QSAM Biosciences Reports First Quarter 2022 Financial Results and Provides Corporate Update

Dosed First Patient in Phase 1 Clinical Program Evaluating CycloSam® Radiopharmaceutical Drug Candidate for Treatment of Metastatic Bone Cancer

Austin, TX, May 17, 2022 (GLOBE NEWSWIRE) -- QSAM Biosciences Inc. (OTCQB: QSAM), a company developing next-generation therapeutic radiopharmaceuticals, including Samarium-153 DOTMP (CycloSam®), for the treatment of bone cancer and related diseases, today announces financial results for the first quarter ended March 31, 2022, as filed with the SEC on May 16, 2022 in the Company’s Form 10-Q, and provides a corporate update.

Recent Corporate Highlights:

  Dosed first patient in its Phase 1 clinical trial for CycloSam® for the treatment of metastatic bone cancer in April. Completion of the first cohort of patients in the trial is expected this quarter. The Phase 1 study consists of 17 patients divided into four dose-escalating cohorts in an open-label trial to evaluate the safety, tolerability, dosimetry and preliminary efficacy of CycloSam®.
  Advanced the onboarding process of three additional clinical trial sites for CycloSam®; expects to report further definitive information and details over following months.
  Awarded Rare Pediatric Disease designation from the FDA for CycloSam® in the treatment of osteosarcoma in children. This designation qualifies a future study for a transferable Priority Review Voucher that is inclusive of fast-track FDA review process.
  Added two distinguished healthcare industry veterans with significant finance, public company and operational experience to the Board of Directors .
  Postponed contemplated NASDAQ “uplisting” and public offering due to adverse market conditions.
     

“As previously highlighted, the recent dosing of our first patient with CycloSam® was a milestone event for QSAM. We are very pleased with the progress we have made in under 24 months – advancing from a preclinical asset to a drug candidate treating patients with metastatic bone cancer, receiving both Orphan and Rare Pediatric Disease designations from the FDA, performing a successful single patient study at a world-renowned medical institution, and establishing our supply chain, manufacturing and executive team – efficiently utilizing under $2 million,” stated Douglas R. Baum, CEO and co-founder of the Company.

“Given highly challenging market conditions, in particular for small cap biotechnology companies, we made the prudent decision in May to suspend our planned equity raise and NASDAQ uplisting. We did not believe the valuation we would have received at this time reflects the real intrinsic value of our technology and market opportunity. We are committed to bringing CycloSam® to market, and this will require additional capital; but we are also committed to raising such capital in a manner that limits dilution and provides a clear path to increasing shareholder value. In line with this, management has agreed to defer over 50% of the cash component of our salaries so that our current capital and that which we raise in the short-term can primarily be used to advance our clinical trial and provide data that supports our strong belief that CycloSam® can have a meaningful impact on children and adults suffering from bone cancer,” added Baum.

Financial Results for the Quarter Ended March 31, 2022:

Net loss attributable to common stockholders for the quarter ended March 31, 2022 was $1,873,879, compared to approximately $4,956,458 for the quarter ended March 31, 2021.

Operating expenses were $1,770,109 for the three months ended March 31, 2022, as compared to $3,333,857 for the three months ended March 31, 2021. The majority of the $1,563,748 decrease in operating expenses was due to other income and expenses related to the loss on debt extinguishment of $744,505, loss on conversion of debt to equity of $390,067, and non-cash stock-based compensation expense related to stock issued for services, all in the 2021 period.

As of March 31, 2022, the Company had cash of approximately $872,066. The Company believes this is sufficient to support operations at the current pace into the third quarter of 2022. The Company expects to raise additional capital through equity or debt offerings in 2022.

As of May 16, 2022, the Company had 1,686,587 common shares outstanding. In the first quarter of 2022, the Company issued 34,219 shares of common stock to a service provider and a director for prior services, and to retire the remaining outstanding convertible debentures. At the end of the first quarter of 2022 there were 488,235 shares of common stock that could be issued upon the conversion of preferred stock, warrants and convertible debt, excluding employee stock options.

