SEC Complaint...you can too! ////////// Sunshine Biopharma is headquartered in Quebec, Canada and registered in Colorado. The CEO is Steve Slilaty, the CFO is Camille Sebally.
Slilaty email - steve.slilaty@sunshinebiopharma.com; General email (reaches Camille) - info@sunshinebiopharma.com; Chamoun emails - malek.chamoun@hec.ca, mchamoun@norapharma.ca
I will first discuss the misleading statements they made with regards to drug development, that to me are intentionally misleading to investors and even evidence of defrauding investors.
Then I will discuss the issues with uplisting from OTC to NASDAQ, then I will discuss the incredibly predatory voting shares action Slilaty intends to take.
Most of the forms I mention can be found on their website, but they have even removed some PRs from the investor site as an obvious way to remove negative content from being easily accessible to new investors.
https://sunshinebiopharma.com/press-releases/
https://sunshinebiopharma.com/sec-filings/
Thank you for your time. Please feel free to reach out to me for any further questions.
To start, I want to discuss specifically misleading investors and potential defrauding of investors in regards to their drug development.
In February, 2021 they specifically and definitively state in a published PR that they started mice trials of SBFM-Pl4.
https://sunshinebiopharma.com/assets/press/Press-Release-INITIATES-MICE-STUDY-OF-COVID-19-V4_Final.pdf
In an investor Powerpoint published February 2021, obviously as part of the uplist they directly state SBFM-Pl4 will be in Phase 1 trials within 9-18 months.
https://sunshinebiopharma.com/assets/secfilings/Sunshine%208-K.pdf
However, in SEC filings and investor documents, specifically the 10Q report filed November 7, 2022 for the period ending September 30, 2022 they directly state about SBFM-Pl4: "The next steps in our SBFM-PL4 drug development plan will involve conducting additional in vitro studies followed by cell culture assays and assessment in Coronavirus infected mice before entering human clinical trials."
https://sunshinebiopharma.com/assets/secfilings/Sunshine%2010-Q%209-30-22.pdf
This directly proves that they did NOT enter mice trials in February of 2021, or they were abandoned without notifying investors. Part of my investment in Sunshine was directly tied to these mice trial results. If they announced they had abandoned them, or not started them, I would not have invested as heavily and I would have sold. It is obvious they knew this and obfuscated the lack of progress to mislead investors.
Then in their 10K for 2022, they do not mention advancing Pl4 to trials at all, only a VERY vague agreement with University of Arizona to advance their IP.
https://sunshinebiopharma.com/assets/secfilings/Sunshine%20Bio%2010-K%2012-31-22%20as-filed.pdf
I also want to highlight paid advertising the company has done and how that also was designed to mislead investors, specifically with sponsored stories on USA Today's website.
The first is from May 9, 2022 -
https://www.usatoday.com/story/sponsor-story/sunshine-biopharma/2022/05/09/learn-new-drug-pancreatic-and-other-hard-treat-cancers/9657951002/
From the article, regarding Adva-27a cancer drug - "They expect to “fast-track” the research and have filed the appropriate applications with regulators."
Except, if you look at ANY of their SEC filings, they directly state they have NOT filed any paperwork for regulatory approval. This is evidence of fraud in my non-legal opinion. Below is the quarterly filing filed for the period ending June 2022, so it would encompass when the article was published. They directly state "NEXT STEPS" for Adva-27a and one of the items is "Regulatory Filing".
This 10Q is directly contrary to the article with regards to Adva-27a. I remember the wording of the article was very enticing to investors, but obviously the company was misleading us.
https://sunshinebiopharma.com/assets/secfilings/sunshinebio_i10q-063022.pdf
If you look at their 10K for 2022, published April 2023, they state even more directly -
https://sunshinebiopharma.com/assets/secfilings/Sunshine%20Bio%2010-K%2012-31-22%20as-filed.pdf
"As of the date of the filing of this report, we have not made any filings with the FDA or other regulatory bodies in other jurisdictions. We anticipate filing an initial IND application for an anti-Covid-19 compound within approximately one year and filing an initial IND for our anti-cancer compound within approximately two years. We have however had discussions with clinicians and as a result we believe that the FDA and Health Canada are likely to grant us a so-called “fast-track” process on the basis of the ongoing Covid-19 pandemic and the terminal nature of the cancer type we are planning to treat. There are no assurances this will occur."
They directly contradict their OWN investor documents and sponsored articles.
Here it is from April 2022 -
https://www.usatoday.com/story/sponsor-story/sunshine-biopharma/2022/04/13/meet-biotech-firm-sunshine-biopharma-changing-health/9468265002/
They directly state a timeline of 9-18 months to get to trials.
Now from June 2022 on USA Today's website -
https://www.usatoday.com/story/sponsor-story/sunshine-biopharma/2022/06/21/meet-biotech-firm-researching-new-cancer-and-covid-19-treatments/7647535001/
This is a sponsored story, so the content would have come directly from the company itself and in the article they state "SBFM-PL4 is also showing promise in preclinical research, and it is expected to be prescribed as a tablet that patients could take at home. Sunshine Biopharma expects Phase I clinical trials to happen at a University of Georgia Affiliate Hospital."
Phase I clinical trials CANNOT happen until mice trials and IND-enabling trials have been performed. This is intentionally misleading to investors. Being these are sponsored articles, it is obvious that they are intended for NEW investors.
As you can see, the filings and the publicly sponsored articles have content that directly contradict one another. It is obvious the company intends to continue to delay and extend timelines while engaging with extremely predatory practices against shareholders, which I will get into below.
