U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: June 30, 2010
Commission File Number: 0-52898
SUNSHINE BIOPHARMA INC.
(Exact name of small business issuer as specified in its charter)
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Colorado
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20-5566275
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(State of other jurisdiction
of incorporation)
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(IRS Employer ID No.)
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6100 Royalmount Ave.
Montreal, Quebec, Canada H4P 2R2
(Address of principal executive offices)
(514) 496-5197
(Issuer’s Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 __
X
__ No ____.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
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Large accelerated filer [ ]
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Accelerated filer [ ]
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Non-accelerated filer [ ] (Do not check if a
smaller reporting company)
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Smaller reporting company [X]
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The number of shares of the registrant’s only class of common stock issued and outstanding as of August 3, 2010, was 31,335,007 shares.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ____ Yes
X
No
TABLE OF CONTENTS
PART I.
FINANCIAL INFORMATION
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Page No.
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Item 1.
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Financial Statements
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3
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Consolidated Balance Sheet as of June 30, 2010 (unaudited)
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F-1
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Unaudited Consolidated Statement of Operations for the Six Month Period
Ended June 30, 2010 and for the Period beginning August
17, 2009 (Inception) through June 30, 2010
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F-2
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Unaudited Consolidated Statement of Cash Flows for the for the Six Month
Period Ended June 30, 2010 and for the Period
beginning August 17, 2009 (Inception) through June 30, 2010
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F-3
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Unaudited Consolidated Statement of Shareholders’ Equity
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F-4
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Notes to Consolidated Financial Statements
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F-5
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and
Results of Operations/Plan of Operation.
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8
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk.
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13
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Item 4.
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Controls and Procedures.
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13
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PART II
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OTHER INFORMATION
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Item 1.
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Legal Proceedings.
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14
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Item 1A.
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Risk Factors
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14
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds.
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14
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Item 3.
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Defaults Upon Senior Securities.
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14
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Item 4.
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Submission of Matters to a Vote of Security Holders.
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14
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Item 5.
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Other Information.
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15
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Item 6.
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Exhibits.
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15
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Signatures
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16
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PART I.
ITEM 1. FINANCIAL STATEMENTS
Sunshine Biopharma, Inc.
Consolidated Balance Sheet
(A Development Stage Company)
See Accompanying Notes to These Financial Statements.
F-1
Sunshine Biopharma, Inc.
Unaudited Consolidated Statement Of Operations
(A Development Stage Company)
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Unaudited
3 Months
Ended
June 30,
2010
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Unaudited
6 Months
Ended
June 30,
2009
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August 17,
2009 (inception)
through June
30, 2010
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||||||||||
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Revenue:
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$ | - | $ | - | $ | - | ||||||
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General & Administrative Expenses:
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||||||||||||
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Accounting
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1,500 | 7,795 | $ | 15,395 | ||||||||
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Office
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25 | 140 | 2,195 | |||||||||
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Incorporation Cost
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- | - | 3,000 | |||||||||
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Legal
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12,035 | 28,308 | 74,051 | |||||||||
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Merger costs
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- | - | 155,150 | |||||||||
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Consulting fees
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1,574,500 | 1,574,500 | 1,574,500 | |||||||||
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Miscellaneous Expenses
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- | - | 708 | |||||||||
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Public Relations
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- | 8,366 | 49,264 | |||||||||
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Stock Transfer Fees
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- | 3,600 | 3,600 | |||||||||
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Writedown of intangible assets
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- | 50,000 | 995,976 | |||||||||
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Total General & Administrative Expenses
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1,588,060 | 1,672,709 | 2,873,839 | |||||||||
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Net (Loss)
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$ | (1,588,060 | ) | $ | (1,672,709 | ) | $ | 2,873,839 | ) | |||
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Basic (Loss) per common share
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$ | (0.05 | ) | $ | (0.06 | ) | ||||||
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Weighted Average Common Shares Outstanding
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29,799,590 | 29,799,590 | ||||||||||
See Accompanying Notes to These Financial Statements.
