Sunshine Biopharma, Inc - FORM 10-K

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EX-32.1 - CERTIFICATE - Sunshine Biopharma, Inc	sbfm_exh321.htm
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U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________

FORM 10-K

__________________

(Mark one)

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014

o	TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ________________ to__________________.

Commission File Number 000-52898

SUNSHINE BIOPHARMA, INC.

(Exact name of registrant as specified in its charter)

Colorado		20-5566275
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)

469 Jean-Talon West

3rd Floor

Montreal, Quebec, Canada H3N 1R4

(Address of principal executive offices)

(514) 764-9698

(Issuer’s Telephone Number)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Act. Yes o No þ

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesþ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o
Non-accelerated filer o		Smaller reporting company þ
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

The aggregate market value of the shares of voting stock held by non-affiliates of the Registrant as of March 9, 2015 was $1,160,838.

As of March 9, 2015, the Registrant had 77,051,041 shares of Common Stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE - None

TABLE OF CONTENTS

Facing Page		Page No.
Index

PART I

Item 1.	Business	3

Item 1A.	Risk Factors	8

Item 1B.	Unresolved Staff Comments	8

Item 2	Properties	9

Item 3.	Legal Proceedings	9

Item 4.	Mine Safety Disclosures	9

PART II

Item 5.	Market for the Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	9

Item 6.	Selected Financial Data	11

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	14

Item 8.	Financial Statements and Supplementary Data	15

Item 9.	Changes in and Disagreements on Accounting and Financial Disclosure	16

Item 9A.	Controls and Procedures	16

Item 9B.	Other Information	17

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	17

Item 11.	Executive Compensation	19

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	19

Item 13.	Certain Relationships and Related Transactions, and Director Independence	20

Item 14.	Principal Accounting Fees and Services	21

PART IV

Item 15.	Exhibits, Financial Statement Schedules	21

	Signatures	23

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. The statements regarding Sunshine Biopharma Inc. contained in this Report that are not historical in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “likely,” “expects,” “anticipates,” “estimates,” “believes” or “plans,” or comparable terminology, are forward-looking statements based on current expectations and assumptions, and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements.

Important factors known to us that could cause such material differences are identified in this Report and in our “Risk Factors” in Item 1A. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any future disclosures we make on related subjects in future reports to the SEC.

PART I

ITEM 1. BUSINESS

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.

Effective October 15, 2009, we executed an agreement to acquire Sunshine Biopharma, Inc., a Colorado corporation, 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 we changed our name to “Sunshine Biopharma, Inc.” On December 21, 2011, Advanomics Corporation, a privately held Canadian company (“Advanomics”), and our licensor, exercised its right to convert the 850,000 shares of Series “A” Preferred Stock it held in our Company into 17,000,000 shares of Common Stock.

Description of Current Business

We are currently a pharmaceutical company focused on the research, development and commercialization of drugs for the treatment of various forms of cancer. The preclinical studies for our lead compound, Adva-27a, a multi-purpose antitumor compound, were successfully completed in late 2011. We are now continuing our clinical development of Adva-27a by conducting the next sequence of steps comprised of Good Manufacturing Practice (“GMP”) manufacturing of a 2 kilogram quantity, Investigational New Drug (“IND”)-enabling studies, regulatory filing and Phase I clinical trials. We plan to conduct our Phase I clinical trials for Adva-27a at the Jewish General Hospital, Montreal, Canada, one of McGill University’s Hospital Centers. The planned indication will be pancreatic cancer in parallel to multidrug resistant breast cancer as Adva-27a has shown a positive effect on both of these cancer types for which there is currently little or no treatment options available. See “Clinical Trials” below.

We have licensed our technology on an exclusive basis from Advanomics Corporation, and we are planning to initiate our own research and development 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. See "Part I, Item 2, Management's Discussion and Analysis of Financial Condition -- Liquidity and Capital Resources," below.

Carbon-Difluoride Platform 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 nine-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 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

Our Lead Compound (Adva-27a)

Our initial drug candidate is Adva-27a, a GEM-difluorinated C-glycoside derivative of Podophyllotoxin, targeted for various forms of cancer. If we are successful in our current financing efforts, Adva-27a is expected to enter Phase I clinical trials for pancreatic cancer and multidrug resistant breast cancer in mid to late 2016 (see “Clinical Development Path” and “Clinical Trials” below). Etoposide, which is also a derivative of Podophyllotoxin, 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. Like Etoposide, Adva-27a is a Topoisomerase II inhibitor; however, unlike Etoposide and other anti-tumor drugs currently in use, Adva-27a is able to destroy multidrug resistant cancer cells. Adva-27a is a new chemical entity and has been shown to have distinct and more desirable biological properties compared to Etoposide. Most notably, Adva-27a is very effective against multidrug resistant breast cancer cells while Etoposide has no activity against this aggressive form of cancer (see Figure 2). In other side-by-side studies against Etoposide as a reference, Adva-27a showed markedly improved cell killing activity in various other cancer types, particularly prostate, colon and lung cancer (see Table 1). Our preclinical studies to date have shown that:

●	Adva-27a is effective at killing different types of multidrug resistant cancer cells, including:

	o	Breast Cancer Cells (MCF-7/MDR)

	o	Small Cell Lung Cancer Cells (H69AR)

	o	Uterine Cancer (MES-SA/Dx5)

	o	Pancreatic Cancer (Panc-1)

●	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 manuscript entitled “Adva-27a, a Novel Podophyllotoxin Derivative Found to Be Effective Against Multidrug Resistant Human Cancer Cells” appeared in print in the October 2012 issue of the journal [ANTICANCER RESEARCH 32: 4423-4432 (2012)]. A copy of the full manuscript as it appeared in the journal is available on our website at www.sunshinebiopharma.com.

Figure 2

Table 1

Clinical Development Path

The early stage preclinical studies for our lead compound, Adva-27a, were successfully completed in late 2011 and the results have been published [ANTICANCER RESEARCH 32: 4423-4432 (2012)]. We have been delayed in our implementation of our clinical development program due to lack of funding, but, while there are no assurances, we now believe we may have secured this funding. If we do receive this funding, we will continue our clinical development program of Adva-27a by conducting the next sequence of steps comprised of the following:

	●	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 (Multidrug Resistant Breast Cancer Indication)

GMP Manufacturing

On November 14, 2014, we entered into a Manufacturing Services Agreement with Lonza Ltd. and Lonza Sales Ltd. (hereinafter jointly referred to as “Lonza”), whereby we engaged Lonza to be the manufacturer of our Adva-27a anticancer drug (the “Lonza Agreement”). Lonza is one of the world’s leading and most-trusted manufacturers of pharmaceutical ingredients. Headquartered in Basel, Switzerland, Lonza has more than 40 major manufacturing facilities worldwide and is currently manufacturing 2 kilograms of our Adva-27a for clinical trials. The Lonza Agreement was effective November 10, 2014, has a term of 5 years, and may be extended or terminated earlier as provided in the Lonza Agreement. On November 30, 2014, we placed a Purchase Order for the manufacturing of 2 kilograms of our Adva-27a at an initial cost of $385,000 for the purchase of raw material and delivery of samples for process validation. Lonza has deferred the $385,000 payment until the samples for process validation are delivered, which is expected to occur in the third calendar quarter of 2015.

Pursuant to the terms of the Lonza Agreement, Lonza will manufacture our drug in accordance with current Good Manufacturing Practices (“cGMP”) in compliance with the regulations applicable in the U.S., Canada, Europe and other countries around the world relating to the manufacturing of medicinal products for human use. Lonza will build a master drug file for our Adva-27a drug and will have it ready for filing with regulatory authorities as may be required to secure ultimate drug approval. Kilogram level cGMP manufacturing for clinical trials shall commence following completion and testing of the process validation samples. Lonza is also responsible for procuring all required raw materials to prepare the batches, at our cost. The Agreement provides for us to maintain one representative of our Company at their facility during the manufacturing process. Quality assurance and control is the responsibility of both Lonza and us during the process.

We have the right to inspect, test and approve all batches to insure compliance with the manufacturing specifications, which is required to be completed within 30 days after release of a batch. In the event of a dispute regarding compliance with the manufacturing specifications, the dispute will be resolved ultimately by independent analysis and testing.

The Lonza Agreement contains customary warranties and disclaimers, confidentiality provisions as well as mutual indemnifications common in agreements of this type.

Clinical Trials

Adva-27a’s initial indication will be pancreatic cancer and multidrug resistant breast cancer for which there are currently little or no treatment options available. In June 2011 we concluded an agreement with McGill University’s Jewish General Hospital in Montreal, Canada to conduct Phase I clinical trials for these two indications. All aspects of the planned clinical trials in Canada will employ U.S. Food and Drug Administration (“FDA”) standards at all levels. As a result of the Dutchess Agreement and other financing opportunities described below, we now anticipate that Phase I clinical trials will commence in mid to late 2016 and we estimate that it will take 18 months to complete, at which time we expect to 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 pancreatic cancer and multidrug resistant breast cancer indications we are planning to study, we anticipate being granted limited marketing approval (“compassionate-use”) for our Adva-27a following receipt of funding and a successful Phase I clinical trial. 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 experimental therapy and/or “compassionate-use”, thereby generating some revenues in the near-term.

