claire, Quebec, Canada H9R 0A5

(Address of principal executive offices)

 

(514) 426-6161

(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

Common Stock

Common Stock Purchase Warrants

SBFM

SBFMW

The NASDAQ Stock Market LLC

The NASDAQ Stock Market LLC

 

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: Yes ☒   No ☐

 

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). Yes ☒ No ☐

 

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  ☐
  Non-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  ☒ No

 

The number of shares of the registrant’s common stock, par value $0.001, issued and outstanding as of November 13, 2023, was 25,678,290 shares.

 

   

 

 

TABLE OF CONTENTS

 

    Page
     
  PART I. FINANCIAL INFORMATION  
     
Item 1. Financial Statements 3
  Consolidated Balance Sheet as of September 30, 2023 (Unaudited) and December 31, 2022 3
  Consolidated Statements of Operations for the Nine Months Ended September 30, 2023 and 2022 (Unaudited) 4
  Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (Unaudited) 5
  Consolidated Statement of Shareholders' Equity for the Nine Months Ended September 30, 2023 and 2022 (Unaudited) 6
  Notes to Unaudited Consolidated Financial Statements 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 16
Item 3. Quantitative and Qualitative Disclosures About Market Risk 24
Item 4. Controls and Procedures 24

 

  PART II. OTHER INFORMATION  
   
Item 1. Legal Proceedings 25
Item 1A. Risk Factors 25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 25
Item 3. Defaults Upon Senior Securities 25
Item 4. Mine Safety Disclosures 25
Item 5. Other Information 25
Item 6. Exhibits 25
  Signatures 26

 

 

 

 

 

 2 

 

 

PART I.  FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

Sunshine Biopharma, Inc.

Consolidated Balance Sheets

         
   September 30,   December 31, 
   2023   2022 
   (Unaudited)     
ASSETS          
Current Assets:          
Cash and cash equivalents  $18,846,140   $21,826,437 
Accounts receivable   2,034,119    1,912,153 
Inventory   4,517,044    3,289,945 
Prepaid expenses   37,556    283,799 
Total Current Assets   25,434,859    27,312,334 
           
Property and equipment   334,922    394,249 
Intangible assets   1,216,207    776,856 
Right-of-use-asset   664,296    760,409 
TOTAL ASSETS  $27,650,284   $29,243,848 
           
LIABILITIES          
Current Liabilities:          
Accounts payable and accrued expenses  $2,220,870   $2,802,797 
Earnout payable   2,547,831    3,632,000 
Income tax payable   201,541    373,191 
Right-of-use-liability   117,840    123,026 
Total Current Liabilities   5,088,082    6,931,014 
           
Long-Term Liabilities:          
Deferred tax liability   43,032    43,032 
Right-of-use-liability   555,687    642,232 
Total Long-Term Liabilities   598,719    685,264 
TOTAL LIABILITIES   5,686,801    7,616,278 
           
SHAREHOLDERS' EQUITY          
Preferred Stock, Series B $0.10 par value per share; 1,000,000 shares authorized; 10,000 Shares issued and outstanding   1,000    1,000 
Common Stock, $0.001 par value per share; 3,000,000,000 shares authorized; 25,678,290 and 22,585,632 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively   25,678    22,585 
Capital paid in excess of par value   84,387,890    80,841,752 
Accumulated comprehensive income   204,549    161,847 
Accumulated (Deficit)   (62,655,634)   (59,399,614)
TOTAL SHAREHOLDERS' EQUITY   21,963,483    21,627,570 
           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $27,650,284   $29,243,848 

 

The accompanying notes are an integral part of these unaudited financial statements

 

 

 

 3 

 

 

Sunshine Biopharma, Inc.

Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

                     
   3 Months Ended September 30,   9 Months Ended September 30, 
   2023   2022   2023   2022 
                 
Sales  $5,957,668   $132,808   $16,412,586   $405,760 
Cost of sales   3,967,412    65,783    10,641,461    200,311 
Gross profit   1,990,256    67,025    5,771,125    205,449 
                     
General and Administrative Expenses:                    
Accounting   56,350    122,913    301,381    237,773 
Consulting   221,781    162,852    745,850    270,033 
Director fees   100,000    100,000    300,000    200,000 
Legal   133,302    146,467    392,874    403,386 
Marketing   241,897    217,666    502,987    400,386 
Office   544,215    76,818    1,422,058    449,730 
R&D   238,012    362,500    1,039,502    770,095 
Salaries   1,144,377    595,000    4,344,801    1,105,000 
Taxes   52,586    –    212,953    – 
Depreciation   37,210    789    106,797    6,186 
Total General and Administrative Expenses:   2,769,730    1,785,005    9,369,203    3,842,589 
                     
(Loss) from operations   (779,474)   (1,717,980)   (3,598,078)   (3,637,140)
                     
Other Income (Expense):                    
Foreign exchange   40    25    (206)   45 
Interest income   207,431    260,938    624,361    406,984 
Debt release   –    –    –    10,852 
Interest expense   (38,527)   (2)   (107,198)   (12,866)
Total Other Income (Expense)   168,944    260,961    516,957    405,015 
                     
Net (loss) before income taxes   (610,530)   (1,457,019)   (3,081,121)   (3,232,125)
Provision for income taxes   (40,952)   –    (174,899)   – 
Net (Loss)  $(651,482)  $(1,457,019)  $(3,256,020)  $(3,232,125)
                     
Gain (Loss) from foreign exchange translation   (460,507)   (45,126)   42,702    (56,764)
Comprehensive (Loss)  $(1,111,989)  $(1,502,145)  $(3,213,318)  $(3,288,889)
                     
                     
Basic (Loss) per common share  $(0.04)  $(0.08)  $(0.133)  $(0.26)
                     
Weighted Average Common Shares Outstanding (Basic and Diluted)   25,690,449    18,885,632    24,507,122    12,789,733 

 

The accompanying notes are an integral part of these unaudited financial statements

 

 

 

 4 

 

 

Sunshine Biopharma, Inc.

Consolidated Statements of Cash Flows (Unaudited)

         
   September 30,   September 30, 
   2023   2022 
         
Cash Flows From Operating Activities:          
Net (Loss)  $(3,256,020)  $(3,232,125)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   106,794    6,186 
Foreign exchange   (374)   45 
Debt release   –    (10,852)
Accounts receivable   (118,482)   7,776 
Inventory   (1,221,112)   (163,991)
Prepaid expenses   247,977    2,235 
Accounts payable and accrued expenses   (587,973)   437,267 
Income tax payable   (172,076)   – 
Interest payable   (1,084,169)   (48,287)
Net Cash Flows (Used) in Operations   (6,085,435)   (3,001,746)
           
Cash Flows From Investing Activities:          
Reduction in Right-of-use asset   97,498    – 
Purchase of intangible assets   (19,804)   – 
Purchase of equipment   (464,614)   – 
Net Cash Flows (Used) in Investing Activities   (386,920)   – 
           
Cash Flows From Financing Activities:          
Common stock issued   4,089,218    43,560,363 
Exercise of warrants   1,156    – 
Purchase of treasury stock   (541,143)   (99,000)
Lease liability   (93,125)   – 
Payments of notes payable   –    (1,900,000)
Net Cash Flows Provided by Financing Activities   3,456,106    41,561,363 
           
Cash and Cash Equivalents at Beginning of Period   21,826,437    2,045,167 
Net increase (decrease) in cash and cash equivalents   (3,016,249)   38,559,617 
Effect of exchange rate changes on cash   –    (105,617)
Foreign currency translation adjustment   35,952    56,764 
Cash and Cash Equivalents at End of Period  $18,846,140   $40,555,931 
           
Supplementary Disclosure of Cash Flow Information:   –    – 
Cash paid for interest  $–   $61,151 
Cash paid for income taxes  $–   $– 

 

The accompanying notes are an integral part of these unaudited financial statements

 

 

 

 5 

 

 

Sunshine Biopharma, Inc.

Consolidated Statement of Shareholders' Equity (Unaudited)

                                 
   Number Of Common Shares   Common   Capital Paid in Excess of Par   Number Of Preferred Shares   Preferred   Comprehensive   Accumulated     
   Issued   Stock   Value   Issued   Stock   Income   Deficit   Total 
Three Month Period Ended September 30, 2023                                        
Balance at June 30, 2023   25,746,302   $25,746   $84,422,143    10,000   $1,000   $665,056   $(62,004,152)  $23,109,793 
Repurchase stock   (68,012)   (68)   (34,253)   –    –    –    –    – 
Net (loss)   –    –    –    –    –    (460,507)   (651,482)   (1,111,989)
Balance at September 30, 2023   25,678,290   $25,678   $84,387,890    10,000   $1,000   $204,549   $(62,655,634)  $21,963,483 
                                         
Nine Month Period Ended September 30, 2023                                        
Balance December 31, 2022   22,585,632   $22,585   $80,841,752    10,000   $1,000   $161,847   $(59,399,614)  $21,627,570 
Repurchase of common stock   (513,723)   (514)   (540,629)   –    –    –    –    – 
Common stock and pre-funded warrants issued in a private offering   2,450,000    2,451    4,086,767    –    –    –    –    4,089,218 
Exercise of warrants   1,156,381    1,156    –    –    –    –    –    1,156 
Net (loss)   –    –    –    –    –    42,702    (3,256,020)   (3,213,318)
Balance at September 30, 2023   25,678,290   $25,678   $84,387,890    10,000   $1,000   $204,549   $(62,655,634)  $21,963,483 
                                         
Three Month Period Ended September 30, 2022                                        
Balance at June 30, 2022   18,885,632   $18,886   $76,331,451    10,000   $1,000   $(34,777)  $(34,430,280)  $41,886,280 
Net (loss)   –    –    –    –    –    (45,126)   (1,457,019)   (1,502,145)
Balance at September 30, 2022   18,885,632   $18,886   $76,331,451    10,000   $1,000   $(79,903)  $(35,887,299)  $40,384,135 
                                         
Nine Month Period Ended September 30, 2022                                        
Balance December 31, 2021   2,595,620   $2,596   $32,787,379    1,000,000   $100,000   $(23,139)  $(32,655,174)  $211,662 
Common stock and pre-funded warrants issued in public offering   6,656,526    6,657    30,360,528    –    –    –    –    30,367,185 
Exercise of warrants   9,633,486    9,633    13,183,544    –    –    –    –    13,193,177 
Preferred stock purchased from related party   –    –    –    (990,000)   (99,000)   –    –    (99,000)
Net (loss)   –    –    –    –    –    (56,764)   (3,232,125)   (3,288,889)
Balance at September 30, 2022   18,885,632   $18,886   $76,331,451    10,000   $1,000   $(79,903)  $(35,887,299)  $40,384,135 

 

The accompanying notes are an integral part of these unaudited financial statements

 

 

 

 6 

 

 

Sunshine Biopharma, Inc.

Notes to Unaudited Consolidated Financial Statements

For the Nine Months Ended September 30, 2023 and 2022

 

Note 1 – Description of Business

 

The Company was originally 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 transaction, the Company changed its name to Sunshine Biopharma, Inc. and began operating as a pharmaceutical company.

 

In addition to conducting its own drug development activities, Sunshine Biopharma operates two wholly owned subsidiaries: (i) Nora Pharma Inc. (“Nora Pharma”), a Canadian corporation with a portfolio of pharmaceutical products consisting of 51 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”) products. In addition to the 51 generic prescription drugs currently on the market in Canada, the Company has 32 additional generic prescription drugs scheduled to be launched in 2024 and 2025 in Canada.

 

The Company has determined that it has two reportable segments:

 

  · Prescription Generic Pharmaceuticals (“Generic Pharmaceuticals”)
  · Nonprescription Over-The-Counter Products (“OTC Products)

 

Through December 31, 2022 and as of September 30, 2023, sales from the Generic Pharmaceuticals segment represented approximately 97% of total revenues of the Company while the remaining approximately 3% was generated from the sale of OTC Products. Based on these results, the Company deems segmentation reporting to be immaterial at September 30, 2023.