F-2
Sunshine Biopharma, Inc.
Unaudited Consolidated Statement Of Cash Flows
(A Development Stage Company)
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3 Months
Ended
June
30, 2010
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August 17,
2009 (inception)
through June
30, 2010
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Cash Flows From Operating Activities:
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||||||||
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Net (Loss)
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$ | (1,672,709 | ) | $ | (2,873,839 | ) | ||
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Adjustments to reconcile net loss to net cash used in
operating activities:
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Stock issued for licenses, services, and other assets
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1,574,500 | 649,932 | ||||||
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Increase in Accounts Payable
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2,384 | 16,698 | ||||||
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Net Cash Flows (used) in operations
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(95,825 | ) | (2,207,209 | ) | ||||
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Cash Flows From Investing Activities:
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Net Cash Flows (used) in Investing activities
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- | - | ||||||
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Cash Flows From Financing Activities:
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Issuance of common stock
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0 | 649,000 | ||||||
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Net Cash Flows provided by financing activities
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0 | 649,000 | ||||||
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Net Increase (Decrease) In Cash and cash equivalents
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(95,825 | ) | (1,558,209 | ) | ||||
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Cash and cash equivalents at beginning of period
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112,116 | - | ||||||
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Cash and cash equivalents at end of period
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$ | 16,291 | $ | (1,558,209 | ) | |||
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Supplementary Disclosure Of Cash Flow Information:
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Stock issued for services, licenses and other assets
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$ | 1,256,250 | $ | 1,906,182 | ||||
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Stock issued for note conversions
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$ | - | $ | 29,465 | ||||
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Stock issued for net deficit of MWBS
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$ | - | $ | (29,465 | ) | |||
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Cash paid for interest
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$ | - | $ | - | ||||
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Cash paid for income taxes
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$ | - | $ | - | ||||
See Accompanying Notes to These Financial Statements.
F-3
Sunshine Biopharma, Inc.
Unaudited Consolidated Statement Of Shareholders’ Equity
(A Development Stage Company)
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Number of
Common
Shares Issued
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Common
Stock
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Capital Paid
in Excess
of Par Value
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Number of
Preferred
Shares Issued
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Preferred
Stock
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Deficit
Accumulated
During the
development
stage
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Total
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||||||||||||||||||||||
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Balance at August 17, 2009 (Inception)
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- | $ | - | $ | - | - | $ | - | $ | - | $ | - | ||||||||||||||||
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August 17, 2009 issued
703,118 shares of par
value $.001 common
stock
for services
valued at
$.004
per share
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703,118 | 703 | 2,297 | - | - | - | 3,000 | |||||||||||||||||||||
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August 19, 2009 issued
218,388 shares of par
value $.001 common
stock
for services
valued at
$.004
per share
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218,388 | 218 | 714 | - | - | - | 932 | |||||||||||||||||||||
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August 20, 2009 issued
17,109,194shares of
par value $.001
common
stock and
730,000
shares of
par value $0.10
preferred stock for
license agreement
with Advanomics:
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Common valued at or
$.004 per share and
Preferred valued at or
$.086 per share
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17,109,194 | 17,109 | 55,891 | 850,000 | 73,000 | - | 146,000 | |||||||||||||||||||||
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September – October
2009;
Private
Placement
– The
Company sold
2,220,552 shares of par
value $.001 common
stock
for cash of
$649,000 or
$.2922
per share