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.

Intellectual Property

We are the exclusive licensee for the U.S. territory of Advanomics Corporation’s Adva-27a which is covered by international patent applications filed on April 27, 2007 (PCT/FR2007/000697). These patent applications, which are now issued in Europe, Canada and the United States (US 8,236,935) and are still pending elsewhere around the world, were originally owned by Institut National des Sciences Appliquées de Rouen (France) and have recently been purchased by Advanomics Corporation. On January 14, 2013, Advanomics Corporation filed a new patent application covering Adva-27a manufacturing processes as well as new Adva-27a derivatives and compositions.

Our Lead Anti-Cancer Compound, Adva-27a, in 3D

Development of New Business

On July 25, 2014, we formed Sunshine Biopharma Canada Inc., a Canadian wholly owned subsidiary for the purposes of conducting pharmaceutical business in Canada and elsewhere around the globe. While no assurances can be provided and subject to the availability of adequate financing, of which there is no assurance, we anticipate that Sunshine Biopharma Canada will soon secure a Drug Establishment License (DEL) from Health Canada and proceed to signing manufacturing, marketing, sales and distribution contracts for various generic pharmaceuticals and biomedical products. This new effort broadens our business scope and provides us with the opportunity to generate revenues in the near to mid-term. We anticipate revenues to be generated through the export of generic pharmaceuticals overseas. There are no assurances that we will be able to sign applicable contracts or generate profits from these anticipated new operations. In addition to revenue generation, we anticipate that as a result of these activities, Sunshine Biopharma Canada will then be well positioned for the marketing and distribution of Adva-27a, our flagship oncology drug candidate currently being developed for the treatment of pancreatic cancer and multidrug resistant breast cancer, provided that Adva-27a is approved for such marketing and distribution, of which there can be no assurance.

While no assurances can be provided, we are also planning to expand our product line through acquisitions and/or in-licensing as well as in-house research and development.

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 U.S. in order to obtain the approval of the FDA to offer our product on the market. The approximate procedure for obtaining FDA approval involves an initial filing of an IND application following which the FDA would give the go ahead with Phase I clinical (human) trials. As a result of the Dutchess Agreement and other financing opportunities described below, we now anticipate that this process will commence in mid to late 2016 and we estimate that this procedure will take 18 months to complete. 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 is made for marketing approval. Depending on various issues and considerations, the FDA could provide limited marketing approval on a humanitarian basis if the drug treats terminally ill patients with limited treatment options available. As of the date of this Report we have not made any filings with the FDA or other regulatory bodies in other jurisdictions. We have however had extensive discussions with clinicians at the McGill University’s Jewish General Hospital in Montreal where we plan to undertake our Phase I study for pancreatic cancer and multidrug resistant breast cancer 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 cancer types which we will be treating. There are no assurances this will occur.

Employees

As of the date of this Report we have three (3) employees, our management. We anticipate that if we receive financing we will hire additional employees in the areas of accounting, regulatory affairs, marketing and laboratory personnel.

Competition

We will be competing with publicly and privately held companies engaged in developing cancer therapies. There are numerous other entities engaged in this business that have greater resources, both financial and otherwise, than the resources presently available to us. Nearly all major pharmaceutical companies including Amgen, Roche, Pfizer, Bristol-Myers Squibb and Novartis, to name just a few, have on-going anti-cancer drug development programs and some of the drug they may develop could be in direct competition with our drug. Also, a number of small companies are also working in the area of cancer and could develop drugs that may be in competition with ours. However, none of these competitor companies can use molecules similar to ours as they would be infringing our patents.

Trademarks-Tradenames

We are the exclusive licensee for the U.S. territory of Advanomics’ Adva-27a which is covered by international patent applications filed on April 27, 2007 (PCT/FR2007/000697). These patent applications, which are now issued in Europe, Canada and the United States (US 8,236,935) and which are still pending elsewhere around the world, were originally owned by Institut National des Sciences Appliquées de Rouen (France) and have recently been purchased by Advanomics.

ITEM 1A. RISK FACTORS

We are a smaller reporting company and not required to include this disclosure in our Form 10-K annual report.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

Since June 2012 our principal place of business has been located at 469 Jean-Talon West, 3rd Floor, Montreal, Quebec, Canada, H3N 1R4. This is also the location of our licensor, Advanomics Corporation, who is providing this space to us on a rent free basis as of the date of this Report. If and when we are able to secure financing we expect that we will lease our own office and laboratory space. Our current space consists of approximately 1,000 square feet of shared executive office space. We anticipate that this will be sufficient for our needs until financing is in place, of which there is no assurance.

ITEM 3. LEGAL PROCEEDINGS

In February 2015 we filed an action in the Circuit Court of the 11th Judicial Circuit for Miami-Date County, Florida against Justin Keener, d/b/a JMJ Financial, arising out of a convertible note that we issued to the defendant. The complaint alleges among other things, claims of usury, fraudulent inducement, breach of contract, and injunctive and declaratory relief. As of the date of this report we are awaiting receipt of an answer to our complaint, which is due on or before March 9, 2015.

To the best of our management’s knowledge and belief, there are no other material claims that have been brought against us nor have there been any claims threatened.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Trading of our Common Stock commenced on the OTCBB in September 2007 under the symbol “MWBN.” Effective November 30, 2009, the trading symbol for our Common Stock was changed to “SBFM” as a result of our name change discussed above.

The table below sets forth the reported high and low bid prices for the periods indicated. The bid prices shown reflect quotations between dealers, without adjustment for markups, markdowns or commissions, and may not represent actual transactions in our Common Stock.

Quarter Ended	High		Low

March 31, 2013	$	0.44	$	0.24
June 30, 2013	$	0.28	$	0.19
September 31, 2013	$	0.23	$	0.16
December 31, 2013	$	0.21	$	0.13

March 31, 2014	$	0.20	$	0.125
June 30, 2014	$	0.22	$	0.125
September 31, 2014	$	0.13	$	0.055
December 31, 2014	$	0.08	$	0.161

As of March 9, 2015, the closing bid price of our Common Stock was $0.02.

Trading volume in our Common Stock is very limited. As a result, the trading price of our Common Stock is subject to significant fluctuations.

The Securities Enforcement and Penny Stock Reform Act of 1990

The Securities and Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).

As of the date of this Report, our Common Stock is defined as a “penny stock” under the Securities and Exchange Act. It is anticipated that our Common Stock will remain a penny stock for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his/her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock.

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the Commission, which:

	●	contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

	●	contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of the Securities Act of 1934, as amended;

	●	contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask price;

	●	contains a toll-free telephone number for inquiries on disciplinary actions;

	●	defines significant terms in the disclosure document or in the conduct of trading penny stocks; and

	●	contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation;

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer:

	●	the bid and offer quotations for the penny stock;

	●	the compensation of the broker-dealer and its salesperson in the transaction;

	●	the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and

	●	monthly account statements showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities.

Holders

We had 121 holders of record of our Common Stock as of the date of this Report, not including those persons who hold their shares in “street name.”

Stock Transfer Agent

The stock transfer agent for our securities is Corporate Stock Transfer, Inc., of Denver, Colorado. Their address is 3200 Cherry Creek South Drive, Suite 430, Denver, Colorado, 80209. Their phone number is (303) 282-4800.

Dividends

We have not paid any dividends since our incorporation and do not anticipate the payment of dividends in the foreseeable future. At present, our policy is to retain earnings, if any, to develop and market our products. The payment of dividends in the future will depend upon, among other factors, our earnings, capital requirements, and operating financial conditions.

Reports

We are subject to certain reporting requirements and furnish annual financial reports to our stockholders, certified by our independent accountants, and furnish unaudited quarterly financial reports in our quarterly reports filed electronically with the SEC. All reports and information filed by us can be found at the SEC website, www.sec.gov.

ITEM 6. SELECTED FINANCIAL DATA.

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our audited 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. See PART III, Item 10, below. As a result of this transaction we have changed our name to “Sunshine Biopharma, Inc.” On December 21, 2011, Advanomics Corporation, a privately held Canadian company (“Advanomics”), and our licensor, exercised its right to convert the 850,000 shares of Series “A” Preferred Stock it held in our Company into 17,000,000 shares of Common Stock.

Our principal place of business is located at 469 Jean-Talon West, 3rd Floor, Montreal, Quebec, Canada H3N 1R4. Our phone number is (514) 764-9698 and our website address is www.sunshinebiopharma.com.

We have not been subject to any bankruptcy, receivership or similar proceeding.

