Q BioMed Inc. [QBIO] Filings

10-Q 1 tmb-20220831x10q.htm 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: August 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission File Number: 000-55535

Q BIOMED INC.

(Exact name of registrant as specified in its charter)

Nevada	30-0967746
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

c/o Ortoli Rosenstadt LLP 366 Madison Avenue, 3rd Floor New York, NY 10017
(Address of principal executive offices)

(212) 588-0022
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Symbol	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities 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. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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


Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


Common Stock, $0.001 par value	70,318,066 shares
(Class)	(Outstanding at October 31, 2022)

Table of Contents

Q BIOMED INC.

Table of Contents


		Page
PART I - FINANCIAL INFORMATION		1
Item 1. Condensed Consolidated Financial Statements (Unaudited)		1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3. Quantitative and Qualitative Disclosure About Market Risk		29
Item 4. Controls and Procedures		30
PART II - OTHER INFORMATION		31
Item 1. Legal Proceedings		31
Item 1A. Risk Factors		31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		31
Item 3. Defaults Upon Senior Securities		31
Item 4. Mine Safety Disclosures		31
Item 5. Other Information		32
Item 6. Exhibits		33
SIGNATURES		34

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Q BIOMED INC.

Condensed Consolidated Balance Sheets


	As of August 31,		As of November 30,
	2022		2021
	(Unaudited)
ASSETS
Current assets:
Cash	$	137,827	$	344,009
Accounts receivable		11,535		80,097
Inventory		22,676		22,253
Prepaid expenses and other current assets		13,496		13,121
Total current assets		185,534		459,480
Intangible assets, net		312,500		350,000
Total Assets	$	498,034	$	809,480

LIABILITIES AND STOCKHOLDERS‘ DEFICIT
Current liabilities:
Accounts payable	$	2,079,652	$	1,345,319
Accrued expenses		1,216,374		954,309
Accrued expenses - related party		221,000		71,500
Accrued interest payable		202,504		70,677
Debt		3,772,798		3,053,037
Derivative liabilities		240,022		—
Total current liabilities		7,732,350		5,494,842
Total Liabilities		7,732,350		5,494,842

Commitments and Contingencies (Note 6)

Stockholders' Deficit:
Preferred stock, $0.001 par value; 100,000,000 shares authorized as of August 31, 2022 and November 30, 2021		—		—
Convertible Series A, 500,000 shares designated - 227,998 shares issued and outstanding at August 31, 2022 and November 30, 2021, respectively		2,160,574		2,161,195
Convertible Series B, 1,000,000 shares designated - 318,000 and 400,000 shares issued and outstanding at August 31, 2022 and November 30, 2021, respectively		3,094,623		3,915,512
Common stock, $0.001 par value; 250,000,000 shares authorized; 57,364,746 and 28,647,788 shares issued and outstanding as of August 31, 2022 and November 30, 2021, respectively		57,365		28,648
Additional paid-in capital		55,851,395		53,335,901
Accumulated deficit		(68,398,273)		(64,126,618)
Total Stockholders' Deficit		(7,234,316)		(4,685,362)
Total Liabilities and Stockholders' Deficit	$	498,034	$	809,480

The accompanying notes are an integral part of these condensed consolidated financial statements

Table of Contents

Q BioMed Inc.

Condensed Consolidated Statements of Operations

(Unaudited)


	For the three months ended				For the nine months ended
	August 31, 2022		August 31, 2021		August 31, 2022		August 31, 2021
Net Sales	$	26,271	$	45,675	$	271,817	$	90,675
Cost of sales		66,442		73,770		213,138		160,763
Gross income (loss)		(40,171)		(28,095)		58,679		(70,088)
Operating expenses:
General and administrative expenses		720,075		1,371,676		2,835,543		5,028,668
Research and development expenses		20,839		202,168		103,159		667,538
Total operating expenses		740,914		1,573,844		2,938,702		5,696,206
Loss from operations		(781,085)		(1,601,939)		(2,880,023)		(5,766,294)
Other (income) expenses:
Interest expense		239,638		99,418		1,108,372		234,752
Change in fair value of derivatives		(382,072)		101,247		(264,267)		128,720
Loss on debt extinguishment		152,211		(15,212)		384,311		40,910
Loss on issuance of convertible note		4,250		—		4,250		—
Settlement of registration liability		—		—		241,875		—
Total other expenses		14,027		185,453		1,474,541		404,382
Net loss		(795,112)		(1,787,392)		(4,354,564)		(6,170,676)
Accumulated dividend on convertible preferred stock		(114,257)		(125,485)		(364,289)		(375,517)
Deemed dividend for induced conversion of convertible preferred stock		(460,233)		—		(968,160)		—
Net loss attributable to common stockholders	$	(1,369,602)	$	(1,912,877)	$	(5,687,013)	$	(6,546,193)

