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 services to 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. 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 October 2012, we published the results of our initial preclinical studies of
Adva-27a in the peer-reviewed journal, ANTICANCER RESEARCH. The preclinical
studies were conducted in collaboration with Binghamton University, a State
University of New York, and Ecole Polytechnique, Universite de Montreal. The
publication is entitled "Adva-27a, a Novel Podophyllotoxin Derivative Found to
Be Effective Against Multidrug Resistant Human Cancer Cells" [ANTICANCER
RESEARCH Volume 32, Pages 4423-4432 (2012)].
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. Sunshine
Canada has recently transitioned its focus to the development and marketing of
Science-Based Nutritional Supplements.
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 our first Science-Based
Nutritional Supplements product, Essential-9tm. This new supplement is an
over-the-counter tablet comprised of the nine (9) amino acids which the human
body cannot make. Essential-9tmhas been authorized for marketing by Health
Canada under NPN 80089663. On March 12, 2019, Essential-9tmbecame 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.
13
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 April 30, 2021, we filed a PCT
application containing new research results and extending coverage to include
the Coronavirus Papain-Like protease, PLpro. The priority date of May 22, 2020
has been maintained in the newly filed PCT application.
On 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 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
issuance brought the total number of Series "B" Preferred Stock held by Dr.
Slilaty to 1,000,000 shares.
On September 8, 2020, we executed a financing agreement with RB Capital
Partners, Inc., La Jolla, CA, who agreed to provide us with a minimum of $2
million in convertible debt financing during the ensuing three to six month
period pursuant to the terms and conditions included in relevant Promissory
Notes (the "Promissory Notes"). As of the date of this Report, we have received
a total of $2,554,000 in funding under this agreement. The Promissory Notes bear
interest at the rate of 5% per annum and are fully convertible into shares of
our Common Stock at a conversion price equal to the market value of our Common
Stock on the applicable conversion date or $0.30 per share, whichever is
greater. The Promissory Notes have a maturity date of two years from the date of
issuance and must be fully converted on or before the maturity date. We have the
right under these Promissory Notes to pay off all or any part of the Promissory
Notes at any time without penalty.
Effective October 6, 2020, we entered into a Research Agreement (the
"Agreement") with the University of Georgia Research Foundation, Inc. ("UGARF"),
representing the University of Georgia ("UGA"). The purpose of the Agreement is
to memorialize the terms of our working together with UGA to conduct the
necessary research and development to advance our Anti-Coronavirus lead
compound, SBFM-PL4 (or derivatives thereof) through various stages of
preclinical development, animal studies and clinical trials for Coronavirus
infections. The Agreement grants us an exclusive worldwide license for all of
the intellectual property developed by UGA, whether alone or jointly with us.
On January 26, 2021, we received a Notice of Allowances from the Canadian
Intellectual Property Office for a new patent application covering Adva-27a. The
newly issued patent contains new subject matter and extends the proprietary
protection of Adva-27a in Canada until 2033.
On February 4, 2021, we entered into an exclusive license agreement with the
University of Georgia ("UGA") for two Anti-Coronavirus compounds which UGA had
previously developed and patented. In collaboration with UGA, we will advance
the development of these two compounds in parallel with our own Anti-Coronavirus
compound, SBFM-PL4.
On March 1, 2021, we launched a new eCommerce website,
Nutrition.SushineBiopharma.com. The site has over 20 products ranging from
essential amino acids and rich protein powders to balanced vitamins and crucial
micronutrients. All of our science-based nutritional supplements are
manufactured and tested in Canada under GMP conditions.
On March 9, 2021, we received a Notice of Allowance from the European Patent
Office for a new patent application covering Adva-27a. The newly issued patent
contains new subject matter and extends the proprietary protection of Adva-27a
in Europe until 2033. The equivalent patent in the United States was issued in
2019 (US Patent Number 10,272,065).
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.
14
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.
Drug Development Operations
SBFM-PL4 Anti-Coronavirus Treatment
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 genome size that places it
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 15 specific sites by two virus encoded proteases (Mpro and PLpro) to generate
16 different non-structural proteins essential for viral replication. Mpro and
PLpro represent an attractive anti-viral drug development targets as they play 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. Similarly, PLpro, also a Cysteine Protease, has an active
site Cysteine at position 112 and a Histidine at 273. The following is a summary
of the development to date of our Coronavirus Treatment project:
?
On May 22, 2020, we filed a patent application in the United States for a new
treatment for Coronavirus infections. Our patent application covers composition
subject matter pertaining to small molecules for inhibition of the Coronavirus
main 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.
?
In August 2020, we completed the synthesis of four different potential
inhibitors of Coronavirus protease. These compounds are based on the technology
described in our patent application filed on May 22, 2020.
?