Results Of Operations

Comparison of Results of Operations for the fiscal years ended December 31, 2014 and 2013

Total expenses, including general and administrative expenses and research and development expenses for our fiscal year ended December 31, 2014 were $1,755,114, compared to $1,936,077 during our fiscal year ended December 31, 2013, a decrease of $180,963. During our fiscal year ended December 31, 2014, our principal expenses included $700,500 in financial consulting fees, compared to $1,186,610 during 2013, a decrease of $486,110. Other principal expenses included $263,333 in licensing fees compared to $475,000 incurred during 2013, $327,000 in research and development costs in 2014 compared to $137,400 in 2013 and increased professional fees, including an increase in accounting fees of approximately $17,000 in 2014 compared to 2013 and increased legal fees of approximately $180,000 in 2014 compared to 2013 as a result of increased litigation expenses. We also incurred $105,000 in public relation fees during 2014, compared to no related expenses during 2013.

In 2013 we incurred a loss of $548,951 which arose from the conversion of outstanding convertible notes. No loss was incurred in this category during 2014. On March 30, 2013 we issued 2,590,426 shares of our Common Stock upon the conversion of Convertible Notes payable on or before March 31, 2013 (“Convertible Notes”) valued at $621,703 representing principal of $513,000 and interest of $5,086. These Convertible Notes contained a beneficial conversion feature convertible at our option and were convertible at a fixed conversion price of $0.20. The market price on the issuance of these Convertible Notes varied from a low of $0.21 per share and a high of $0.46 per share with an average of $0.36 per share. Consequently, the Convertible Notes were considered to have a beneficial conversion feature and under ASC 470-20-25-10 the beneficial conversion feature was calculated to be $548,951 in total based on the issuance date and the share price on that date. This amount was booked to interest expense and Additional Paid in Capital.

As a result, we incurred a net loss of $1,934,210 (approximately $0.03 per share) for the fiscal year ended December 31, 2014, compared to a net loss of $2,491,483 during our fiscal year ended December 31, 2013 (approximately $0.04 per share).

Because we have not generated any revenues, following is our Plan of Operation.

Plan of Operation

As of the date of this Report we are a pharmaceutical company focused on the research, development and commercialization of drugs for the treatment of various forms of cancer. Our lead compound, Adva-27, a multi-purpose anti-tumor compound, is expected to enter Phase I clinical trials in 2016. 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 research and development 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. More details about our Plan of Operations are provided above under "PART I, Item 1, Business," above.

Liquidity and Capital Resources

As of December 31, 2014, we had cash or cash equivalents of $143,423.

Net cash used in operating activities was $538,595 during our fiscal year ended December 31, 2014, compared to $564,398 during our fiscal year ended December 31, 2013. We anticipate that overhead costs in current operations will increase in the future once we enter Phase I clinical trials as discussed in "PART I, Item 1, Business," above.

Cash flows provided or used in investing activities were $0 for the period from August 17, 2009 (inception) through December 31, 2013, as well as during our fiscal year ended December 31, 2014. Net cash flows provided or used by financing activities was $650,778 during our fiscal year ended December 31, 2014, compared to $463,000 during our fiscal year ended December 31, 2013.

During the fiscal year ended December 31, 2014, we issued 1,900,000 shares of our Common Stock upon the conversion of $29,820 in debt. The fair market value of the 1,900,000 shares was $68,000. The difference of $38,180 went to loss on conversion of note payable on our Statement of Operations for December 31, 2014. We also sold 1,196,900 shares of our Common Stock for cash of $153,334 and issued 9,655,080 shares of our Common Stock in exchange for services valued at $1,258,006. During 2014 we issued 500,000 shares of our Common Stock in exchange for prepaid interest valued at $75,000.

During the fiscal year ended December 31, 2013, we issued 2,590,426 shares of our Common Stock for the conversion of $513,000 in debt and interest of $5,086. We sold 1,000,000 shares of common stock for cash of $195,000 and issued 5,292,543 shares of our Common Stock in exchange for services valued at $1,151,310.

We are not generating revenue from our operations, and our ability to implement our 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 drug research and development capabilities and continue operations. We estimate that we will require approximately $5 million in debt and/or equity capital to fully implement our business plan in the future and there are no assurances that we will be able to raise this capital. During our fiscal year ended December 31, 2014, we did, on April 23, 2014, enter into an Investment Agreement (the “Investment Agreement”) with Dutchess Opportunity Fund, II, LP (“Dutchess”), for the sale of up to $2.5 million of shares of our Common Stock over a three-year commitment period. Under the terms of the Investment Agreement we may, from time to time and in our sole discretion, issue shares of our Common Stock to Dutchess at a price equal to ninety percent (90%) of the lowest daily volume weighted average price during a Trading Day of our Common Stock during the five (5) consecutive Trading Days immediately preceding the Put Notice Date, up to $2.5 million. In connection with the Investment Agreement, we also issued to Dutchess an engagement fee in the form of 400,000 “restricted” shares of our Common Stock.

The amount of each tranche under the Investment Agreement is limited to maximum $100,000 and we may only issue a Put Notice (as defined under the Investment Agreement) ten (10) Trading Days after each prior Put Notice Date and if the trading price of our Common Stock is $0.10 or greater. We are not obligated to utilize any of the $2.5 million available under the Investment Agreement and there are no minimum commitments or minimum use penalties.

The Investment Agreement does not impose any restrictions on our operating activities. During the term of the Investment Agreement, Dutchess is prohibited from engaging in any short selling or hedging transactions, either directly or indirectly, related to our Common Stock.

As a material term of the Dutchess Agreement, we were required to register the 400,000 shares of our Common Stock already issued to Dutchess, as well as 13,000,000 additional shares of our Common Stock reserved for issuance upon our drawing down funds pursuant to the Investment Agreement. We filed the registration statement with the SEC on May 22, 2014 and it became effective July 23, 2014. On August 7, 2014, we elected to issue our initial put notice to Dutchess, wherein we requested that Dutchess purchase 930,233 shares of our Common Stock for $100,000. We utilized the proceeds from the sale of these shares to repay debt. We anticipate that the proceeds from the next put notice shall be utilized to commence IND studies on our Adva-27a drug.

Despite the Dutchess Agreement there can be no assurances that we will have sufficient capital to complete the implementation of our business plan, as we currently estimate we will need up to $5 million to do so. We expect to raise the additional capital necessary to fully implement our business plan either by the sale of our securities, or through generating revenues as described in Plan of Operation above. There are no assurances that either scenario will be successfully implemented. As of the date of this report we have not reached any agreement with any party that has agreed to provide us with the additional capital we think may be necessary to fully implement our business plan, or whether we will generate sufficient revenues to allow us to do so. Our inability to obtain additional sufficient funds from external sources if and when needed may have a material adverse effect 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. 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.

Subsequent Events

On February 20, 2015, we entered into an agreement with Belair Capital Markets Inc. (“Belair”) and Villette Capital Inc. ("Villette") pursuant to which Belair and Villette have agreed to provide us with advice on corporate structure and operations as well as aid us in our efforts to raise $5 million in debt and/or equity financing to fund our Adva-27a drug development program and for working capital.

In January and February 2015, the holder of the $94,624 convertible note elected to convert a total of $30,090 into 3,500,000 shares of $0.001 par value common stock leaving a note balance of $64,534.

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 our fiscal year ended December 31, 2014.

Critical Accounting Policies and Estimates

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. 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.

Leases – We follow the guidance in SFAS No. 13 “Accounting for Leases,” as amended, which requires us to evaluate the lease agreements we enter into to determine whether they represent operating or capital leases at the inception of the lease.

Recently Adopted Accounting Standards – In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the existing accounting standards for revenue recognition.

In June 2014 FASB issued Accounting Standards Update (ASU), ASU 2014-10 regarding development stage entities. The ASU removes the definition of development stage entity, as was previously defined under generally accepted accounting principles in the United States (U.S. GAAP), from the accounting standards codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the ASU eliminates the requirements for development stage entities to (i) present inception-to-date information in the statement of income, cash flow and stockholders' equity, (ii) label the financial statements as those of a development stage entity, (iii) disclose a description of the development stage activities in which the entity is engaged, and (iv) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

We have chosen to adopt the ASU early for our financial statements as of September 30, 2014. The adoption of this pronouncement impacted us by eliminating the requirement to report inception to date financial information previously required.

There were various other accounting standards and interpretations issued during 2014 and 2013, none of which are expected to have a material impact on our consolidated financial position, operations or cash flows.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

TABLE OF CONTENTS

		Page No.

Independent Accountant’s Audit Report		F-1

Consolidated Balance Sheet		F-2

Consolidated Statement of Operations		F-3

Consolidated Statement of Cash Flow		F-4

Statement of Shareholders’ Equity		F-5-F-6

Notes to the Consolidated Financial Statements		F-7-F-13

Independent Auditor Report

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Sunshine Biopharma, Inc.:

We have audited the accompanying consolidated balance sheet of Sunshine Biopharma, Inc. (“the Company”) as of December 31, 2014 and 2013 and the related statement of operations, stockholders’ equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statement referred to above present fairly, in all material respects, the financial position of Sunshine Biopharma, Inc., as of December 31, 2014 and 2013, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles in the United States of America.