Net loss per share - basic and diluted	$	(0.03)	$	(0.07)	$	(0.16)	$	(0.25)
Weighted average shares outstanding, basic and diluted		44,897,574		27,660,616		35,878,092		26,207,685

The accompanying notes are an integral part of these condensed consolidated financial statements

Table of Contents

Q BIOMED INC.

Condensed Consolidated Statements of Changes in Shareholders’ Deficit

(Unaudited)


	For the Three Months Ended August 31, 2022
														Total
	Series A Preferred Stock			Series B Preferred Stock			Common Stock			Additional Paid		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		in Capital		Deficit		Deficit
Balance as of June 1, 2022	227,998	$	2,160,916	345,000	$	3,364,623	39,222,374	$	39,222	$	54,947,369	$	(67,603,161)	$	(7,091,031)
Issuance of common stock for dividend payment on preferred stock	—		(45,599)	—		(69,000)	1,051,376		1,052		113,547		—		—
Issuance of common stock to convert Series B preferred stock	—		—	(27,000)		(270,000)	7,619,012		7,619		722,614		—		460,233
Deemed dividend for induced conversion of Series B preferred stock	—		—	—		—	—		—		(460,233)		—		(460,233)
Issuance of common stock to convert notes payable	—		—	—		—	7,423,424		7,423		533,091		—		540,514
Issuance of common stock to settle commitment shares	—		—	—		—	300,000		300		8,400		—		8,700
Accumulated dividend on preferred stock	—		45,257	—		69,000	—		—		(114,257)		—		—
Share based compensation for services	—		—	—		—	1,748,560		1,749		102,364		—		104,113
Share based compensation for options modification	—		—	—		—	—		—		3,000		—		3,000
Reclassification of options from equity to liability due to reassessment under ASC 815	—		—	—		—	—		—		(4,500)		—		(4,500)
Net loss	—		—	—		—	—		—		—		(795,112)		(795,112)
Balance as of August 31, 2022	227,998	$	2,160,574	318,000	$	3,094,623	57,364,746	$	57,365	$	55,851,395	$	(68,398,273)	$	(7,234,316)


	For the Three Months Ended August 31, 2021
														Total
	Series A Preferred Stock			Series B Preferred Stock			Common Stock			Additional Paid		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		in Capital		Deficit		Deficit
Balance as of June 1, 2021	227,998	$	2,161,702	400,000	$	3,915,512	27,456,512	$	27,456	$	51,972,556	$	(60,269,352)	$	(2,192,126)
Issuance common stock for dividend payment on preferred stock	—		(45,600)	—		(80,000)	130,833		131		125,469		—		—
Accumulated dividend on preferred stock	—		45,485	—		80,000	—		—		(125,485)		—		—
Beneficial conversion feature related to convertible notes	—		—	—		—	—		—		225,750		—		225,750
Issuance of warrants in conjunction with convertible note	—		—	—		—	—		—		252,683		—		252,683
Issuance of common stock to convert notes payable	—		—	—		—	301,372		301		213,532		—		213,833
Share based compensation for services	—		—	—		—	85,628		86		290,687		—		290,773
Net loss	—		—	—		—	—		—		—		(1,787,392)		(1,787,392)
Balance as of August 31, 2021	227,998	$	2,161,587	400,000	$	3,915,512	27,974,345	$	27,974	$	52,955,192	$	(62,056,744)	$	(2,996,479)

Table of Contents

Q BIOMED INC.

