Large accelerated filer
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☐
|
|
Accelerated filer
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☐
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Non-accelerated filer
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☐
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(Do not check if smaller reporting
company)
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Smaller reporting company
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☒
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|
|
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Emerging growth company
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☐
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Common Stock, $0.001 par value
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13,987,130 shares
|
(Class)
|
(Outstanding as at July 16, 2018)
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|
Page
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PART
I – FINANCIAL INFORMATION
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2
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Item
1. Condensed Consolidated Financial Statements
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2
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Item
2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
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10
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Item
3. Quantitative and Qualitative Disclosure About Market
Risk
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14
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Item
4. Controls and Procedures
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14
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PART
II – OTHER INFORMATION
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15
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Item
1. Legal Proceedings
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15
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Item
1A. Risk Factors
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15
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Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
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15
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Item
3. Defaults Upon Senior Securities
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15
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Item
4. Mine Safety Disclosures
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15
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Item
5. Other Information
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15
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Item
6. Exhibits
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15
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SIGNATURES
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16
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|
May
31, 2018
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November
30, 2017
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|
(Unaudited)
|
|
ASSETS
|
|
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Current
assets:
|
|
|
Cash
|
$
2,324,171
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$
824,783
|
Prepaid
expenses
|
2,500
|
2,500
|
Total current
assets
|
2,326,671
|
827,283
|
Total
Assets
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$
2,326,671
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$
827,283
|
|
|
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LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
Current
liabilities:
|
|
|
Accounts payable
and accrued expenses
|
$
432,792
|
$
463,539
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Accrued expenses -
related party
|
7,500
|
7,500
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Total current
liabilities
|
440,292
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471,039
|
Total
Liabilities
|
440,292
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471,039
|
|
|
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Commitments
and Contingencies (Note 5)
|
|
|
|
|
|
Stockholders' Equity:
|
|
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Preferred
stock, $0.001 par value; 100,000,000 shares authorized; no shares
issued and outstanding as of May 31, 2018 and November 30,
2017
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-
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-
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Common
stock, $0.001 par value; 250,000,000 shares authorized; 13,987,130
and 12,206,409 shares issued and outstanding as of May 31, 2018 and
November 30, 2017, respectively
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13,987
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12,206
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Additional
paid-in capital
|
28,902,745
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23,187,408
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Accumulated
deficit
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(27,030,353
)
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(22,843,370
)
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Total Stockholders' Equity
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1,886,379
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356,244
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Total
Liabilities and Stockholders' Equity
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$
2,326,671
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$
827,283
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|
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For
the three months ended May 31,
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For
the six months ended May 31,
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||
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2018
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2017
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2018
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2017
|
Operating
expenses:
|
|
|
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General and
administrative expenses
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$
1,230,616
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$
1,676,961
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$
2,551,370
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$
3,084,439
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Research and
development expenses
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782,188
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1,013,420
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1,635,613
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1,598,358
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Total operating
expenses
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2,012,804
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2,690,381
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4,186,983
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4,682,797
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|
|
|
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Other
income (expenses):
|
|
|
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Interest
expense
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-
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(216,600
)
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-
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(433,107
)
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Loss on conversion
of debt
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-
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(2,442
)
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-
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(365,373
)
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Change in fair
value of embedded conversion option
|
-
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60,000
|
-
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(845,000
)
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Change in fair
value of warrant liability
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-
|
-
|
-
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(59,870
)
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Total other income
(expenses)
|
-
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(159,042
)
|
-
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(1,703,350
)
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|
|
|
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Net
loss
|
$
(2,012,804
)
|
$
(2,849,423
)
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$
(4,186,983
)
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$
(6,386,147
)
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|
|
|
|
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Net loss per share - basic and diluted
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$
(0.14
)
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$
(0.29
)
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$
(0.31
)
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$
(0.66
)
|
|
|
|
|
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Weighted average shares outstanding, basic and diluted
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13,982,627
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9,920,456
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13,358,654
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9,698,816
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For
the six months ended May 31,