The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the Company's internal control over financial reporting. Accordingly, we express no such opinion.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ B F Borgers CPA PC

B F Borgers CPA PC

Lakewood, CO

March 9, 2015

F-1

Sunshine Biopharma, Inc.

Balance Sheet

	December 31,			December 31,
	2014			2013
ASSETS

Current Assets:

Cash and cash equivalents	$	143,423		$	31,240

Total Current Assets		143,423			31,240

TOTAL ASSETS	$	143,423		$	31,240

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

Current portion of note payable		480,124			12,500
Accounts payable		34,766			23,809
Interest payable		16,113			2,641

Total Curent Liabilities

TOTAL LIABILITIES		531,003			38,950

SHAREHOLDERS' EQUITY

Preferred stock, $0.10 par value per share;
Authorized 5,000,000 Shares; Issued
and outstanding -0- shares.		-			-

Common Stock, $0.001 per share;
Authorized 200,000,000 Shares; Issued
and outstanding 73,551,041and 60,299,061 at
December 31, 2014 and December 31, 2013 respectively		73,551			60,299

Capital paid in excess of par value		6,967,228			5,426,140

Accumulated other comprehesive (Loss)		-			-

Accumulated (Deficit)		(7,428,359	)		(5,494,149	)

TOTAL SHAREHOLDERS' EQUITY		(387,580	)		(7,710	)

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	143,423		$	31,240

See Accompanying Notes To These Financial Statements.

F-2

Sunshine Biopharma, Inc.

Statement Of Operations

	December 31,			December 31,
	2014			2013

Revenue:	$	-		$	-

General & Administrative Expenses

Research and Development		327,000			137,400
Accounting		40,440			23,640
Consulting		700,500			1,186,610
Director fees		15,000			-
Legal		268,335			88,381
Licenses		263,333			475,000
Office		25,738			18,963
Merger Cost		-			-
Public Relations		105,000			-
Stock Transfer Fee		9,768			6,083
Writedown of intangible assets		-			-

Total G & A		1,755,114			1,936,077

(Loss) from operations		(1,755,114	)		(1,936,077	)

Other (expense):
Interest expense		(179,096	)		(6,455	)
Beneficial conversion feature		-			(548,951	)

Total Other (Expense)		(179,096	)		(555,406	)

Net (loss)	$	(1,934,210	)	$	(2,491,483	)

Basic (Loss) per common share	$	(0.03	)	$	(0.04	)

Weighted Average Common Shares Outstanding		66,131,657			55,395,819

See Accompanying Notes To These Financial Statements.

F-3

Sunshine Biopharma, Inc.

Statement Of Cash Flows

	December 31,			December 31,
	2014			2013
Cash Flows From Operating Activities:

Net (Loss)	$	(1,934,210	)	$	(2,491,483	)

Adjustments to reconcile net loss to net cash used in operating activities:

Stock issued for licenses, services, and other assets		1,258,006			1,246,310
Stock issued for payment interest on notes payable		113,180			100,000
Stock issued for payment of expenses		-			5,086
Beneficial conversion feature on note conversion		-			548,951
Decrease in prepaid expenses		-			2,155
Increase in Accounts Payable		10,957			23,214
Increase in interest payable		13,472			1,369

Net Cash Flows (used) in operations		(538,595	)		(564,398	)

Cash Flows From Investing Activities:

Net Cash Flows (used) in Investing activities		-			-

Cash Flows From Financing Activities:

Proceed from note payable		395,000			463,000
Note payable used to pay expenses		63,333
Note payable used to pay origionation fees & interest		39,111
Sale of common stock		153,334			-

Net Cash Flows provided by financing activities		650,778			463,000

Net Increase (Decrease) In Cash and cash equivalents		112,183			(101,398	)
Cash and cash equivalents at beginning of period		31,240			132,638

Supplementary Disclosure Of Cash Flow Information:	$	143,423		$	31,240

Stock issued for services, licenses and other assets	$	1,258,006		$	1,237,310
Stock issued for note conversions	$	68,000		$	513,000
Stock issued for interest	$	75,000		$	-
Stock issued for payment of expenses	$	-		$	100,000
Loan proceeds used to pay expenses	$	50,000		$	-
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

See Accompanying Notes To These Financial Statements.

F-4

Sunshine Biopharma, Inc.

Statement of Shareholders' Equity

	Number Of				Capital Paid		Number Of				Stock				During the
	Common		Common		in Excess		Preferred		Preferred		Subscription		Comprehensive		development
	Shares Issued		Stock		of Par Value		Shares Issued		Stock		Receivable		Income		stage			Total
Balance at December 31, 2012		51,416,092	$	51,416	$	3,021,676		-	$	-	$	-	$	-	$	(3,002,666	)	$	70,426

March 30, 2013 issued 2,590,428 shares of par value $0.001 common stock for conversion of debt in the amount of $513,000 and interest of $5,086 or $0.24 per share		2,590,426		2,590		515,496													518,086

Common stock issued for cash		1,000,000		1,000		194,000													195,000

Common stock issued for services		5,292,543		5,293		1,146,017													1,151,310

Beneficial conversion feature						548,951													548,951

Net (Loss)		-		-		-										(2,491,483	)		(2,491,483	)

Balance at December 31, 2013		60,299,061	$	60,299	$	5,426,140		-	$	-	$	-	$	-	$	(5,494,149	)	$	(7,710	)

Common stock issued for cash		1,196,900		1,197		152,137													153,334

Common stock issued for services		9,655,080		9,655		1,248,351													1,258,006

Common stock issued for the reduction of note payable		1,900,000		1,900		66,100													68,000

Common stock issued for prepaid interest		500,000		500		74,500													75,000


Net (Loss)		-		-		-										(1,934,210	)		(1,934,210	)
Balance at December 31, 2014		73,551,041	$	73,551	$	6,967,228		-	$	-	$	-	$	-	$	(7,428,359	)	$	(387,580	)

See Accompanying Notes To These Audited Financial Statements.

F-5

Sunshine Biopharma, Inc.

Statement of Shareholders' Equity

	Number Of				Capital Paid		Number Of				Stock				During the
	Common		Common		in Excess		Preferred		Preferred		Subscription		Comprehensive		development
	Shares Issued		Stock		of Par Value		Shares Issued		Stock		Receivable		Income		stage			Total
Balance at December 31, 2012		51,416,092	$	51,416	$	3,021,676		-	$	-	$	-	$	-	$	(3,002,666	)	$	70,426

January 11, 2013 issued 350,000 sharesof par value $0.001 common stock for services valued at $ 136,500 or $0.39 per share		350,000		350		136,150													136,500

March 28, 2013 issued 918,500 shares of par value $0.001 common stock for services valued at $ 220,440 or $0.24 per share		918,500		919		219,522				-		-							220,440

March 30, 2013 issued 259,043 shares of par value $0.001 common stock for services valued at $ 219,370 or $0.24 per share		914,043		914		218,456													219,370

March 30, 2013 issued 2,590,428 shares of par value $0.001 common stock for conversion of debt in the amount of $513,000 and interest of $5,086 or $0.24 per share		2,590,426		2,590		515,496													518,086

Beneficial conversion feature						548,951													548,951

May 14, 2013 issued 250,000 shares of par value $0.001 common stock for services valued at $ 60,000 or $0.24 per share		250,000		250		59,750													60,000

August 1, 2013 issued 150,000 shares of par value $0.001 common stock for services valued at $ 30,000 or $0.20 per share		150,000		150		29,850													30,000

August 23, 2013 issued 250,000 shares of par value $0.001 common stock for services valued at $ 50,000 or $0.20 per share		250,000		250		49,750													50,000

October 4, 2013 issued 60,0000 shares of par value $0.001 common stock for services valued at $ 15,000 or $0.25 per share		60,000		60		14,940													15,000

November 4, 2013 issued 500,000 shares of par value $0.001 common stock for cash of $95,000 or $0.19 per share		500,000		500		94,500													95,000

November 20, 2013 issued 425,000 shares of par value $0.001 common stock for cash of $85,000 or $0.20 per share		425,000		425		84,575													85,000

November 20, 2013 issued 600,000 shares of par value $0.001 common stock for services valued at $ 114,000 or $0.19 per share		600,000		600		113,400													114,000

December 2, 2013 issued 75,000 shares of par value $0.001 common stock for cash of $15,000 or $0.20 per share		75,000		75		14,925													15,000

December 27, 2013 issued 1,800,000 shares of par value $0.001 common stock for services valued at $ 306,000 or $0.17 per share		1,800,000		1,800		304,200													306,000

Net (Loss)		-		-		-										(2,491,483	)		(2,491,483	)

Balance at December 31, 2013		60,299,061	$	60,299	$	5,426,140		-	$	-	$	-	$	-	$	(5,494,149	)	$	(7,710	)

