Sunshine Biopharma
Kurta Law is investigating broker recommendations of Sunshine Biopharma (NASDAQ: SBFM). Investors who lost money on these investments should know that they were high risk, and broker recommendations of these stocks may have violated securities rules and regulations. The Financial Industry Regulatory Authority (FINRA) requires brokers to consider their client’s risk tolerance before making a recommendation. FINRA Rule 2111 also requires brokers to consider other criteria, such as the investor’s age, financial goals, tax status, overall investment strategy, and other key characteristics. Investment recommendations that do not take these factors into account may be unsuitable.
If you believe you suffered investment losses due to broker fraud or misconduct, contact Kurta Law for a free case evaluation. Call (877) 600-00098 or email info@kurtalawfirm.com.
The Offering
The prospectus dated February 15, 2022, announced that Sunshine Biopharma would offer 1,882,353 units. Each unit consisted of one share of common stock and two warrants. Warrants give owners the right to purchase a stock at a certain price by a specified deadline. Each warrant was exercisable for one share of common stock.
Each unit was $4.25. As of April 16, 2024, Sunshine Biopharma stock is trading for $0.065 per share.
About Sunshine Biopharma
According to the prospectus, Sunshine Biopharma’s operations focused on proprietary drug development, including an anti-cancer drug and an anti-coronavirus treatment.
Risks Associated with Sunshine Biopharma Investments
The Risk Factors section of the prospectus clearly states, “Investing in our securities includes a high degree of risk.” Brokers either knew or should have known about the following risks.
Uncertainty Surrounding Sunshine Biopharma’s Ability to Continue
In 2021, the prospectus states that Sunshine Biopharma incurred a net loss of $13,103,563. It also states, “We may never generate significant revenues or achieve profitability. If we fail to continue as a going concern, investors may lose their entire investment in the company.”
Regulatory Approval
There was no guarantee that the proprietary drugs would receive regulatory approval.
Generating Revenues
With no approved pharmaceutical products on the market, Sunshine Biopharma did not expect to generate significant revenues from pharmaceutical product sales in the foreseeable future, if at all.
Additional Financing
Sunshine Biopharma disclosed in the prospectus that even after this offering, it may need significant additional funding for its research and development expenses. At the time, its burn rate was $500,000 per fiscal quarter.
Regulatory Requirements
Regulatory requirements could change and require Sunshine Biopharma to conduct additional clinical trials, which could delay or prevent the commercialization of its products.
Qualified Personnel
If Sunshine Biopharma was unable to attract or retain qualified scientific, technical, and key management personnel, it would delay its research and development efforts.
Third-Party Manufacturers
Even if the FDA approved Sunshine Biopharma’s drug candidates, it would need third parties to manufacture the products in larger candidates. There was no guarantee that the company would find third-party manufacturers for its product candidates.
Aegis Capital Corp. Underwriting
Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.
Kurta Law Can Help
Contact Kurta Law today for a free case evaluation – keep in mind that you have a limited time to file a claim. Our attorneys do not collect a fee unless we win your case. If you have any questions, call (877) 600-0098 or email info@kurtalawfirm.com.