U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
Form 10-Q/A
Amendment No. 1
 
Quarterly Report Under
the Securities Exchange Act of 1934
 
For Quarter Ended: June 30, 2020
 
Commission File Number: 000-52898
 
SUNSHINE BIOPHARMA, INC.
(Exact name of small business issuer 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: None
 
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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes  No 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 only class of Common Stock issued and outstanding as of August 18, 2020, was 278,419,296 shares.
 

 
 
 
EXPLANATORY NOTE
 
This Amendment No. 1 to the Quarterly Report on Form 10-Q (this “Amended 10-Q”) of Sunshine Biopharma, Inc. (the “Company”) amends the Company’s Quarterly Report on Form 10-Q for the three-month period ended June 30, 2020 (the “Original 10-Q”), which was filed with the Securities and Exchange Commission (the “SEC”) on August 19, 2020. The Company is filing this Amended 10-Q to correct the financial statements and their consequences on the remainder of the Original 10-Q. These amendments are being made in response to material information received from the Company’s transfer agent approximately four (4) hours after the filing of the Original 10-Q, advising that holders of outstanding convertible notes had elected to convert a portion of their notes into shares of our Common Stock. This Amended 10-Q incorporates the issuance of these additional shares and provides corrected financial statements and their impact on the financial information previously stated in the MD&A and other sections in the Original 10-Q. The items restated in this Amended 10-Q provided in tabular form under Note 8.
 
Except as described above, no other amendments have been made to the Original 10-Q. This Amended 10-Q does not reflect events that occurred after the date of the Original 10-Q, and except as described above, the Company has not modified or updated disclosures contained in the Original 10-Q.
 
 
 
 
 
 
 
 
 
 
 
PART I.  FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS
 
Sunshine Biopharma, Inc.
Unaudited Condensed Consolidated Balance Sheet
 
 
 
June 30,
2020
 
 
December 31,
2019
 
ASSETS
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
Cash and cash equivalents
 $85,593 
 $40,501 
Accounts receivable
  - 
  430 
Inventory
  16,576 
  15,910 
Prepaid expenses
  2,406 
  1,255 
Deposits
  7,590 
  7,590 
Total Current Assets
  112,165 
  65,686 
 
    
    
Equipment (net of $43,723 and $37,109 depreciation, respectively)
  26,352 
  32,456 
Patents (net of $58,918 amortization and $556,120 impairment)
  - 
  - 
 
    
    
TOTAL ASSETS
 $138,517 
 $98,142 
 
    
    
LIABILITIES
    
    
 
    
    
Current Liabilities:
    
    
Notes payable
  357,311 
  586,307 
Notes payable - related party
  128,269 
  129,261 
Accounts payable & accrued expenses
  89,883 
  96,882 
Interest payable
  27,083 
  21,077 
Total Current Liabilities
  602,546  
  833,527 
 
    
    
Long-term portion of notes payable
  63,234 
  - 
 
    
    
TOTAL LIABILITIES
  665,780 
  833,527 
 
    
    
COMMITMENTS AND CONTINGENCIES
    
    
 
    
    
SHAREHOLDERS' EQUITY (DEFICIT)
    
    
 
    
    
Preferred Stock, Series B $0.10 par value per share; Authorized 1,000,000 shares;
Issued and outstanding 1,000,000 and 500,000 at June 30, 2020 and December 31, 2019, respectively
  100,000 
  50,000 
 
    
    
Common Stock, $0.001 per share; Authorized 3,000,000,000 Shares;
Issued and outstanding 269,821,248 and 35,319,990 at June 30, 2020 and December 31, 2019, respectively
  269,820 
  35,320 
 
    
    
Capital paid in excess of par value
  17,542,616 
  16,616,426 
 
    
    
Accumulated comprehensive income
  (3,360)
  (2,495)
 
    
    
Accumulated (Deficit)
  (18,436,339)
  (17,434,636)
 
    
    
TOTAL SHAREHOLDERS' EQUITY (DEFICIT)
  (527,263)
  (735,385)
 
    
    
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
 $138,517 
 $98,142 
 
See Accompanying Notes To These Financial Statements.
 
 
5
 
 
Sunshine Biopharma, Inc.
Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income (Loss)
 
 
 
3 Months Ended June 30, 2020
 
 
3 Months Ended June 30, 2019
 
 
6 Months Ended June 30, 2020
 
 
6 Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 $15,145 
 $3,033 
 $26,247 
 $3,239 
Cost of revenues
  5,161 
  1,460 
  9,044 
  1,572 
Gross profit
  9,984 
  1,573 
  17,203 
  1,667 
 
    
    
    
    
General & Administrative Expenses:
    
    
    
    
Accounting
  37,200 
  24,140 
  37,200 
  41,140 
Consulting
  2,184 
  10,940 
  3,908 
  22,016 
Legal
  20,351 
  6,313 
  44,075 
  38,969 
Office
  22,835 
  18,202 
  34,457 
  34,910 
Officer & director remuneration
  52,000 
  3,751 
  55,830 
  43,952 
Rent
  492 
  1,009 
  999 
  2,257 
Depreciation
  3,491 
  3,415 
  7,002 
  6,829 
Total General & Administrative Expenses
  138,553 
  67,770 
  183,471 
  190,073 
 
    
    
    
    
Income (Loss) from Operations
  (128,569)
  (66,197)
  (166,268)
  (188,406)
 
    
    
    
    
Other Income (Expense):
    
    
    
    
Miscellaneous income
  3,000 
  - 
  3,000 
  - 
Foreign exchange gain (loss)
  (2,894)
  (3,440)
  8,002 
  (13,056)
Interest expense
  (24,219)
  (18,342)
  (40,575)
  (64,639)
Debt release
  1,259 
  - 
  1,552 
  - 
Loss on debt conversions
  (756,021)
  (42,786)
  (807,414)
  (65,094)
Total Other Income (Expense)
  (778,875)
  (64,568)
  (835,435)
  (142,789)
 
    
    
    
    
Net income (loss) before income taxes
  (907,444)
  (130,765)
  (1,001,703)
  (331,195)
Provision for income taxes
  - 
  - 
  - 
  - 
Net income (loss) from continuing operations
  (907,444)
  (130,765)
  (1,001,703)
  (331,195)
Net income (loss) on discontinued operations
  - 
  (580,125)
  - 
  (582,237)
Net Income (Loss)
  (907,444)
  (710,890)
  (1,001,703)
  (913,432)

    
    
    
    
Unrealized Gain (Loss) from foreign exchange translation
  476 
  2,499 
  (865)
  1,714 
Comprehensive Income (Loss)
  (906,968)
  (708,391)
  (1,002,568)
  (911,718)
 
    
    
    
    
Basic income (loss) from continuing operations per common share
 $(0.01)
 $(0.03)
 $(0.01)
 $(0.07)
 
    
    
    
    
Basic income (loss) from discontinued operations per common share
 $0.00 
 $(0.12)
 $0.00 
 $(0.13)
 
    
    
    
    
Basic income (loss) per common share
 $(0.01)
 $(0.14)
 $(0.01)
 $(0.20)
 
    
    
    
    
Weighted Average Common Shares Outstanding
  153,069,298 
  4,973,649 
  101,111,514 
  4,641,040 
 
  See Accompanying Notes To These Financial Statements.
 
 
6
 
 
Sunshine Biopharma, Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
 
 
 
6 Months Ended June 30,
2020
 
 
6 Months Ended June 30,
2019
 
 
 
 
 
 
 
 
Cash Flows From Operating Activities:
 
 
 
 
 
 
Net Income (Loss)
 $(1,001,703)
 $(913,432)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
  7,002 
  6,829 
Foreign exchange (gain) loss
  (8,002)
  13,056 
Stock issued for services
  50,000 
  - 
Stock issued for payment interest
  32,766 
  3,841 
Loss on debt conversion
  807,414 
  65,094 
Debt & interest release
  (1,552)
  (720)
Loss on disposition of subsidiary
  - 
  582,237 
(Increase) decrease in accounts receivable
  430 
  (1,023)
(Increase) decrease in inventory
  (666)
  (18,193)
(Increase) in prepaid expenses
  (1,151)
  (5,442)
(Increase) in deposits
  - 
  (7,590)
Increase (decrease) in Accounts Payable & accrued expenses
  (3,594)
  (31,449)
Increase (decrease) in interest payable
  6,006 
  25,369 
Net Cash Flows (Used) in Operations
  (113,050)
  (281,423)
 
    
    
Cash Flows From Investing Activities:
    
    
Advances to discontinued operations
  - 
  (12,491)
Purchase of equipment
  - 
  (485)
Net Cash Flows (Used) in Investing Activities
  - 
  (12,976)
 
    
    
Cash Flows From Financing Activities:
    
    
Proceeds from notes payable
  155,007 
  249,500 
Payments of notes payable
  - 
  (53,000)
Advances from related parties
  - 
  6,998 
Note payable used to pay note origination fees
  4,000 
  15,930 
Net Cash Flows Provided by Financing Activities
  159,007 
  219,428 
 
    
    
Cash and Cash Equivalents at Beginning of Period
 $40,501 
 $110,534 
Net increase (decrease) In cash and cash equivalents
  45,957 
  (74,971)
Foreign currency translation adjustment
  (865)
  1,714 
Cash and Cash Equivalents at End of Period
 $85,593 
 $37,277 
 
    
    
Supplementary Disclosure of Cash Flow Information:
    
    
Stock issued for note conversions including interest
 $807,909 
 $151,169 
Note payable cancelled upon disposal of subsidiary
 $- 
 $315,785 
Cash paid for interest
 $- 
 $11,034 
Cash paid for income taxes
 $- 
 $- 
 
  See Accompanying Notes To These Financial Statements.
 