January 6, 2014 issued 200,000 shares of par value $0.001 common stock for cash of $40,000 or $0.20 per share		200,000		200		39,800													40,000

January 30, 2014 issued 600,000 shares of par value $0.001 common stock for services valued at $ 96,000 or $0.16 per share		600,000		600		95,400													96,000

February 14, 2014 issued 66,667 shares of par value $0.001 common stock for cash of $13,333 or $0.20 per share		66,667		67		13,267													13,334

March 2, 2014 issued 10,000 shares of par value $0.001 common stock for services valued at $ 1,400 or $0.14 per share		10,000		10		1,390													1,400

March 14, 2014 issued 1,000,000 shares of par value $0.001 common stock for services valued at $ 170,000 or $0.17 per share		1,000,000		1,000		169,000													170,000

March 27, 2014 issued 500,000 shares of par value $0.001 common stock for prepaid interest valued at $ 75,000 or $0.15 per share		500,000		500		74,500													75,000

April 14, 2014 issued 500,000 shares of par value $0.001 common stock for services valued at $ 100,000 or $0.20 per share		500,000		500		99,500													100,000

April 17, 2014 issued 1,700 000 shares of par value $0.001 common stock for services valued at $323,000 or $0.19 per share		1,700,000		1,700		321,300													323,000

April 25, 2014 issued 400,000 shares of par value $0.001 common stock for services valued at $ 60,000 or $0.15 per share		400,000		400		59,600													60,000

May 15, 2014 issued 500,0000 shares of par value $0.001 common stock for services valued at $ 80,000 or $0.16 per share		500,000		500		79,500													80,000

June 12, 2014 issued 190,000 shares of par value $0.001 common stock for services valued at $ 30,400 or $0.16 per share		190,000		190		30,210													30,400

July 7, 2014 issued 975,000 shares of par value $0.001 common stock for services valued at $136,500 or $0.14 per share		975,000		975		135,525													136,500

July 24, 2014 issued 400,000 shares of par value $0.001 common stock for services valued at $52,000 or $0.13 per share		400,000		400		51,600													52,000

August 7, 2014 issued 930,233 shares of par value $0.001 common stock for cash of $100,000 or $0.1075 per share		930,233		930		99,070													100,000

September 8, 2014 issued 300,000 shares of par value $0.001 common stock for services valued at $27,000 or $0.09 per share		300,000		300		26,700													27,000

September 19, 2014 issued 340,080 shares of par value $0.001 common stock for services valued at $27,206 or $0.08 per share		340,080		340		26,866													27,206

November 1, 2014 issued 500,000 shares of par value $0.001 common stock for services valued at $35,000 or $0.07 per share		500,000		500		34,500													35,000

November 10, 2014 issued 250,000 shares of par value $0.001 common stock for services valued at $20,000 or $0.08 per share		250,000		250		19,750													20,000

November 11, 2014 issued 300,000 shares of par value $0.001 common stock for the reduction of a note payable of $9,000, valued at $18,000 or $.06 per share		300,000		300		17,700													18,000

November 24 2014 issued 600,000 shares of par value $0.001 common stock for the reduction of a note payable of $11,160, valued at $30,000 or $.05 per share		600,000		600		29,400													30,000

November 27, 2014 issued 640,000 shares of par value $0.001 common stock for services valued at $32,000 or $0.05 per share		640,000		640		31,360													32,000

December 4, 2014 issued 1,350,000 shares of par value $0.001 common stock for services valued at $67,500 or $0.05 per share		1,350,000		1,350		66,150													67,500

December 18, 2014 issued 1,000,000 shares of par value $0.001 common stock for the reduction of a note payable of $9,660, valued at $20,000 or $.02 per share		1,000,000		1,000		19,000													20,000

Beneficial conversion feature						-													-

Net (Loss)		-		-		-										(1,934,210	)		(1,934,210	)
Balance at December 31, 2014		73,551,041	$	73,551	$	6,967,228		-	$	-	$	-	$	-	$	(7,428,359	)	$	(387,580	)

See Accompanying Notes To These Audited Financial Statements.

F-6

Sunshine Biopharma, Inc.

CONSOLIDATED FINANCIAL STATEMENTS

With Independent Accountant’s Audit Report

At December 31, 2014 and 2013

F-7

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

Note 1. Organization and Basis of Presentation

Mountain West Business Solutions, Inc. (“MWBS”) was incorporated August 31, 2006 in the State of Colorado. Sunshine Etopo, Inc. (formerly Sunshine Biopharma, Inc.) was incorporated in the State of Colorado on August 17, 2009. Effective October 15, 2009 MWBS was acquired by Sunshine Etopo, Inc. in a transaction classified as a reverse acquisition. MWBS concurrently changed its name to Sunshine Biopharma, Inc. The financial statements represent the activity of Sunshine Etopo, Inc. from August 17, 2009 (inception) through October 15, 2009, and the consolidated activity of Sunshine Etopo, Inc. and Sunshine Biopharma Inc. from October 15, 2009 forward. Sunshine Etopo, Inc. and Sunshine Biopharma, Inc. are hereinafter referred to collectively as the "Company". The Company was formed for the purposes of conducting research, development and commercialization of drugs for the treatment of various forms of cancer. The Company may also engage in any other business that is permitted by law, as designated by the Board of Directors of the Company.

NOTE 2. Summary of Significant Accounting Policies

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

For the Balance Sheets and Statements of Cash Flows, all highly liquid investments with maturity of 90 days or less are considered to be cash equivalents. The Company had a cash balance of $143,423 and $31,240 as of December 31, 2014 and December 31, 2013, respectively. At times such cash balances may be in excess of the FDIC limit of $250,000.

F-8

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

NOTE 2. Summary of Significant Accounting Policies (Continued)

INCOME TAXES

In accordance with ASC 740 - Income Taxes, the provision for income taxes is computed using the asset and liability method. The liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities have been adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized.

The Company expects to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a "more-likely-than-not" threshold, the amount to be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of December 31, 2014, the Company had no uncertain tax positions. The Company recognizes interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. The Company currently has no federal or state tax examinations nor has it had any federal or state examinations since its inception. To date, the Company has not incurred any interest or tax penalties.

For federal tax purposes, the Company’s 2011 through 2013 tax years remain open for examination by the tax authorities under the normal three-year statute of limitations.

CONCENTRATION OF CREDIT RISKS

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash equivalents, notes receivables, deposits, and trade receivables. The Company places its cash equivalents with high credit quality financial institutions. As of December 31, 2014 and 2013 there were no trade receivables.

F-9

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

NOTE 2. Summary of Significant Accounting Policies (Continued)

FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company applies the provisions of Financial Accounting Standards Board (FASB) accounting guidance, FASB Topic ASC 825, Financial Instruments. ASC 825 requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of December 31, 2014 and 2013, the fair value of cash, accounts receivable and notes receivable, accounts payable, accrued expenses, and other payables approximated carrying value due to the short maturity of the instruments, quoted market prices or interest rates which fluctuate with market rates.

The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.

F-10

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

NOTE 2. Summary of Significant Accounting Policies (Continued)

The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared.

NOTES PAYABLE

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings using the effective interest method.

ACCOUNTING FOR DERIVATIVES LIABILITIES

The Company evaluates stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and

Hedging: Contracts in Entity’s Own Equity. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense.

Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date. The Company determined that none of the Company’s financial instruments meet the criteria for derivative accounting as of December 31, 2014 and 2013.

EQUITY INSTRUMENTS ISSUED TO NON-EMPLOYEES FOR AQUIRING GOODS OR SERVICES

Issuances of the Company’s common stock or warrants for acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a “performance commitment” which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete. When it is appropriate for the Company to recognize the cost of a transaction during financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values at each of those interim financial reporting dates.

F-11

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

NOTE 2. Summary of Significant Accounting Policies (Continued)

NONCASH EQUITY TRANSACTIONS

Shares of equity instruments issued for noncash consideration are recorded at the estimated fair market value of the consideration granted based on the estimated market value of the equity instrument, or at the estimated value of the goods or services received whichever is more readily determinable.

RELATED PARTIES

A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses consisted of professional service fees, rent and utility expenses, meals, travel and entertainment expenses, and other general and administrative overhead costs. Expenses are recognized when incurred.

BASIC AND DILUTED NET (LOSS) PER SHARE

The Company computes loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement.

Basic net income (loss) per share is calculated by dividing net (loss) by the weighted-average common shares outstanding. Diluted net income per share is calculated by dividing net income by the weighted-average common shares outstanding during the period using the treasury stock method or the two-class method, whichever is more dilutive. As the Company incurred net losses for the year ended December 31, 2014 no potentially dilutive securities were included in the calculation of diluted earnings per share as the impact would have been anti-dilutive.

F-12

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

NOTE 2. Summary of Significant Accounting Policies (Continued)

BASIC AND DILUTED NET INCOME (LOSS) PER SHARE (Continued)

Therefore, basic and dilutive net (loss) per share were the same as of December 31, 2014 and 2013.

