--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                      ------------------------------------

                                   FORM 10-QSB
(Mark One)

|X|      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1996

|_|      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

             For the transition period from __________ to __________
                         Commission File Number 0-27578
                      ------------------------------------

                              SUNPHARM CORPORATION
        (Exact name of small business issuer as specified in its charter)

         Delaware                                       F593097048
(State or other jurisdiction                (I.R.S. Employer Identification No.)
of incorporation or organization) 

                         4651 Salisbury Road, Suite 205
                           Jacksonville, Florida 32256
                    (Address of principal executive offices)

                    Issuer's telephone number: (904) 296-3320
                      ------------------------------------


         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

                                           Yes |X|          No |_|


                  Number of shares of the issuer's Common Stock
                  outstanding as of November 14, 1996:3,363,096




--------------------------------------------------------------------------------

                                                            

<PAGE>



                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

         The  following  unaudited  financial   statements  have  been  prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and notes disclosures  normally included in annual financial
statements prepared in accordance with generally accepted accounting  principles
have been omitted pursuant to these rules and regulations.  However, the Company
believes that the disclosures  made herein are adequate,  and  accordingly,  the
Company  believes the information  presented is not misleading.  These financial
statements  should be read in conjunction with the financial  statements for the
year ended  December 31, 1995 included in the  Company's  1995 Form 10-KSB filed
pursuant to Section 15(d) of the Securities Exchange Act of 1934.


                                        2

<PAGE>



                              SUNPHARM CORPORATION
                          (A Development Stage Company)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                                              Pro Forma
                                                                                                            September 30,
                                                                  December 31,         September 30,      1996 (unaudited)
                                                                      1995           1996 (unaudited)       (See Note 3)
                                                                ----------------     ----------------     ----------------
<S>                                                                      <C>                     <C>                  <C>    

                            ASSETS
Current assets:
      Cash and cash equivalents...............................  $   331,069            $1,435,544            $3,224,994
      Investments.............................................    1,290,464                    --                    --
      Prepaid expenses and other current assets...............      159,857                24,708                24,708
                                                                    -------                ------
          Total current assets................................    1,781,390             1,460,252             3,249,702
                                                                  ---------             ---------             ---------
Receivable from stockholder...................................       13,114                11,843                11,843
Other assets..................................................       14,237                12,436                12,436
                                                                     ------                ------                ------       
                                                                $ 1,808,741            $1,484,531            $3,273,981
                                                                ===========            ==========            ==========
</TABLE>

<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                               <C>                    <C>                 <C>   
 
      Current Liabilities:
      Accounts payable........................................     $360,722              $522,567              $522,567
      Accrued liabilities.....................................      177,483               386,507               571,507
      Accrued legal fees......................................      300,000                30,000                30,000
      Notes payable...........................................       87,834                10,027                10,027
                                                                     ------                ------                ------

         Total current liabilities............................      926,039               949,101             1,134,101
                                                                    =======               =======             =========
                                                                  
Commitments and contingencies

Stockholders' equity:
Undesignated series preferred stock,
      $.001 par value, 2,500,000 shares authorized,
      none issued and outstanding.............................          --                    --                    --

Commonstock,   $.0001  par  value  25,000,000  shares
      authorized,   2,884,535, 3,339,683 (unaudited)
      and 3,665,037 (pro forma) issued and outstanding,
      respectively............................................         288                   334                   365
Additional paid-in capital....................................   9,642,434            11,134,068            12,738,487
Deficit accumulated during development stage..................  (8,760,020)          (10,598,972)          (10,598,972)
                                                                ----------           -----------           ----------- 
          Total stockholders' equity .........................     882,702               535,430             2,139,880
                                                                   -------               -------             ---------
          
                                                               $ 1,808,741            $1,484,531            $3,273,981
                                                               ===========            ==========            ==========
</TABLE>

   The accompanying notes are an integral part of these financial statements.