 
7
 
 
Sunshine Biopharma, Inc.
Unaudited Condensed Statement of Shareholders' Equity
 
 
 
Number of Common Shares Issued
 
 
Par Value
 
 
Capital Paid in Excess of Par Value
 
 
Number of Preferred Shares Issued
 
 
Value of Preferred Stock
 
 
Comprehensive Income
 
 
Accumulated Deficit
 
 
 Total
 
Three Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at March 31, 2019
  4,467,449 
 $4,468 
 $15,715,170 
  500,000 
 $50,000 
 $(4,523)
 $(15,976,887)
 $(211,772)
 
    
    
    
    
    
    
    
    
Common stock issued for the reduction of notes payable
    
    
    
    
    
    
    
    
and payment of interest
  746,922 
  747 
  103,114 
    
    
    
    
  103,861 
 
    
    
    
    
    
    
    
    
Net income (loss)
    
    
    
    
    
  2,499 
  (710,890)
  (708,391)
 
    
    
    
    
    
    
    
    
Balance at June 30, 2019
  5,214,371 
 $5,215 
 $15,818,284 
  500,000 
 $50,000 
 $(2,024)
 $(16,687,777)
 $(816,302)
 
    
    
    
    
    
    
    
    
Six Months Ended June 30, 2019
    
    
    
    
    
    
    
    
Balance at December 31, 2018
  4,282,620 
 $4,283 
 $15,668,047 
  500,000 
 $50,000 
 $(3,738)
 $(15,774,345)
 $(55,753)
 
    
    
    
    
    
    
    
    
Common stock issued for the reduction of notes payable
    
    
    
    
    
    
    
    
and payment of interest
  931,751 
  932 
  150,237 
    
    
    
    
  151,169 
 
    
    
    
    
    
    
    
    
Net income (loss)
    
    
    
    
    
  1,714 
  (913,432)
  (911,718)
 
    
    
    
    
    
    
    
    
Balance at June 30, 2019
  5,214,371 
 $5,215 
 $15,818,284 
  500,000 
 $50,000 
 $(2,024)
 $(16,687,777)
 $(816,302)
 
    
    
    
    
    
    
    
    
Three Months Ended June 30, 2020
    
    
    
    
    
    
    
    
Balance at March 31, 2020
  59,675,417 
 $59,675 
 $16,714,450 
  500,000 
 $50,000 
 $(3,836)
 $(17,528,895)
 $(708,606)
 
    
    
    
    
    
    
    
    
Common stock issued for the reduction of notes payable
    
    
    
    
    
    
    
    
and payment of interest
  210,145,831 
  210,145 
  828,166 
    
    
    
    
  1,038,311 
 
    
    
    
    
    
    
    
    
Preferred stock issued for services
    
    
    
  500,000 
  50,000 
    
    
  50,000 
 
    
    
    
    
    
    
    
    
Net income (loss)
    
    
    
    
    
  476 
  (907,444)
  (906,968)
 
    
    
    
    
    
    
    
    
Balance at June 30, 2020
  269,821,248 
 $269,820 
 $17,542,616 
  1,000,000 
 $100,000 
 $(3,360)
 $(18,436,339)
 $(527,263)
 
    
    
    
    
    
    
    
    
Six Months Ended June 30, 2020
    
    
    
    
    
    
    
    
Balance at December 31, 2019
  35,319,990 
 $35,320 
 $16,616,426 
  500,000 
 $50,000 
 $(2,495)
 $(17,434,636)
 $(735,385)
 
    
    
    
    
    
    
    
    
Common stock issued for the reduction of notes payable
    
    
    
    
    
    
    
    
and payment of interest
  234,501,258 
  234,500 
  926,190 
    
    
    
    
  1,160,690 
 
    
    
    
    
    
    
    
    
Preferred stock issued for services
    
    
    
  500,000 
  50,000 
    
    
  50,000 
 
    
    
    
    
    
    
    
    
Net (loss)
    
    
    
    
    
  (865)
  (1,001,703)
  (1,002,568)
 
    
    
    
    
    
    
    
    
Balance at June 30, 2020
  269,821,248 
 $269,820 
 $17,542,616 
  500,000 
 $50,000 
 $(3,360)
 $(18,436,339)
 $(527,263)
 
See Accompanying Notes To These Financial Statements. 
 
 
8
 
 
Sunshine Biopharma, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
For the Three and Six Month Interim Periods Ended June 30, 2020 and 2019
 
Note 1 – Nature of Business and Basis of Presentation
 
Sunshine Biopharma, Inc. (the "Company") was originally incorporated under the name Mountain West Business Solutions, Inc. on August 31, 2006 in the State of Colorado. Until October 2009, the Company was operating as a business consultancy firm. Effective October 15, 2009, the Company acquired Sunshine Biopharma, Inc. in a transaction classified as a reverse acquisition. Sunshine Biopharma, Inc. was holding an exclusive license to a new anticancer drug bearing the laboratory name, Adva-27a. Upon completion of the reverse acquisition transaction, the Company changed its name to Sunshine Biopharma, Inc. and began operating as a pharmaceutical company focusing on the development of the licensed Adva-27a anticancer drug.
 
In July 2014, the Company formed a wholly owned Canadian subsidiary, Sunshine Biopharma Canada Inc. (“Sunshine Canada”) for the purposes of offering generic pharmaceutical products in Canada and elsewhere around the world. Sunshine Canada has signed licensing agreements for four (4) generic prescription drugs for treatment of breast cancer, prostate cancer and BPH (Benign Prostatic Hyperplasia).
 
On January 1, 2018, the Company acquired all of the issued and outstanding shares of Atlas Pharma Inc. (“Atlas”), a Canadian privately held analytical chemistry company. The purchase price for the shares was Eight Hundred Forty-Eight Thousand Dollars $848,000 Canadian ($676,748 US). The purchase price included a cash payment of $100,500 Canadian ($80,289 US), plus the issuance of 50,000 shares of the Company’s Common Stock valued at $238,000, and a promissory note (“Atlas Debt”) in the principal amount of $450,000 Canadian ($358,407 US), with interest payable at the rate of 3% per annum. Effective April 1, 2019, the Company re-assigned all of its stock in Atlas back to the original owner in exchange for the Atlas Debt. The loss on the disposition was $580,125. See “Discontinued Operations” below for a more detailed explanation of this disposition.
 
In March 2018, the Company formed NOX Pharmaceuticals, Inc., a wholly owned Colorado corporation and assigned all of the Company’s interest in the Adva27a anticancer drug to that company. NOX Pharmaceuticals Inc.’s mission is to research, develop and commercialize proprietary drugs including Adva-27a.
 
In December 2018, the Company launched its first over-the-counter product, Essential 9tm, a nutritional supplement comprised of the nine (9) essential amino acids that the human body cannot synthesize. Essential 9tm has been authorized for marketing by Health Canada under NPN 80089663.
 
Effective February 1, 2019, the Company completed a 20 to 1 reverse split of its $0.001 par value Common Stock, reducing the issued and outstanding shares of Common Stock from 1,713,046,242 to 85,652,400 (the “First Reverse Stock Split”). The Company’s authorized capital of Common Stock remained as previously established at 3,000,000,000 shares.
 
In November 2019, the Company received Health Canada approval for a new Calcium-Vitamin D supplement. Health Canada issued NPN 80093432 through which it authorized the Company to manufacture and sell the new Calcium-Vitamin D supplement under the brand name Essential Calcium-Vitamin Dtm.
 
 
9
 
 
Effective April 6, 2020, the Company completed another 20 to 1 reverse split of its $0.001 par value Common Stock, reducing the issued and outstanding shares of Common Stock from 1,193,501,925 to 59,675,417 (the “Second Reverse Stock Split”). The number of authorized Common Shares remained as previously established at 3,000,000,000 post-second split.
 
On May 22, 2020, the Company filed a patent application in the United States for a new treatment for Coronavirus infections, including COVID-19. The Company’s 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 June 17, 2020, the Company filed an amendment to its Articles of Incorporation (the “Amendment”) with the Secretary of State for the State of Colorado, to eliminate the Series “A” Preferred Shares consisting of Eight Hundred and Fifty Thousand (850,000) shares, par value $0.10 per share, and the designation thereof, which shares were returned to the status of undesignated shares of Preferred Stock. In addition, the Amendment also increased the number of authorized Series “B” Preferred Shares from Five Hundred Thousand (500,000) to One Million (1,000,000) shares.
 