In September 2020, we completed the screening of our four compounds and
subsequently identified a lead Anti-Coronavirus drug candidate (SBFM-PL4). The
screening which pinpointed the lead compound was performed at the University of
Georgia, College of Pharmacy under the leadership of Dr. Scott D. Pegan,
Director of the Center for Drug Discovery and Interim Associate Head of
Pharmaceutical and Biomedical Sciences.
?
In October 2020, we expanded our collaboration with Dr. Scott Pegan group by
entering into a research agreement with the University of Georgia to further
develop our Anti-Coronavirus lead compound, SBFM-PL4.
?
On February 1, 2021, we entered into an exclusive license agreement with the
University of Georgia for two Anti-Coronavirus compounds which the University of
Georgia had previously developed and patented. We are currently advancing the
development of these two compounds in parallel with our SBFM-PL4 by conducting a
transgenic mice study in collaboration with the University of Georgia. The mice
being used in the study have been genetically engineered to express the human
angiotensin-converting enzyme 2 (hACE2) transmembrane protein in their lungs
making them susceptible to lethal infection by SARS-CoV-2, the causative agent
of COVID-19. The SARSCoV-2 virus uses the hACE2 receptor to gain entry into
human cells to replicate. The goal of the study is to determine if our protease
inhibitors will protect the hACE2-transgenic mice from disease progression and
death following infection with SARS-CoV-2 virus. Should these mice studies prove
successful, we plan to submit the results to the FDA for authorization to
conduct testing on actual COVID-19 patient volunteers in a Phase I clinical
trial setting. The implications of a COVID-19 treatment becoming available are
vast. This is particularly the case in view of the fact that some of the
variants emerging around the world are more virulent and may escape
neutralization by the current vaccines.
Adva-27a Anticancer Drug
Since inception, our proprietary drug development activities has 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.
15
[[Image Removed]]
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).
16
[[Image Removed]]
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.
17
? 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.
18
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, particularly those in which Topoisomerase II has been amplified. 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.
[[Image Removed]]
Figure 3
Generic Pharmaceuticals Operations
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. Due to
unfavorable evolution of the generic drugs marketplace, Sunshine Canada has
recently terminated its Generic Pharmaceuticals Operations and shifted its focus
to the development and marketing of Science-Based Nutritional Supplements.
19
Science-Based Nutritional Supplements Operations
In December 2018, we completed the development of Essential 9™, 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 9™ product. Our
Essential 9™ 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 9™ provides all 9 Essential Amino Acids in freeform and in
the proportions recommended by Health Canada. Essential 9™ is currently
available on Amazon.com and Amazon.ca. Figure 4 below shows our 60-Tablet
Essential 9™product.
[[Image Removed]]
Figure 4
20
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 proper functioning of
the immune system, promoting healthy growth of bone, 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 early 2021.
On March 1, 2021, we launched a new eCommerce website,
Nutrition.SushineBiopharma.com. The site has over 20 products including
Essential 9tmand Essential Calcium-Vitamin D™. All of our Science-Based
Nutritional Supplements are manufactured and tested in Canada under GMP
conditions.
Results of Operations
Comparison of Results of Operations for the Three Months Ended March 31, 2021
and 2020
During the three months ended March 31, 2021, we generated $40,058 in revenues,
compared to $11,102 in revenues for the same three month period in 2020, an
increase of $28,956. The increase is attributable an enhanced advertising
campaign we undertook in 2021. All of these revenues were generated from our new
Science-Based Nutritional Supplements Operations which we launched in March
2019. The direct cost for generating these revenues was $18,520 (46%) for the
period ended March 31, 2021, compared to $3,883 (35%) for the same period in
2020. The increase in the cost of goods sold in 2021 is due to increased
manufacturing cost. Our gross profit increased to $21,538 for the period ended
March 31, 2021, compared to a gross profit of $7,219 for the same period in
2020.
General and Administrative expenses during the three month period ended March
31, 2021 were $1,297,184, compared to General and Administrative expense of
$44,918 incurred during the three month period ended March 31, 2020, an increase
of $1,252,266. Nearly all categories of our General and Administrative expenses
saw an increase during the three month period ended March 31, 2021, compared to
the same period in 2020. Specifically, the increases included accounting fees by
$41,400, consulting fees by $9,169, office expenses by $27,557, officer and
director compensation by $1,018,097, patenting fees by $1,816, and R&D by
$166,786. These increases were due to expansion of our drug development and
nutritional supplements operations. Overall, we incurred a loss of $1,275,646
from our operations in the three month period ended March 31, 2021, compared to
a loss of $37,699 in the similar period of 2020.
In addition, we incurred $49,711 in interest expense during the three months
ended March 31, 2021, compared to $16,356 in interest expense during the similar
period in 2020. We also incurred $4,910,786 in losses arising from debt
conversion during the three months ended March 31, 2021, compared to $51,100 in
losses from debt conversion during the similar period in 2020. These increases
were due to increased borrowings to fund our expanded drug development and
nutritional supplements operations.