Next I want to cover uplist and corporate actions.
In late 2021, Sunshine Biopharma announced it would be uplisting to NASDAQ Capital Markets in order to generate fundraising that was otherwise not available to then on the OTC at the time. In order to do this, they announced a reverse split would occur before the uplist to make share price compliant, as well as have an offering to raise capital.
On October 8, 2021, in a DEF14C filing, they stated the reverse split would be no more than 100-1, and no less than 2-1. On January 20, 2022, in the DEF14C filing, they revised this to be up to 500-1 reverse split, most likely because share price had fallen so much due to complete lack of company action or updates to investors.
On February 3, 2022, they filed an S-1/A form that clearly stated the reverse split to be 200-1 and the offering price to be $9.80 per unit, with a conversion price of $9.80. This is 200x the share price of $0.049 at the time.
On February 8, 2022, they filed an 8K which was an investor PowerPoint. They clearly state 9-18 months for their two drugs to get to Phase 1 trials. Neither drug has progressed at all in any way since this was published. This is clearly misleading investors, and I will come back to that point again.
On February 9, 2022, they filed an S-1/A that finalizes the ratio and documents their agreement with the underwriter - Aegis Capital. In this filing they announce the offering units to be compromised of one share of stock and two warrants. This shift in the offering was incredibly predatory to those holding shares as the extra warrants diluted the share structure on top of the share offering.
On February 10, 2022 they filed an 8K announcing the reverse split that began on February 9, the previous day - this begins the share lock up where investors can not sell their assets.
On February 14, 2022 they filed an S-1/A again which once again states the offering unit price to be at $9.80.
On February 17, 2022 they filed a 424B4 which states the offering unit price to be at $4.25 per unit. The offering prospectus date is listed as February 15, 2022. This means that on the day they moved to NASDAQ, while shares were still locked up, without any warning, the company more than HALVED the offering price. This immediately cut the value of the stock held by long-term investors from the OTC in half. They write the last sale on the OTC was listed at $10.50 per share after the reverse split.
This corporate action shows deliberate, intentional destruction of share price during a period where investors had no ability to sell even if they had been warned of the predatory changes to the offering. The share price then fell drastically as the initial offering investors converted their warrants cheaply and diluted the share structure.
On March 15, 2022, they filed an 8K about another private placement offering they did on March 10, 2022 - This time at $2.22 per unit which I believe was market price at the time. The company took no action to counter the effects of the initial offering, and instead further diluted the share structure.
From then on, the company had made no meaningful progress, only raised capital while diluting share structure.
On October 20, 2022 the company filed an 8K that they entered an agreement with Malek Chamoun to purchase Nora Pharma for approximately $21.9 million. Part of this deal was to issue 3.7 million new shares of stock directly to Chamoun. This deal was incredibly in the benefit of Chamoun, as the company was not worth that price based on revenue AND was incredibly dilutive to the share structure. Simply put, there was no reason to issue these new shares instead of using company funds.
It is also worth noting - in filings it is stated that Slilaty maintains voting control of Chamoun's shares. This appears to be a way for Slilaty to maintain control of Sunshine corporate action, as a way to override the other company directors and even shareholders.
In the first half of 2023, the company filed that they intended on having a shareholders meeting and that shareholders would vote on a proposed reverse split that the board ALREADY approved. This shows that the company has no intention of doing any corporate action in the interest of investors, and plan to use extensions and reverse splits to stay compliant on NASDAQ.
On January 19, 2023, the company issued a PR that they would be using $2 million for a share repurchase program. It is obvious they used this to stay compliant on NASDAQ for 10 days to reset the non-conformance timeline. Based on filings after the fact, they only used ~$550k, leaving ~$1.5 million for future buyback.
On May 2, 2023, the company filed that they would have a shareholder meeting in June of 2023. This meeting did NOT happen and was not commented on again until recently in a warrant holder voting proxy form which I will discuss below.
On September 5, 2023, the company stated that Warrant holders will be able to vote on a corporate action to reduce the conversion price of the warrants from $2.22 to $0.11 and on an action to remove the prohibition on Slilaty's Class B voting shares - of which he returned 90% after uplist. I went to vote on these corporate actions as a holder of warrants, and I found that these are NOT individual votes. It is all or nothing.
Here is the proxy statement that is NOT publicly available or distributed to shareholders, just warrant holders, and is NOT filed with the SEC - https://materials.proxyvote.com/Approved/867781/20230831/NPS_550408.PDF
This proxy form CLEARLY STATES that this conversion price is a hand-out to the offering investors to entice them to give Slilaty his voting shares back so the board can complete ANOTHER reverse split at the shareholder meeting they intend to have in 2023.
It is obvious that Slilaty is making moves to get his Class B shares back, as there must be some kind of mechanism that allows him to override shareholder voting. The board has made their intention to have a reverse split clear since early 2023. The fact that they have NOT attempted to use the rest or any of the share buyback cash is another piece of evidence. They will do nothing with their money that helps the share structure or investors. I do not believe the buyback cash will be used unless the somehow the reverse split is officially terminated at the shareholder meeting, but the obvious manipulation to free up Class B shares AND how Slilaty controls Chamouns shares for voting makes it apparent they will force another reverse split, regardless of how investors feel about it.
If left to his own devices, it is obvious Slilaty will continue to ignore shareholder interests and has completely failed at his duty of loyalty.
This company has only raised capital on the backs of investors and will continue to do so, as evidenced by corporate action.
Thank you again.
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