Also on June 17, 2020, the Company issued Five Hundred Thousand (500,000) shares of Series “B” Preferred Stock in favor of Dr. Steve N. Slilaty, the Company’s CEO, in consideration for the COVID-19 treatment technology he developed. The Series “B” Preferred Stock is non-convertible, non-redeemable, non-retractable and has a superior liquidation value of $0.10 per share. Each share of Series “B” Preferred Stock is entitled to 1,000 votes per share. This stock issuance brought Dr. Slilaty’s holdings of the Company’s Series B Preferred Stock to One Million (1,000,000) shares.
 
The Company's financial statements reflect both the First and Second Reverse Stock Split on a retroactive basis and represent the consolidated activity of Sunshine Biopharma, Inc. and its subsidiaries (Sunshine Biopharma Canada Inc. and NOX Pharmaceuticals Inc.) herein collectively referred to as the "Company".
 
The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company’s proprietary drug development program and other business activities.
 
Impact of Coronavirus (COVID-19) Pandemic
  
In March 2020, the World Health Organization declared Coronavirus and its associated disease, COVID-19, a global pandemic. Conditions surrounding the Coronavirus outbreak are evolving rapidly and government authorities around the world have implemented emergency measures to mitigate the spread of the virus. The outbreak and related mitigation measures have had and will continue to have a material adverse impact on the world economies and the Company's business activities. It is not possible for the Company to predict the duration or magnitude of the adverse conditions of the outbreak and their effects on the Company’s business or ability to raise funds. No adjustments have been made to the amounts reported in the Company's financial statements as a result of this matter.
 
Basis of Presentation of Unaudited Condensed Financial Information
 
The unaudited financial statements of the Company for the three and six month periods ended June 30, 2020 and 2019 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-K. 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 June 30, 2020 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on May 1, 2020. These financial statements should be read in conjunction with that report.
 
Recently Issued Accounting Pronouncements
 
In January 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-01, LEASES (TOPIC 842): LAND EASEMENT PRACTICAL EXPEDIENT FOR TRANSITION TO TOPIC 842. In February 2016, the FASB issued Accounting Standards Update No. 2016- 02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. The Company adopted this pronouncement on January 1, 2019. The Company's month-to-month arrangement for office space has no short-term or long-term asset or liability value.
 
 
10
 
 
Discontinued Operations
 
Effective April 1, 2019 the Company disposed of its Atlas Pharma Inc. subsidiary. As a consequence of the sale, the operating results and the assets and liabilities of the discontinued operations, which formerly comprised the Analytical Chemistry Services Operations, are presented separately in the Company's financial statements. Summarized financial information for the discontinued business is shown below. Prior period balances have been reclassified to present the operations of the Analytical Chemistry Services business as a discontinued operation.
 
Discontinued Operations Income Statement:
 
 
 
Unaudited
 
 
Unaudited
 
 
 
6 Month and 3 Month Ended
June 30, 2020
 
 
6 Month and 3 Month Ended
June 30, 2019
 
 
 
 
 
 
 
 
Revenues
 $- 
 $119,522 
Cost of revenues
  - 
  81,920 
Gross profit
  - 
  37,602 
 
    
    
General & Administrative Expenses
  - 
  36,196 
Gain (Loss) from operations
  - 
  1,406 
 
    
    
Other income (expense) – Interest
  - 
  (3,518)
Net Income (Loss) from discontinued operations  
  - 
 (2,112)
Loss on disposal
  (580,125)
  580,125)
Total Net Income (Loss) from Discontinued Operations 
 $(580,125)
 $(582,237)
 
Discontinued Operations Balance Sheet:
 
 
 
Unaudited
June 30, 2020
 
 
Unaudited
June 30, 2019
 
ASSETS


Current Assets:                                 
 
 
 
 
 
 
Cash and cash equivalents
 $- 
 $4,682 
Accounts receivable
  - 
  94,955 
Total Current Assets
  - 
  99,637 
 
    
    
Equipment (net of $-0- and $34,959 depreciation)
  - 
  224,238 
Goodwill
  - 
  665,697 
TOTAL ASSETS
  - 
  989,572 
 
    
    
LIABILITIES
    
    
Current Liabilities:
    
    
Notes payable
  - 
  4,657 
Notes payable - related party
  - 
  18,230 
Related party advances
  - 
  10,248 
Accounts payable and accrued expenses
  - 
  70,597 
Total Current Liabilities
  - 
  103,732 
TOTAL LIABILITIES
 $- 
 $103,732 
 
Discontinued Operations Cash Flows:
 
Cash flows used in discontinued operations for the six months ended June 30, 2020 and 2019 were $-0- and $8,510, respectively. There were no cash flows used in or provided by financing or investing activities during those periods.
 
 
11
 
 
Note 2 – Going Concern and Liquidity
 
As of June 30, 2020 and December 31, 2019, the Company had $85,593 and $40,501 in cash on hand, respectively, and limited revenue-producing business and other sources of income. Additionally, as of June 30, 2020 and December 31, 2019, the outstanding liabilities of the Company totaled $665,780 and $833,527, respectively.
 
These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. Based on the Company’s current financial projections, management believes it does not have sufficient existing cash resources to fund its current operations.
  
It is the Company’s current intention to raise debt and/or equity financing to fund ongoing operating expenses. There is no assurance that these events will be satisfactorily completed or on terms acceptable to the Company. Any issuance of convertible debt or equity securities, if accomplished, could cause substantial dilution to existing stockholders. Any failure by the Company to successfully implement these plans would have a material adverse effect on its business, including the possible inability to continue operations.
 
Note 3 – Notes Payable
 
The Company’s Notes Payable at June 30, 2020 consisted of the following:
 
On April 1, 2017, the Company received monies in exchange for a Note Payable having a Face Value of $100,000 Canadian ($73,380 US at June 30, 2020) with interest payable quarterly at 9%, which Note was due April 1, 2019. The Note is convertible any time after issuance into $0.001 par value Common Stock at a price of $0.015 Canadian (approximately $0.011 US) per share. The Company estimates that the fair value of this convertible debt approximates the face value, so no value has been assigned to the beneficial conversion feature. Any gain or loss will be recognized at conversion. In June 2018, the Company filed an action in the Superior Court of the Province of Quebec in the District of Montreal (Canada) against the holder of this Note. The complaint alleges among other things, claims of misrepresentations and misleading conduct resulting in damages to the Company in an amount of approximately $200,000 Canadian (approximately $143,000 US). The matter is currently pending. See “PART II, Item 1, Legal Proceedings”, below.
 
On September 10, 2018, the Company issued two Notes Payable having an aggregate Face Value of $36,500 with interest accruing at 8%. The two Notes were issued for services rendered to the Company and had maturity dates in June 2019. The Company was unable to pay the notes and on November 30, 2019 the Company issued a new Note which included accrued interest and accelerated interest of $7,059 for a total Face Value of $43,559. The new Note accrues interest at 8% and is convertible after 180 days from issuance into Common Stock at a price 35% below market value. The new Note is due August 31, 2020. As of June 30, 2020, a total principal amount of $7,774 of this Note plus accrued interest of $2,082 was converted into 5,600,000 shares of Common Stock valued at $18,760 resulting in a loss of $8,904. At June 30, 2020, the remaining principal balance of this note was $35,785.
 
On December 24, 2018, the Company received monies in exchange for a Note Payable having a Face Value of $87,000 with interest accruing at 8% was due December 24, 2019. The Note is convertible after 180 days from issuance into $0.001 par value Common Stock at a price 35% below market value. As of June 30, 2020, the entire principal amount of $87,000 of this Note plus accrued interest of $9,639 was converted into 43,986,317 shares of Common Stock valued at $276,396 resulting in a loss of $161,036.
 
On January 8, 2019, the Company received monies in exchange for a Note Payable having a Face Value of $54,000 with interest accruing at 8% was due January 8, 2020. The Note is convertible after 180 days from issuance into Common Stock at a price 35% below market value. During the three month period ended June 30, 2020, the entire principal amount of $54,000 of this Note plus accrued interest of $9,814 was converted into 44,931,640 shares of Common Stock valued at $365,787 resulting in a loss of $301,973.
 
 
12
 
   
On February 5, 2019, the Company received monies in exchange for a Note Payable having a Face Value of $37,450 with interest accruing at 8% was due October 10, 2019. The Note is convertible after 180 days from issuance into Common Stock at a price 35% below market value. As of June 30, 2020, the entire principal amount of $37,450 of this Note plus accrued interest of $2,996 was converted into 38,263,409 shares of Common Stock valued at $217,971 resulting in a loss of $182,790.
 
On July 2, 2019, the Company received monies in exchange for a Note Payable having a Face Value of $40,000 with interest accruing at 8% was due April 30, 2020. The Note is convertible after 180 days from issuance into Common Stock at a price 35% below market value. During the six month period ended June 30, 2020, the entire principal amount of $40,000 of this Note plus accrued interest of $1,600 was converted into 13,099,359 shares of Common Stock valued at $58,684 resulting in a loss of $17,084.
 