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2,220,552 | 2,221 | 646,779 | - | - | - | 649,000 | |||||||||||||||||||||
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September 30, 2009
issued
1,710,748
shares of par
value
$.001 common stock
for asset
purchase
from
Sunshine Bio
Investment
valued at
$.2922 per
share
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1,710,748 | 1,711 | 498,289 | - | - | - | 500,000 | |||||||||||||||||||||
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October 31, 2009
Outstanding stock of
MWBS counted as
issued
for MWBS net
Deficit
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888,000 | 888 | (30,353 | ) | - | - | - | (29,465 | ) | |||||||||||||||||||
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November 16, 2009
Note
conversions,
several,
principal of
$26,500 and
interest
of
$2,965
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6,810,000 | 6,810 | 22,655 | - | - | - | 29,465 | |||||||||||||||||||||
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Fractional Shares
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7 | - | - | - | - | |||||||||||||||||||||||
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Net (Loss)
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- | - | - | - | - | (1,201,130 | ) | (1,201,130 | ) | |||||||||||||||||||
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Balance at December 31, 2009
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29,660,007 | 29,660 | 1,196,272 | 850,000 | 73,000 | (1,201,130 | ) | 97,802 | ||||||||||||||||||||
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June 2, 2010 issued
1,675,000 shares of par
value $.001 common
stock
for services
valued at
$.75 per share
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1,675,000 | 1,675 | 1,572,825 | - | - | - | 1,574,500 | |||||||||||||||||||||
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Net (Loss)
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- | - | - | - | - | (1,672,709 | ) | (1,672,709 | ) | |||||||||||||||||||
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Balance at June 30, 2010 (Unaudited)
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31,335,007 | $ | 31,335 | $ | 2,769,097 | 850,000 | $ | 73,000 | $ | (2,873,839 | ) | $ | (407 | ) | ||||||||||||||
See Accompanying Notes to These Financial Statements.
F-4
Sunshine Biopharma, Inc.
Notes To Unaudited Financial Statements
For The Three Month and Six Month Interim Period Ended June 30, 2010
Note 1 - Unaudited Financial Information
The unaudited financial information included for the three month and six month interim period ended June 30, 2010 was taken from the books and records without audit. However, such information reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management are necessary to reflect properly the results of the interim periods presented. The results of operations for the three month interim period ended June 30, 2010 are not necessarily indicative of the results expected for the fiscal year ended December 31, 2010.
Note 2 - Financial Statements
For a complete set of footnotes, reference is made to the Company’s Report on Form 10-K for the year ended December 31, 2009 as filed with the Securities and Exchange Commission and the audited financial statements included therein.
F-5
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.” During our fiscal year ended July 31, 2009 our business was to provide management consulting with regard to accounting, computer and general business issues for small and home-office based companies. Effective October 15, 2009, we executed an agreement to acquire Sunshine Biopharma, Inc., a Colorado corporation (“SBI”), in exchange for the issuance of 21,962,000 shares of our Common Stock and 850,000 shares of Convertible Preferred Stock, each convertible into twenty (20) shares of our Common Stock (the “Agreement”). As a result of this transaction our officers and directors resigned their positions with us and were replaced by our current management. The effectiveness of the Agreement was conditional upon various conditions being satisfied, including the filing of our Form 10-K for our fiscal year ended July 31, 2009 and SBI changing its name to Sunshine Etopo, Inc. These conditions were satisfied and Sunshine Etopo (formerly SBI) is now a wholly owned subsidiary of our Company. Also as a result of this transaction we have changed our name to “Sunshine Biopharma, Inc.”
We entered into this transaction because of our former management’s belief that by doing so we will significantly increase our shareholders’ future opportunity to enhance the value of their respective ownership in our Company. In addition, our former Board of Directors approved a “spin-off” of our wholly owned subsidiary company Mountain West Beverage, Inc. The terms of this “spin-off” provide for a dividend to be issued to our shareholders of one share of common stock for every share that our shareholders owned as of October 15, 2009, the record date of the dividend.
In January 2010, our Board of Directors adopted a resolution changing our fiscal year from July 31 to December 31, effective December 31, 2009. Article VIII, Section 2 of our Bylaws provides the authority for our Board of Directors to establish our fiscal year on a date in their sole discretion. Our Board undertook this resolution in order to have the fiscal year coincide with the fiscal year end for our wholly owned operating subsidiary company.
As a result of the transaction described above we have revised our current business plan to that of a pharmaceutical company focused on the research, development and commercialization of drugs for the treatment of various forms of cancer.