 

The Company is not subject to material customer concentration risks as it sells its products directly to pharmacies in several Canadian Provinces. Provincial governments in Canada reimburse patients for their prescription drugs expenditures to various degrees under drug reimbursement programs, making generic drugs prices highly dependent on government regulations which may change over time. The most recent negotiations between the pan-Canadian Pharmaceutical Alliance and the Canadian Generic Pharmaceutical Association have 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.

 

In addition, the Company is engaged in the development of the following proprietary drugs:

 

·Adva-27a, a small chemotherapy molecule for treatment of pancreatic cancer (IND-enabling studies were paused on November 2, 2023 due to unfavorable results. See Note 13 – Subsequent Events)
·K1.1 mRNA, a lipid nano-particle (LNP) targeted for liver cancer
·SBFM-PL4, a protease inhibitor for treatment of Coronavirus infections

 

 

 

 7 

 

 

Note 2 – Basis of Presentation

 

The unaudited financial statements of the Company for the nine months periods ended September 30, 2023 and 2022 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, 2022, was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 4, 2023. These financial statements should be read in conjunction with that report.

 

Note 3 – Private Placement

 

On May 16, 2023, the Company completed a private placement pursuant to a securities purchase agreement with a single institutional investor for gross proceeds of approximately $5 million, before deducting fees to the placement agent and other offering expenses payable by the Company. The net proceeds received by the Company were $4,089,218.

 

In connection with the private placement, the Company issued (i) 2,450,000 shares of common stock, (ii) 3,502,381 pre-funded warrants (the “May Pre-Funded Warrants”), and (iii) investor warrants (the “May Investor Warrants”) to purchase up to 11,904,762 shares of common stock at $0.59 per share. Each share of common stock and accompanying two May Investor Warrants were sold together at a combined offering price of $0.84 and each May Pre-Funded Warrant and accompanying two May Investor Warrants were sold together at a combined offering price of $0.839. The May Pre-Funded Warrants are immediately exercisable at a nominal exercise price of $0.001, and may be exercised at any time until all of the May Pre-Funded Warrants are exercised in full. The May Investor Warrants which have an exercise price of $0.59 per share (subject to adjustment as set forth therein), are exercisable upon issuance and will expire five and a half years from the date of issuance. As of September 30, 2023, a total of 1,156,381 May Pre-Funded Warrants and no May Investor Warrants have been exercised. The net proceeds received from the exercise of May Pre-Funded Warrants were $1,156.

 

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. The purchase price for the shares was $18,860,637 (USD), $14,346,637 of which was paid in cash and the remainder was paid through the issuance of 3,700,000 shares of the Company’s common stock valued at $4,514,000 or $1.22 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.

 

 

 

 8 

 

 

The following table summarizes the allocation of the purchase price as of October 20, 2022, the acquisition date using Nora Pharma’s balance sheet assets and liabilities:

    
Accounts receivable  $1,358,121 
Inventory   3,181,916 
Intangible assets   659,571 
Equipment & furniture   210,503 
Other assets   1,105,093 
Total assets   6,515,204 
Liabilities assumed   (5,981,286)
Net assets   533,918 
Goodwill   18,326,719 
Total Consideration  $18,860,637 

 

The value of the 3,700,000 common shares issued as part of the consideration paid for Nora Pharma was determined based on the closing market price of the Company’s common shares on the acquisition date, October 20, 2022 ($1.22 per share).

 

The Company impaired 100% of the goodwill amount in 2022 and plans to depreciate the intangible assets as detailed in Note 5 below.

 

As part of the consideration paid for Nora Pharma, the Company agreed to a $5,000,000 CAD ($3,632,000 USD) earnout amount payable to Mr. Malek Chamoun, the Seller of Nora Pharma. The earnout is payable in the form of twenty (20) payments of $250,000 CAD for every $1,000,000 CAD increase in gross sales (as defined in the Purchase Agreement) above Nora Pharma’s June 30, 2022 gross sales, provided that his employment with the Company is not terminated pursuant to the Company’s employment agreement with him. The total earnout amount of $3,632,000 has been recorded as a salary payable. During the nine-month period ended September 30, 2023, the Company paid an earn-out amount of $1,084,169 leaving a balance earn-out to be paid of $2,547,831 at September 30, 2023.

 

The unaudited financial information in the table below summarizes the combined results of operations of the Company and Nora Pharma for the years ended December 31, 2022 and 2021, on a pro forma basis, as though the two companies had been combined as of January 1, 2021. The unaudited pro forma financial information does not purport to be indicative of the Company's combined results of operations which would have been obtained had the acquisition taken place on January 1, 2021, nor should it be taken as indicative of future consolidated results of operations: 

Schedule of Pro Forma results from acquisition        
Pro Forma Results From Acquisition  December 31,
2022		   December 31,
2021		 
Total revenues  $14,758,115   $7,927,165 
Net (loss) from operations  $(26,192,503)  $(2,224,253)
Net (loss)  $(26,164,764)  $(12,289,655)
Basic and fully diluted (loss) per share  $(1.74)  $(4.70)
Weighted average number of shares outstanding   15,056,097    2,612,061 
 

 

 

 

 9 

 

 

Note 5 – Intangible Assets

 

Intangible assets, net, consisted of the following at September 30, 2023: 

     
Balance June 30, 2023  $1,233,570 
Dossier fee additions   13,905 
Balance at September 30, 2023   1,247,475 
Less accumulated amortization   (31,268)
Finite-lived intangible assets, net, at September 30, 2023  $1,216,207 
      
Balance December 31, 2022  $776,856 
Dossier fee additions   470,619 
Balance at September 30, 2023   1,247,475 
Less accumulated amortization   (31,268)
Finite-lived intangible assets, net, at September 30, 2023  $1,216,207 

 

Amortization expense for the three months period ended September 30, 2023, and the nine months period ended September 30, 2023, amounted to $10,797 and $26,746, respectively.

 

As of September 30, 2023, estimated amortization expense of the Company’s intangible assets for each of the next five years is as follows: 

     
2024  $55,418 
2025   55,418 
2026   54,240 
2027   15,599 
2028   7,370 

 

Note 6 – Reverse Stock Splits

 

Effective February 9, 2022, the Company completed a 1 for 200 reverse split of its common stock. The Company had previously completed two 20 to 1 reverse stock splits, one in 2019 and the other in 2020. The Company’s financial statements reflect all three reverse stock splits on a retroactive basis for all periods presented and for all references to common stock, unless specifically stated otherwise.

 

 

 

 10 

 

 

Note 7 – Capital Stock

 

The Company’s authorized capital is comprised of 3,000,000,000 shares of common stock, par value $0.001, and 30,000,000 shares of preferred stock, $0.10 par value. As of December 31, 2022 and September 30, 2023, the Company had authorized 1,000,000 shares of Series B Preferred Stock. The Series B Preferred Stock is non-convertible, non-redeemable and non-retractable. It has superior liquidation rights to the common stock at $0.10 per share and gives the holder the right to 1,000 votes per share. As of September 30, 2023 and December 31, 2022, 10,000 shares of Series B Preferred Stock are outstanding and held by the Company’s chief executive officer.

 

On February 17, 2022, the Company completed a public offering and received net proceeds of $6,833,071 from the offering. Pursuant to the public offering, the Company issued and sold an aggregate of 1,882,353 shares of common stock and 4,102,200 warrants to purchase shares of common stock (the “Tradeable Warrants”).

 

On February 22, 2022, the Company redeemed 990,000 shares of Series B Preferred Stock from the CEO of the Company at a redemption price equal to the stated value of $0.10 per share. The remaining 10,000 shares of Series B Preferred Stock could not be voted pursuant to a warrant agent agreement relating to the Tradeable Warrants (the “Warrant Agent Agreement”). On October 12, 2023, the Company held a special meeting of the holders of the outstanding Tradeable Warrants in which the holders of the majority of the outstanding Tradeable Warrants approved an amendment to the Warrant Agent Agreement to eliminate the provision that prohibited the Company’s CEO from exercising his voting rights under the Series B Preferred Stock, as well as to lower the exercise price of the Tradeable Warrants to $0.11. The Company entered into the amendment to the Warrant Agent Agreement on October 18, 2023.

 

On March 14, 2022, the Company completed a private placement and received net proceeds of $6,781,199. In connection with this private placement, the Company issued (i) 2,301,353 shares of its common stock together with investor warrants (“Investor Warrants”) to purchase up to 2,301,353 shares of common stock, and (ii) 1,302,251 pre-funded warrants (“Pre-Funded Warrants”) with each Pre-Funded Warrant exercisable for one share of common stock, together with Investor Warrants to purchase up to 1,302,251 shares of common stock. Each share of common stock and accompanying Investor Warrant was sold together at a combined offering price of $2.22 and each Pre-Funded Warrant and accompanying Investor Warrant were sold together at a combined offering price of $2.219. The Pre-Funded Warrants were immediately exercisable, at a nominal exercise price of $0.001, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The Investor Warrants have an exercise price of $2.22 per share (subject to adjustment as set forth in the warrant), are exercisable upon issuance and will expire five years from the date of issuance.

 

On April 28, 2022, the Company completed another private placement and received net proceeds of $16,752,915. In connection with this private placement, the Company issued (i) 2,472,820 shares of its common stock together with warrants (“April Warrants”) to purchase up to 4,945,640 shares of common stock, and (ii) 2,390,025 pre-funded warrants (“Pre-Funded Warrants”) with each Pre-Funded Warrant exercisable for one share of common stock, together with April Warrants to purchase up to 4,780,050 shares of common stock. Each share of common stock and accompanying two April Warrants were sold together at a combined offering price of $4.01 and each Pre-Funded Warrant and accompanying two April Warrants were sold together at a combined offering price of $4.009. The Pre-Funded Warrants were immediately exercisable, at a nominal exercise price of $0.001, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The April Warrants have an exercise price of $3.76 per share (subject to adjustment as set forth in the warrant), are exercisable upon issuance and will expire five years from the date of issuance.

 

On October 20, 2022, the Company issued 3,700,000 shares of common stock as part of the acquisition of Nora Pharma. These shares were valued at $4,514,000, or $1.22 per share.

 

 

 

 11 

 

 

On January 19, 2023, the Company announced a stock repurchase program of up to $2 million (“Stock Repurchase Program”). During the six months ended June 30, 2023, the Company repurchased a total of 445,711 shares of common stock at an average price of $1.1371 per share for a total cost of $506,822. The 445,711 repurchased common shares were cancelled and returned to treasury reducing the number of issued and outstanding shares from 22,585,632 to 22,139,921.

 

On May 16, 2023, the Company completed a private placement pursuant to a securities purchase agreement with a single institutional investor for gross proceeds of approximately $5 million, before deducting fees to the placement agent and other offering expenses payable by the Company. The net proceeds received by the Company were $4,089,218. In connection with the private placement, the Company issued (i) 2,450,000 shares of common stock, (ii) 3,502,381 pre-funded warrants (the “May Pre-Funded Warrants”), and (iii) investor warrants (the “May Investor Warrants”) to purchase up to 11,904,762 shares of common stock at $0.59 per share. Each share of common stock and accompanying two May Investor Warrants were sold together at a combined offering price of $0.84 and each May Pre-Funded Warrant and accompanying two May Investor Warrants were sold together at a combined offering price of $0.839. The May Pre-Funded Warrants are immediately exercisable, at a nominal exercise price of $0.001, and may be exercised at any time until all of the May Pre-Funded Warrants are exercised in full. The May Investor Warrants which have an exercise price of $0.59 per share (subject to adjustment as set forth therein), are exercisable upon issuance and will expire five and a half years from the date of issuance.

 

In 2022 and the first six months of 2023, the Company issued a total of 10,789,867 shares of common stock in connection with warrant exercises for aggregate net proceeds of $13,194,335.

 

In July 2023, the Company repurchased a total of 68,012 shares of common stock on the open market under the Stock Repurchase Program announced on January 19, 2023, at an average price of $0.5046 per share for a total cost of $34,321. In October 2023, the 68,012 repurchased common shares were cancelled and returned to treasury reducing the number of issued and outstanding shares from 25,746,302 to 25,678,290.

 

As of September 30, 2023 and December 31, 2022, the Company has a total of 25,678,290 and 22,585,632 shares of common stock issued and outstanding, respectively.

 

The Company has declared no dividends since inception.