                                        3

<PAGE>



                              SUNPHARM CORPORATION
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                       For the Three Months Ended
                                                                              September 30,
                                                                              -------------
                                                                   1995                          1996
                                                                   ----                          ----
<S>                                                         <C>                           <C>    
Interest Income................................             $         40,476              $         21,609
                                                                     -------                       -------
                                                            


Expenses:
    Research and development...................                      374,103                       313,379
    General and administrative.................                      433,718                       365,971
    Royalty....................................                           --                            --
                                                                     -------                       -------
            Total expenses.....................                      807,821                       679,350
                                                                     -------                       -------
                                                            
Net loss.......................................               $     (767,345)                $    (657,741)
                                                              ==============                 ============= 
                                                                
                                                            
Net loss per share.............................               $        (0.27)                $       (0.20)
                                                              ==============                 ============= 
                                                            
                                                             

Shares used in computing loss per share........               $    2,884,535                 $   3,231,655
                                                              ==============                 =============
                                                               
</TABLE>
                                                                

   The accompanying notes are an integral part of these financial statements.






                                        4

<PAGE>




                              SUNPHARM CORPORATION
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                                                        
                                                                                                          For the Period
                                                                                                          from Inception
                                                                  For the Nine Months Ended                (May 3, 1990)  
                                                                         September 30,                        Through
                                                                         -------------                     September 30,
                                                                  1995                 1996                    1996
                                                                  ----                 ----                    ----
<S>                                                          <C>                 <C>                     <C>  

Sponsored research/sublicensing revenues................     $          __       $    500,000            $    2,385,000

Interest income.........................................           133,461             47,385                   210,042
                                                                   -------             ------                   -------
                                                                  

             Total revenues.....................                   133,461            547,385                 2,595,042
                                                                   -------            -------                 ---------
                                                                  



Expenses:
    Research and development............................         1,214,422          1,012,770                 6,681,002
    General and administrative..........................         2,038,769          1,373,567                 6,303,012
    Royalty.............................................                --                 --                   210,000
                                                                 ---------          ---------                ----------
            Total expenses..............................         3,253,191          2,386,337                13,194,014
                                                                 ---------          ---------                ----------
                                                              
Net loss................................................    $   (3,119,730)      $ (1,838,952)            $ (10,598,972)
                                                            ==============       ============             ============= 
Net loss per share......................................    $       ( 1.11)      $      (0.61)
                                                            ==============       ============
Shares used in computing loss per share.................    $    2,814,869       $  3,003,094
                                                            ==============       ============
</TABLE>

                                                                   
   The accompanying notes are an integral part of these financial statements.



                                        5

<PAGE>



                              SUNPHARM CORPORATION
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                           For the Period
                                                                                                           from Inception
                                                                                                            (May 3, 1990)
                                                                   For the Nine Months Ended                   Through
                                                                         September 30,                     September 30 ,
                                                                           1995 1996                            1996
                                                                           ---- ----                            ----
<S>                                                         <C>                 <C>                       <C>    
Cash flows from operating activities:
   Net loss............................................      $(3,119,730)         $   (1,838,952)          $(10,598,972)
   Adjustments to reconcile net loss to net
      cash used in operating activities -
       Depreciation and amortization...................            2,579                   1,800                 71,706
      Expenses related to issuance
         of stock for services.........................               --                      --                 43,750
      Compensation expense related to options
            and warrants issued........................           50,000                      --                865,246
      Offering costs incurred in connection with
         10% Convertible Secured Notes.................          775,000                      --                775,000
      Write-off of patents.............................               --                      --                 70,120
      (Increase) decrease in receivable from
                stockholder............................             (657)                  1,271                (11,843)
      (Increase) decrease in prepaid expenses
          and other assets.............................           51,993                 135,562                (36,232)
       Increase (decrease) in accounts payable.........         (819,477)                161,849                522,567
       Increase (decrease) in accrued liabilities......         (335,735)                209,024                386,507
                                                                 -------
       Increase in accrued legal fees...................              --                (270,000)                30,000
                                                                --------                --------                 ------
         Total adjustments.............................         (276,297)                239,506              2,716,821
                                                                --------                 -------              --------- 
Net cash used in operating activities..................       (3,396,027)             (1,599,446)            (7,882,151)
                                                              ----------              ----------             ---------- 
                                                            