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|
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2018
|
2017
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Cash
flows from operating activities:
|
|
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Net
loss
|
$
(4,186,983
)
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$
(6,386,147
)
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Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
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Issuance of common
stock, warrants and options for services
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771,867
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1,849,149
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Issuance of common
stock for acquired in-process research and development
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-
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487,500
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Change in fair
value of embedded conversion option
|
-
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845,000
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Change in fair
value of warrant liability
|
-
|
59,870
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Accretion of debt
discount
|
-
|
354,766
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Loss on conversion
of debt
|
-
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365,373
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Changes in
operating assets and liabilities:
|
|
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Prepaid
expenses
|
-
|
(20,000
)
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Accounts payable
and accrued expenses
|
(30,747
)
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(202,171
)
|
Accrued expenses -
related party
|
-
|
(63,002
)
|
Accrued interest
payable
|
-
|
78,341
|
Net
cash used in operating activities
|
(3,445,863
)
|
(2,631,321
)
|
|
|
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Cash
flows from financing activities:
|
|
|
Proceeds
from issuance of convertible notes
|
-
|
2,500,000
|
Proceeds
received from exercise of warrants
|
-
|
70,000
|
Proceeds
received for issuance of common stock and warrants, net of offering
costs
|
4,945,251
|
-
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Net
cash provided by financing activities
|
4,945,251
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2,570,000
|
|
|
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Net increase (decrease) in cash
|
1,499,388
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(61,321
)
|
|
|
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Cash at beginning of period
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824,783
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1,468,724
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Cash at end of period
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$
2,324,171
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$
1,407,403
|
|
|
|
Non-cash financing activities:
|
|
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Issuance
of common stock upon conversion of convertible notes
payable
|
$
-
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$
2,879,273
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Reclassification
of warrant liability to equity
|
$
-
|
$
227,940
|
|
|
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Supplemental disclosures:
|
|
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Cash paid for
interest
|
$
-
|
$
-
|
Cash paid for
income taxes
|
$
-
|
$
-
|
|
|
|
|
For
the six months ended May 31,
|
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Potentially dilutive securities
|
2018
|
2017
|
Warrants
(Note 8)
|
4,877,558
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1,111,500
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Convertible
debt
|
-
|
985,723
|
Options (Note
8)
|
500,000 -
|
-
|
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For
the three months ended May 31,
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For
the six months ended May 31,
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||
|
2018
|
2017
|
2018
|
2017
|
Rent
expense
|
$
7,500
|
$
7,500
|
$
15,000
|
$
12,500
|
|
For
the three months ended May 31,
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For
the six months ended May 31,
|
||
|
2018
|
2017
|
2018
|
2017
|
Consulting and
legal expenses
|
$
60,000
|
$
130,000
|
$
120,000
|
$
243,000
|
|
Warrants
|
Weighted
Average
Exercise Price
|
Weighted
Average
Remaining Contractual
Life
(years)
|
Intrinsic
Value
|
Outstanding
at November 30, 2017
|
3,083,995
|
$
3.67
|
4.02
|
$
2,539,185
|
Issued
|
1,793,563
|
$
3.23
|
4.67
|
|
Outstanding
at May 31, 2018
|
4,877,558
|
$
3.51
|
3.95
|
$
1,479,375
|
Exercisable
at May 31, 2018
|
4,871,308
|
$
3.51
|
3.95
|
$
1,479,375
|
|
|
|
Weighted
Average
|
|
|
|
Weighted
Average
|
Remaining
Contractual
|
|
|
Options
|
Exercise
Price
|
Life
(years)
|
Intrinsic
Value
|
Outstanding
at November 30, 2017
|
450,000
|
$
4.00
|
4.51
|
$
220,500
|
Issued
|
50,000
|
$
3.00
|
4.70
|
$
20,000
|
Outstanding
at May 31, 2018
|
500,000
|
$
3.90
|
4.08
|
$
20,000
|
Exercisable
at May 31, 2018
|
350,000
|
$
3.96
|
4.04
|
$
5,000
|
|
|
|
|
|
|
For
the six months ended May 31,
|
|
2018
|
Exercise
price
|
$
3.00
|
Expected
term (years)
|
5.0
|
Volatility
|
127.70
%
|
Risk-free
rate
|
2.52
%
|
Dividend
yield
|
0.00
%
|
|
For
the six months ended May 31,
|
|
|
2018
|
2017
|
|
|
|
Net
cash (used in) provided by:
|
|
|
Operating
activities
|
$
(3,445,863
)
|
$
(2,631,321
)
|
Financing
activities
|
4,945,251
|
2,570,000
|
Net (decrease)
increase in cash
|
$
1,499,388
|
$
(61,321
)
|
|
For
the three months ended May 31,
|
For
the six months ended May 31,
|
||
|
2018
|
2017
|
2018
|
2017
|
Rent
expense
|
$
7,500
|
$
7,500
|
$
15,000
|
$
12,500
|
|
For
the three months ended May 31,
|
For
the six months ended May 31,
|
||
|
2018
|
2017
|
2018
|
2017
|
Consulting and
legal expenses
|
$
60,000
|
$
130,000
|
$
120,000
|
$
243,000
|
Exhibit Number
|
Name and/or Identification of Exhibit
|
|
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31.1
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Rule 13a-14(a)/15d-14(a) Certifications
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|
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32.1
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Certification under Section 906 of the Sarbanes-Oxley Act (18
U.S.C. Section 1350)
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|
|
101
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Interactive Data File
|
|
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101.INS
|
XBRL Instance Document*
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101.SCH
|
XBRL Taxonomy Extension Schema Document*
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101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document*
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101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document*
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101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document*
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101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
Document*
|
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Q BIOMED INC.
|
|
|
|
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July 16, 2018
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By:
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/s/ Denis Corin
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|
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Denis Corin
|
|
|
President, Chief Executive Officer, Acting Principal Accounting
Officer, Principal Financial Officer
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|
(1)
|
I have reviewed this quarterly report on Form 10-Q for the
quarterly period ended May 31, 2018 of Q BioMed Inc.;
|
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(2)
|
Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
|
|
(3)
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Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects, the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this report;
|
|
(4)
|
The registrant’s other certifying officer and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
|
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(b)
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Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report
based on such evaluation; and
|
|
(d)
|
Disclosed in the report any change in the registrant’s
internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of the annual
report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over
financial reporting; and
|
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(5)
|
The registrant’s other certifying officer and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and
the audit committee of registrant’s board of directors (or
persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial
information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or
other employees who have a significant role in the
registrant’s internal control over financial
reporting.
|
|
Dated: July 16, 2018
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/s/ Denis Corin
|
|
Denis Corin
|
|
Chief Executive Officer (Principal Executive Officer
and
Acting Principal Financial and Accounting Officer)
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
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|
Dated: July 16, 2018
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|
/s/ Denis Corin
|
|
Denis Corin
|
|
Chief Executive Officer (Principal Executive Officer
and
Acting Principal Financial and Accounting Officer)
|