 

Note 8 – 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 and during the first nine months of 2023, the Company completed four financing events, and in connection therewith, it issued warrants as follows:

             
Type   Number   Exercise Price   Expiry Date
Pre-Funded Warrants   3,692,276   $0.001   Unlimited
Tradeable Warrants   4,102,200   $2.22*   February 2027
Investor Warrants   3,603,604   $2.22   March 2027
April Warrants   9,725,690   $3.76   April 2027
May Pre-Funded Warrants   3,502,381   $0.001   Unlimited
May Investor Warrants   11,904,762   $0.59   November 2028

 

* The Tradeable Warrants had an initial exercise price of $4.25, subject to adjustment. Upon the closing of the Company's private placement on March 14, 2022, the exercise price of the Tradeable Warrants was reduced to $2.22, in accordance with the terms thereof.

 

As of September 30, 2023, all of the Pre-Funded Warrants and a total of 3,138,507 Tradeable Warrants, 2,802,703 Investor Warrants, and 1,156,381 May Pre-Funded Warrants were exercised resulting in aggregate proceeds of $13,194,335 received by the Company.

 

The Company’s outstanding warrants at September 30, 2023 consisted of the following: 

             
Type   Number   Exercise Price   Expiry Date
Pre-Funded Warrants   None   $0.001   Unlimited
Tradeable Warrants   963,693   $2.22*   February 2027
Investor Warrants   800,901   $2.22   March 2027
April Warrants   9,725,690   $3.76   April 2027
May Pre-Funded Warrants   2,346,000   $0.001   Unlimited
May Investor Warrants   11,904,762   $0.59   November 2028

 

* On October 12, 2023, the Company held a special meeting of the holders of its outstanding Tradeable Warrants in which a majority of the holders approved an amendment to the Warrant Agent Agreement to reduce the exercise price of the Tradeable Warrants to $0.11 per warrant. The amendment was executed on October 18, 2023.

 

Note 9 – Net Loss Per Common Share

 

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents.

 

Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, taking into consideration common stock equivalents.

 

 

 

 13 

 

 

In February 2022, the Company issued 4,102,200 Tradeable Warrants pursuant to the Company’s Public Offering. In March and April 2022, the Company issued 3,603,604 Investor Warrants and 9,725,690 April Warrants pursuant to two private placements. In May 2023, the Company issued 11,904,762 May Investor Warrants pursuant to two private placements. As of September 30, 2023, 3,138,507 Tradeable Warrants and 2,802,703 Investor Warrants were exercised, leaving 963,693 Tradeable Warrants, 800,901 Investor Warrants, 9,725,690 April Warrants, and 11,904,762 May Investor Warrants outstanding. These warrants are dilutive and were included in the diluted earnings per share.

 

In March and April 2022, the Company issued and sold Pre-Funded Warrants to purchase an aggregate of 3,692,276 shares of common stock at a nominal exercise price of $0.001 per share. During the nine months ended September 30, 2023, all of these warrants were exercised and therefore had no remaining dilutive effect.

 

In May 2023, the Company issued and sold May Pre-Funded Warrants to purchase an aggregate of 3,502,381 shares of common stock at a nominal exercise price of $0.001 per share. During the nine months ended September 30, 2023, 1,156,381 of these warrants were exercised leaving 2,346,000 outstanding. These warrants were not included in the calculation of weighted average outstanding shares as they would be ant-dilutive.

 

Note 10 – Lease

 

The Company has obligations as a lessee for 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 September 30, 2023 were as follows:

     
  Operating lease ROU asset $664,296
  Operating Lease liability - Short-term $117,840
  Operating lease liability - Long-term $555,687
  Remaining lease term 6 years 3 months
  Discount rate 6%

 

Amounts disclosed for ROU assets obtained in exchange for lease obligations and reductions of ROU assets resulting from reductions of lease obligations include amounts reduced from the carrying amount of ROU assets resulting from deferred rent.

 

 

 

 14 

 

 

Maturities of lease liabilities under non-cancellable operating leases at September 30, 2023 are as follows:

   
2023 $ 30,124
2024   116,090
2025   116,277
2026   110,134
2027   103,736
Thereafter   197,166

 

Note 11 – Management and Director Compensation

 

The Company paid its officers cash compensation totaling $245,000 and $362,500 and $1,290,000 and $770,095 for the three and nine-month periods ended September 30, 2023 and 2022, respectively.

 

The Company paid its directors cash compensation totaling $100,000 and $300,000 and $100,000 and $200,000 for the three and nine-month periods ended September 30, 2023 and 2022, respectively.

 

Note 12 – Income Taxes

 

In calculating the provision for income taxes on an interim basis, the Company uses an estimate of the annual effective tax rate based upon currently known facts and circumstances and applies that rate to its year-to-date earnings or losses. The Company’s effective tax rate is based on expected income and statutory tax rates and takes into consideration permanent differences between financial statement and tax return income applicable to the Company in the various jurisdictions in which the Company operates. The effect of discrete items, such as changes in estimates, changes in rates or tax status, and unusual or infrequently occurring events, is recognized in the interim period in which the discrete item occurs. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the result of new judicial interpretations or regulatory or tax law changes.

 

The Company’s interim effective tax rate, inclusive of discrete items, for the nine-month periods ended September 30, 2023 and 2022 was 26.83%.

 

Note 13 – Subsequent Events

 

On October 12, 2023, the Company held a special meeting of the holders of its outstanding Tradeable Warrants in which the holders of the majority of the outstanding Tradeable Warrants approved an amendment to the Warrant Agent Agreement to (i) reduce the exercise price of the Tradeable Warrants to $0.11, subject to further adjustment as provided therein, and (ii) eliminate the provision that prohibits the Company’s CEO from exercising his voting rights under his Series B Preferred Stock.

 

In December 2022, the Company had entered into a research agreement with the Jewish General Hospital (“JGH”), Montreal, Canada to conduct IND-enabling studies of the Company’s anticancer drug candidate, Adva-27a (the “Research Agreement”). In August 2023, the Company was advised by JGH that the lab results on testing of the Adva-27a molecule were not favorable. After conclusion of an internal review of the lab results on November 2, 2023, the Company provided notice of termination of the Research Agreement, which will become effective on December 2, 2023, pursuant to the terms of the Research Agreement. The Company has now paused the IND-enabling studies of Adva-27a pending a review of the possibility of chemical modification of the compound to address the suboptimal performance of the molecule in certain studies.

 

 

 

 15 

 

 

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, 2022. 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 to 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. In addition to pursuing our own drug development program, we operate two wholly owned subsidiaries: (i) Nora Pharma Inc. (“Nora Pharma”), a Canadian corporation with a portfolio consisting of 51 generic prescription drugs on the market in Canada and 32 additional drugs scheduled to be launched in Canada in 2024 and 2025, and (ii) Sunshine Biopharma Canada Inc. (“Sunshine Canada”), a Canadian corporation which develops and sells nonprescription over-the-counter (“OTC”) products.

 

History

 

We were incorporated in the State of Colorado on August 31, 2006, and on October 15, 2009, we acquired Sunshine Biopharma, Inc. in a transaction classified as a reverse acquisition.

 

Sunshine Biopharma, Inc. held an exclusive license to a new anticancer drug bearing the laboratory name, Adva-27a (the “License Agreement”). Upon completion of the reverse acquisition transaction, we changed our name to Sunshine Biopharma, Inc. and began operating as a pharmaceutical company.

 

In December 2015, we acquired all worldwide issued (US Patent Number 8,236,935, and 10,272,065) and pending patents under PCT/FR2007/000697 and PCT/CA2014/000029 for the Adva-27a anticancer compound and terminated the License Agreement.

 

In early 2020, we initiated a new R&D project focused on the development of a treatment for COVID-19 and on May 22, 2020, we filed a provisional patent application in the United States for the new coronavirus treatment. The patent application covers composition subject matter pertaining to small molecules for inhibition of the main Coronavirus protease, Mpro. On April 30, 2021, we filed a PCT application containing new research results and extending coverage to include the Coronavirus Papain-Like protease, PLpro.

 

In June 2021, we initiated another R&D project in which we set out to determine if certain mRNA molecules can be used as anticancer agents. The data obtained for mRNA molecules bearing the laboratory name K1.1 became the subject of a new patent application filed in April 2022.

 

In October 2022, we acquired Nora Pharma, a Canadian generic pharmaceuticals company based in the greater Montreal area. Nora Pharma has 41 employees and operates in a 15,000 square foot facility certified by Health Canada. Nora Pharma currently sells 51 generic prescription drugs in Canada. The consolidated financial statements contained in this report include the results of operations of Nora Pharma and Sunshine Canada.

 

 

 

 16 

 

 

Generic Prescription Drugs on the Market

 

As a result of the acquisition of Nora Pharma we now have the following generic prescription drugs on the market in Canada:

 

Drug   Action/Indication   Reference Brand
Alendronate   Osteoporosis   Fosamax®
Amlodipine   Cardiovascular   Norvasc®
Apixaban   Cardiovascular   Eliquis®
Atorvastatin   Cardiovascular   Lipitor®
Azithromycin   Antibacterial   Zithromax®
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®
Donepezil   Central nervous system   Aricept®
Duloxetine   Central nervous system   Cymbalta®
Dutasteride   Urology   Avodart®
Escitalopram   Central nervous system   Cipralex®
Ezetimibe   Cardiovascular   Ezetrol®
Finasteride   Urology   Proscar®
Flecainide   Cardiovascular   Tambocor®
Fluconazole   Antifungal   Diflucan®
Fluoxetine   Central nervous system   Prozac®
Hydroxychloroquine   Antimalarial   Plaquenil®
Lacosamide   Central nervous system   Vimpat®
Letrozole   Oncology   Femara®
Levetiracetam   Central nervous system   Keppra®
Mirtazapine   Central nervous system   Remeron®
Metformin   Diabetes   Glucophage®
Montelukast   Allergy   Singulair®
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®
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®
Tramadol Acetaminophen   Central nervous system   Tramacet®
Zolmitriptan   Central nervous system   Zomig®
Zopiclone   Central nervous system   Imovane®

 

 

 

 17 

 

 

Generic Prescription Drugs Pipeline

 

In addition to the 51 drugs on the market, we currently have the following roster of generic prescription drugs scheduled to be launched in 2024 and 2025:

 

Generic Drugs   Therapeutic Area(s)   Development Stage   Launch Date
Group A (2 Products)   Cardiovascular, CNS*   Under manufacturing   2024Q1
Group B (6 Products)   Oncology, Gastroenterology, CNS*   Under regulatory review   2024Q2
Group C (3 Products)   Central Nervous System, Diabetes, CNS*   Under regulatory review   2024Q3
Group D (5 Products)   Cardiovascular, Urology, Endocrinology   Under regulatory review   2024Q4
Group E (16 Products)   Cardiovascular, Oncology, Anti-infectives, Anti-inflammatory, Diabetes, Gastroenterology, CNS*   Soon to be under regulatory review   2025

 

* Central Nervous System

 

We believe the addition of these products to our existing portfolio will strengthen our presence in the Canadian generic drugs marketplace and provide us with greater access to pharmacies as we become more of a go-to supplier for every-day and specialty medicines.

 

Proprietary Drugs in Development

 

We are currently developing the following drug candidates:

 

Proprietary Drugs   Therapeutic Area   Development Stage   Launch Date
Adva-27a (Small Molecule)   Oncology (Pancreatic Cancer)   See Note 9 - Subsequent Events   TBD*
K1.1 (mRNA LNP)   Oncology (Liver Cancer)   Preclinical   TBD*
SBFM-PL4 (Small Molecule)   Antiviral (COVID-19)   Preclinical   TBD*

 

* To be determined

 

Adva-27a Anticancer Drug

 

Adva-27a is a small molecule designed for the treatment of aggressive forms of cancer. A Topoisomerase II inhibitor, Adva-27a has been shown to be effective at destroying Multidrug Resistant Cancer cells including Pancreatic Cancer cells, Breast Cancer cells, Small-Cell Lung Cancer cells and Uterine Sarcoma cells (Published in ANTICANCER RESEARCH, Volume 32, Pages 4423-4432, October 2012). We are the direct owner of all patents pertaining to Adva-27a including U.S. Patents Number 8,236,935 and 10,272,065.

