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.
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.
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
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
●
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.
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)
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
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 $550,390 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 $36,719 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 $732,572 ($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.
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 $20,363 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 $498,997 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 $638,313 ($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
156,390,606 shares of our Common Stock valued at $807,909 for the
conversion of outstanding notes payable, reducing the debt by
$230,074 and interest payable by $27,445 and generating a loss on
conversion of $550,390.
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.
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