We have not been subject to any bankruptcy, receivership or similar proceeding.
Results Of Operations
Results of Operations for the six months ended June 30, 2010
For the six months ended June 30, 2010 and from inception (August 17, 2009) through June 30, 2010, we did not generate any revenues.
General and administrative expenses during the six month period ended June 30, 2010 were $1,672,709, including a one-time charge of $1,574,500 paid by the issuance of shares of our Common Stock to various consultants, $50,000 in a write down of intangible assets, $36,103 in professional fees and $8,366 in public relations fees. As a result, we incurred a net loss of $1,672,709 (approximately $0.06 per share) for the six month period ended June 30, 2010.
Results of Operations for the three months ended June 30, 2010
General and administrative expenses during the three month period ended June 30, 2010 were $1,588,060, including a one-time charge of $1,574,500 paid by the issuance of shares of our Common Stock to various consultants and $13,535 in professional fees. As a result, we incurred a net loss of $1,588,060 (approximately $0.05 per share) during the three month period ended June 30, 2010.
Because we did not generate any revenues during the prior fiscal year, following is our plan of operation.
Plan of Operation
As a result of the transaction described above we have revised our current business plan to that of a pharmaceutical company focused on the research, development and commercialization of drugs for the treatment of various forms of cancer. Our lead compound, Difluoro-Etoposide
tm
, a multi-purpose anti-tumor compound, is expected to enter Phase I clinical trials in 2010. We have licensed our technology on an exclusive basis from Advanomics Corporation, a privately held Canadian company (“Advanomics”), and we are planning to initiate our own R&D program as soon as practicable, once financing is in place. There are no assurances that we will obtain the financing necessary to allow us to implement this aspect of our business plan, or to enter clinical trials.
Carbon-Difluoride Technology
Many therapeutically important compounds contain diester bonds that link different parts of the molecule together. Diester bonds are naturally unstable often leading to suboptimal performance when the molecule is administered to patients. Diester bonds have specific six-dimensional, as well as electrostatic properties that cannot be easily mimicked by other bonds. Bonds that do not mimic the diester bond correctly invariably render the compound inactive. In collaboration with L’Institut National des Sciences Appliquées de Rouen in France (“INSA”), Advanomics has developed a way to replace the diester bond with a Carbon-Difluoride bond which acts as a diester isostere. An isostere is a different chemical structure that mimics the properties of the original. In the body, Carbon-Difluoride compounds are resistant to metabolic degradation but recognized similarly to the diester compounds (See Figure 1).
Figure 1
While no assurances can be provided, we are planning to expand our product line through acquisitions and/or in-licensing as well as in-house research & development.
Our Lead Compound (Adva-27a)
Our initial drug candidate is Difluoro-Etoposide
tm
(Adva-27a), a Carbon-Difluoride derivative of Etoposide, targeted for various forms of cancer. If sufficient funding can be obtained, Difluoro-Etoposide
tm
is expected to enter Phase I clinical trials in Canada during 2010. Etoposide is currently on the market and has been for over 20 years. It is sold under different brand names by various drug companies including, VePesid, VP-16, Etopophos and Vumon or Teniposide (Bristol-Myers Squibb, the original developer), Toposar (Sicor/Pfizer), Lastet (Nippon Kayaku Ltd) and Etoposide (TEVA, Bedford Laboratories, Supergen, American Pharmaceutical Partners, Watson Pharmaceuticals, and Genpharm). Etoposide is an effective anti-tumor compound and is currently in use to treat various types of cancer including leukemia, lymphoma, testicular cancer, breast cancer, lung cancer, brain cancer, prostate cancer, bladder cancer, colon cancer, ovarian cancer, liver cancer and several other forms of cancer. It is also being tested in clinical trials against other types of cancer, such as Kaposi's sarcoma. Etoposide is administered both intravenously and orally as liquid capsules.