 

In December 2022, we entered into a research agreement with the Jewish General Hospital (“JGH”), to conduct the IND-enabling studies of Adva-27a (the “Research Agreement”). In August 2023, we were informed by the JGH that the lab results on testing of the Adva-27a molecule were not favorable. After conclusion of an internal review of the lab results on November 2, 2023, we provided notice to JGH of termination of the Research Agreement. We have now paused the IND-enabling studies of Adva-27a pending a review of the possibility of chemical modification of the compound to address the suboptimal performance of the molecule in certain studies.

 

 

 

 18 

 

 

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 effects. These new mRNA molecules, bearing the laboratory name K1.1, are readily adaptable for delivery into patients using the mRNA vaccine technology. In April 2022, we filed a provisional patent application in the United States covering the subject mRNA molecules.

 

We recently concluded an agreement with a specialized partner for the purposes of formulating our K1.1 mRNA molecules into lipid nanoparticles, ready for use to conduct studies in xenograft mice. We anticipate commencing such studies later this year.

 

SBFM-PL4 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.

 

Our Anti-Coronavirus research effort has been focused on developing an inhibitor of PLpro and, on May 22, 2020, we filed a patent application in the United States covering composition subject matter pertaining to small molecules for inhibition of the Coronavirus PLpro as well as Mpro.

 

In February 2022, we expanded our PLpro inhibitors 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 the Company 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, the Company and the University of Arizona entered into an option agreement (the “Option Agreement”) whereby the Company was 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 recently expanded our objective to include the development of an injectable candidate of 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 interaction and possible ‘rebound’ infections and other side effects.

 

 

 

 19 

 

 

Intellectual Property

 

We are the sole owner of all worldwide rights pertaining to Adva-27a. These patent rights are covered by PCT/FR2007/000697 and PCT/CA2014/000029. The patent applications filed under these two PCT's have been issued in the United States (US Patent Number 8,236,935 and 10,272,065), Europe, and Canada.

 

On May 22, 2020, we filed a provisional patent application in the United States for a new treatment for Coronavirus infections. Our patent application 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 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.

 

Our wholly owned subsidiary, Nora Pharma, owns 180 Drug Identification Numbers (“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.

 

In addition, we are the owner of two Natural Product Numbers (“NPN’s”) issued by Health Canada: NPN 80089663 authorizes us to manufacture and sell our in-house developed OTC product, Essential 9™, and NPN 80093432 authorizes us to manufacture and sell the OTC product, Calcium-Vitamin D under the brand name Essential Calcium-Vitamin D™.

  

Results of Operations

 

Comparison of results of operations for the three months ended September 30, 2023 and 2022

 

During the three months ended September 30, 2023, we generated $5,957,668 in sales, compared to $132,808 for the three months ended September 30, 2022, an increase of $5,824,860. The increase is attributable to sales generated by our wholly owned subsidiary, Nora Pharma. The direct cost for generating these sales was $3,967,412 (66.6%) for the three months ended September 30, 2023, compared to $65,783 (49.5%) for the three months ended September 30, 2022. The increase in the cost of goods sold in 2023 is due to increased cost of manufacturing of the generic prescription drugs sold by Nora Pharma. Our gross profit grew to $1,990,256 for the three months ended September 30, 2023, compared to $67,025 for the three months ended September 30, 2022.

 

General and administrative expenses during the three-month period ended September 30, 2023, were $2,769,730, compared to $1,785,005 during the three-month period ended September 30, 2022, an increase of $984,725. This increase was the result of increased overhead associated with being a Nasdaq listed company and expenses related to Nora Pharma operations. Specifically, we incurred increased costs in consulting ($58,929), office ($467,397), salaries ($549,377) and taxes ($52,586). Overall, we incurred a loss of $779,474 from our operations for the three months ended September 30, 2023, compared to a loss of $1,717,980 from our operations in the three-month period ended September 30, 2022.

 

 

 

 20 

 

 

In addition, we had net interest income of $168,904 during the three months ended September 30, 2023, compared to a net interest income of approximately $260,936 during the three months ended September 30, 2022, as a result of interest earned on cash on hand.

 

As a result, we incurred a net loss of $651,482 ($0.04 per share) for the three months ended September 30, 2023, compared to a net loss of $1,457,019 ($0.08 per share) for the three-month period ended September 30, 2022.

 

Comparison of results of operations for the nine months ended September 30, 2023 and 2022

 

During the nine months ended September 30 2023, we generated revenues of $16,412,586, compared to revenues of $405,760 for the nine months ended September 30, 2022, an increase of $16,006,826. The increase is attributable to sales generated by our recently acquired wholly owned subsidiary, Nora Pharma. The direct cost for generating these revenues was $10,641,461 (64.8%) for the nine months ended September 30, 2023, compared to $200,311 (49.4%) for the nine months ended September 30, 2022. The increase in the cost of goods sold in 2023 is due to increased cost of manufacturing of the generic prescription drugs sold by Nora Pharma. Our gross profit increased to $5,771,125 for the nine months ended September 30, 2023, compared to a gross profit of $205,449 for the same period in 2022.

 

General and administrative expenses during the nine-month period ended September 30, 2023 were $9,369,203 compared to $3,842,589 during the nine-month period ended September 30, 2022, an increase of $5,526,614. This increase was the result of increased overhead associated with being a Nasdaq listed company and expenses related to Nora Pharma operations. Specifically, we incurred increased costs in accounting ($63,608), consulting ($475,817), office costs ($972,328), research and development ($269,407), salaries ($3,239,801) and taxes ($212,953). Overall, we incurred a loss of $3,598,078 from our operations in the nine-month period ended September 30, 2023, compared to a loss from operations of $3,637,140 in the similar period of 2022.

 

In addition, we had net interest income of $517,163 during the nine months ended September 30, 2023, compared to a net interest income of $394,118 during the nine months ended September 30, 2022, as a result of interest earned on cash on hand.

 

As a result, we incurred a net loss of $3,256,020 ($0.12 per share) for the nine-month period ended September 30, 2023, compared to a net loss of $3,232,125 ($0.26 per share) for the nine-month period ended September 30, 2022.

 

Liquidity and Capital Resources

 

As of September 30, 2023, we had cash or cash equivalents of $18,846,140.

  

Net cash used in operating activities was $6,085,435 during the nine months ended September 30, 2023, compared to $3,001,746 during the nine-month period ended September 30, 2022. The increase was a result of the addition of Nora Pharma’s operations.

 

Cash flows used in investing activities were $386,920 for the nine months ended September 30, 2023, compared to $0 for the nine months ended September 30, 2022. The increase was the result of cash invested in Nora Pharma.

 

Cash flows provided by financing activities were $3,456,106 during the nine months ended September 30, 2023, compared to $41,561,363 during the nine months ended September 30, 2022. The decrease was primarily as a result of one offering made during the nine months ended September 30, 2023, compared to three offerings completed in February, March, and April 2022, and due to our repurchase of a total of $540,629 in common stock in the first and third quarter of 2023.

 

 

 

 21 

 

 

We are not generating adequate revenues from our operations to fully implement our business plan as set forth herein. On February 17, 2022, we received net proceeds of approximately $6.8 million from the sale of common stock and warrants in an underwritten public offering. On March 14, 2022, we received net proceeds of approximately $6.8 million from the sale of common stock and warrants in a private placement. On April 28, 2022, we received net proceeds of approximately $16.8 million from the sale of common stock and warrants in a private placement. On May 16, 2023, we received net proceeds of approximately $4.1 million from the sale of common stock and warrants in a private placement. We believe our existing cash will be sufficient to fund our operations, including general and administrative expenses, research and development activities, and the generic pharmaceuticals sales business, for the next 18 to 24 months. There is no assurance our estimates will be accurate.

 

Management estimates that we will need additional capital in the amount of approximately $30 million for expansion of our drug development activities and generic pharmaceuticals operations, including possibly a Phase I clinical trial. Additional capital may not be available on terms acceptable to us, or at all. Currently, we do not have any committed arrangements for financing and can provide no assurance that we will be able to obtain financing when required. No assurance can be given that we will obtain access to capital markets in the future or that financing, adequate to satisfy the cash requirements of implementing our business will be available on acceptable terms. Our inability to obtain acceptable financing could have an adverse effect upon the results of our operations and financial condition.

 

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 are believed 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, 2022, including our financial statements and notes thereto included therein as filed with the SEC on April 4, 2023.

 

Recently Adopted Accounting Standards

 

In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations. The Company is in the process of determining the effects adoption will have on its consolidated financial statements.

 

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40), (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU2020-06 amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is evaluating the impact of this guidance on its unaudited consolidated financial statements.

 

Off Balance-Sheet Arrangements

 

None.

 

 

 

 23 

 

 

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 September 30, 2023, 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 September 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

 

 24 

 

 

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

 

None.

 

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.

 

 

 

 25 

 

 

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 November 13, 2023.

 

  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)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 26 

 

Exhibit 31.1

 

CERTIFICATION PURSUANT TO

18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

 

I, Dr. Steve N. Slilaty, certify that:

 

  1. I have reviewed this quarterly report on Form 10-Q of Sunshine Biopharma, Inc.

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

 

  4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedure to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based upon such evaluation; and

 

  d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Dated: November 13, 2023

/s/ Dr. Steve N. Slilaty

Dr. Steve N. Slilaty, Chief Executive Officer

 

Exhibit 31.2

 

CERTIFICATION PURSUANT TO

18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

 

I, Camille Sebaaly, certify that:

 

  1. I have reviewed this quarterly report on Form 10-Q of Sunshine Biopharma, Inc.

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

 

  4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedure to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based upon such evaluation; and

 

  d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Dated: November 13, 2023

/s/ Camille Sebaaly

Camille Sebaaly, Chief Financial Officer

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with this quarterly report of Sunshine Biopharma, Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, the undersigned, in the capacities and on the date indicated below, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

 

  1. The Report fully complies with the requirements of Rule 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

  2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Dated: November 13, 2023

/s/ Dr. Steve N. Slilaty

Dr. Steve N. Slilaty, Chief Executive Officer

   
Dated: November 13, 2023

/s/ Camille Sebaaly

Camille Sebaaly, Chief Financial Officer

 