Condensed Consolidated Statements of Changes in Shareholders’ Deficit

(Unaudited)


	For the Nine Months Ended August 31, 2022
														Total
	Series A Preferred Stock			Series B Preferred Stock			Common Stock			Additional Paid		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		in Capital		Deficit		Deficit
Balance as of December 1, 2021	227,998	$	2,161,195	400,000	$	3,915,512	28,647,788	$	28,648	$	53,335,901	$	(64,126,618)	$	(4,685,362)
Issuance of common stock and warrants for cash	—		—	—		—	400,000		400		99,630		—		100,030
Cash proceeds from warrants modification	—		—	—		—	—		—		20,000		—		20,000
Issuance common stock for dividend payment on preferred stock	—		(136,799)	—		(229,000)	1,731,816		1,732		364,067		—		—
Issuance of common stock to convert Series B preferred stock	—		—	(82,000)		(820,000)	12,591,809		12,592		1,775,568		—		968,160
Deemed dividend for induced conversion of Series B preferred stock	—		—	—		—	—		—		(968,160)		—		(968,160)
Issuance of common stock to convert notes payable	—		—	—		—	10,890,765		10,891		1,866,367		—		1,877,258
Issuance of common stock to extinguish accrued liabilities	—		—	—		—	676,627		676		73,223		—		73,899
Issuance of common stock to settle commitment shares	—		—	—		—	545,000		545		61,810		—		62,355
Accumulated dividend on preferred stock	—		136,178	—		228,111	—		—		(364,289)		—		—
Share based compensation for services	—		—	—		—	1,880,941		1,881		325,826		—		327,707
Share based consideration for warrants modification	—		—	—		—	—		—		277,897		—		277,897
Share based compensation for options modification	—		—	—		—	—		—		182,436		—		182,436
Adoption of ASU 2020-06	—		—	—		—	—		—		(290,967)		82,909		(208,058)
Reclassification of warrants and options from equity to liability due to reassessment under ASC 815	—		—	—		—	—		—		(907,914)		—		(907,914)
Net loss	—		—	—		—	—		—		—		(4,354,564)		(4,354,564)
Balance as of August 31, 2022	227,998	$	2,160,574	318,000	$	3,094,623	57,364,746	$	57,365	$	55,851,395	$	(68,398,273)	$	(7,234,316)


	For the Nine Months Ended August 31, 2021
														Total
	Series A Preferred Stock			Series B Preferred Stock			Common Stock			Additional Paid		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		in Capital		Deficit		Deficit
Balance as of December 1, 2020	227,998	$	2,161,980	503,134	$	4,968,368	23,816,489	$	23,816	$	47,656,423	$	(55,886,068)	$	(1,075,481)
Issuance of common stock for cash	—		—	—		—	100,000		100		99,900		—		100,000
Issuance of common stock and warrants for cash	—		—	—		—	1,213,333		1,213		908,787		—		910,000
Issuance common stock for dividend payment on preferred stock	—		(136,799)	—		(260,627)	385,846		386		397,040		—		—
Issuance of common stock to convert notes payable	—		—	—		—	469,152		469		416,378		—		416,847
Issuance of common stock to convert Series B preferred stock	—		—	(103,134)		(1,031,340)	1,245,089		1,245		1,030,095		—		—
Issuance cost related to issuance of convertible notes	—		—	—		—	35,000		35		34,790		—		34,825
Beneficial conversion feature related to convertible notes	—		—	—		—	—		—		290,967		—		290,967
Issuance of warrants in conjunction with convertible note	—		—	—		—	—		—		252,683		—		252,683
Accumulated dividend on preferred stock	—		136,406	—		239,111	—		—		(375,517)		—		—
Share based compensation for services	—		—	—		—	709,436		710		2,243,646		—		2,244,356
Net loss	—		—	—		—	—		—		—		(6,170,676)		(6,170,676)
Balance as of August 31, 2021	227,998	$	2,161,587	400,000	$	3,915,512	27,974,345	$	27,974	$	52,955,192	$	(62,056,744)	$	(2,996,479)

The accompanying notes are an integral part of these condensed consolidated financial statements

Table of Contents

Q BIOMED INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	For the nine months ended
	August 31, 2022		August 31, 2021
Cash flows from operating activities:
Net loss	$	(4,354,564)	$	(6,170,676)
Adjustments to reconcile net loss to net cash used in operating activities
Share based compensation for services		327,707		2,244,356
Share based consideration related to warrants modification		299,883		—
Share based compensation related to stock options modification		211,936		—
Change in fair value of derivatives		(264,267)		128,720
Accretion of debt discount		920,925		188,118
Amortization expense		37,500		37,500
Settlement on registration liability		241,875		—
Loss on issuance of convertible note		4,250
Loss on debt extinguishment		384,311		40,910
Changes in operating assets and liabilities:
Accounts receivable		68,562		(38,875)
Prepaid expenses and other current assets		(798)		(2,628)
Accounts payable and accrued expenses		1,264,641		851,332
Accrued interest payable		131,827		(20,938)
Net cash used in operating activities		(726,212)		(2,742,181)