On July 26, 2019, the Company received monies in exchange for a Note Payable having a Face Value of $50,000 with interest accruing at 8%, which became due July 26, 2020. The Note is convertible after 180 days from issuance into Common Stock at a price 35% below market value. During the three month period ended June 30, 2020, the entire principal of $50,000 of this Note plus accrued interest of $4,909 was converted into 43,522,363 shares of Common Stock valued at $131,370 resulting in a loss of $76,461.
 
On September 12, 2019, the Company received monies in exchange for a Note Payable having a Face Value of $43,000 with interest accruing at 8% is due July 15, 2020. The Note is convertible after 180 days from issuance into Common Stock at a price 35% below market value. During the three month period ended June 30, 2020, the entire principal amount of $43,000 of this Note plus accrued interest of $1,720 was converted into 38,855,726 shares of Common Stock valued at $117,177 resulting in a loss of $72,457.
 
On December 14, 2019, the Company received monies in exchange for a Note Payable having a Face Value of $42,800 with interest accruing at 8% and which is due December 14, 2020. The Note is convertible after 180 days from issuance into Common Stock at a price 35% below market value. During the three month period ended June 30, 2020, the entire principal amount of $42,800 of this Note plus accrued interest of $1,712 was converted into 18,592,605 shares of Common Stock valued at $81,796 resulting in a loss of $37,284.
 
On April 17, 2020, the Company’s Canadian subsidiary received a CEBA Loan (Canada Emergency Business Account Loan) from CIBC (Canadian Imperial Bank of Commerce) in the principal amount of $40,000 Canadian ($29,352 US) as part of the Canadian government’s COVID-19 relief program. The CEBA Loan is non-interest bearing if repaid on or before December 31, 2022 (the “Termination Date”). The CEBA Loan is considered repaid in full if the borrower repays 75% of the Principal Amount on or before the Termination Date. If the CEBA Loan is not repaid in full on or before the Termination Date, the lender will automatically extend the term of the loan by three years until December 31, 2025 (the “Extension Period”). During the Extension Period, interest will be charged, and will accrue on the outstanding amount of the CEBA Loan at a fixed rate of 5% per year, calculated daily and compounded monthly. The outstanding balance of the CEBA Loan and all accrued interest will be due at the end of the Extension Period.
 
On April 27, 2020, the Company received a Paycheck Protection Program loan in the principal amount of $50,655 from the US Small Business Administration as part of the US government’s COVID-19 relief program. This loan accrues interest at the rate of 1% per annum. The Company is obligated to make payments of principal and interest totaling $2,133 each month commencing on November 27, 2020, with any remaining balances due and payable on or before April 27, 2022. The proceeds derived from this loan may only be used for payroll costs, interest on mortgages, rent and utilities (“Admissible Expenses”). In addition, the Paycheck Protection Program provides for conditional loan forgiveness if the Company utilizes at least 75% of the proceeds from the loan to pay Admissible Expenses. As of the date of this Report, all of the proceeds from this loan have been utilized for Admissible Expenses and the Company believes that it will qualify for forgiveness of the entire amount of the loan. 
 
On June 1, 2020, the Company received monies in exchange for a Note Payable having a Face Value of $42,000 with interest accruing at 8% is due June 1, 2021. The Note is convertible after 180 days from issuance into Common Stock at a price 35% below market value. The Company estimates that the fair value of this convertible debt approximates the Face Value, so no value has been assigned to the beneficial conversion feature. Any gain or loss will be recognized at conversion.
 
On June 9, 2020, the Company received monies in exchange for a Note Payable having a Face Value of $37,000 with interest accruing at 8% is due June 9, 2021. The Note is convertible after 180 days from issuance into Common Stock at a price 35% below market value. The Company estimates that the fair value of this convertible debt approximates the Face Value, so no value has been assigned to the beneficial conversion feature. Any gain or loss will be recognized at conversion.
 
 
13
 
  
A Note Payable dated December 31, 2018 having a Face Value of $26,893 and accruing interest at 12% was due December 31, 2019. On December 31, 2019, the Company renewed the Note, together with accrued interest of $3,227 for a 12-month period. The new Note has a Face Value of $30,120 and accrues interest at 12%. This Note is nonconvertible and matures on December 31, 2020.
 
A Note Payable dated December 31, 2018 having a Face Value of $136,744 and accruing interest at 12% was due December 31, 2019. On October 1, 2019, the holder of this note requested to convert $30,000 in principal amount into 1,500,000 shares of Common Stock, leaving a principal balance $106,744. On December 31, 2019, the Company renewed the remaining principal balance of this Note, together with accrued interest of $15,509 for a 12-month period. The new Note has a Face Value of $122,253 and accrues interest at 12%. This Note is nonconvertible and matures on December 31, 2020.
 
The Company assessed the conversion features of the notes above for derivative accounting consideration, per ASC 815, and determined that the embedded conversion features should not be classified as a derivative because the exercise price of the convertible notes does not exceed the market value of the company's shares on the conversion date.
 
At June 30, 2020 and December 31, 2019, total accrued interest on Notes Payable was $27,083 and $21,077, respectively.
 
Note 4 – Notes Payable - Related Party
 
Outstanding Notes Payable at June 30, 2020 held by related parties consist of the following:
 
A Note Payable dated December 31, 2018 held by the CEO of the Company having a Face Value of $117,535 Canadian ($86,118 US) and accruing interest at 12% was due December 31, 2019. On December 31, 2019, the Company renewed the Note together with accrued interest of $14,104 Canadian ($10,845 US) and cash advances made to the Company of $36,473 Canadian ($28,044 US) for a 12-month period. The new Note, which was converted to USD, now has a face Value of $128,269 US. This new Note is nonconvertible, accrues interest at 12% per annum and has a maturity date of December 31, 2020.
 
Note 5 – Shareholders’ Equity
 
Effective February 1, 2019, the Company completed a 20 to 1 reverse split of its $0.001 par value Common Stock, reducing the issued and outstanding shares of Common Stock from 1,713,046,242 to 85,652,400 (the “First Reverse Stock Split”). The Company’s authorized capital of Common Stock remained as previously established at 3,000,000,000 shares.
 
Effective April 6, 2020, the Company completed another 20 to 1 reverse split of its $0.001 par value Common Stock, reducing the issued and outstanding shares of Common Stock from 1,193,501,925 to 59,675,417 (the “Second Reverse Stock Split”). The number of authorized Common Shares remained as previously established at 3,000,000,000 post-second split.
 
The Company's financial statements reflect both the First and Second Reverse Stock Split on a retroactive basis.
 
On June 17, 2020, the Company filed an amendment to its Articles of Incorporation (the “Amendment”) with the Secretary of State for the State of Colorado, to eliminate the Series “A” Preferred Shares consisting of Eight Hundred and Fifty Thousand (850,000) shares, par value $0.10 per share, and the designation thereof, which shares were returned to the status of undesignated shares of Preferred Stock. In addition, the Amendment also increased the number of authorized Series “B” Preferred Shares from Five Hundred Thousand (500,000) to One Million (1,000,000) shares.
 
Also on June 17, 2020, the Company issued Five Hundred Thousand (500,000) shares of Series “B” Preferred Stock in favor of Dr. Steve N. Slilaty, the Company’s CEO, in consideration for the COVID-19 treatment technology he developed. The Series “B” Preferred Stock is non-convertible, nonredeemable, non-retractable and has a superior liquidation value of $0.10 per share. Each share of Series “B” Preferred Stock is entitled to 1,000 votes per share. This stock issuance brought Dr. Slilaty’s holdings of the Company’s Series B Preferred Stock to One Million (1,000,000) shares.
 
During the six months ended June 30, 2020 the Company issued a total of 234,501,258 shares of Common Stock for the conversion of outstanding notes payable, reducing the debt by $324,769 and interest payable by$28,507 and generating a loss on conversion of $807,414.
 
The Company declared no dividends through June 30, 2020.
 
Note 6 – Related Party Transactions
 
In addition to the related party transaction detailed in Note 4 above, the Company paid its Officers and Directors cash compensation totaling $55,830 and $43,952 for the six months ended June 30, 2020 and 2019, respectively.
 
Note 7 – Subsequent Events
 
On July 7, 2020, the holder of a note payable dated November 30, 2019 elected to convert a total of $35,785 in principal and $441 in accrued interest into 8,598,048 shares of Common Stock leaving a principal balance of $-0-.
 
On July 7, 2020, the Company received monies in exchange for a Note Payable having a Face Value of $48,000 with interest accruing at 8% is due July 7, 2021. The Note is convertible after 180 days from issuance into Common Stock at a price 35% below market value.
 
On July 27, 2020, the Company received monies in exchange for a Note Payable having a Face Value of $102,000 with interest accruing at 8% is due July 27, 2021. The Note is convertible after 180 days from issuance into Common Stock at a price 30% below market value.
 