v3.23.3
Cover - shares
 9 Months Ended
Sep. 30, 2023
Nov. 13, 2023
Document Type 10-Q  
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Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Sep. 30, 2023  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2023  
Current Fiscal Year End Date --12-31  
Entity File Number 001-41282  
Entity Registrant Name SUNSHINE BIOPHARMA, INC.  
Entity Central Index Key 0001402328  
Entity Tax Identification Number 20-5566275  
Entity Incorporation, State or Country Code CO  
Entity Address, Address Line One 6500 Trans-Canada Highway  
Entity Address, Address Line Two 4th Floor  
Entity Address, Address Line Three Pointe-Claire  
Entity Address, City or Town Quebec  
Entity Address, Country CA  
Entity Address, Postal Zip Code H9R 0A5  
City Area Code (514)  
Local Phone Number 426-6161  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   25,678,290
Common Stock [Member]    
Title of 12(b) Security Common Stock  
Trading Symbol SBFM  
Security Exchange Name NASDAQ  
Warrant [Member]    
Title of 12(b) Security Common Stock Purchase Warrants  
Trading Symbol SBFMW  
Security Exchange Name NASDAQ  
v3.23.3
Consolidated Balance Sheets (Unaudited) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Current Assets:    
Cash and cash equivalents $ 18,846,140 $ 21,826,437
Accounts receivable 2,034,119 1,912,153
Inventory 4,517,044 3,289,945
Prepaid expenses 37,556 283,799
Total Current Assets 25,434,859 27,312,334
Property and equipment 334,922 394,249
Intangible assets 1,216,207 776,856
Right-of-use-asset 664,296 760,409
TOTAL ASSETS 27,650,284 29,243,848
Current Liabilities:    
Accounts payable and accrued expenses 2,220,870 2,802,797
Earnout payable 2,547,831 3,632,000
Income tax payable 201,541 373,191
Right-of-use-liability 117,840 123,026
Total Current Liabilities 5,088,082 6,931,014
Long-Term Liabilities:    
Deferred tax liability 43,032 43,032
Right-of-use-liability 555,687 642,232
Total Long-Term Liabilities 598,719 685,264
TOTAL LIABILITIES 5,686,801 7,616,278
SHAREHOLDERS' EQUITY    
Preferred Stock, Series B $0.10 par value per share; 1,000,000 shares authorized; 10,000 Shares issued and outstanding 1,000 1,000
Common Stock, $0.001 par value per share; 3,000,000,000 shares authorized; 25,678,290 and 22,585,632 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively 25,678 22,585
Capital paid in excess of par value 84,387,890 80,841,752
Accumulated comprehensive income 204,549 161,847
Accumulated (Deficit) (62,655,634) (59,399,614)
TOTAL SHAREHOLDERS' EQUITY 21,963,483 21,627,570
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 27,650,284 $ 29,243,848
v3.23.3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Sep. 30, 2023
Dec. 31, 2022
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 3,000,000,000 3,000,000,000
Common stock, shares issued 25,678,290 22,585,632
Common stock, shares outstanding 25,678,290 22,585,632
Series B Preferred Stock [Member]    
Preferred stock, par value $ 0.10 $ 0.10
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, shares issued 10,000 10,000
Preferred stock, shares outstanding 10,000 10,000
v3.23.3
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Income Statement [Abstract]        
Sales $ 5,957,668 $ 132,808 $ 16,412,586 $ 405,760
Cost of sales 3,967,412 65,783 10,641,461 200,311
Gross profit 1,990,256 67,025 5,771,125 205,449
General and Administrative Expenses:        
Accounting 56,350 122,913 301,381 237,773
Consulting 221,781 162,852 745,850 270,033
Director fees 100,000 100,000 300,000 200,000
Legal 133,302 146,467 392,874 403,386
Marketing 241,897 217,666 502,987 400,386
Office 544,215 76,818 1,422,058 449,730
R&D 238,012 362,500 1,039,502 770,095
Salaries 1,144,377 595,000 4,344,801 1,105,000
Taxes 52,586 0 212,953 0
Depreciation 37,210 789 106,797 6,186
Total General and Administrative Expenses: 2,769,730 1,785,005 9,369,203 3,842,589
(Loss) from operations (779,474) (1,717,980) (3,598,078) (3,637,140)
Other Income (Expense):        
Foreign exchange 40 25 (206) 45
Interest income 207,431 260,938 624,361 406,984
Debt release 0 0 0 10,852
Interest expense (38,527) (2) (107,198) (12,866)
Total Other Income (Expense) 168,944 260,961 516,957 405,015
Net (loss) before income taxes (610,530) (1,457,019) (3,081,121) (3,232,125)
Provision for income taxes (40,952) 0 (174,899) 0
Net (Loss) (651,482) (1,457,019) (3,256,020) (3,232,125)
Gain (Loss) from foreign exchange translation (460,507) (45,126) 42,702 (56,764)
Comprehensive (Loss) $ (1,111,989) $ (1,502,145) $ (3,213,318) $ (3,288,889)
Basic (Loss) per common share $ 0.04 $ 0.08 $ 0.133 $ 0.26
v3.23.3
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical) - shares
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Income Statement [Abstract]        
Weighted average common shares outstanding (Basic) 25,690,449 18,885,632 24,507,122 12,789,733
Weighted average common shares outstanding (Diluted) 25,690,449 18,885,632 24,507,122 12,789,733
v3.23.3
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Cash Flows From Operating Activities:    
Net (Loss) $ (3,256,020) $ (3,232,125)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 106,794 6,186
Foreign exchange (374) 45
Debt release 0 (10,852)
Accounts receivable (118,482) 7,776
Inventory (1,221,112) (163,991)
Prepaid expenses 247,977 2,235
Accounts payable and accrued expenses (587,973) 437,267
Income tax payable (172,076) 0
Interest payable (1,084,169) (48,287)
Net Cash Flows (Used) in Operations (6,085,435) (3,001,746)
Cash Flows From Investing Activities:    
Reduction in Right-of-use asset 97,498 0
Purchase of intangible assets (19,804) 0
Purchase of equipment (464,614) 0
Net Cash Flows (Used) in Investing Activities (386,920) 0
Cash Flows From Financing Activities:    
Common stock issued 4,089,218 43,560,363
Exercise of warrants 1,156 0
Purchase of treasury stock (541,143) (99,000)
Lease liability (93,125) 0
Payments of notes payable 0 (1,900,000)
Net Cash Flows Provided by Financing Activities 3,456,106 41,561,363
Cash and Cash Equivalents at Beginning of Period 21,826,437 2,045,167
Net increase (decrease) in cash and cash equivalents (3,016,249) 38,559,617
Effect of exchange rate changes on cash 0 (105,617)
Foreign currency translation adjustment 35,952 56,764
Cash and Cash Equivalents at End of Period 18,846,140 40,555,931
Supplementary Disclosure of Cash Flow Information:    
Cash paid for interest 0 61,151
Cash paid for income taxes $ 0 $ 0
v3.23.3
Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Preferred Stock [Member]
Comprehensive Income [Member]
Retained Earnings [Member]
Total
Beginning balance, value at Dec. 31, 2021 $ 2,596 $ 32,787,379 $ 100,000 $ (23,139) $ (32,655,174) $ 211,662
Beginning balance, shares at Dec. 31, 2021 2,595,620   1,000,000      
Common stock and pre-funded warrants issued in public offering $ 6,657 30,360,528 30,367,185
Common stock and pre-funded warrants issued in public offering, shares 6,656,526          
Exercise of warrants $ 9,633 13,183,544 13,193,177
Exercise of warrants, shares 9,633,486          
Preferred stock purchased from related party $ (99,000) (99,000)
Preferred stock purchased from related party, shares     (990,000)      
Net (loss) (56,764) (3,232,125) (3,288,889)
Ending balance, value at Sep. 30, 2022 $ 18,886 76,331,451 $ 1,000 (79,903) (35,887,299) 40,384,135
Ending balance, shares at Sep. 30, 2022 18,885,632   10,000      
Beginning balance, value at Jun. 30, 2022 $ 18,886 76,331,451 $ 1,000 (34,777) (34,430,280) 41,886,280
Beginning balance, shares at Jun. 30, 2022 18,885,632   10,000      
Net (loss) (45,126) (1,457,019) (1,502,145)
Ending balance, value at Sep. 30, 2022 $ 18,886 76,331,451 $ 1,000 (79,903) (35,887,299) 40,384,135
Ending balance, shares at Sep. 30, 2022 18,885,632   10,000      
Beginning balance, value at Dec. 31, 2022 $ 22,585 80,841,752 $ 1,000 161,847 (59,399,614) 21,627,570
Beginning balance, shares at Dec. 31, 2022 22,585,632   10,000      
Repurchase of common stock $ (514) (540,629)
Repurchase of common stock, shares (513,723)          
Common stock and pre-funded warrants issued in a private offering $ 2,451 4,086,767 4,089,218
Common stock and pre-funded warrants issued in a private offering, shares 2,450,000          
Exercise of warrants $ 1,156 1,156
Exercise of warrants, shares 1,156,381          
Preferred stock purchased from related party, shares 445,711          
Net (loss) 42,702 (3,256,020) (3,213,318)
Ending balance, value at Sep. 30, 2023 $ 25,678 84,387,890 $ 1,000 204,549 (62,655,634) 21,963,483
Ending balance, shares at Sep. 30, 2023 25,678,290   10,000      
Beginning balance, value at Jun. 30, 2023 $ 25,746 84,422,143 $ 1,000 665,056 (62,004,152) 23,109,793
Beginning balance, shares at Jun. 30, 2023 25,746,302   10,000      
Repurchase stock $ (68) (34,253)
Repurchase stock, shares (68,012)          
Net (loss) (460,507) (651,482) (1,111,989)
Ending balance, value at Sep. 30, 2023 $ 25,678 $ 84,387,890 $ 1,000 $ 204,549 $ (62,655,634) $ 21,963,483
Ending balance, shares at Sep. 30, 2023 25,678,290   10,000      
v3.23.3
Description of Business
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business

Note 1 – Description of Business

 

The Company was originally 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 transaction, the Company changed its name to Sunshine Biopharma, Inc. and began operating as a pharmaceutical company.

 

In addition to conducting its own drug development activities, Sunshine Biopharma operates two wholly owned subsidiaries: (i) Nora Pharma Inc. (“Nora Pharma”), a Canadian corporation with a portfolio of pharmaceutical products consisting of 51 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”) products. In addition to the 51 generic prescription drugs currently on the market in Canada, the Company has 32 additional generic prescription drugs scheduled to be launched in 2024 and 2025 in Canada.

 

The Company has determined that it has two reportable segments:

 

  · Prescription Generic Pharmaceuticals (“Generic Pharmaceuticals”)
  · Nonprescription Over-The-Counter Products (“OTC Products)

 

Through December 31, 2022 and as of September 30, 2023, sales from the Generic Pharmaceuticals segment represented approximately 97% of total revenues of the Company while the remaining approximately 3% was generated from the sale of OTC Products. Based on these results, the Company deems segmentation reporting to be immaterial at September 30, 2023.

 

The Company is not subject to material customer concentration risks as it sells its products directly to pharmacies in several Canadian Provinces. Provincial governments in Canada reimburse patients for their prescription drugs expenditures to various degrees under drug reimbursement programs, making generic drugs prices highly dependent on government regulations which may change over time. The most recent negotiations between the pan-Canadian Pharmaceutical Alliance and the Canadian Generic Pharmaceutical Association have 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.

 

In addition, the Company is engaged in the development of the following proprietary drugs:

 

·Adva-27a, a small chemotherapy molecule for treatment of pancreatic cancer (IND-enabling studies were paused on November 2, 2023 due to unfavorable results. See Note 13 – Subsequent Events)
·K1.1 mRNA, a lipid nano-particle (LNP) targeted for liver cancer
·SBFM-PL4, a protease inhibitor for treatment of Coronavirus infections

 
v3.23.3
Basis of Presentation
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Basis of Presentation

Note 2 – Basis of Presentation

 

The unaudited financial statements of the Company for the nine months periods ended September 30, 2023 and 2022 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, 2022, was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 4, 2023. These financial statements should be read in conjunction with that report.

 
v3.23.3
Private Placement
 9 Months Ended
Sep. 30, 2023
Private Placement  
Private Placement

Note 3 – Private Placement

 

On May 16, 2023, the Company completed a private placement pursuant to a securities purchase agreement with a single institutional investor for gross proceeds of approximately $5 million, before deducting fees to the placement agent and other offering expenses payable by the Company. The net proceeds received by the Company were $4,089,218.

 

In connection with the private placement, the Company issued (i) 2,450,000 shares of common stock, (ii) 3,502,381 pre-funded warrants (the “May Pre-Funded Warrants”), and (iii) investor warrants (the “May Investor Warrants”) to purchase up to 11,904,762 shares of common stock at $0.59 per share. Each share of common stock and accompanying two May Investor Warrants were sold together at a combined offering price of $0.84 and each May Pre-Funded Warrant and accompanying two May Investor Warrants were sold together at a combined offering price of $0.839. The May Pre-Funded Warrants are immediately exercisable at a nominal exercise price of $0.001, and may be exercised at any time until all of the May Pre-Funded Warrants are exercised in full. The May Investor Warrants which have an exercise price of $0.59 per share (subject to adjustment as set forth therein), are exercisable upon issuance and will expire five and a half years from the date of issuance. As of September 30, 2023, a total of 1,156,381 May Pre-Funded Warrants and no May Investor Warrants have been exercised. The net proceeds received from the exercise of May Pre-Funded Warrants were $1,156.

 
v3.23.3
Acquisition of Nora Pharma Inc.
 9 Months Ended
Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract]  
Acquisition of Nora Pharma Inc.

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. The purchase price for the shares was $18,860,637 (USD), $14,346,637 of which was paid in cash and the remainder was paid through the issuance of 3,700,000 shares of the Company’s common stock valued at $4,514,000 or $1.22 per share. Nora Pharma sells generic pharmaceutical products in Canada. Nora Pharma’s operations are authorized by a Drug Establishment License issued by Health Canada.