REVENUE RECOGNITION

The Company is focused on the research, development and commercialization of drugs for the treatment of various forms of cancer. The Company does not expect to generate revenues until clinical trials of its proposed products are completed. Once completed, revenues would be recognized as its technology is licensed or sold or its products become marketable.

IMPACT OF NEW ACCOUNTING STANDARDS

In addition, the ASU eliminates the requirements for development stage entities to (i) present inception-to-date information in the statement of income, cash flow and stockholders' equity, (ii) label the financial statements as those of a development stage entity, (iii) disclose a description of the development stage activities in which the entity is engaged, and (iv) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

The Company has chosen to adopt the ASU early for the Company’s financial statements as of September 30, 2014. The adoption of this pronouncement impacted the Company by eliminating the requirement to report inception to date financial information previously required.

In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the existing accounting standards for revenue recognition.

F-13

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

NOTE 2. Summary of Significant Accounting Policies (Continued)

IMPACT OF NEW ACCOUNTING STANDARDS (Continued)

ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. ASU 2014-09 will be effective for the Company beginning in its first quarter of 2017.

Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of adopting the new revenue standard on its financial statements.

In August 2014, FASB issued guidance that requires management to evaluate whether there are conditions or events that raise substantial doubt about an entity's ability to continue as a going concern. If such conditions or events exist, disclosures are required that enable users of the financial statements to understand the nature of the conditions or events, management's evaluation of the circumstances and management's plans to mitigate the conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. The Company will be required to perform an annual assessment of its ability to continue as a going concern when this standard becomes effective on January 1, 2017; however, the adoption of this guidance is not expected to impact our financial position, results of operations or cash flows.

GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of approximately $7,457,134 and $5,494,149 at December 31, 2014 and 2013, respectively, had a net loss of approximately, $1,962,985 for the year ended December 31, 2014 and a net loss of $2,491,483 for the fiscal year ended December 31, 2013, and negative Shareholders’ Equity (Working Capital) of approximately $416,355 and $7,710 at December 31, 2014 and 2013, respectively.

These matters, among others, raise substantial doubt about our ability to continue as a going concern. While the Company’s cash position may not be significant enough to support the Company’s daily operations, Management intends to raise additional funds by way of a public offering and/or debt financing to fund operations.

F-14

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

NOTE 2. Summary of Significant Accounting Policies (Continued)

OFFICER COMPENSATION

Through the period ended December 31, 2014 the officers and directors of the Company have not received any cash, stock, or other forms of compensation except for Director receiving $15,000 in cash compensation.

LEGAL FEES

During the years ended December 31, 2014 and 2013 legal fees were incurred largely as a result of services provided to the Company to assist with its regulatory requirements with the Securities and Exchange Commission.

DATE OF MANAGEMENT’S REVIEW

Subsequent events have been evaluated through February 10, 2015, which is the date the Financial Statements were available to be issued.

Note 3 – Going Concern

In the course of its life the Company has had limited operations, and has a Working Capital deficit. This raises substantial doubt about the Company’s ability to continue as a going concern.

The Company believes it can raise capital through equity sales and borrowing to fund its operations. Management believes this will contribute toward its subsequent profitability. The accompanying Financial Statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note 4 – Capital Stock

The Company’s authorized capital is comprised of 200,000,000 shares of $0.001 par value Common Stock and 5,000,000 shares of $0.10 par value Preferred Stock, to have such rights and preferences as the directors of the Company have or may assign from time to time. Out of the authorized Preferred Stock, the Company has designated 850,000 shares as Series A Preferred Stock (“Series A”). The Series A is convertible at any time after issuance into 20 shares of the Company's Common Stock with no further consideration, has full voting rights at 20 votes per share, and has superior liquidation rights to the common stock. Through December 31, 2014 and December 31, 2013, the Company has issued and outstanding a total of 73,551,041 and 60,299,061 shares of Common Stock and 0 and 0 shares of Series A Preferred Stock, respectively.

F-15

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

Note 4 – Capital Stock( Continued)

During the fiscal year ended December 31, 2014, the Company issued 2,590,426 shares of common stock for the conversion of $513,000 in debt and interest of $5,086. The Company sold 1,000,000 shares of common stock for cash of $195,000 and issued 5,292,543 shares of common stock in exchange for services valued at $1,151,310.

During the fiscal year ended December 31, 2013, the Company issued 1,900,000 shares of common stock for the conversion of $28,820 in debt. The Company sold 1,196,900 shares of common stock for cash of $195,000. The Company issued 9,655,080 shares of common stock in exchange for services valued at $1,258,060 and issued 500,000 shares of common stock in exchange for prepaid interest valued at $75,000.

The Company has declared no dividends through December 31, 2014.

Note 5 – Earnings Per Share

The following table sets forth the computation of basic and diluted net income per share:

	For the Years
	Ended December 31,
	2014			2013

Net (loss) attributable to common stockholders	$	(1,934,210	)	$	(2,491,483	)
Basic weighted average outstanding shares of common stock		66,131,657			55,395,819
Dilutive effects of common share equivalents		-0-			-0-
Dilutive weighted average outstanding shares of common stock		66,131,657			55,395,819
Net loss per share of common stock
Basic and Diluted	$	(0.03	)	$	(0.04	)

Note 6 – Income Taxes

Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur. The Company accounts for income taxes pursuant to ASC 740.

F-16

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

NOTE 6. INCOME TAXES (continued)

Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses and other items. Loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur.

The Company follows FASB Statement Accounting Standards Codification No. 740, “Accounting for Income Taxes”, which requires, among other things, an asset and liability approach to calculating deferred income taxes. The components of the deferred income tax assets and liabilities arising under ASC No. 740 were as follows:

	December 31,		December 31,
	2014		2013

Deferred tax assets:
Short-term	$	-0-	$	-0-
Long-term		-0-		-0-
Total deferred tax asset	$	-0-	$	-0-
Deferred tax liabilities:
Short-term	$	-0-	$	-0-
Long-term		-0-		-0-
Total deferred tax liabilities	$	-0-	$	-0-
Total deferred tax assets		-0-		-0-
Net deferred tax liability	$	-0-	$	-0-

The types of temporary differences between the tax basis of assets and their financial reporting amounts that give rise to a significant portion of the deferred assets and liabilities are as follows:

	December 31,						December 31,
	2014						2013
	Temporary Difference			Tax Effect			Temporary Difference			Tax Effect
Deferred tax assets:		6,898,490			2,664,887			5,013,866			1,936,856
Net operating (loss)		(6,898,490	)		(2,664,887	)		(5,013,866	)		(1,936,856	)
Valuation allowance		-0-			-0-			-0-			-0-
Total deferred tax asset		-0-			-0-			-0-			-0-
Deferred tax liabilities:		-0-			-0-			-0-			-0-
Total deferred liability		-0-			-0-			-0-			-0-
Net deferred tax asset		-0-			-0-			-0-			-0-
	$	-0-		$	-0-		$	-0-		$	-0-

F-17

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

NOTE 6. INCOME TAXES (continued)

At December 31, 2014 and December 31, 2013, the Company had approximately $6,898,490 and $5,013,866, respectively, in unused federal net operating loss carryforwards, which begin to expire principally in the year 2029. A deferred tax asset at each date of approximately $2,664,887 and $1,936,856 resulting from the loss carryforwards has been offset by a 100% valuation allowance. The change in the valuation allowance for the period ended December 31, 2014 and December 31, 2013 was approximately $728,030 and $750,400.

A reconciliation of the U.S. statutory federal income tax rate to the effective tax rate is as follows:

The Company’s income tax filings are subject to audit by various taxing authorities. The Company’s open audit periods are 2011, 2012, and 2013, although, the statute of limitations for the 2011 tax year will expire effective March 15, 2014. In evaluating the Company’s provisions and accruals, future taxable income, and reversal of temporary differences, interpretations and tax planning strategies are considered. The Company believes its estimates are appropriate based on current facts and circumstances.