On August 14, 2020, the Company received monies in exchange for a Note Payable having a Face Value of $67,000 with interest accruing at 8% is due August 14, 2021. The Note is convertible after 180 days from issuance into Common Stock at a price 30% below market value.
 
 
14
 
 
Note 8 – Amendments
 
The following tables set forth the amendments made to the financial statements contained in this amended 10-Q report:
 
 
 
  As of June 30, 2020
 
Balance Sheet
 
As Previously reported
 
 
Adjustement
 
 
As restated
 
Notes payable
  439,496 
  (82,185)
  357,311 
Interest payable
  28,548 
  (1,465)
  27,083 
Total Current Liabilities
  686,196 
  (83,650)
  602,546 
TOTAL LIABILITIES
  749,430 
  (83,650)
  665,780 
Common Stock Issued and Outstanding
  191,710,596 
  78,110,652 
  269,821,248 
Common Stock par value
  191,709 
  78,111 
  269,820 
Capital paid in excess of par value
  17,267,946 
  274,670 
  17,542,616 
Accumulated (Deficit)
  (18,167,208)
  (269,131)
  (18,436,339)
TOTAL SHAREHOLDERS' EQUITY (DEFICIT)
  (610,913)
  83,650 
  (527,263)
 
 
 
 Three Months Ended June 30, 2020
 
Statement of Operations and Comprehensive Income (Loss)
 
As Previously reported
 
 
Adjustement
 
 
As restated
 
Interest expense
  (20,363)
  (3,856)
  (24,219)
Debt release
  9,510 
  (8,251)
  1,259 
Loss on debt conversions
  (498,997)
  (257,024)
  (756,021)
Total Other Income (Expense)
  (509,744)
  (269,131)
  (778,875)
Net income (loss) before income taxes
  (638,313)
  (269,131)
  (907,444)
Net income (loss) from continuing operations
  (638,313)
  (269,131)
  (907,444)
Net Income (Loss)
  (638,313)
  (269,131)
  (907,444)
Comprehensive Income (Loss)
  (637,837)
  (269,131)
  (906,968)
Weighted Average Common Shares Outstanding
  109,110,342 
  43,958,956 
  153,069,298 
 
 
 
 Six Months Ended June 30, 2020
 
Statement of Operations and Comprehensive Income (Loss)
 
As Previously reported
 
 
Adjustement
 
 
As restated
 
Interest expense
  (36,719)
  (4,038)
  (40,757)
Debt release
  9,803 
  (8,251)
  1,552 
Loss on debt conversions
  (550,390)
  (257,024)
  (807,414)
Total Other Income (Expense)
  (566,304)
  (269,131)
  (835,435)
Net income (loss) before income taxes
  (732,572)
  (269,131)
  (1,001,703)
Net income (loss) from continuing operations
  (732,572)
  (269,131)
  (1,001,703)
Net Income (Loss)
  (732,572)
  (269,131)
  (1,001,703)
Comprehensive Income (Loss)
  (733,437)
  (269,131)
  (1,002,568)
Weighted Average Common Shares Outstanding
  78,975,458 
  22,136,056 
  101,111,514 
 
 
15
 
 
 
 
 Six Months Ended June 30, 2020
 
Statement of Cash Flows
 
As Previously reported
 
 
Adjustement
 
 
As restated
 
Net Income (Loss)
  (732,572)
  (269,131)
  (1,001,703)
Stock issued for payment interest
  27,445 
  5,321 
  32,766 
Loss on debt conversion
  550,390 
  257,024 
  807,414 
Debt & interest release
  (9,803)
  8,251 
  (1,552)
Increase (decrease) in interest payable
  7,471 
  (1,465)
  6,006 
 
 
 
 Three Months Ended June 30, 2020
 
Statement of Shareholders' Equity
 
As Previously reported
 
 
Adjustement
 
 
As restated
 
Common stock issued for reduction of Notes Payable & interest
  132,035,179 
  78,110,652 
  210,145,831 
Par value
  132,033 
  78,112 
  210,145 
Capital paid in excess of par value
  553,497 
  274,669 
  828,166 
Total capital stock
  685,530 
  352,781 
  1,038,311 
Net income (loss)
  (638,313)
  (269,131)
  (907,444)
Total income (loss)
  (637,837)
  (269,131)
  (906,968)
Balance of common stock
  191,710,596 
  78,110,652 
  269,821,248 
Balance of par value
  191,708 
  78,112 
  269,820 
Balance of capital paid in excess of par value
  17,267,947 
  274,669 
  17,542,616 
Accumulated deficit
  (18,167,208)
  (269,131)
  (18,436,339)
Shareholders' equity
  (610,913)
  83,650 
  (527,263)
 
 
 
 Six Months Ended June 30, 2020
 
Statement of Shareholders' Equity
 
As Previously reported
 
 
Adjustement
 
 
As restated
 
Common stock issued for reduction of Notes Payable & interest
  156,390,606 
  78,110,652 
  234,501,258 
Par value
  156,388 
  78,112 
  234,500 
Capital paid in excess of par value
  651,521 
  274,669 
  926,190 
Total capital stock
  807,909 
  352,781 
  1,160,690 
Net income (loss)
  (732,572)
  (269,131)
  (1,001,703)
Total income (loss)
  (733,437)
  (269,131)
  (1,002,568)
Balance of common stock
  191,710,596 
  78,110,652 
  269,821,248 
Balance of par value
  191,708 
  78,112 
  269,820 
Balance of capital paid in excess of par value
  17,267,947 
  274,669 
  17,542,616 
Accumulated deficit
  (18,167,208)
  (269,131)
  (18,436,339)
Shareholders' equity
  (610,913)
  83,650 
  (527,263)
 
 
 
16
 
 
 
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. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf. We disclaim any obligation to update forward looking statements.
 
Overview and History
 
We were incorporated in the State of Colorado on August 31, 2006 under the name “Mountain West Business Solutions, Inc.” Until October 2009, our business was to provide management consulting with regard to accounting, computer and general business issues for small and home-office based companies.
 
In October 2009, we acquired Sunshine Biopharma, Inc., a Colorado corporation holding an exclusive license (the “License”) to a new anticancer drug bearing the laboratory name, Adva-27a. As a result of this transaction we changed our name to “Sunshine Biopharma, Inc.” and our officers and directors resigned their positions with us and were replaced by Sunshine Biopharma, Inc.’s management at the time, including our current CEO, Dr. Steve N. Slilaty, and our current CFO, Camille Sebaaly each of whom remain part of our current management. Our principal business became that of a pharmaceutical company focusing on the development of our licensed Adva-27a anticancer compound. In December 2015 we acquired all issued and pending patents pertaining to our Adva-27a technology and terminated the License.
 
In July 2014, we formed a wholly owned Canadian subsidiary, Sunshine Biopharma Canada Inc. (“Sunshine Canada”), for the purposes of offering generic pharmaceutical products in Canada and elsewhere around the world. In April and June 2016 Sunshine Canada signed licensing agreements for four (4) generic prescription drugs for the treatment of breast cancer, prostate cancer and BPH (Benign Prostatic Hyperplasia).
 
In January 2018, we acquired all of the issued and outstanding shares of Atlas Pharma Inc. (“Atlas”), a Health Canada certified company dedicated to chemical analysis of pharmaceutical and other industrial samples. Effective April 1, 2019, we re-assigned all of our stock in Atlas back to the original owner in exchange for the Atlas related debt. See “Discontinued Analytical Chemistry Services Operations” below for a more detailed explanation of this acquisition and the subsequent disposition thereof in April 2019.
 
In March 2018, we formed NOX Pharmaceuticals, Inc., a wholly owned Colorado corporation, and assigned all of our interest in our Adva-27a anticancer compound to that company. NOX Pharmaceuticals, Inc.’s mission is to research, develop and commercialize proprietary drugs including Adva-27a.
 
In December 2018, we completed the development of a new nutritional supplement which we trademarked Essential 9tm. This new supplement is an over-the-counter tablet comprised of the nine amino acids which the human body cannot make. Essential 9tm has been authorized for marketing by Health Canada under NPN 80089663. On March 12, 2019 Essential 9tm became available for sale on Amazon.ca and shortly thereafter on Amazon.com.
 
Effective February 1, 2019, we completed a 20 to 1 reverse split of our $0.001 par value Common Stock reducing the issued and outstanding shares of Common Stock from 1,713,046,242 to 85,652,400 (the “First Reverse Stock Split”). The number of authorized shares of our $0.001 par value Common Stock remained at 3,000,000,000 shares.
 
In November 2019, we received Health Canada approval for a new Calcium-Vitamin D supplement. Health Canada issued NPN 80093432 through which it authorized us to manufacture and sell the new Calcium-Vitamin D supplement under the brand name Essential Calcium-Vitamin Dtm.
 
 
17
 
 
Effective April 6, 2020, we completed another 20 to 1 reverse split of our $0.001 par value Common Stock, reducing the issued and outstanding shares of Common Stock from 1,193,501,925 to 59,675,417 (the “Second Reverse Stock Split”). The authorized capital of our Common Stock remained as previously established at 3,000,000,000 shares. Except in the paragraphs describing the reverse stock splits, all references in this Report to our Common Stock as well as the price per share of Common Stock are presented on a post First and Second Reverse Stock Splits basis.
 