Cash flows from investing activities:
     Purchase of short-term investments................       (2,316,837)                     --             (3,324,062)
     Sale of short-term investments....................               --               1,290,464              3,324,062
     Purchases of office equipment.....................           (2,876)                   (416)               (17,614)
     Payment of patent costs...........................               --                      --                (67,424)
                                                                 -------                 -------                ------- 
     Net cash (used in) provided  by investing
              activities...............................       (2,319,713)              1,290,048                (85,038)
                                                              ----------               ---------                ------- 
                                                            
Cash flows from financing activities:
     Payments of notes payable.........................       (1,582,459)                (77,807)               (89,973)
     Decrease in deferred offering costs...............               --                      --               (597,348)
     Issuance of Series A redeemable
         convertible preferred stock...................               --                      --                513,525
     Issuance of Series B redeemable
         convertible preferred stock...................               --                      --                450,000
     Issuance of common stock..........................        7,634,849               1,491,680              9,126,529
     Proceeds from payable to stockholders.............           25,000                      --                542,500
     Repayment of payable to stockholders..............         (200,000)                     --               (542,500)
                                                                --------                --------               -------- 
     Net cash provided by
               financing activities....................        5,877,390               1,413,873              9,402,733
                                                               ---------               ---------              ---------
                                                           
Net change in cash.....................................          161,650               1,104,475              1,435,544
Cash at beginning of period............................               --                 331,069                     --
                                                                --------                --------              ---------
Cash at end of period..................................      $   161,650              $1,435,544             $1,435,544
                                                             ===========              ==========             ==========
Supplemental information:
      Cash paid for interest............................     $    13,514              $    2,962             $  164,871
      Deferred compensation for stock                        $    94,000                      --                     --
            appreciation rights........................
</TABLE>

   The accompanying notes are an integral part of these financial statements.



                                        6

<PAGE>



                              SUNPHARM CORPORATION
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 1996
                                   (Unaudited)


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

     The balance  sheet at  September  30, 1996 and the  related  statements  of
operations  for the three month and nine month periods ended  September 30, 1996
and 1995 and the period from inception (May 3, 1990) through  September 30, 1996
and statements of cash flows for the nine month periods ended September 30, 1996
and 1995 and the period from inception (May 3, 1990) through  September 30, 1996
are unaudited.  These interim financial statements should be read in conjunction
with the December 31, 1995 financial statements and related notes. The unaudited
interim financial  statements  reflect all adjustments which are, in the opinion
of management, necessary for a fair statement of results for the interim periods
presented and all such  adjustments are of a normal  recurring  nature.  Interim
results are not necessarily indicative of results for a full year.

NET LOSS PER SHARE
     Net loss per share is  computed  based on the  weighted  average  shares of
common stock outstanding for the period.

PATENT COSTS
     The Company reimburses the University of Florida Research Foundation,  Inc.
(UFRI),  for direct  expenses  relating to the Company's  patents.  Patent costs
consist of legal fees and other  direct  costs  incurred in  obtaining  patents.
These  costs are  charged to  research  and  development  expense or general and
administrative expense when incurred.

RESEARCH AND DEVELOPMENT
       Sponsored research revenue is recognized as revenue when the payments are
earned or received and the research has been performed. Research and development
expenses are charged to  operations  when  incurred.  Research  and  development
expenses include, among other things, consulting fees and cost reimbursements to
UFRI.

PRO FORMA BALANCE SHEET
     The unaudited pro forma balance sheet at September 30, 1996 gives effect to
the private  placement  and the exercise  and issuance of warrants  described in
Note 2 and the adjustments described in Note 3. The pro forma information should
be read together with the Financial Statements including the Notes thereto.


2. STATUS OF FINANCINGS

     In April 1996,  the Company  received  notice from The Nasdaq  Stock Market
("Nasdaq")  that the  Company's  total  assets  and  capital  and  surplus as of
December 31, 1995, did not meet the minimum  requirements for continued  listing
on the Nasdaq Small Cap Market and that the Company's Common Stock, Warrants and
Units were subject to delisting.  Nasdaq  requested  that the Company  provide a
specific plan demonstrating how the Company will achieve ongoing compliance with
Nasdaq's  minimum  requirements  of $2,000,000 of total assets and $1,000,000 of
capital and surplus. The Company provided a plan to Nasdaq