 

The following table summarizes the allocation of the purchase price as of October 20, 2022, the acquisition date using Nora Pharma’s balance sheet assets and liabilities:

    
Accounts receivable  $1,358,121 
Inventory   3,181,916 
Intangible assets   659,571 
Equipment & furniture   210,503 
Other assets   1,105,093 
Total assets   6,515,204 
Liabilities assumed   (5,981,286)
Net assets   533,918 
Goodwill   18,326,719 
Total Consideration  $18,860,637 

 

The value of the 3,700,000 common shares issued as part of the consideration paid for Nora Pharma was determined based on the closing market price of the Company’s common shares on the acquisition date, October 20, 2022 ($1.22 per share).

 

The Company impaired 100% of the goodwill amount in 2022 and plans to depreciate the intangible assets as detailed in Note 5 below.

 

As part of the consideration paid for Nora Pharma, the Company agreed to a $5,000,000 CAD ($3,632,000 USD) earnout amount payable to Mr. Malek Chamoun, the Seller of Nora Pharma. The earnout is payable in the form of twenty (20) payments of $250,000 CAD for every $1,000,000 CAD increase in gross sales (as defined in the Purchase Agreement) above Nora Pharma’s June 30, 2022 gross sales, provided that his employment with the Company is not terminated pursuant to the Company’s employment agreement with him. The total earnout amount of $3,632,000 has been recorded as a salary payable. During the nine-month period ended September 30, 2023, the Company paid an earn-out amount of $1,084,169 leaving a balance earn-out to be paid of $2,547,831 at September 30, 2023.

 

The unaudited financial information in the table below summarizes the combined results of operations of the Company and Nora Pharma for the years ended December 31, 2022 and 2021, on a pro forma basis, as though the two companies had been combined as of January 1, 2021. The unaudited pro forma financial information does not purport to be indicative of the Company's combined results of operations which would have been obtained had the acquisition taken place on January 1, 2021, nor should it be taken as indicative of future consolidated results of operations: 

Schedule of Pro Forma results from acquisition        
Pro Forma Results From Acquisition  December 31,
2022		   December 31,
2021		 
Total revenues  $14,758,115   $7,927,165 
Net (loss) from operations  $(26,192,503)  $(2,224,253)
Net (loss)  $(26,164,764)  $(12,289,655)
Basic and fully diluted (loss) per share  $(1.74)  $(4.70)
Weighted average number of shares outstanding   15,056,097    2,612,061 
 

 
v3.23.3
Intangible Assets
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

Note 5 – Intangible Assets

 

Intangible assets, net, consisted of the following at September 30, 2023: 

     
Balance June 30, 2023  $1,233,570 
Dossier fee additions   13,905 
Balance at September 30, 2023   1,247,475 
Less accumulated amortization   (31,268)
Finite-lived intangible assets, net, at September 30, 2023  $1,216,207 
      
Balance December 31, 2022  $776,856 
Dossier fee additions   470,619 
Balance at September 30, 2023   1,247,475 
Less accumulated amortization   (31,268)
Finite-lived intangible assets, net, at September 30, 2023  $1,216,207 

 

Amortization expense for the three months period ended September 30, 2023, and the nine months period ended September 30, 2023, amounted to $10,797 and $26,746, respectively.

 

As of September 30, 2023, estimated amortization expense of the Company’s intangible assets for each of the next five years is as follows: 

     
2024  $55,418 
2025   55,418 
2026   54,240 
2027   15,599 
2028   7,370 

 
v3.23.3
Reverse Stock Splits
 9 Months Ended
Sep. 30, 2023
Reverse Stock Splits  
Reverse Stock Splits

Note 6 – Reverse Stock Splits

 

Effective February 9, 2022, the Company completed a 1 for 200 reverse split of its common stock. The Company had previously completed two 20 to 1 reverse stock splits, one in 2019 and the other in 2020. The Company’s financial statements reflect all three reverse stock splits on a retroactive basis for all periods presented and for all references to common stock, unless specifically stated otherwise.

 
v3.23.3
Capital Stock
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Capital Stock

Note 7 – Capital Stock

 

The Company’s authorized capital is comprised of 3,000,000,000 shares of common stock, par value $0.001, and 30,000,000 shares of preferred stock, $0.10 par value. As of December 31, 2022 and September 30, 2023, the Company had authorized 1,000,000 shares of Series B Preferred Stock. The Series B Preferred Stock is non-convertible, non-redeemable and non-retractable. It has superior liquidation rights to the common stock at $0.10 per share and gives the holder the right to 1,000 votes per share. As of September 30, 2023 and December 31, 2022, 10,000 shares of Series B Preferred Stock are outstanding and held by the Company’s chief executive officer.

 

On February 17, 2022, the Company completed a public offering and received net proceeds of $6,833,071 from the offering. Pursuant to the public offering, the Company issued and sold an aggregate of 1,882,353 shares of common stock and 4,102,200 warrants to purchase shares of common stock (the “Tradeable Warrants”).

 

On February 22, 2022, the Company redeemed 990,000 shares of Series B Preferred Stock from the CEO of the Company at a redemption price equal to the stated value of $0.10 per share. The remaining 10,000 shares of Series B Preferred Stock could not be voted pursuant to a warrant agent agreement relating to the Tradeable Warrants (the “Warrant Agent Agreement”). On October 12, 2023, the Company held a special meeting of the holders of the outstanding Tradeable Warrants in which the holders of the majority of the outstanding Tradeable Warrants approved an amendment to the Warrant Agent Agreement to eliminate the provision that prohibited the Company’s CEO from exercising his voting rights under the Series B Preferred Stock, as well as to lower the exercise price of the Tradeable Warrants to $0.11. The Company entered into the amendment to the Warrant Agent Agreement on October 18, 2023.

 

On March 14, 2022, the Company completed a private placement and received net proceeds of $6,781,199. In connection with this private placement, the Company issued (i) 2,301,353 shares of its common stock together with investor warrants (“Investor Warrants”) to purchase up to 2,301,353 shares of common stock, and (ii) 1,302,251 pre-funded warrants (“Pre-Funded Warrants”) with each Pre-Funded Warrant exercisable for one share of common stock, together with Investor Warrants to purchase up to 1,302,251 shares of common stock. Each share of common stock and accompanying Investor Warrant was sold together at a combined offering price of $2.22 and each Pre-Funded Warrant and accompanying Investor Warrant were sold together at a combined offering price of $2.219. The Pre-Funded Warrants were immediately exercisable, at a nominal exercise price of $0.001, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The Investor Warrants have an exercise price of $2.22 per share (subject to adjustment as set forth in the warrant), are exercisable upon issuance and will expire five years from the date of issuance.

 

On April 28, 2022, the Company completed another private placement and received net proceeds of $16,752,915. In connection with this private placement, the Company issued (i) 2,472,820 shares of its common stock together with warrants (“April Warrants”) to purchase up to 4,945,640 shares of common stock, and (ii) 2,390,025 pre-funded warrants (“Pre-Funded Warrants”) with each Pre-Funded Warrant exercisable for one share of common stock, together with April Warrants to purchase up to 4,780,050 shares of common stock. Each share of common stock and accompanying two April Warrants were sold together at a combined offering price of $4.01 and each Pre-Funded Warrant and accompanying two April Warrants were sold together at a combined offering price of $4.009. The Pre-Funded Warrants were immediately exercisable, at a nominal exercise price of $0.001, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The April Warrants have an exercise price of $3.76 per share (subject to adjustment as set forth in the warrant), are exercisable upon issuance and will expire five years from the date of issuance.

 

On October 20, 2022, the Company issued 3,700,000 shares of common stock as part of the acquisition of Nora Pharma. These shares were valued at $4,514,000, or $1.22 per share.

 

On January 19, 2023, the Company announced a stock repurchase program of up to $2 million (“Stock Repurchase Program”). During the six months ended June 30, 2023, the Company repurchased a total of 445,711 shares of common stock at an average price of $1.1371 per share for a total cost of $506,822. The 445,711 repurchased common shares were cancelled and returned to treasury reducing the number of issued and outstanding shares from 22,585,632 to 22,139,921.

 

On May 16, 2023, the Company completed a private placement pursuant to a securities purchase agreement with a single institutional investor for gross proceeds of approximately $5 million, before deducting fees to the placement agent and other offering expenses payable by the Company. The net proceeds received by the Company were $4,089,218. In connection with the private placement, the Company issued (i) 2,450,000 shares of common stock, (ii) 3,502,381 pre-funded warrants (the “May Pre-Funded Warrants”), and (iii) investor warrants (the “May Investor Warrants”) to purchase up to 11,904,762 shares of common stock at $0.59 per share. Each share of common stock and accompanying two May Investor Warrants were sold together at a combined offering price of $0.84 and each May Pre-Funded Warrant and accompanying two May Investor Warrants were sold together at a combined offering price of $0.839. The May Pre-Funded Warrants are immediately exercisable, at a nominal exercise price of $0.001, and may be exercised at any time until all of the May Pre-Funded Warrants are exercised in full. The May Investor Warrants which have an exercise price of $0.59 per share (subject to adjustment as set forth therein), are exercisable upon issuance and will expire five and a half years from the date of issuance.

 

In 2022 and the first six months of 2023, the Company issued a total of 10,789,867 shares of common stock in connection with warrant exercises for aggregate net proceeds of $13,194,335.

 

In July 2023, the Company repurchased a total of 68,012 shares of common stock on the open market under the Stock Repurchase Program announced on January 19, 2023, at an average price of $0.5046 per share for a total cost of $34,321. In October 2023, the 68,012 repurchased common shares were cancelled and returned to treasury reducing the number of issued and outstanding shares from 25,746,302 to 25,678,290.

 

As of September 30, 2023 and December 31, 2022, the Company has a total of 25,678,290 and 22,585,632 shares of common stock issued and outstanding, respectively.

 

The Company has declared no dividends since inception.

 
v3.23.3
Warrants
 9 Months Ended
Sep. 30, 2023
Warrants  
Warrants

Note 8 – Warrants

 

The Company accounts for issued warrants either as a liability or equity in accordance with ASC 480-10 or ASC 815-40. Under ASC 480-10, warrants are considered a liability if they are mandatorily redeemable and they require settlement in cash, other assets, or a variable number of shares. If warrants do not meet liability classification under ASC 480-10, the Company considers the requirements of ASC 815-40 to determine whether the warrants should be classified as a liability or as equity. Under ASC 815-40, contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event. Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period. Any change in the fair value of the warrants after the issuance date is recorded in the consolidated statements of operations as a gain or loss. If warrants do not require liability classification under ASC 815-40, in order to conclude warrants should be classified as equity, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or other applicable GAAP standard. Equity-classified warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date.

 

In 2022 and during the first nine months of 2023, the Company completed four financing events, and in connection therewith, it issued warrants as follows:

             
Type   Number   Exercise Price   Expiry Date
Pre-Funded Warrants   3,692,276   $0.001   Unlimited
Tradeable Warrants   4,102,200   $2.22*   February 2027
Investor Warrants   3,603,604   $2.22   March 2027
April Warrants   9,725,690   $3.76   April 2027
May Pre-Funded Warrants   3,502,381   $0.001   Unlimited
May Investor Warrants   11,904,762   $0.59   November 2028

 

* The Tradeable Warrants had an initial exercise price of $4.25, subject to adjustment. Upon the closing of the Company's private placement on March 14, 2022, the exercise price of the Tradeable Warrants was reduced to $2.22, in accordance with the terms thereof.

 

As of September 30, 2023, all of the Pre-Funded Warrants and a total of 3,138,507 Tradeable Warrants, 2,802,703 Investor Warrants, and 1,156,381 May Pre-Funded Warrants were exercised resulting in aggregate proceeds of $13,194,335 received by the Company.

 

The Company’s outstanding warrants at September 30, 2023 consisted of the following: 

             
Type   Number   Exercise Price   Expiry Date
Pre-Funded Warrants   None   $0.001   Unlimited
Tradeable Warrants   963,693   $2.22*   February 2027
Investor Warrants   800,901   $2.22   March 2027
April Warrants   9,725,690   $3.76   April 2027
May Pre-Funded Warrants   2,346,000   $0.001   Unlimited
May Investor Warrants   11,904,762   $0.59   November 2028

 

* On October 12, 2023, the Company held a special meeting of the holders of its outstanding Tradeable Warrants in which a majority of the holders approved an amendment to the Warrant Agent Agreement to reduce the exercise price of the Tradeable Warrants to $0.11 per warrant. The amendment was executed on October 18, 2023.

 
v3.23.3
Net Loss Per Common Share
 9 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
Net Loss Per Common Share

Note 9 – Net Loss Per Common Share

 

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents.