On May 22, 2020, we filed a patent application in the United States for a new treatment for Coronavirus infections, including COVID-19. 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 small molecules covered by the patent application were computer modelled and designed by Dr. Steve N. Slilaty, our CEO. The patent application has a priority date of May 22, 2020.
 
On June 17, 2020, we filed an amendment to our Articles of Incorporation (the “Amendment”) with the Secretary of State for the State of Colorado, to eliminate the Series “A” Preferred Shares consisting of Eight Hundred and Fifty Thousand (850,000) shares, par value $0.10 per share, and the designation thereof, such shares to be returned to the status of undesignated shares of Preferred Stock. In addition, the Amendment also increased the number of authorized Series “B” Preferred Shares from Five Hundred Thousand (500,000) to One Million (1,000,000) shares.
 
Also on June 17, 2020, our Board of Directors authorized the issuance of Five Hundred Thousand (500,000) shares of our Series “B” Preferred Stock in favor of Dr. Steve N. Slilaty, our CEO and a director, in consideration for his development of a new treatment for Coronavirus infections, including COVID-19. The Series “B” Preferred Stock is non-convertible, non-redeemable, non-retractable and has a superior liquidation value of $0.10 per share. Each share of Series “B” Preferred Stock is entitled to 1,000 votes per share. This stock issuance brought Dr. Slilaty’s holdings of our Series B Preferred Stock to One Million (1,000,000) shares.
 
Our principal place of business is located at 6500 Trans-Canada Highway, 4th Floor, Pointe-Claire, Quebec, Canada H9R 0A5. Our phone number is (514) 426-6161 and our website address is www.sunshinebiopharma.com.
 
We have not been subject to any bankruptcy, receivership or similar proceeding.
 
Plan of Operation
 
Despite the fact that we now are generating revenues, we have elected to include a Plan of Operation to discuss our ongoing research and development activities relating to our proprietary drug development operations, as well as, our other business activities.
 
Proprietary Drug Development Operations
 
Coronavirus Treatment
 
On May 22, 2020, we filed a patent application in the United States for a new treatment for Coronavirus infections, including COVID-19. 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 small molecules covered by the patent application were computer modelled and designed by Dr. Steve N. Slilaty, our CEO. The patent application has a priority date of May 22, 2020.
 
Viruses carry minimal genetic information as they rely, for the most part, on host cellular machinery to multiply. Coronavirus has a positive-sense RNA genome consisting of approximately 30,000 nucleotides, a size that places Coronavirus among the larger sized viruses. A positive-sense RNA genome is effectively a messenger RNA which allows the virus to express its genes immediately upon gaining entry into the host cell without the need for any prior replication or transcription steps as is the case with negative-sense RNA or DNA viruses. This is part of what makes Coronavirus a highly aggressive pathogen. Many of the causative agents of serious human diseases are positive-sense RNA viruses, including Hepatitis C, Zeka, Polio, West Nile, Dengue, Cardiovirus, and many others. Some positive-sense RNA viruses, such as the rhinoviruses that cause the common cold, are less clinically serious but they are responsible for widespread morbidity on a yearly basis.
 
The initial genome expression products of Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV-2), the causative agent of COVID-19, are two large polyproteins, referred to as pp1a and pp1ab. These two polyproteins are cleaved at 13 specific sites by the main Coronavirus virus encoded protease (Mpro or 3CLpro) to generate a number of mature viral proteins essential for viral replication. Mpro represents an attractive anti-viral drug development target as it plays a central role in the early stages of viral replication. The crystal structure of Mpro shows the presence of an active site Cysteine (Cys145) and a coordinated active site Histidine (His41), both of which are essential for the enzyme’s proteolytic activity. We have designed and filed a patent application for a series of Mpro inhibitors which we plan to synthesize and test for potential viral replication inhibitory activity soon.
 
 
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Adva-27a Anticancer Drug
 
Since inception, our proprietary drug development activities have been focused on the development of a small molecule called Adva-27a 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). Sunshine Biopharma is direct owner of all issued and pending worldwide patents pertaining to Adva-27a including U.S. Patents Number 8,236,935 and 10,272,065.
 
Figure 1
 
 Adva-27a is a GEM-difluorinated C-glycoside derivative of Podophyllotoxin (see Figure 1). Another derivative of Podophyllotoxin called Etoposide is currently on the market and is used to treat various types of cancer including leukemia, lymphoma, testicular cancer, lung cancer, brain cancer, prostate cancer, bladder cancer, colon cancer, ovarian cancer, liver cancer and several other forms of cancer. Etoposide is one of the most widely used anticancer drugs. Adva-27a and Etoposide are similar in that they both attack the same target in cancer cells, namely the DNA unwinding enzyme, Topoisomerase II. Unlike Etoposide however, Adva-27a is able to penetrate and destroy Multidrug Resistant Cancer cells. Adva-27a is the only compound known today that is capable of destroying Multidrug Resistant Cancer. In addition, Adva-27a has been shown to have distinct and more desirable biological and pharmacological properties compared to Etoposide. In side-by-side studies using Multidrug Resistant Breast Cancer cells and Etoposide as a reference, Adva-27a showed markedly greater cell killing activity (see Figure 2).
 
 
Figure 2
   
 
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Our preclinical studies to date have shown that:
 
Adva-27a is effective at killing different types of Multidrug Resistant cancer cells, including Pancreatic Cancer Cells (Panc-1), Breast Cancer Cells (MCF-7/MDR), Small-Cell Lung Cancer Cells (H69AR), and Uterine Sarcoma Cells (MES-SA/Dx5).
 
Adva-27a is unaffected by P-Glycoprotein, the enzyme responsible for making cancer cells resistant to anti-tumor drugs.
   
Adva-27a has excellent clearance time (half-life = 54 minutes) as indicated by human microsomes stability studies and pharmacokinetics data in rats.
 
Adva-27a clearance is independent of Cytochrome P450, a mechanism that is less likely to produce toxic intermediates.
 
Adva-27a is an excellent inhibitor of Topoisomerase II with an IC50 of only 13.7 micromolar (this number has recently been reduce to 1.44 micromolar as a result of resolving the two isomeric forms of Adva-27a).
 
Adva-27a has shown excellent pharmacokinetics profile as indicated by studies done in rats.
 
Adva-27a does not inhibit tubulin assembly.
 
These and other preclinical data have been published in ANTICANCER RESEARCH, a peer-reviewed International Journal of Cancer Research and Treatment. The publication which is entitled “Adva-27a, a Novel Podophyllotoxin Derivative Found to Be Effective Against Multidrug Resistant Human Cancer Cells” [ANTICANCER RESEARCH 32: 4423-4432 (2012)] is available on our website at www.sunshinebiopharma.com.
 
We have been delayed in our clinical development program due to lack of funding. Our fund raising efforts are continuing and as soon as adequate financing is in place we will continue our clinical development program of Adva-27a by conducting the following next sequence of steps:
 
GMP Manufacturing of 2 kilogram for use in IND-Enabling Studies and Phase I Clinical Trials
 
IND-Enabling Studies
 
Regulatory Filing (Fast-Track Status Anticipated)
 
Phase I Clinical Trials (Pancreatic Cancer Indication)
 
Adva-27a’s initial indication will be Pancreatic Cancer for which there are currently little or no treatment options available. We are planning to conduct our clinical trials at McGill University’s Jewish General Hospital in Montreal, Canada. All aspects of the clinical trials in Canada will employ FDA standards at all levels.
   
 
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According to the American Cancer Society, nearly 1.5 million new cases of cancer are diagnosed in the U.S. each year.  While particularly effective against Multidrug Resistant Cancer, we believe Adva-27a can potentially treat all cancer types as it is general chemotherapy drug. We believe that upon successful completion of Phase I Clinical Trials we may receive one or more offers from large pharmaceutical companies to buyout or license our drug.  However, there are no assurances that our Phase I Trials will be successful, or if successful, that any pharmaceutical companies will make an acceptable offer to us.  In the event we do not consummate such a transaction, we will require significant capital in order to manufacture and market our new drug on our own. The following, Figure 3, is a space-filling molecular model of our Adva-27a.
 