This Etoposide compound which is currently in use suffers from molecular instability leading to reduced efficacy and high toxicity. Using its Carbon-Difluoride platform technology (see Figure 1), Advanomics has constructed several Difluoro derivatives of Etoposide by replacing the labile diester bond between the sugar and the toxin moieties of the existing Etoposide molecule with a Carbon-Difluoride bond (Figure 1). All Difluoro substituted constructs were found to be completely stable. Advanomics subsequently tested these constructs for their ability to kill cancer cells in vitro by conducting side-by-side experiments against the standard Etoposide compound. The results of these studies, which have been published in our patent application PCT/FR2007/000697, are summarized in Table 1. One of the constructs, Adva-27a, showed enhanced cancer cell killing activity over the existing Etoposide molecule (see Table 1).
This new compound, which we call Difluoro-Etoposide
tm
, is entering Phase I clinical trials in Canada in 2010. Subject to receipt of financing, we anticipate the Phase I clinical trials to be completed by late 2011 at which time we will apply for limited marketing approval (see Clinical Trials below).
Table 1
Clinical Trials
Advanomics is entering Phase I clinical trials for our lead compound, Difluoro-Etoposide
tm
, in Canada in 2010. The planned clinical trials for small-cell lung cancer indication will be carried out at the Jewish General Hospital, one of the McGill University Hospital Centers in Montreal (Canada). In addition, Advanomics is planning to conduct Phase I clinical trials on Multi-Drug-Resistant breast cancer patients at Hotel Dieu Hospital, one of the University of Montreal Hospital Centers. All aspects of the planned clinical trials in Canada will employ FDA standards at all levels. We anticipate the clinical trials to begin in late 2010 and be completed by late 2011, at which time we together with our licensor will file for limited marketing approval with the regulatory authorities in Canada and the FDA in the U.S. (see Marketing below).
Marketing
According to the American Cancer Society, nearly 1.5 million new cases of cancer are diagnosed in the U.S. each year. Given the terminal and limited treatment options available for the indications Advanomics is planning to study, we anticipate being granted limited marketing approval for our Difluoro-Etoposide
tm
following receipt of funding and a successful Phase I. There are no assurances that either will occur. Such limited approval will allow us to make the drug available to various hospitals and health care centers for “compassionate-use” and experimental therapy/further studies, thereby generating some revenues. As with the existing Etoposide, our Difluoro-Etoposide
tm
is anticipated to be usable to treat virtually all forms of cancer. Similar to the existing Etoposide, our Difluoro-Etoposide
tm
product will be a single-treatment blister-pack comprised of 20 gel-caps each containing 50 milligrams of Difluoro-Etoposide
tm
for a total of 1 gram per pack.
Intellectual Property
We are the exclusive licensee for the US territory of Advanomics’ Difluoro-Etoposide
tm
which is covered by international patent applications filed on April 25, 2006 (PCT/FR2007/000697). This patent, which is issued in France and still pending elsewhere, is owned by L’Institut National des Sciences Appliquées de Rouen (France) and is licensed exclusively on a worldwide basis to Advanomics Corporation, who has subsequently issued to us an exclusive license for the US.
Our Lead Anti-Cancer Compound in 3D
Government Regulations
Our existing and proposed business operations are subject to extensive and frequently changing federal, state, provincial and local laws and regulations. We will be subject to significant regulations in the US in order to obtain the approval of the Food and Drug Administration (“FDA”) to offer our product. The approximate procedure for obtaining FDA approval involves an initial filing of an IND (Investigational New Drug) application following which the FDA would give the go ahead with Phase I clinical (human) trials. Following completion of Phase I, the results are filed with the FDA and a request is made to proceed to Phase II. Similarly, following completion of Phase II the data are filed with the FDA and a request is made to proceed to Phase III. Following completion of Phase III, a request for marketing approval is made through the filing of an NDA (New Drug Application). Depending on various issues and considerations, the FDA could provide limited marketing approval for “compassionate-use if the drug treats terminally ill patients with limited treatment options available. Parts of what is required to be included in the IND are animal studies (xenografts and toxicity studies). Such studies have not as yet been carried out. We also have not as of this date made any filings with the FDA or other regulatory bodied in other jurisdictions. We have however had extensive discussions with clinicians at the Jewish General Hospital in Montreal where we plan to undertake our initial Phase I study and they believe that Health Canada is likely to grant us a so-called fast-track process on the basis of the terminal nature of the cancers which we will be treating.