                                       7

<PAGE>



                              SUNPHARM CORPORATION
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS
                               September 30, 1996
                                  (Unaudited)


which  contemplated cash inflows to the Company through the private placement of
equity  and other  sources in an amount  sufficient  to bring the  Company  into
compliance  by  June  15,  1996,  the  date  established  by  Nasdaq  for  final
determination.  On June 17, 1996, the Company filed a Current Report on Form 8-K
which established that the Company had met the minimum requirements on such date
for continued listing on Nasdaq, as a result of the following events:

(i) the  receipt  in escrow of  $370,480  of  proceeds  in  connection  with the
offering  of Common  Stock  and  warrants  in the  private  placement;  (ii) the
exercise of outstanding  warrants from certain  current  warrantholders  and the
issuance of  additional  warrants  to such  individuals,  in an amount  equal to
$468,301; (iii) payment of $500,000 from Warner-Lambert as a progress payment on
the Phase I clinical  trials of DENSPM for cancer;  and (iv) the settlement of a
lawsuit  with Dean L. Rider,  M.D.  ("Rider  Settlement")  pursuant to which the
Company  issued to Rider 50,000 shares of Common Stock.  After the filing of the
Current  Report  on Form 8-K,  the  Company  received  additional  proceeds  and
conducted an initial closing on July 19, 1996, in which the Company  received an
aggregate  of $623,605  of proceeds  (including  the amount  previously  held in
escrow).  Since the initial  closing,  the Company  has  received an  additional
$2,092,190 of proceeds ($1,789,450 of which was received subsequent to September
30, 1996) from the private  placement  and $24,535 of proceeds from the exercise
of  warrants.  Based on all of the  above,  there can be no  assurance  that the
Company will be successful in  maintaining  its continued  listing on the Nasdaq
Small Cap Market. In the event that the Company's  securities are delisted,  the
market value of such securities may be adversely affected.


3. PRO FORMA BALANCE SHEET

     The pro forma Balance Sheet as of September 30, 1996,  reflects the receipt
of private  placement  proceeds  of  $1,789,450  and  assumes  the  issuance  of
securities by the Company in exchange  therefor.  Such proceeds were received by
the  Company  during  October and  November  1996.  Additionally,  the pro forma
balance  sheet  reflects the $185,000 of fees  incurred in  connection  with the
private placement.



                                        8

<PAGE>




ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS.  The Quarterly  Report on Form 10-QSB  contains  forward-looking
statements  within the meaning of Section 27A of the  Securities Act of 1933 and
Section 21E of the Securities  Exchange Act of 1934. Actual results could differ
materially from those projected in the forward-looking statements as a result of
a number of important factors.  For a discussion of important factors that could
affect the Company's results,  please refer to the discussions below, and to the
discussions in the Company's 1995 Annual Report on Form 10-KSB under the caption
"Item 1. Business - Risk Factors."

OVERVIEW

     Since its inception in May 1990, SunPharm has devoted  substantially all of
its efforts and  resources  to research  and  development  conducted  on its own
behalf and through collaborations with clinical institutions. The Company's drug
development  strategy  emphasizes  conducting  most of its research and clinical
activities at the University of Florida. Consequently, the Company believes that
its research and development  expenditures have been lower than other comparable
development stage pharmaceutical  companies. The Company has incurred cumulative
net losses of  $10,598,972  from its inception  through  September 30, 1996. The
Company expects to incur  additional  significant  operating losses for at least
the next several years  principally  as a result of its  continuing  anticipated
research and development and clinical trial expenditures.

RESULTS OF OPERATIONS

Three Months Ended September 30, 1995 and 1996

     The Company's  research and  development  expenses  decreased  $61,000 from
$374,000  in the three  months  ended  September  30,  1995 to  $313,000  in the
comparable 1996 period.  These expenses  consisted of expenditures  for research
and development conducted by Dr. Bergeron at the University of Florida, the cost
of human clinical trials and costs related to other tests and studies  performed
in connection with the Company's pharmaceutical compounds. Although research and
development  expenses  decreased from period to period,  the Company expects its
research and  development  expenses to increase during the remainder of 1996 and
1997,  reflecting  anticipated  increased  expenses related to ongoing research,
preclinical studies and Phase I and Phase II human clinical trials.