 
Figure 3
 
Generic Pharmaceuticals Operations
 
In 2016, our Canadian wholly owned subsidiary, Sunshine Biopharma Canada Inc. (“Sunshine Canada”), signed Licensing Agreements with a major pharmaceutical company for four prescription generic drugs for the treatment of Breast Cancer, Prostate Cancer and Enlarged Prostate. We have since been working towards commencement of marketing of these pharmaceutical products under our own, Sunshine Biopharma, label. These four generic products are as follows:
 
Anastrozole (brand name Arimidex® by AstraZeneca) for treatment of Breast Cancer;
 
Letrozole (brand name Femara® by Novartis) for treatment of Breast Cancer;
 
Bicalutamide (brand name Casodex® by AstraZeneca) for treatment of Prostate Cancer;
 
Finasteride (brand name Propecia® by Merck) for treatment of BPH (Benign Prostatic Hyperplasia)
 
 
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Sunshine Canada is currently in the process of securing a Drug Identification Number (“DIN”) for each of these products from Health Canada. We are also required to obtain a Drug Establishment License (“DEL”) from Health Canada. Upon receipt of the DEL and DIN’s, we will be able to accept orders for our own label SBI-Anastrozole, SBI-Letrozole, SBI-Bicalutamide and SBI-Finasteride. We cannot estimate the timing for our obtaining either the DIN’s or the DEL due to variables involved that are out of our control. Figure 4 shows our 30-Pill blister pack of Anastrozole.
 
 
Figure 4
 
We currently have a number of additional Generic Pharmaceuticals under review for in-licensing. While no assurances can be provided that we will acquire the rights to any additional generic drugs, we believe that a larger product portfolio will provide us with more opportunities and a greater reach into the marketplace.
  
Various publicly available sources indicate that the worldwide sales of generic pharmaceuticals are approximately $200 billion per year. In the United States and Canada, the sales of generic pharmaceuticals are approximately $50 billion and $5 billion, respectively. The generic pharmaceuticals business is fairly competitive and there are several multinational players in the field including Teva (Israel), Novartis - Sandoz (Switzerland), Hospira (USA), Mylan (Netherlands), Sanofi (France), Fresenius Kabi (Germany) and Apotex (Canada). While no assurances can be provided, with our offering of Canadian approved products we believe that we will be able to access at least a small percentage of the generic pharmaceutical marketplace.
   
Nutritional Supplements Operations
 
In December 2018, we completed the development of Essential 9tm, the first in a line of essential micronutrients products that we are planning to launch. On December 14, 2018, Health Canada issued NPN 80089663 through which it authorized Sunshine Biopharma Inc. to manufacture and sell the Essential 9tm product. Our Essential 9tm nutritional supplement tablets contain a balanced formula of the 9 Essential Amino Acids that the human body cannot make. Essential Amino Acids are 9 out of the 20 amino acids required for protein synthesis. Proteins are involved in all body functions – From the musculature and immune system to hormones and neurotransmitters. Like vitamins, Essential Amino Acids cannot be made by the human body and must be obtained through diet. Deficiency in one or more of the 9 Essential Amino Acids can lead to loss of muscle mass, fatigue, weight gain and reduced ability to build muscle mass in athletes. Sunshine Biopharma’s Essential 9tm provides all 9 Essential Amino Acids in freeform and in the proportions recommended by Health Canada. Essential 9tm is currently available on Amazon.com and Amazon.ca. Figure 5 below shows our 60-Tablet Essential 9tm product.
 
 
Figure 5
  
 
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              In November 2019, we received Health Canada approval for another nutritional supplement, a new Calcium-Vitamin D tablets. Health Canada issued NPN 80093432 through which it authorized us to manufacture and sell the new Calcium-Vitamin D supplement under the brand name Essential Calcium-Vitamin D™.
 
Vitamin D is a group of steroid-like molecules responsible for increasing intestinal absorption of calcium, magnesium, and phosphate. They are also involved in multiple other biological functions, including promoting the healthy growth and remodeling of bone, cell growth, neuromuscular and immune functions, and reduction of inflammation. The most important compounds in this group are Vitamin D2 (ergocalciferol) and Vitamin D3 (cholecalciferol). Sunshine Biopharma’s Essential Calcium-Vitamin D™ tablets contain both of these compounds as well as Calcium for optimum health benefits. We anticipate that Essential Calcium-Vitamin D™ will be available on Amazon.ca in the third quarter of 2020.
 
Discontinued Analytical Chemistry Services Operations
 
On January 1, 2018, we acquired all of the issued and outstanding shares of Atlas Pharma Inc. (“Atlas”), a privately held Canadian company providing analytical chemistry testing services (“Atlas Business”). The purchase price for the shares was $848,000 Canadian ($676,748 US). The purchase price included a cash payment of $100,500 Canadian ($80,289 US), plus the issuance of 50,000 shares of the Company’s Common Stock valued at $238,000, and a promissory note in the principal amount of $450,000 Canadian ($358,407 US), with interest payable at the rate of 3% per annum (“Atlas Note”).
 
Effective April 1, 2019, we disposed of Atlas by re-assigning all of our stock in Atlas back to the original owner in exchange for the Atlas Note. As a consequence of the sale, the operating results and the assets and liabilities of the discontinued Atlas Business are presented separately in the Company's financial statements as Discontinued Operations. In additions, prior period balances have been reclassified to present the operations of the Atlas Business as Discontinued Operations.
 
Results Of Operations
 
Comparison of Results of Operations for the Six Months ended June 30, 2020 and 2019
 
During the six months ended June 30, 2020, we generated revenues of $26,247 from the sale of products generated by our Nutritional Supplements Operations which we launched in March 2019. The direct cost for generating these revenues was $9,044. We generated $3,239 in revenues during the comparable period in 2019, which included a little over three months of sales activities. The direct cost for generating these revenues was $1,572. 
 
General and Administrative Expenses during the six months ended June 30, 2020 was $183,471, compared to $190,073 during the six months ended June 30, 2019, a decrease of $6,602. The reason for this relatively small decrease was due to our continuing effort to reduce expenses across the board. In terms of specific expense categories that saw a relatively large change were executive compensation which increased by $11,878 due to the issuance of Series B Preferred Stock to our CEO and consulting which decreased by $18,108 owing to our ongoing cost cutting effort. 
 
We incurred $807,414 in losses arising from debt conversion during the six months ended June 30, 2020, compared to $65,094 in losses from debt conversion during the similar period in 2019. This large increase was due to the specific structure of our convertible debt combined with recent volatility in our stock price. We also incurred $40,575 in interest expense during the six months ended June 30, 2020, compared to $64,639 in interest expense during the similar period in 2019. The decrease was a result of a more rapid rate of conversion by our debt holders. In addition, we incurred $582,237 in losses from discontinued operations during the six month ended June 30, 2019 as a result of the sale of Atlas Pharma Inc. and termination of our Analytical Chemistry Services Operations. We did not incur this loss during the similar period in 2020.
 
As a result, we incurred a Net Loss of $1,001,703 ($0.01 per share) during the six month period ended June 30, 2020, compared to a net loss of $913,432 ($0.07 per share) during the six month period ended June 30, 2019.
 
 
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Comparison of Results of Operations for the Three Months Ended June 30, 2020 and 2019
 
During the three months ended June 30, 2020, we generated $15,145 in revenues, compared to $3,033 in revenues for the same three months period of 2019, an increase of $12,112. All of these revenues were generated from our new Nutritional Supplements Operations which we launched in March 2019. The direct cost for generating these revenues was $5,161 for the period ended June 30, 2020, compared to $1,460 for the same period in 2019. Our gross profit increased to $9,984 for the period ended June 30, 2020, compared to a gross profit of $1,573 for the same period in 2019.
 
General and Administrative expenses during the three month period ended June 30, 2020 were $138,553, compared to General and Administrative expense of $67,770 incurred during the three month period ended June 30, 2019, an increase of $70,783. Nearly all categories of our General and Administrative expenses saw an increase during the three month period ended June 30, 2020, compared to the same period in 2019, except for consulting which decreased by $8,756. The expense categories that increased included accounting fees by $13,060, legal fees by $14,038, office expenses by $4,633, and officer and director compensation by $48,249. The increase in officer and director compensation was due to the issuance of Series B Preferred Stock to our CEO. Overall, we incurred a loss of $138,553 from our operations in the three month period ended June 30, 2020, compared to a loss of $67,770 in the similar period of 2019.
 
In the area of other expenses, we incurred $24,219 in interest expense during the three months ended June 30, 2020, compared to $18,342 in interest expense during the similar period in 2019. In addition, we incurred $756,021 in losses arising from debt conversion during the three months ended June 30, 2020, compared to $42,786 in losses from debt conversion during the similar period in 2019.
 
As a result, we incurred a net loss of $907,444 ($0.01 per share) for the three month period ended June 30, 2020, compared to a net loss of $710,890 ($0.03 per share) during the three month period ended June 30, 2019.
 
Liquidity and Capital Resources
 
As of June 30, 2020, we had cash or cash equivalents of $85,593.
 
Net cash used in operating activities was $113,050 during the six month period ended June 30, 2020, compared to $281,423 for the six month period ended June 30, 2019.  We anticipate that overhead costs and other expenses will increase in the future as we move forward with our Proprietary Drug Development activities and expansion of our Generic Pharmaceuticals and Nutritional Supplements operations discussed above.
 
Cash flows provided by financing activities were $159,007 for the six month periods ended June 30, 2019, compared to $219,428 during the six months ended June 30, 2019.  Cash flows used in investing activities were $-0- for both the six month period ended June 30, 2020, compared to $12,976 during the six month period ended June 30, 2019.
 