	December 31,
	2014			2013
U.S. Federal statutory graduated rate		34.00	%		34.00	%
State income tax rate,
net of federal benefit		4.63	%		4.63	%
Net rate		38.63	%		38.63	%

Net operating loss used		0.00	%		0.00	%
Net operating loss for which no tax
benefit is currently available		-38.63	%		-38.63	%
		0.00	%		0.00	%

F-18

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

Note 7 – Notes Payable

Notes payable consist of the following:	2014			2013

Note Payable - Face Value $12,500 with interest of 12% due December 31, 2015.	$	12,500		$	12,500

Note Payable - Face Value $128,000 interest of 10% due May 27, 2015. Issued on November 27, 2014 at a premium and Convertible from issuance into $0.001 par value common stock at a price of $0.20 per share. Any gain or loss will be recognized at conversion.		128,000			-0-

Note Payable – Original face Value $100,000 with origination fees of $11,111 built into loan balance, due November 7, 2014. Convertible after 180 days from issuance into $0.001 par value common stock at a price of 35% below market value. We estimate that the fair value of the convertible debt approximates the face value, so no value has been assigned to the beneficial conversion feature. At November 7, 2014 the note was increased by the origination fees of $11,111 and accrued interest of $3,024 and other fees of $10,309 and became a convertible note with a principal balance of $124,444. After November 7, 2014 no additional interest will be accrued. After November 7, 2014, $29,820 of principal was converted into 1,900,000 shares of common stock leaving a principal balance of $94,624. The fair market value at the conversion was $68,000. The difference between the fair market value and the $29,820 in principal reduction of $38,180 was booked as loss from conversion of notes payable for the period ended December 31, 2014.		94,624			-0-

Note Payable - Face Value 113,500 with interest of 8% due June 8, 2015. Convertible after 180 days from issuance into $0.001 par value common stock at a price of 35% below market value. We estimate that the fair value of the convertible debt approximates the face value, so no value has been assigned to the beneficial conversion feature.		113,500			-0-

Note Payable - Face Value $53,500 with interest of 8% due August 17, 2015. Convertible after 180 days from issuance into $0.001 par value common stock at a price of 35% below market value. We estimate that the fair value of the convertible debt approximates the face value, so no value has been assigned to the beneficial conversion feature.		53,500			-0-

Note Payable - Face Value $78,000 with interest of 8% due November 14, 2015. Convertible after 180 days from issuance into $0.001 par value common stock at a price 35% below market value. We estimate that the fair value of the convertible debt approximates the face value, so no value has been assigned to the beneficial conversion feature.
		78,000			-0-
		480,124			12,500
Less: current portion		(480,124	)		(12,500	)
Long-term debt	$	-0-		$	-0-

Interest expense for the years ended December 31, 2014 and 2013 was $101,805 and $6,455 respectively. The balance of interest payable at December 31, 2014 and 2013 was $16,113 and $2,641 respectively. Loss on conversion of notes payable for the years ended December 31, 2014 and 2013 was $38,180 and $-0- respectively.

All of our debt is reflected as a current liability due to either having a maturity date within one year.

F-19

Sunshine Biopharma, Inc.

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

Note 8 – Related Transactions

The Company has licensed its technology on an exclusive basis from Advanomics Corporation, a privately held Canadian company. Dr. Steve N. Slilaty, the Company’s Chief Executive Officer and a Director, is an Officer, Director and principal shareholder of Advanomics.

Note 9 – Subsequent Events

On January 14, 2015, the holder of the $94,624 note elected to convert $14,490 into 1,500,000 shares of $0.001 par value common stock leaving a note balance of $80,134.

On February 5, 2015, the holder of the $94,624 note elected to convert $15,600 into 2,000,000 shares of $0.001 par value common stock leaving a note balance of $64,534.

F-20

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure 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/CFO to allow timely decisions regarding required disclosure.

Based on this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective as of December 31, 2014, at the reasonable assurance level. We believe that our financial statements presented in this annual report on Form 10-K fairly present, in all material respects, our financial position, results of operations, and cash flows for all periods presented herein.

Inherent Limitations – Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. In particular, many of our current processes rely upon manual reviews and processes to ensure that neither human error nor system weakness has resulted in erroneous reporting of financial data.

Changes in Internal Control over Financial Reporting – There were no changes in our internal control over financial reporting during our fiscal year ended December 31, 2014, 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.

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report.

Management Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act. Those rules define internal control over financial reporting as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

●

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

●

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and the receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company; and

●

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2014. In making this assessment, our management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on an assessment carried out January 5-6, 2015, management believes that, as of December 31, 2014, our internal control over financial reporting was effective.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Following is a list of our officers and directors:

Name	Age	Position(s)

Dr. Steve N. Slilaty	62	President, Chief Executive Officer, and Chairman

Dr. Abderrazzak Merzouki	51	Chief Operating Officer and Director

Camille Sebaaly	54	Chief Financial Officer, Secretary and Director

Our directors serve as directors until our next Annual Meeting of Stockholders and the election and qualification of the director’s respective successor or until the director’s earlier death, removal or resignation.

Following is biographical information of our current management:

Dr. Steve N. Slilaty was appointed as our CEO, President and Chairman of our Board of Directors on October 15, 2009. In addition, since February 2002, Dr. Slilaty has been President and Chief Scientific Officer of Advanomics Corporation, a privately held Canadian company engaged in the research, development and commercialization of drugs for the treatment of various forms of cancer. Advanomics Corporation is the third in a line of biotechnology companies that Dr. Slilaty founded and managed through their early and mid-stages of development. The first, Quantum Biotechnologies Inc. later known as Qbiogene Inc., was founded in 1991 and grew to over $60 million in annual sales. Today, Qbiogene is a member of a family of companies owned by MP Biomedicals, one of the largest international suppliers of biotechnology reagents with a catalogue containing over 55,000 products. The second company which Dr. Slilaty founded, Genomics One Corporation, now known as Alert B&C Corporation, conducted an initial public offering (IPO) of its capital stock in 1999 and, on the basis of its ownership of Dr. Slilaty’s patented TrueBlue® Technology, Genomics One became one of the key participants in the Human Genome Project. Formerly a research team leader of the Biotechnology Research Institute, a division of the National Research Council of Canada, Dr. Slilaty also served as a consultant in a management and advisory capacity for a major Canadian biotechnology company between 1995 and 1997 during which time the company completed one of the largest biotechnology IPO‘s in Canada raising over $34 million. Dr. Slilaty's distinguished scientific career accomplishments include the discovery of a new class of enzymes, the S24 Family of Proteases (IUBMB Enzyme Nomenclature: EC 3.4.21.88), development of the first site-directed mutagenesis system applicable directly to double-stranded DNA, cloning the gene for the first yeast-lytic enzyme (lytic β-1,3-glucanase), developing a new molecular strategy for increasing the rate of enzyme reactions, inventing a powerful new cloning system for accelerating gene discovery (TrueBlue® Technology) and developing a new transcriptomics technology for generating entire RNA profiles. These and other works of Dr. Slilaty are cited in research papers, editorials, review articles and textbooks. Dr. Slilaty received his Ph.D. degree in Molecular Biology from the University of Arizona in 1983 and Bachelor of Science degree in Genetics and Biochemistry from Cornell University in 1976. In addition, Dr. Slilaty holds a position as Adjunct Professor at Université du Québec in the Department of Microbiology and Biotechnology. He devotes approximately 50% of his time to our business affairs.

Dr. Abderrazzak Merzouki was appointed as a Director and our Chief Operating Officer in February 2015. In addition to his new positions with our Company, since January 2015 he has been self-employed as a consultant in the fields of biotechnology and pharmacology. From July 2007 through December 2014, Dr. Merzouki worked at the Institute of Biomedical Engineering in the Department of Chemical Engineering at Ecole Polytechnique de Montreal, where he taught and acted as a senior scientist involved in the research and development of plasmid and siRNA-based therapies. Dr. Merzouki is a molecular biologist and an immunologist with extensive experience in the area of gene therapy where he performed several preclinical studies for pharmaceutical companies involving the use of adenoviral vectors for cancer therapy and plasmid vectors for the treatment of peripheral arterial occlusions. Dr. Merzouki also has extensive expertise in the design of expression vectors, and production and purification of recombinant proteins. He developed technologies for production of biogeneric therapeutic proteins for the treatment of various diseases including cancer, diabetes, hepatitis and multiple sclerosis. Dr. Merzouki obtained his Ph.D. in Virology and Immunology from Institut Armand-Frappier in Quebec and received his post-doctoral training at the University of British Columbia and the BC Center for Excellence in HIV/AIDS research. Dr. Merzouki has over 30 publications and 70 communications in various, highly respected scientific journals in the field of cellular and molecular biology. He will devote approximately 50% of his time to our business affairs.

Camille Sebaaly was appointed as our Chief Financial Officer, Secretary and a Director of our Company on October 15, 2009. Since 2001, Mr. Sebaaly has been self-employed as a business consultant, primarily in the biotechnology and biopharmaceutical sectors. He held a number of senior executive positions in various areas including, financial management, business development, project management and finance. As an executive and an entrepreneur, he combines expertise in strategic planning and finance with strong skills in business development and deal structure and negotiations. In addition, Mr. Sebaaly worked in operations, general management, investor relations, marketing and business development with emphasis on international business and marketing of advanced technologies including hydrogen generation and energy saving. In the area of marketing, Mr. Sebaaly has evaluated market demands and opportunities, created strategic marketing and business development plans, designed marketing communications and launched market penetration programs. Mr. Sebaaly was a cofounder of Advanomics Corporation with Dr. Slilaty. Mr. Sebaaly graduated from State University of New York at Buffalo with an Electrical and Computer Engineering Degree in 1987. He devotes approximately 50% of his time to our business affairs.

