UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 24, 2021
QSAM BIOSCIENCES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-55148 | 20-1602779 | ||
| (State or other jurisdiction | (Commission File | (IRS Employer | ||
| of incorporation) | Number) | Identification Number) |
| 9442 Capital of Texas Hwy N, Plaza 1, Suite 500 | 78759 | |
| (Address of principal executive offices) | (Zip Code) | |
| Registrant’s telephone number, including area code | (512) 343-4558 |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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. ☐
Item 1.01 Entry into a Material Definitive Agreement
As previously reported on Form 8-K, on April 20, 2020, QSAM Biosciences, Inc. (the “Company”), through its wholly-owned subsidiary, QSAM Therapeutics Inc. (the “Subsidiary”), entered into a patent and technology license agreement (the “License Agreement”) and trademark assignment with IGL Pharma, Inc. (“IGL”) to secure the exclusive, worldwide rights to the radiopharmaceutical drug candidate, CycloSam®. The License Agreement stipulated milestone-based payments to IGL tied to successful completion of clinical trial phases, royalty fees on net sales, and commissions from sublicensing or sale of the product among other things. On November 24, 2021, the Company and IGL entered into a first amendment to the License Agreement to effect certain changes to the commercial arrangement between the parties. We have summarized the key terms of the amendment below (the “Amended License Agreement”):
| (i) | The Company had previously agreed to issue a 5% equity interest in the Subsidiary to IGL upon satisfaction of certain conditions. Pursuant to the Amended License Agreement, we have agreed to issue 500,000 restricted common shares of the Company to IGL in lieu of equity interest in the Subsidiary; | |
| (ii) | The License Agreement stipulated a payment to IGL of up to 50% of any sublicense fees received by the Company in the event of a grant of rights to CycloSam® to a third party. This fee has been materially reduced to a fixed payment of 5% of any sublicense fee, which includes the sale of the technology or sale of our Subsidiary that holds the Amended License Agreement to a third party; | |
| (iii) | Milestone payments tied to phases of clinical trials were increased from a total of $150,000 to a total of $410,000, which are expected to be paid over the following two to three years, and our payment upon the first commercial sale of CycloSam® to third parties was increased from $1,500,000 to $2,000,000; | |
| (iv) | We have agreed to provide IGL the right to observe and participate in any board of directors meeting of the Company in which any scheduled agenda item may reasonably affect the rights of IGL under the Amended License Agreement. |
The above terms represent a summary of the Amended License Agreement and are qualified in their entirety by reference to the copy filed as Exhibit 10.1 to this Report on Form 8-K.
Item 3.02 Unregistered Sales of Equity Securities
In connection with the Amended License Agreement, the Company issued 500,000 shares of common stock to IGL. See Item 1.01 above. The shares of common stock issued under the Amended License Agreement were not registered under the Securities Act of 1933, as amended, but were issued in reliance on an exemption from registration set forth in Section 4(a)(2) of the Securities Act and/or Regulation D thereunder.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description | |
| 10.1 | First Amendment to Patent and Technology License Agreement and Trademark Assignment | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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 hereunto duly authorized.
| QSAM Biosciences, Inc. | ||
| By: | /s/ Christopher Nelson | |
| Christopher Nelson | ||
| General Counsel | ||
Date: November 30, 2021
Exhibit 10.1
FIRST AMENDMENT
Patent and Technology License Agreement and Trademark Assignment
Between IGL Pharma, Inc. and QSAM Therapeutics Inc.
This Patent and Technology License Agreement and Trademark Assignment Amendment (the “Amendment”) is made and entered into as of November 17, 2021 (the “Effective Date”), by and between IGL Pharma, Inc., a Delaware corporation, (“IGL Pharma”) having its principal place of business at 1004 S. Velasco Street, Angleton, Texas 77515 and QSAM Therapeutics Inc., (“QSAM”) a Texas corporation having its principal place of business 3616 Far West Blvd, Suite 117-292, Austin, Texas 78731. IGL Pharma and QSAM are each referred to herein as a “Party” and collectively as the “Parties.”
The Parties desire to amend their Patent and Technology License Agreement and Trademark Assignment, effective April 20, 2020 (“Agreement”) by this Amendment, which upon the last signature date below by a Party (“Signature Date”), shall be effective as of the Effective Date above. The Parties agree that the various terms below refer to the Agreement where now amended and all other terms of the Agreement remain unchanged. The consideration for this Amendment is considered sufficient by the Parties based on the items now amended below.
These amendments are as follows:
Replace the present Section 3.1(b) entirely with the following wording:
Within ten (10) business days from the Effective Date, issue to IGL Pharma 500,000 shares of the parent company of QSAM, namely QSAM Biosciences Inc. (“Parent”).
Amend Section 3.1(d) as follows:
Delete the initial $25,000 number and replace with $35,000.
Amend Section 3.1(e) as follows:
Delete the initial $25,000 number and replace with $50,000.
Amend Section 3.1(f) as follows:
Delete the initial $25,000 number and replace with $75,000.
Amend Section 3.1(g) as follows:
Delete the initial $25,000 number and replace with $100,000.
Amend Section 3.1(h) as follows:
Delete the initial $25,000 number and replace with $150,000.
Amend Section 3.1(i) as follows:
Delete the initial $1,500,000 number and replace with $2,000,000.
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Replace Sections 3.1m(i), (ii) and (iii) with following Section 3.1(m):
Five percent (5%) of all Sublicense Consideration received by QSAM at any time; and
Add a new Section 3.1(n) reading as follows:
Five percent (5%) of all value paid to QSAM or its Parent, or any other entity that controls or owns QSAM, including but not limited to a sublicensee of QSAM.
Replace Section 3.2 with the following:
3.2 Board Observer Rights. IGL Pharma shall have the right to observe and participate in any Board of Directors meeting of the Parent in which any scheduled agenda item may reasonably affect the rights of IGL Pharma under this Agreement.
All other terms of the Agreement remain unchanged.
This Amendment may be executed by the Parties in two or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement. This Amendment may be executed by the Parties by the exchange of facsimile signature pages, with signed original counterparts of the Agreement to be exchanged by the Parties promptly thereafter.
IN WITNESS WHEREOF, the Parties’ represent that their respective duly authorized representatives hereto have executed this Amendment as of the dates below, which upon the last Signature Date below shall render this Amendment effective as of the Effective Date above.
| QSAM Therapeutics Inc. | IGL Pharma, Inc. | |||
| By: | /s/ Douglas Baum | By: | /s/ R. Keith Frank | |
| Name: | Douglas Baum | Name: | R. Keith Frank, PhD | |
| Title: | CEO | Title: | Chairman | |
| Date: | 11/24/21 | Date: | 11/24/21 | |
Understood and Accepted for the issuance of shares by:
| QSAM Biosciences Inc. | ||
| By: | /s/ Douglas Baum | |
| Name: | Douglas Baum | |
| Title: | CEO | |
| Date: | 11/24/21 | |
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