During the six months ended June 30, 2020, we issued a total of 234,501,258 shares of our Common Stock valued at $1,160,690 for the conversion of outstanding notes payable, reducing the debt by $324,769 and interest payable by $28,507 and generating a loss on conversion of $807,414.
 
During the six month period ended June 30, 2019, we issued a total of 931,751 shares of our Common Stock valued at $151,169 for the conversion of outstanding notes payable, reducing debt by $83,000 and interest payable by $3,841 and generating a loss on conversion of $65,094. 
 
During the six months ended June 30, 2020, we did not sell any of our capital stock for cash; however, we entered into the following new debt arrangements:
 
On April 27, 2020, we received a Paycheck Protection Program loan in the principal amount of $50,655 from the US Small Business Administration as part of the US government’s COVID-19 relief program. This loan accrues interest at the rate of 1% per annum. We are obligated to make payments of principal and interest totaling $2,133 each month commencing November 27, 2020, with any remaining balances due and payable on or before April 27, 2022. The proceeds derived from this loan may only be used for payroll costs, interest on mortgages, rent and utilities (“Admissible Expenses”). In addition, the Paycheck Protection Program provides for conditional loan forgiveness if we utilize at least 75% of the proceeds from the loan to pay Admissible Expenses. As of the date of this Report, all of the proceeds from this loan have been utilized for Admissible Expenses and we believe that we will qualify for forgiveness of the entire amount of the loan.
 
On June 1, 2020, we received monies in exchange for a Note Payable having a Face Value of $42,000 with interest accruing at 8% is due June 1, 2021. The Note is convertible after 180 days from issuance into Common Stock at a price 35% below market value.
 
 
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On June 9, 2020, we received monies in exchange for a Note Payable having a Face Value of $37,000 with interest accruing at 8% is due June 9, 2021. The Note is convertible after 180 days from issuance into Common Stock at a price 35% below market value.
 
We are not generating adequate revenues from our operations to fully implement our business plan as set forth herein. As a result, our future success will depend on the future availability of financing, among other things. Such financing will be required to enable us to actualize our Proprietary Drug Development program and further develop our Generic Pharmaceuticals Operations and Nutritional Supplements plans. We intend to raise funds through private placements of our Common Stock and/or debt financing. We estimate that we will require approximately $20 million ($2 million for the Generic Pharmaceuticals and Nutritional Supplements operations and $18 million for the recently expanded Proprietary Drug Development program) to fully implement our business plan in the future and there are no assurances that we will be able to raise this capital. Our inability to obtain sufficient funds from external sources when needed will have a material adverse effect on our plan of operation, results of operations and financial condition.
 
Our cost of operations is expected to increase as we move forward with implementation of our business plan. We do not have sufficient funds to cover the anticipated increase in the relevant expenses. We need to raise additional capital in order to continue our existing operations and finance our expansion plans for the next year. If we are successful in raising additional funds, we expect our operations and business efforts to continue and expand. There are no assurances this will occur.
 
Subsequent Events
 
On July 7, 2020, the holder of a note payable dated November 30, 2019 elected to convert a total of $35,785 in principal and $441 in accrued interest into 8,598,048 shares of Common Stock leaving a principal balance of $-0-.
 
On July 7, 2020, we received monies in exchange for a Note Payable having a Face Value of $48,000 with interest accruing at 8% is due July 7, 2021. The Note is convertible after 180 days from issuance into Common Stock at a price 35% below market value.
 
On July 27, 2020, we received monies in exchange for a Note Payable having a Face Value of $102,000 with interest accruing at 8% is due July 27, 2021. The Note is convertible after 180 days from issuance into Common Stock at a price 30% below market value.
 
On August 14, 2020, the Company received monies in exchange for a Note Payable having a Face Value of $67,000 with interest accruing at 8% is due August 14, 2021. The Note is convertible after 180 days from issuance into Common Stock at a price 30% below market value.
 
Off Balance Sheet Arrangements
 
None
 
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 pursuant to Regulation S-K.
 
ITEM 4. CONTROLS AND PROCEDURES.
 
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 Securities Exchange Act of 1934, as amended (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 Securities Exchange Act of 1934 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.
 
 
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Based on this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were not effective as of June 30, 2020, at reasonable assurance level, for the following reasons:
 
Ineffective control environment and lack of qualified full-time CFO who has SEC experience to focus on our financial affairs;
 
Lack of qualified and sufficient personnel, and processes to adequately and timely identify making any and all required public disclosures;
 
Deficiencies in the period-end reporting process and accounting policies;
 
Inadequate internal controls over the application of new accounting principles or the application of existing accounting principles to new transactions;
 
Inadequate internal controls relating to the authorization, recognition, capture, and review of transactions, facts, circumstances, and events that could have a material impact on the Company’s financial reporting process;
 
Deficient revenue recognition policies;
 
Inadequate internal controls with respect to inventory transactions; and
 
Improper and lack of timely accounting for accruals such as prepaid expenses, accounts payable and accrued liabilities.
 
Our Board of Directors has assigned a priority to the short-term and long-term improvement of our internal control over financial reporting. We are reviewing various potential solutions to remedy the processes that would eliminate the issues that may arise due to the absence of separation of duties within the financial reporting functions. Additionally, the Board of Directors will continuously review controls and procedures to identified deficiencies and implement remediation within our internal controls over financial reporting and our disclosure controls and procedures.
 
We believe that our financial statements presented in this amended quarterly report on Form 10-Q fairly present, in all material respects, our financial position, results of operations, and cash flows for all periods presented herein.
 
Inherent Limitations – Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. In particular, many of our current processes rely upon manual reviews and processes to ensure that neither human error nor system weakness has resulted in erroneous reporting of financial data.
 
Changes in Internal Control over Financial Reporting – There were no changes in our internal control over financial reporting during the six month period ended June 30, 2020, which were identified in conjunction with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
 
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PART II. OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
In June 2018 we filed an action in the Superior Court of the Province of Quebec in the District of Montreal (Canada) against one of our existing shareholders residing in Quebec City (Canada) arising out of a possible equity investment intended to be completed by August 2018. The complaint alleges among other things, claims of misrepresentations and misleading conduct resulting in damages to us in an amount of approximately $200,000 Canadian (approximately $154,000 US). On April 1, 2019, a note payable held by the defendant having a face value of $100,000 Canadian (approximately $76,000 US) became due and payable. We have elected not to pay the amount due and to petition the courts to link this matter to the ongoing litigation. On March 6, 2020, the Superior Court in the District of Montreal granted our motion and the two proceedings were linked. A date for the hearings to commence was subsequently set for April 7, 2020, however due to the ongoing Coronavirus (COVID-19) Pandemic the date has been postponed until further notice.
 
To the best of our management’s knowledge and belief, there are no other material claims that have been brought against us nor have there been any claims threatened.
 
ITEM 1A. RISK FACTORS
 
We are a smaller reporting company and are not required to provide the information under this item pursuant to Regulation S-K.
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
During the six months ended June 30, 2020, we issued a total of 234,501,258 shares of our Common Stock valued at $1,160,690 for the conversion of outstanding notes payable, reducing the debt by $324,769 and interest payable by $28,507 and generating a loss on conversion of $807,414.
 
During the six month period ended June 30, 2019, we issued a total of 931,751 shares of our Common Stock valued at $151,169 for the conversion of outstanding notes payable, reducing debt by $83,000 and interest payable by $3,841 and generating a loss on conversion of $65,094.
 
We relied upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, to issue these shares.
 
Other than reduction of debt from the conversion of the outstanding convertible notes payable described above, we did not receive any direct proceeds from the issuance of these shares. The proceeds from the convertible notes payable were used for working capital.
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
None.
 
ITEM 4. MINE SAFETY DISCLOSURE
 
Not Applicable.
 
ITEM 5. OTHER INFORMATION
 
None.
 
ITEM 6. EXHIBITS
 
Exhibit No.
 
Description
 
 
 
 
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
   
 
 
 
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
   
 
 
 
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
 
XBRL Instance Document*
101.SCH
 
XBRL Schema Document*
101.CAL
 
XBRL Calculation Linkbase Document*
101.DEF
 
XBRL Definition Linkbase Document*
101.LAB
 
XBRL Label Linkbase Document*
101.PRE
 
XBRL Presentation Linkbase Document*
______________________
* Pursuant to Rule 406T of Regulation S-T, these interactive data files are not deemed filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act or Section 18 of the Securities Exchange Act and otherwise not subject to liability.
 
 
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SIGNATURES
 
Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this amended Report to be signed on its behalf by the undersigned, thereunto duly authorized on August 28, 2020.
 
 
SUNSHINE BIOPHARMA, INC.
 
 
 
 
 
 
By:
s/ Dr. Steve N. Slilaty
 
 
 
Dr. Steve N. Slilaty,
 
 
 
Principal Executive Officer
 
 
 
 
 
 
 
 
 
 
By:
s/ Camille Sebaaly
 
 
 
Camille Sebaaly,
Principal Financial Officer and
 
 
 
Principal Accounting Officer
 
 
 
 
 
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