 

Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, taking into consideration common stock equivalents.

 

In February 2022, the Company issued 4,102,200 Tradeable Warrants pursuant to the Company’s Public Offering. In March and April 2022, the Company issued 3,603,604 Investor Warrants and 9,725,690 April Warrants pursuant to two private placements. In May 2023, the Company issued 11,904,762 May Investor Warrants pursuant to two private placements. As of September 30, 2023, 3,138,507 Tradeable Warrants and 2,802,703 Investor Warrants were exercised, leaving 963,693 Tradeable Warrants, 800,901 Investor Warrants, 9,725,690 April Warrants, and 11,904,762 May Investor Warrants outstanding. These warrants are dilutive and were included in the diluted earnings per share.

 

In March and April 2022, the Company issued and sold Pre-Funded Warrants to purchase an aggregate of 3,692,276 shares of common stock at a nominal exercise price of $0.001 per share. During the nine months ended September 30, 2023, all of these warrants were exercised and therefore had no remaining dilutive effect.

 

In May 2023, the Company issued and sold May Pre-Funded Warrants to purchase an aggregate of 3,502,381 shares of common stock at a nominal exercise price of $0.001 per share. During the nine months ended September 30, 2023, 1,156,381 of these warrants were exercised leaving 2,346,000 outstanding. These warrants were not included in the calculation of weighted average outstanding shares as they would be ant-dilutive.

 
v3.23.3
Lease
 9 Months Ended
Sep. 30, 2023
Leases [Abstract]  
Lease

Note 10 – Lease

 

The Company has obligations as a lessee for 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 September 30, 2023 were as follows:

     
  Operating lease ROU asset $664,296
  Operating Lease liability - Short-term $117,840
  Operating lease liability - Long-term $555,687
  Remaining lease term 6 years 3 months
  Discount rate 6%

 

Amounts disclosed for ROU assets obtained in exchange for lease obligations and reductions of ROU assets resulting from reductions of lease obligations include amounts reduced from the carrying amount of ROU assets resulting from deferred rent.

 

Maturities of lease liabilities under non-cancellable operating leases at September 30, 2023 are as follows:

   
2023 $ 30,124
2024   116,090
2025   116,277
2026   110,134
2027   103,736
Thereafter   197,166

 
v3.23.3
Management and Director Compensation
 9 Months Ended
Sep. 30, 2023
Management And Director Compensation  
Management and Director Compensation

Note 11 – Management and Director Compensation

 

The Company paid its officers cash compensation totaling $245,000 and $362,500 and $1,290,000 and $770,095 for the three and nine-month periods ended September 30, 2023 and 2022, respectively.

 

The Company paid its directors cash compensation totaling $100,000 and $300,000 and $100,000 and $200,000 for the three and nine-month periods ended September 30, 2023 and 2022, respectively.

 
v3.23.3
Income Taxes
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

Note 12 – Income Taxes

 

In calculating the provision for income taxes on an interim basis, the Company uses an estimate of the annual effective tax rate based upon currently known facts and circumstances and applies that rate to its year-to-date earnings or losses. The Company’s effective tax rate is based on expected income and statutory tax rates and takes into consideration permanent differences between financial statement and tax return income applicable to the Company in the various jurisdictions in which the Company operates. The effect of discrete items, such as changes in estimates, changes in rates or tax status, and unusual or infrequently occurring events, is recognized in the interim period in which the discrete item occurs. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the result of new judicial interpretations or regulatory or tax law changes.

 

The Company’s interim effective tax rate, inclusive of discrete items, for the nine-month periods ended September 30, 2023 and 2022 was 26.83%.

 
v3.23.3
Subsequent Events
 9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
Subsequent Events

Note 13 – Subsequent Events

 

On October 12, 2023, the Company held a special meeting of the holders of its outstanding Tradeable Warrants in which the holders of the majority of the outstanding Tradeable Warrants approved an amendment to the Warrant Agent Agreement to (i) reduce the exercise price of the Tradeable Warrants to $0.11, subject to further adjustment as provided therein, and (ii) eliminate the provision that prohibits the Company’s CEO from exercising his voting rights under his Series B Preferred Stock.

 

In December 2022, the Company had entered into a research agreement with the Jewish General Hospital (“JGH”), Montreal, Canada to conduct IND-enabling studies of the Company’s anticancer drug candidate, Adva-27a (the “Research Agreement”). In August 2023, the Company was advised by JGH that the lab results on testing of the Adva-27a molecule were not favorable. After conclusion of an internal review of the lab results on November 2, 2023, the Company provided notice of termination of the Research Agreement, which will become effective on December 2, 2023, pursuant to the terms of the Research Agreement. The Company has now paused the IND-enabling studies of Adva-27a pending a review of the possibility of chemical modification of the compound to address the suboptimal performance of the molecule in certain studies.

 
v3.23.3
Acquisition of Nora Pharma Inc. (Tables)
 9 Months Ended
Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract]  
Schedule of allocation of purchase price
    
Accounts receivable  $1,358,121 
Inventory   3,181,916 
Intangible assets   659,571 
Equipment & furniture   210,503 
Other assets   1,105,093 
Total assets   6,515,204 
Liabilities assumed   (5,981,286)
Net assets   533,918 
Goodwill   18,326,719 
Total Consideration  $18,860,637 
Schedule of Pro Forma results from acquisition
Schedule of Pro Forma results from acquisition        
Pro Forma Results From Acquisition  December 31,
2022		   December 31,
2021		 
Total revenues  $14,758,115   $7,927,165 
Net (loss) from operations  $(26,192,503)  $(2,224,253)
Net (loss)  $(26,164,764)  $(12,289,655)
Basic and fully diluted (loss) per share  $(1.74)  $(4.70)
Weighted average number of shares outstanding   15,056,097    2,612,061 
v3.23.3
Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of intangible assets
     
Balance June 30, 2023  $1,233,570 
Dossier fee additions   13,905 
Balance at September 30, 2023   1,247,475 
Less accumulated amortization   (31,268)
Finite-lived intangible assets, net, at September 30, 2023  $1,216,207 
      
Balance December 31, 2022  $776,856 
Dossier fee additions   470,619 
Balance at September 30, 2023   1,247,475 
Less accumulated amortization   (31,268)
Finite-lived intangible assets, net, at September 30, 2023  $1,216,207 
Schedule of estimated amortization expense
     
2024  $55,418 
2025   55,418 
2026   54,240 
2027   15,599 
2028   7,370 
v3.23.3
Warrants (Tables)
 9 Months Ended
Sep. 30, 2023
Warrants  
Schedule of warrants issued with financing
             
Type   Number   Exercise Price   Expiry Date
Pre-Funded Warrants   3,692,276   $0.001   Unlimited
Tradeable Warrants   4,102,200   $2.22*   February 2027
Investor Warrants   3,603,604   $2.22   March 2027
April Warrants   9,725,690   $3.76   April 2027
May Pre-Funded Warrants   3,502,381   $0.001   Unlimited
May Investor Warrants   11,904,762   $0.59   November 2028

 

* The Tradeable Warrants had an initial exercise price of $4.25, subject to adjustment. Upon the closing of the Company's private placement on March 14, 2022, the exercise price of the Tradeable Warrants was reduced to $2.22, in accordance with the terms thereof.
Schedule of outstanding warrants
             
Type   Number   Exercise Price   Expiry Date
Pre-Funded Warrants   None   $0.001   Unlimited
Tradeable Warrants   963,693   $2.22*   February 2027
Investor Warrants   800,901   $2.22   March 2027
April Warrants   9,725,690   $3.76   April 2027
May Pre-Funded Warrants   2,346,000   $0.001   Unlimited
May Investor Warrants   11,904,762   $0.59   November 2028

 

* On October 12, 2023, the Company held a special meeting of the holders of its outstanding Tradeable Warrants in which a majority of the holders approved an amendment to the Warrant Agent Agreement to reduce the exercise price of the Tradeable Warrants to $0.11 per warrant. The amendment was executed on October 18, 2023.
v3.23.3
Lease (Tables)
 9 Months Ended
Sep. 30, 2023
Leases [Abstract]  
Schedule of lease information
     
  Operating lease ROU asset $664,296
  Operating Lease liability - Short-term $117,840
  Operating lease liability - Long-term $555,687
  Remaining lease term 6 years 3 months
  Discount rate 6%
Schedule of maturities of lease liabilities
   