Liquidity and Capital Resources
As of June 30, 2010, we had cash and cash equivalents of $16,291.
Net cash used in operating activities was $95,825 during the three months ended June 30, 2010. We anticipate that overhead costs in current operations will increase in the future once we begin implementing our new business plan discussed herein.
Cash flows provided or used in investing activities were $-0- in the three months ended June 30, 2010. Cash flows provided or used by financing activities were also $-0-during this period.
We are not generating revenue from our operations, and our ability to implement our new business plan for the future will depend on the future availability of financing. Such financing will be required to enable us to further develop our testing, research and development capabilities and continue operations. We intend to raise funds through private placements of our common stock and possibly through short-term borrowing. We estimate that we will require approximately $5 million in debt and/or equity capital to fully implement our business plan in the near future and there are no assurances that we will be able to raise this capital. While we have engaged in discussions with various investment banking firms, venture capitalists and private investors to provide us these funds, as of the date of this report we have not reached any agreement with any party that has agreed to provide us with the capital necessary to effectuate our new business plan or otherwise enter into a strategic alliance to provide such funding. Our inability to obtain sufficient funds from external sources when needed will have a material adverse affect on our plan of operation, results of operations and financial condition.
Our cost to continue operations as they are now conducted is nominal, but these are expected to increase once we commence Phase I clinical trials. We do not have sufficient funds to cover the anticipated increase in these expenses and our current cash position is critical. We need to raise additional funds in order to continue our existing operations, to initiate research and development activities, and to finance our plans to expand our operations for the next year. If we are successful in raising additional funds, our research and development efforts will continue and expand.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The following represents a summary of our critical accounting policies, defined as those policies that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.
Inflation
Although our operations are influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations during the six month period ended June 30, 2010.
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, as appropriate, to allow timely decisions regarding required disclosure.
Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2010, at the reasonable assurance level. We believe that our consolidated financial statements presented in this 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, do 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 initial six month period ended June 30, 2010, 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.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
– None
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
In June 2010 we authorized the issuance of an aggregate of 1,675,000 shares of our “restricted” Common Stock, to the following entities, in the amount and in consideration for the services indicated:
|
Consultant
|
# of Shares
|
Purpose
|
||
|
The Video Agency, Inc.
|
375,000
|
Advertising
|
||
|
Brockington Securities, Inc.
|
300,000
|
Financial Consulting
|
||
|
Insight Capital Consultants Corporation
|
650,000
|
Financial Consulting
|
||
|
Alchemy Financial Services Inc.
|
300,000
|
Public Relations
|
||
|
CJR Capital Advisors Inc.
|
50,000
|
Financial Consulting
|
||
|
TOTAL
|
1,675,000
|
We relied upon the exemption from registration provided by Section 4/2 as promulgated under the Securities Act of 1933, as amended, to issue these shares. We did not receive any cash compensation as a result of the issuances of these shares.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION
-
None
ITEM 6. EXHIBITS
|
Exhibit No.
|
Description
|
|
3.4
|
Statement of Share and Equity Capital Exchange filed with the Colorado Secretary of State on November 20, 2009
|
|
3.5
|
Articles of Amendment to Articles of Incorporation filed with the Colorado Secretary of State on July 13, 2010
|
|
31.1
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on August 3, 2010.
|
SUNSHINE BIOPHARMA, INC.
By:
s/Steve N. Slilaty
_________________________
Dr. Steve N. Slilaty, Principal Executive Officer
|
|
|
By:
s/Camille Sebaaly
_________________________
Camille Sebaaly, Principal Financial Officer
and Principal Accounting Officer
|