As a result, we incurred a net loss of $6,185,126 ($0.01 per share) for the
three month period ended March 31, 2021, compared to a net loss of $95,600
($0.00 per share) during the three month period ended March 31, 2020.
Liquidity and Capital Resources
As of March 31, 2021, we had cash or cash equivalents of $1,796,596.
As discussed in Note 2 to the consolidated financial statements included in this
Report for going concern, we have incurred significant continuing losses in 2021
and 2020. Our total accumulated deficits as of March 31, 2021 and December 31,
2020 were $26.4 million and $20.2 million, respectively. Our ability to continue
operating is highly dependent upon continued funding from the debt and equity
markets. Based on past experience, we believe that we will be able to raise the
necessary capital to continue operations. Our historical and ongoing dependence
on proceeds from debt and/or equity issuances to fund operating expenses could
raise substantial doubt about our ability to continue as a going concern. The
consolidated financial statements included in this Report have been prepared
assuming that our Company will continue as a going concern and, accordingly, do
not include any adjustments that may result from the outcome of this
uncertainty.
Net cash used in operating activities was $297,355 during the three month period
ended March 31, 2021, compared to $31,034 for the three month period ended March
31, 2020. We anticipate that overhead costs and other expenses will increase in
the future as we move forward with our Proprietary Drug Development activities
and ourScience-Based Nutritional Supplements operations discussed above.
Cash flows provided by financing activities were $1,102,000 for the three month
periods ended March 31, 2021, compared to $-0- during the three months ended
March 31, 2020. Cash flows used in investing activities were $-0- for both, the
three month period ended March 31, 2021 and the same three month period ended in
2020.
During the three month period ended March 31, 2021, we issued a total of
58,586,629 shares of our Common Stock valued at $5,139,637 for the conversion of
outstanding notes payable, reducing debt by $222,000 and interest payable by
$6,851 and generating a loss on conversion of $4,910,786.
21
During the three months ended March 31, 2020, we issued a total of 24,355,427
shares of our Common Stock valued at $122,379 for the conversion of outstanding
notes payable, reducing the debt by $66,500 and interest payable by $4,486 and
generating a loss on conversion of $51,393.
During the three months ended March 31, 2021, we did not sell any of our capital
stock for cash; however we entered into three (3) new debt arrangements,
including the following:
?
On January 12, 2021, we received monies in exchange for a Note Payable having a
Face Value of $150,000 with interest accruing at 5% is due January 12, 2023. The
Note is convertible after 180 days from issuance into Common Stock at a price
equal to $0.60 per share.
?
On January 27, 2021, we received monies in exchange for a Note Payable having a
Face Value of $300,000 with interest accruing at 5% is due January 27, 2023. The
Note is convertible after 180 days from issuance into Common Stock at a price
equal to $0.50 per share.
?
On February 12, 2021, we received monies in exchange for a Note Payable having a
Face Value of $700,000 with interest accruing at 5% is due February 12, 2023.
The Note is convertible after 180 days from issuance into Common Stock at a
price equal to $0.60 per share.
On September 8, 2020, we executed a financing agreement with RB Capital
Partners, Inc., La Jolla, CA, who agreed to provide us with a minimum of $2
million in convertible debt financing during the ensuing three to six month
period pursuant to the terms and conditions included in relevant Promissory
Notes (the "Promissory Notes"). As of the date of this Report, we have received
a total of $2,554,000 in funding under this agreement. The Promissory Notes bear
interest at the rate of 5% per annum and are fully convertible into shares of
our Common Stock at a conversion price equal to the market value of our Common
Stock on the applicable conversion date or $0.30 per share, whichever is
greater. The Promissory Notes have a maturity date of two years from the date of
issuance and must be fully converted on or before the maturity date. We have the
right under these Promissory Notes to pay off all or any part of the Promissory
Notes at any time without penalty.
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 Drug Development
program and further develop our Science-Based Nutritional Supplements operation.
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
(approximately $18 million for our Proprietary Drug Development projects and $2
million for our Science-Based Nutritional Supplements operations) 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.
We are currently in discussion with various investment groups for additional
financing. There are no assurances that we will be successful in raising any
funds.
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 April 5, 2021, we received monies in exchange for a Note Payable having a
Face Value of $330,000 with interest accruing at 10%. The Note is convertible
after 180 days from issuance into Common Stock at a price 35% below market.
On April 20, 2021, we received monies in exchange for a Note Payable having a
Face Value of $500,000 with interest accruing at 5% is due April 20, 2023. The
Note is convertible after 180 days from issuance into Common Stock at a price
equal to $0.30 per share.
On April 22, 2021, the holder of a Note Payable dated December 31, 2019 elected
to convert a total of $11,028 in principal and $4,472 in accrued interest into
15,500,000 shares of Common Stock leaving a principal balance of $-0-.
Off Balance Sheet Arrangements
None
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