2023 $ 30,124
2024   116,090
2025   116,277
2026   110,134
2027   103,736
Thereafter   197,166
v3.23.3
Description of Business (Details Narrative) - Revenue Benchmark [Member] - Product Concentration Risk [Member]
 9 Months Ended
Sep. 30, 2023
Generic Pharmaceuticals [Member]  
Product Information [Line Items]  
Concentration Risk, Percentage 97.00%
OTC Products [Member]  
Product Information [Line Items]  
Concentration Risk, Percentage 3.00%
v3.23.3
Private Placement (Details Narrative) - USD ($)
 9 Months Ended
May 16, 2023
Sep. 30, 2023
Common Stock [Member]    
Securities Financing Transaction [Line Items]    
Stock Issued During Period, Shares, New Issues   2,450,000
Single Healthcare Focused Institutional Investor [Member]    
Securities Financing Transaction [Line Items]    
Gross proceeds from private placement $ 5,000,000  
Net proceeds from private placement $ 4,089,218  
Single Healthcare Focused Institutional Investor [Member] | May Pre Funded Warrants [Member]    
Securities Financing Transaction [Line Items]    
Net proceeds from private placement   $ 1,156
Stock Issued During Period, Shares, New Issues 3,502,381 1,156,381
Single Healthcare Focused Institutional Investor [Member] | Common Stock [Member]    
Securities Financing Transaction [Line Items]    
Stock Issued During Period, Shares, New Issues 2,450,000  
v3.23.3
Acquisition of Nora Pharma Inc. (Details) - Nora Pharma [Member]
Oct. 20, 2022
USD ($)
Business Acquisition [Line Items]  
Business combination, account receivable $ 1,358,121
Business combination, inventory 3,181,916
Business combination, intangible assets 659,571
Business combination, equipment and furniture 210,503
Business combination, other assets 1,105,093
Business combination, total assets 6,515,204
Business combination, liabilities assumed (5,981,286)
Business combination, net assets 533,918
Business combination, goodwill 18,326,719
Business combination, total consideration $ 18,860,637
v3.23.3
Acquisition of Nora Pharma Inc. (Details - Pro Forma results) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Business Acquisition [Line Items]    
Total revenues $ 14,758,115 $ 7,927,165
Net (loss) from operations (26,192,503) (2,224,253)
Net (loss) $ (26,164,764) $ (12,289,655)
Nora Pharma [Member]    
Business Acquisition [Line Items]    
Basic (loss) per share $ (1.74) $ (4.70)
Fully diluted (loss) per share $ (1.74) $ (4.70)
Weighted average number of shares outstanding, Basic 15,056,097 2,612,061
Weighted average number of shares outstanding, Diluted 15,056,097 2,612,061
v3.23.3
Acquisition of Nora Pharma Inc. (Details Narrative)
 9 Months Ended
Oct. 20, 2022
USD ($)
shares
Sep. 30, 2023
USD ($)
Dec. 31, 2022
USD ($)
Oct. 20, 2022
CAD ($)
Business Acquisition [Line Items]        
Earnout payable   $ 2,547,831 $ 3,632,000  
Nora Pharma [Member]        
Business Acquisition [Line Items]        
Purchase price of shares $ 18,860,637      
Payments to acquire shares $ 14,346,637      
Stock issued for acquisition | shares 3,700,000      
Stock issued for acquisition, value $ 4,514,000      
Nora Pharma [Member] | Malek Chamoun [Member]        
Business Acquisition [Line Items]        
Earnout payable $ 3,632,000 2,547,831   $ 5,000,000
Payment of earnout liability   $ 1,084,169    
v3.23.3
Intangible Assets (Details)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
USD ($)
Sep. 30, 2023
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]    
Finite lived intangible assets, beginning balance $ 1,233,570 $ 776,856
Dossier fee additions 13,905 470,619
Finite lived intangible assets, ending balance 1,247,475 1,247,475
Less accumulated amortization (31,268) (31,268)
Finite lived intangible assets, net $ 1,216,207 $ 1,216,207
v3.23.3
Intangible Assets (Details - Amortization schedule)
Sep. 30, 2023
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
2024 $ 55,418
2025 55,418
2026 54,240
2027 15,599
2028 $ 7,370
v3.23.3
Intangible Assets (Details Narrative) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]    
Amortization expense $ 10,797 $ 26,746
v3.23.3
Reverse Stock Splits (Details Narrative)
Feb. 09, 2022
First Reverse Stock Split [Member]  
Offsetting Assets [Line Items]  
Reverse stock split 1 for 200 reverse split
v3.23.3
Capital Stock (Details Narrative) - USD ($)
 1 Months Ended 6 Months Ended 9 Months Ended 12 Months Ended
May 16, 2023
Oct. 20, 2022
Apr. 28, 2022
Mar. 14, 2022
Feb. 22, 2022
Feb. 17, 2022
Jul. 31, 2023
Jun. 30, 2023
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Jan. 19, 2023
Class of Stock [Line Items]                        
Common stock, shares authorized                 3,000,000,000   3,000,000,000  
Common stock, par value                 $ 0.001   $ 0.001  
Stock repurchase program amount                       $ 2,000,000
Aggregate net proceeds                 $ 1,156 $ 0    
Common stock, shares outstanding                 25,678,290   22,585,632  
Dividends                 $ 0      
Stock Issued For Warrant Exercises [Member]                        
Class of Stock [Line Items]                        
Number of shares issued, shares               10,789,867     10,789,867  
Warrants Exercised [Member]                        
Class of Stock [Line Items]                        
Aggregate net proceeds               $ 13,194,335     $ 13,194,335  
Nora Pharma Inc [Member]                        
Class of Stock [Line Items]                        
Stock issued for acquisition, shares   3,700,000                    
Stock issued for acquisition, value   $ 4,514,000                    
Private Placement [Member]                        
Class of Stock [Line Items]                        
Net proceeds issuance of private placement     $ 16,752,915 $ 6,781,199                
Single Healthcare Focused Institutional Investor [Member]                        
Class of Stock [Line Items]                        
[custom:GrossProceedsFromIssuanceOfPrivatePlacement] $ 5,000,000                      
Proceeds from Issuance of Private Placement $ 4,089,218                      
Tradeable Warrants [Member]                        
Class of Stock [Line Items]                        
Warrants issued, shares                 4,102,200      
Exercise price of warrants [1],[2]                 $ 2.22      
Common Stock Member And Investor Warrants [Member] | Private Placement [Member]                        
Class of Stock [Line Items]                        
Stock issued new, shares       2,301,353                
Common Stock Member And April Warrants [Member] | Private Placement [Member]                        
Class of Stock [Line Items]                        
Stock issued new, shares     2,472,820                  
Common Stock [Member]                        
Class of Stock [Line Items]                        
Payment for stock repurchased                 $ 506,822      
May Pre Funded Warrants [Member]                        
Class of Stock [Line Items]                        
Warrants issued, shares                 3,502,381      
Exercise price of warrants                 $ 0.001      
May Pre Funded Warrants [Member] | Single Healthcare Focused Institutional Investor [Member]                        
Class of Stock [Line Items]                        
Stock issued new, shares 3,502,381               1,156,381      
Proceeds from Issuance of Private Placement                 $ 1,156      
Common Stock [Member]                        
Class of Stock [Line Items]                        
Stock issued new, shares                 2,450,000      
Stock repurchased, shares             68,012   445,711      
Payment for stock repurchased             $ 34,321          
Common stock, shares outstanding                 25,678,290   22,585,632  
Common Stock [Member] | Single Healthcare Focused Institutional Investor [Member]                        
Class of Stock [Line Items]                        
Stock issued new, shares 2,450,000                      
Public Offering [Member]                        
Class of Stock [Line Items]                        
Net proceeds issuance of private placement           $ 6,833,071            
Public Offering [Member] | Tradeable Warrants [Member]                        
Class of Stock [Line Items]                        
Warrants issued, shares           4,102,200            
Exercise price of warrants         $ 0.11              
Public Offering [Member] | Common Stock [Member]                        
Class of Stock [Line Items]                        
Stock issued new, shares           1,882,353            
Series B Preferred Stock [Member]                        
Class of Stock [Line Items]                        
Preferred stock, shares authorized                 1,000,000   1,000,000  
Preferred stock, par value                 $ 0.10   $ 0.10  
Preferred stock, shares issued                 10,000   10,000  
Number of shares redeemed         990,000              
Director [Member]                        
Class of Stock [Line Items]                        
Preferred stock, shares authorized                 30,000,000      
Preferred stock, par value                 $ 0.10      
Chief Executive Officer [Member] | Series B Preferred Stock [Member]                        
Class of Stock [Line Items]                        
Preferred stock, shares issued                     10,000  
[1] On October 12, 2023, the Company held a special meeting of the holders of its outstanding Tradeable Warrants in which a majority of the holders approved an amendment to the Warrant Agent Agreement to reduce the exercise price of the Tradeable Warrants to $0.11 per warrant. The amendment was executed on October 18, 2023.
[2] The Tradeable Warrants had an initial exercise price of $4.25, subject to adjustment. Upon the closing of the Company's private placement on March 14, 2022, the exercise price of the Tradeable Warrants was reduced to $2.22, in accordance with the terms thereof.
v3.23.3
Warrants (Details - Warrants issued with financing)
 9 Months Ended
Sep. 30, 2023
$ / shares
shares
Pre Funded Warrants [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of warrants | shares 3,692,276
Exercise price | $ / shares $ 0.001
Expiry date Unlimited
Tradeable Warrants [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of warrants | shares 4,102,200
Exercise price | $ / shares $ 2.22 [1],[2]
Expiry date February 2027
Investor Warrants [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of warrants | shares 3,603,604
Exercise price | $ / shares $ 2.22
Expiry date March 2027
April Warrants [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of warrants | shares 9,725,690
Exercise price | $ / shares $ 3.76
Expiry date April 2027
May Pre Funded Warrants [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of warrants | shares 3,502,381
Exercise price | $ / shares $ 0.001
Expiry date Unlimited
May Investor Warrants [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of warrants | shares 11,904,762
Exercise price | $ / shares $ 0.59
Expiry date November 2028
[1] On October 12, 2023, the Company held a special meeting of the holders of its outstanding Tradeable Warrants in which a majority of the holders approved an amendment to the Warrant Agent Agreement to reduce the exercise price of the Tradeable Warrants to $0.11 per warrant. The amendment was executed on October 18, 2023.
[2] The Tradeable Warrants had an initial exercise price of $4.25, subject to adjustment. Upon the closing of the Company's private placement on March 14, 2022, the exercise price of the Tradeable Warrants was reduced to $2.22, in accordance with the terms thereof.
v3.23.3
Warrants (Details - Warrants outstanding)
 9 Months Ended
Sep. 30, 2023
$ / shares
shares
Pre Funded Warrants [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of warrants outstanding | shares 0
Exercise price | $ / shares $ 0.001
Expiry date Unlimited
Tradeable Warrants [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of warrants outstanding | shares 963,693
Exercise price | $ / shares $ 2.22 [1],[2]
Expiry date February 2027
Investor Warrants [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of warrants outstanding | shares 800,901
Exercise price | $ / shares $ 2.22
Expiry date March 2027
April Warrants [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of warrants outstanding | shares 9,725,690
Exercise price | $ / shares $ 3.76
Expiry date April 2027
May Pre Funded Warrants [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of warrants outstanding | shares 2,346,000
Exercise price | $ / shares $ 0.001
Expiry date Unlimited
May Investor Warrants [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of warrants outstanding | shares 11,904,762
Exercise price | $ / shares $ 0.59
Expiry date November 2028
[1] On October 12, 2023, the Company held a special meeting of the holders of its outstanding Tradeable Warrants in which a majority of the holders approved an amendment to the Warrant Agent Agreement to reduce the exercise price of the Tradeable Warrants to $0.11 per warrant. The amendment was executed on October 18, 2023.
[2] The Tradeable Warrants had an initial exercise price of $4.25, subject to adjustment. Upon the closing of the Company's private placement on March 14, 2022, the exercise price of the Tradeable Warrants was reduced to $2.22, in accordance with the terms thereof.
v3.23.3
Warrants (Details Narrative) - USD ($)
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Proceeds from Warrant Exercises $ 1,156 $ 0
Tradeable Warrants [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Warrants exercised 3,138,507  
Investor Warrants [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Warrants exercised 2,802,703  
May Pre Funded Warrants [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Warrants exercised 1,156,381  
All Warrants [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Proceeds from Warrant Exercises $ 13,194,335  
v3.23.3
Net Loss Per Common Share (Details Narrative) - shares
 1 Months Ended 9 Months Ended
May 31, 2023
Apr. 30, 2022
Mar. 31, 2022
Feb. 28, 2022
Sep. 30, 2023
Tradeable Warrants [Member]          
Securities Financing Transaction [Line Items]          
Warrants issued, shares         4,102,200
Warrant exercised         3,138,507
Warrants outstanding, shares         963,693
Investor Warrants [Member]          
Securities Financing Transaction [Line Items]          
Warrants issued, shares         3,603,604
Warrant exercised         2,802,703
Warrants outstanding, shares         800,901
April Warrants [Member]          
Securities Financing Transaction [Line Items]          
Warrants issued, shares         9,725,690
Warrants outstanding, shares         9,725,690
May Investor Warrants [Member]          
Securities Financing Transaction [Line Items]          
Warrants issued, shares         11,904,762
Warrants outstanding, shares         11,904,762
Pre Funded Warrants [Member]          
Securities Financing Transaction [Line Items]          
Warrants issued, shares         3,692,276
Warrant exercised   3,692,276 3,692,276   1,156,381
Warrants outstanding, shares         0
Pre Funded Warrant [Member]          
Securities Financing Transaction [Line Items]          
Warrants issued, shares 3,502,381        
May Pre Funded Warrants [Member]          
Securities Financing Transaction [Line Items]          
Warrants issued, shares         3,502,381
Warrant exercised         1,156,381
Warrants outstanding, shares         2,346,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount         2,346,000
Company Public Offering [Member] | Tradeable Warrants [Member]          
Securities Financing Transaction [Line Items]          
Warrants issued, shares       4,102,200  
Two Private Placements [Member] | Investor Warrants [Member]          
Securities Financing Transaction [Line Items]          
Warrants issued, shares     3,603,604    
Two Private Placements [Member] | April Warrants [Member]          
Securities Financing Transaction [Line Items]          
Warrants issued, shares   9,725,690      
Two Private Placements [Member] | May Investor Warrants [Member]          
Securities Financing Transaction [Line Items]          
Warrants issued, shares 11,904,762        
v3.23.3
Lease (Details - Lease information) - USD ($)
 9 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Leases [Abstract]    
Operating lease ROU asset $ 664,296 $ 760,409
Operating Lease liability - Short-term 117,840 123,026
Operating lease liability - Long-term $ 555,687 $ 642,232
Remaining lease term 6 years 3 months  
Discount rate 6.00%  
v3.23.3
Lease (Details - Maturities of lease payments)
Sep. 30, 2023
USD ($)
Leases [Abstract]  
2023 $ 30,124
2024 116,090
2025 116,277
2026 110,134
2027 103,736
Thereafter $ 197,166
v3.23.3
Management and Director Compensation (Details Narrative) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Management And Director Compensation        
Officers cash compensation $ 245,000 $ 362,500 $ 1,290,000 $ 770,095
Directors cash compensation $ 100,000 $ 100,000 $ 300,000 $ 200,000
v3.23.3
Income Taxes (Details Narrative)
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Income Tax Disclosure [Abstract]    
Effective Income Tax Rate Reconciliation, Percent 26.83% 26.83%
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