Cash flows from financing activities:
Proceeds received from issuance of convertible notes, net		350,000		1,706,250
Proceeds received from issuance of common stock and warrants		100,030		1,010,000
Proceeds received from issuance of notes to related parties		—		30,000
Cash advances		50,000		—
Proceeds received for warrants modification		20,000		—
Repayment of notes to related parties		—		(30,000)
Net cash provided by financing activities		520,030		2,716,250

Net decrease in cash		(206,182)		(25,931)

Cash at beginning of the year		344,009		177,145
Cash at end of the year	$	137,827	$	151,214

Supplemental disclosures:
Cash paid for interest to related parties	$	—	$	(441)
Cash paid for income taxes	$	—	$	—

Supplemental disclosures for noncash investing and financing activities:
Issuance of common stock to convert notes payable and accrued interest	$	1,877,258	$	416,847
Issuance of common stock to convert Series B preferred stock	$	820,000	$	1,031,340
Deemed dividend for induced conversion of Series B preferred stock	$	968,160	$	—
Accumulated dividend on convertible preferred stock	$	364,289	$	375,517
Issuance of common stock for dividend payment on preferred stock	$	365,799	$	397,426
Issuance of common stock to extinguish accrued liabilities	$	73,899	$	—
Issuance of common stock to settle derivative liability	$	62,355	$	—
Reclassification of warrants and options from equity to liability due to reassessment under ASC 815	$	907,914	$	—
Adoption of ASU 2020-06	$	208,058	$	—
Beneficial conversion feature related to convertible notes	$	—	$	290,967
Offering cost	$	—	$	69,825

The accompanying notes are an integral part of these condensed consolidated financial statements

Table of Contents

Q BIOMED INC.

Notes to Condensed Consolidated Financial Statements

Note 1 - Organization of the Company and Description of the Business

Q BioMed Inc. (“Q BioMed”), and its wholly owned subsidiaries Q BioMed Cayman SEZC and QBMG Q BioMed Germany UG (collectively, the “Company”), is a biomedical acceleration and development company focused on licensing, acquiring and providing strategic resources to life sciences and healthcare companies. Q BioMed intends to mitigate risk by acquiring multiple assets over time and across a broad spectrum of healthcare related products, companies and sectors. The Company intends to develop these assets to provide returns via organic growth, revenue production, out-licensing, sale or the spinoff of new public companies.

The accompanying condensed consolidated financial statements include the accounts of the Company’s wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Q BioMed Inc. [QBIO] Filings
10-Q	[2022-11-03]
10-Q	[2022-07-28]
10-Q	[2022-04-14]
10-K	[2022-02-28]
10-Q	[2021-10-15]
10-Q	[2021-07-15]
10-Q	[2021-04-14]
10-K	[2021-03-01]
S-1	[2021-01-11]
10-Q	[2020-10-14]
10-Q	[2020-07-15]
S-1	[2020-04-28]
10-Q	[2020-04-13]
10-K	[2020-02-28]
10-Q	[2019-10-15]
10-Q	[2019-07-19]
10-Q	[2019-04-17]
10-K	[2019-03-07]
S-1	[2018-10-25]
10-Q	[2018-10-15]
10-Q	[2018-07-16]
10-Q	[2018-04-16]
10-K	[2018-02-28]
S-1	[2017-12-12]
10-Q	[2017-10-18]
S-1	[2017-09-01]
10-Q	[2017-07-19]
10-Q	[2017-04-14]
S-1	[2017-03-10]
10-K	[2017-02-28]
S-1	[2016-12-22]
10-Q	[2016-10-17]
10-Q	[2016-07-07]
10-Q	[2016-04-22]
10-K	[2016-03-11]
10-Q	[2015-10-20]
10-Q	[2015-07-15]
10-Q	[2015-04-14]
10-K	[2015-02-27]
10-Q	[2014-10-15]
10-Q	[2014-07-15]
10-Q	[2014-04-11]
S-1	[2014-01-13]