     General and  administrative  expenses  decreased from $434,000 in the three
months ended September 30, 1995 to $366,000 in the comparable  1996 period.  The
decrease in the three  months  ended  September  30, 1996 is  attributable  to a
reduction in legal and administrative expenses.

Nine Months Ended September 30, 1995 and 1996

     The Company  recorded  licensing  revenues of $500,000 from  Warner-Lambert
during the nine months ended September 30, 1996.

     The Company's  research and development  expenses  decreased  $201,000 from
$1,214,000  in the nine months ended  September  30, 1995 to  $1,013,000  in the
comparable  1996  period.  This  decrease  results from the  toxicology  studies
performed in 1995.

     General and  administrative  expenses decreased from $2,039,000 in the nine
months ended September 30, 1995 to $1,374,000 in the comparable 1996 period. The
decrease is primarily  attributable  to issuance costs of $775,000  ($600,000 of
which were non-cash  costs)  incurred in connection with the issuance in 1994 of
the 10%  Convertible  Secured  Notes,  which  were  expensed  in 1995  upon  the
repayment of such notes and



                                        9

<PAGE>



other costs  incurred in the 1995 period which related to the Company's  initial
public offering, offset by the costs associated with the Rider Settlement in the
1996 period.

LIQUIDITY AND CAPITAL RESOURCES

     Since its  inception,  the Company has  financed its  operations  primarily
through  collaborative  research and  sublicense  agreements  with its strategic
alliance  partners  and the  issuance  of debt and  equity  securities.  Through
December 31, 1995 the Company had received  $1,885,000 of  cumulative  sponsored
research and sublicensing revenues, approximately $1,000,000 in consideration of
the private placement of equity  securities,  and $1,697,500 in consideration of
the placement of debt securities.  On January 12, 1995, the Company completed an
initial public  offering (the  "Offering") of 1,100,000  units ("Unit") at $7.00
per Unit. Each Unit consists of one share of the Company's  Common Stock and one
Redeemable Common Stock Purchase Warrant ("Warrant"),  which entitles the holder
to  purchase  one share of Common  Stock at $8.75 per  share.  Additionally,  on
February  16,  1995,  the  Representative  exercised  an option to  purchase  an
additional  165,000  Units at $7.00 per Unit.  Proceeds  from the Offering  were
approximately  $7,200,000 of cash, net of underwriting  costs and other Offering
costs of $1,655,000. Of such net proceeds,  approximately $1,793,000 was used to
repay the outstanding indebtedness (including accrued interest and certain fees)
of the Company.  On July 12, 1996, the Company  received a $500,000 payment from
Warner-Lambert in connection with the Phase I DENSPM human clinical trials. Such
payment was accrued as licensing revenues for the period ended June 30, 1996.

     During the nine month period ended September 30, 1996, the net cash used in
operating  activities was $1,600,000.  During the comparable  1995 period,  cash
used by  operating  activities  was  $3,396,000.  The  decrease  in cash used in
operations  is  primarily  attributable  to the  payment  in the 1995  period of
$700,000  of  accounts  payable and  $210,000  of  royalties  both of which were
delayed until the  completion  of the  Company's  initial  public  offering.  At
September 30, 1996, the Company had cash and cash equivalents of $1,436,000. The
Company had net working  capital of $511,000 at September 30, 1996.  The Company
will require  substantial  funds for research and  development  performed by the
University of Florida and to perform  preclinical testing and clinical trials of
its potential products.

     In April 1996,  the Company  received  notice from The Nasdaq  Stock Market
("Nasdaq")  that the  Company's  total  assets  and  capital  and  surplus as of
December 31, 1995, did not meet the minimum  requirements for continued  listing
on the Nasdaq Small Cap Market and that the Company's Common Stock, Warrants and
Units were subject to delisting.  Nasdaq  requested  that the Company  provide a
specific plan demonstrating how the Company will achieve ongoing compliance with
Nasdaq's  minimum  requirements  of $2,000,000 of total assets and $1,000,000 of
capital and surplus.  The Company  provided a plan to Nasdaq which  contemplated
cash  inflows to the Company  through the private  placement of equity and other
sources in an amount sufficient to bring the Company into compliance by June 15,
1996, the date established by Nasdaq for final determination.  On June 17, 1996,
the  Company  filed a  Current  Report on Form 8-K  which  established  that the
Company had met the minimum  requirements on such date for continued  listing on
Nasdaq, as a result of the following events:

(i) the  receipt  in escrow of  $370,480  of  proceeds  in  connection  with the
offering  of Common  Stock  and  warrants  in the  private  placement;  (ii) the
exercise of outstanding warrants from current warrantholders and the issuance of
additional warrants to such individuals,  in an amount equal to $468,301;  (iii)
payment of $500,000  from  Warner-Lambert  as a progress  payment on the Phase I
clinical trials of DENSPM for cancer;  and (iv) the settlement of a lawsuit with
Dean L. Rider, M.D. ("Rider Settlement") pursuant to which the Company issued to
Rider 50,000 shares of Common Stock.  After the filing of the Current  Report on
Form 8-K, the Company  received  additional  proceeds  and  conducted an initial
closing on July 19, 1996, in which the Company received an aggregate of $623,605
of proceeds (including the amount previously held in



                                       10

<PAGE>



escrow).  Since the initial  closing,  the Company  has  received an  additional
$2,092,190 of proceeds of which $1,789,400 was received  subsequent to September
30, 1996,  from the private  placement and $24,535 of proceeds from the exercise
of  warrants.  Based on all of the  above,  there can be no  assurance  that the
Company will be successful in  maintaining  its continued  listing on the Nasdaq
Small Cap Market. In the event that the Company's  securities are delisted,  the
market value of such securities may be adversely affected.

     On a  pro  forma  basis,  the  Company  had  $3,274,000  of  total  assets,
$2,140,000 of equity,  $3,225,000 of cash and  $2,116,000 of working  capital at
September 30, 1996 (see Pro Forma Balance Sheet and Note 3 to unaudited  interim
financial statements).

     The Company will require significant levels of additional capital, which it
intends  to  raise  through  additional  equity  or debt  financing,  additional
arrangements with corporate partners or from other sources.  No assurance can be
given that the Company can obtain  financing to fund its development  activities
on  acceptable  terms  or at all.  If  adequate  funds  are not  available  from
operations or additional  sources of financing,  the Company's  business will be
materially and adversely affected.

     The Company has incurred  losses since  inception and,  therefore,  has not
been subject to federal  income taxes.  As of December 31, 1995, the Company had
net operating loss ("NOL") and tax credit  carryforwards for income tax purposes
of approximately $6,458,000 and $260,000,  respectively,  which may be available
to reduce future taxable income and future tax liabilities.  These carryforwards
begin to expire  in 2008.  The Tax  Reform  Act of 1986  provides  for an annual
limitation  on the  use of  NOL  and  credit  carryforwards  (following  certain
ownership  changes)  that could  significantly  limit the  Company's  ability to
utilize these  carryforwards.  The Company has made no determination  concerning
whether  there has been such a cumulative  change in  ownership.  It is possible
that  such a change  in  ownership  occurred  following  the  completion  of the
Offering  and  exercise of the  Representative's  over-allotment  option or as a
result of the  Company's  1996 private  placement.  Accordingly,  the  Company's
ability to utilize the  aforementioned  carryforwards  to reduce future  taxable
income and tax liabilities may be limited.  Additionally,  because United States
tax laws limit the time during which these  carryforwards may be applied against
future  taxes,  the  Company  may not be able to take  full  advantage  of these
attributes for federal income tax purposes.



                                       11

<PAGE>



                           PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K.

     (a) Exhibits

Number                               Exhibit
------                               -------


4.1       Form of Stock  Purchase  Warrant  relating to Redeemable  Common Stock
          Purchase Warrants.

4.2       Subscription   Agreement  relating  to  May  1996  Offering  of  Units
          consisting of one share of Common Stock and one Warrant.

11.1      Statement of computation of net loss per share

27.       Financial Data Schedule

     (b) Reports on Form 8-K.

         None



                                       12

<PAGE>



                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                                         SUNPHARM CORPORATION


Date: November 14, 1996                  By:           /s/ Stefan Borg
                                             ------------------------------
                                         President and Chief Executive Officer
                                         (Principal Executive, Financial and
                                         Accounting Officer)



                                       13