In February 2015 Michele Di Turi resigned his positions as our Chief Operating Officer and a director to pursue other opportunities.

There are no family relationships between any of our former or current officers and directors.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 (the “34 Act”) requires our officers and directors and persons owning more than ten percent of the Common Stock, to file initial reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”). Additionally, Item 405 of Regulation S-K under the 34 Act requires us to identify in our Form 10-K and proxy statement those individuals for whom one of the above referenced reports was not filed on a timely basis during the most recent year or prior years. All required reports have been filed, but were filed late.

Code of Ethics

Our board of directors has not adopted a code of ethics but plans to do so in the near future.

Committees of the Board of Directors

There are no committees of the Board of Directors but it is anticipated that we will establish an audit committee, nominating committee and governance committee once independent directors are appointed, which is expected to occur in the near future.

ITEM 11. EXECUTIVE COMPENSATION

During our fiscal year ended December 31, 2014 we paid Michele Di Turi $15,000 for his services as our Chief Operating Officer and a director. Mr. Di Turi resigned his positions with us in February 2015. We have not and do not expect to pay any other compensation to our current executive officers or directors until such time as we are able to secure adequate funding for our operations.

Employment Agreements

None of our executive officers is party to an employment agreement with us.

Stock Plan

We have not adopted any stock option or other employee plans as of the date of this Report. We may adopt such plans in the future.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information regarding the ownership of Common Stock as of the date of this Report, by (i) each person known to us to own more than 5% of our outstanding Common Stock as of the date of this Report, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directors and executive officers as a group. Unless otherwise indicated, all shares are owned directly and the indicated person has sole voting and investment power.

Title of Class	Name and Address Of Beneficial Owner	Amount and Nature Of Beneficial Ownership			Percent Of Class

Common	Dr. Steve N. Slilaty(1) 579 rue Lajeunesse Laval, Quebec Canada H7X 3K4		30,702,067	(2)		39.85	%

Common	Dr. Abderrazzak Merzouki(1) 731 Place de l'Eeau Vive, Laval, Quebec, Canada H7Y 2E1		1,467,000			1.90	%

Common	Camille Sebaaly(1) 14464 Gouin West, #B Montreal, Quebec Canada H9H 1B1		234,373			0.30	%*

Common	All Officers and Directors As a Group (3 persons)		32,403,440			42.05	%

*	Less than 1%

(1)	Officer and Director of our Company.

(2)	Includes 30,317,694 shares held in the name of Advanomics Corporation. Dr. Slilaty is an officer, director and principal shareholder of Advanomics Corporation and as a result, controls the disposition of these shares.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Related Party Transactions

We licensed our technology on an exclusive basis (“Exclusive License Agreement”) from Advanomics Corporation (“Advanomics”), a privately held Canadian company. Dr. Steve N. Slilaty, our Chief Executive Officer and a Director, is an Officer, Director and principal shareholder of Advanomics. In 2009 we issued an aggregate of 17,109,194 shares of our Common Stock valued at $73,000 and 850,000 shares of Series “A” Convertible Preferred Stock valued at $73,000 in exchange for this license, and had an obligation to purchase 2,000,000 shares of Advanomics Common Stock at $5 (U.S.) per share within 1 year of September 30, 2009, as well as an option to purchase an additional 1,000,000 shares of Advanomics’ Common Stock at an exercise price of $10.00 (U.S.) per share also for a 1 year term.

Pursuant to a notice of conversion received from Advanomics on December 21, 2011, we issued 17,000,000 shares of our Common Stock in exchange for the 850,000 shares of Preferred Stock held by Advanomics.

On December 21, 2011, we executed an amendment to the Exclusive License Agreement which waived a condition of termination and revised the consideration payable to Advanomics. The original Exclusive License Agreement required us to exercise an option to purchase shares in Advanomics for aggregate consideration of $9,700,000.00 ($5.00 per share). This obligation was waived and replaced with an annual licensing fee of $360,000.00 and reimbursement of research and development expenses incurred by Advanomics in connection with the Licensed Material as defined in the original Exclusive License Agreement.

In July 2014 we entered into a Research Agreement with Axis BioScience Inc. (“Axis”), wherein Axis did agree to utilize its expertise and know-how in the fields of onocology and biotechnology to perform research activities and provide a report thereon to us upon completion of their research. Dr. Merzouki, who was appointed as an officer and director of our Company in February 2015, is the principal of Axis and he received 400,000 shares of our Common Stock in consideration for the services performed in this matter.

In October 2013 Dr. Merzouki was an investor in a private offering of our Common Stock whereby he purchased 425,000 shares of our Common Stock for a purchase price of $85,000 ($0.20 per share).

In 2013 we moved our principal place of business to 469 Jean-Talon West, 3rd Floor, Montreal, Quebec, Canada, H3N 1R4. This is also the location of our licensor, Advanomics Corporation, who is providing this space to us on a rent free basis as of the date of this Report. Dr. Steve N. Slilaty, our Chief Executive Officer and a Director, is an Officer, Director and principal shareholder of Advanomics. If and when we are able to secure financing we expect that we will lease our own office and laboratory space.

There are no other related party transactions that are required to be disclosed pursuant to Regulation S-K promulgated under the Securities Act of 1933, as amended.

Director Independence

None of our current directors are deemed “independent” pursuant to SEC rules. We anticipate appointing independent directors in the foreseeable future.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Fees Paid to Independent Registered Public Accounting Firms

The following table presents fees for professional audit services rendered by B F Borgers CPA PC, our independent accountant, during our fiscal year ended December 31, 2014 and 2013:

	December 31, 2013		December 31, 2014
Audit Fees	$	8, 640	$	10,260
Audit Related Fees		-		-
Tax Fees		-		-
All Other Fees		-		-
Total	$	8, 640	$	10,260

Audit Fees. Consist of amounts billed for professional services rendered for the audit of our annual financial statements included in our Annual Reports on Forms 10-K for our fiscal years ended December 31, 2014 and 2013 and reviews of our interim financial statements included in our Quarterly Reports on Form 10-Q.

Tax Fees. Consists of amounts billed for professional services rendered for tax return preparation, tax planning and tax advice.

All Other Fees. Consists of amounts billed for services other than those noted above.

We do not have an audit committee and as a result our entire board of directors performs the duties of an audit committee. Our board of directors evaluates the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following exhibits are included herewith:

Exhibit No.		Description

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

Following are a list of exhibits which we previously filed in other reports which we filed with the SEC, including the Exhibit No., description of the exhibit and the identity of the Report where the exhibit was filed.

No.	Description	Filed With	Date
3.1	Articles of Incorporation	Form SB-2 Registration Statement	October 19, 2007
3.2	Bylaws	Form SB-2 Registration Statement	October 19, 2007
3.3	Articles of Amendment (Name Change)	Form 8-K Dated November 2, 2009	November 6, 2009
3.4	Statement of Share and Equity Capital Exchange	Form 10-Q For Quarter Ended 06/30/10	August 4, 2010
3.5	Articles of Amendment (Add Preferred and Series A Preferred to Authorized)	Form 10-Q For Quarter Ended 06/30/10	August 4, 2010
10.1	Share Exchange Agreement with Sunshine Biopharma, Inc.	Form 8-K Dated October 15, 2009	October 20, 2009
10.2	License Agreement with Advanomics, Inc.	Form 8-K/A1 Dated October 15, 2009	January 19, 2010
10.3	Amendment No. 1 to License Agreement with Advanomics, Inc.	Form 8-K/A1 Dated October 15, 2009	January 19, 2010
10.4	Research Agreement with The Research Foundation of the State University of New York	Form 8-K Dated January 17, 2011	January 19, 2011
10.5	Research Agreement with Jewish General Hospital	Form 8-K Dated June 14, 2011	June 17, 2011
10.6	Amendment No. 2 to License Agreement with Advanomics	Form 8-K Dated December 21, 2011	December 27, 2011
10.7	Investment Agreement with Dutchess Investment Group II	Form 8-K dated April 23, 2014	April 28, 2014
10.8	Registration Rights Agreement with Dutchess Investment Group II	“ ”	“ ”
21.2	List of Subsidiaries	Form 10-K For FYE December 31, 2010	March 30, 2011

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned thereunder duly authorized.

	SUNSHINE BIOPHARMA, INC.

Dated: March 9, 2015	By:	/s/ Dr. Steve N. Slilaty
		Dr. Steve N. Slilaty, Principal Executive Officer


	By:	/s/ Camille Sebaaly
		Camille Sebaaly, Principal Financial and Accounting Officer

In accordance with the Exchange Act, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 9, 2015.

/s/ Dr. Steve N. Slilaty
Dr. Steve N. Slilaty, Director

/s/ Camille Sebaaly
Camille Sebaaly, Director

/s/ Dr. Abderrazzak Merzouki
Dr. Abderrazzak Merzouki, Director

Sunshine Biopharma, Inc - FORM 10-K - March 11, 2015

Attached files

Sunshine Biopharma, Inc Reports