The following table summarizes our results of operations for the periods indicated:

QSAM Biosciences, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS

    March 31,     December 31,  
    2022     2021  
    (Unaudited)        
ASSETS                
                 
CURRENT ASSETS                
Cash   $ 872,066     $ 1,499,866  
Prepaid expenses and other current assets     93,008       135,014  
Deferred offering costs     -       35,000  
TOTAL CURRENT ASSETS     965,074       1,669,880  
                 
TOTAL ASSETS   $ 965,074     $ 1,669,880  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                
                 
CURRENT LIABILITIES                
Accounts payable and accrued expenses   $ 817,390     $ 569,321  
Accrued payroll and related expenses     346,592       95,400  
Accrued series B preferred stock dividends     190,549       153,343  
Convertible notes payable, net of discount     541,475       532,400  
Notes payable - related parties     7,500       7,500  
Debentures     -       35,000  
TOTAL CURRENT LIABILITIES     1,903,506       1,392,964  
                 
TOTAL LIABILITIES     1,903,506       1,392,964  
                 
Redeemable convertible preferred stock - Series A; $0.0001 par value, 1,500 designated Series A, and 480 and 480 shares issued and outstanding (liquidation preference of $700,782 and $693,580) as of March 31, 2022 and December 31, 2021, respectively     700,782       693,580  
                 
STOCKHOLDERS’ EQUITY (DEFICIT)                
Preferred stock, Series B, $0.001 par value; 2,500 shares authorized, 1,509 and 1,509 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively     2       2  
Preferred stock, Series E-1, $0.0001 par value; 8,500 shares authorized, 0 and 0 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively     -       -  
Common stock, $0.0001 par value, 300,000,000 shares authorized, 1,686,587 and 1,652,102 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively     169       166  
Unearned deferred compensation     (687,701 )     (900,742 )
Additional paid-in capital     30,159,461       29,765,584  
Accumulated deficit     (31,111,145 )     (29,281,674 )
TOTAL STOCKHOLDERS’ DEFICIT     (1,639,214 )     (416,664 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT   $ 965,074     $ 1,669,880  


QSAM Biosciences, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

    For the three months ended  
    March 31,  
    2022     2021  
REVENUES   $ -     $ -  
                 
OPERATING EXPENSES FROM CONTINUING OPERATIONS                
Compensation and related expenses     756,399       76,388  
Professional fees     639,405       769,497  
General and administrative     119,468       2,414,018  
Research and development expenses     254,837       73,954  
Total Operating Expenses     1,770,109       3,333,857  
                 
LOSS FROM CONTINUING OPERATIONS     (1,770,109 )     (3,333,857 )
                 
OTHER INCOME (EXPENSE) FROM CONTINUING OPERATIONS                
Financing costs including interest     (18,137 )     (37,629 )
Other miscellaneous income     -       -  
Gain on sale of equity method investment     -       100,000  
Loss on debentures and accrued expenses converted to common stock     -       (390,068 )
Loss on conversion of bridge notes including accrued interest and debt forgiveness     -       (744,505 )
Total Other Expense, net     (18,137 )     (1,072,202 )
                 
Loss from continuing operations before income taxes     (1,788,246 )     (4,406,059 )
                 
INCOME TAXES     -       -  
Loss from continuing operations     (1,788,246 )     (4,406,059 )
                 
DISCONTINUED OPERATIONS:                
Income from discontinued operations before income taxes     -       -  
                 
INCOME TAXES     -       -  
                 
Income from discontinued operations     -       -  
                 
NET LOSS     (1,788,246 )     (4,406,059 )
                 
PREFERRED STOCK                
Series A preferred stock contractual dividends     (7,202 )     (7,899 )
Series B preferred stock contractual dividends     (37,206 )     -  
Deemed dividend on conversion of Series A preferred stock to shares of common stock     -       (542,500 )
Deemed dividend on warrant modification     (41,225 )     -  
                 
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS   $ (1,873,879 )   $ (4,956,458 )
                 
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS: BASIC AND DILUTED:                
Loss per share   $ (1.12 )   $ (8.76 )
                 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:     1,668,677       565,672  


QSAM Biosciences, Inc.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

    For the three months ended
March 31,
 
    2022     2021  
CASH FLOWS FROM OPERATING ACTIVITIES                
Net Loss   $ (1,788,246 )   $ (4,406,059 )
Adjustments to reconcile net loss to net cash used in operations:                
Common stock issued for services     254,751       652,392  
Stock-based compensation to employees and directors     320,353       -  
Stock-based compensation and stock option modification     -       2,386,223  
Loss on conversion of bridge notes and accrued interest     -       744,505  
Loss on conversion of debentures and accrued expense to common stock     -       390,068  
Paid-in-kind interest - convertible bridge notes     -       35,983  
Amortization of debt discount     9,075       -  
Changes in operating assets and liabilities                
Decrease (increase) in prepaid expenses and other current assets     42,006       (18,141 )
Deferred offering costs     35,000       -  
(Decrease) increase in accounts payable and accrued expenses     248,069       (75,035 )
Increase accrued payroll and related expenses     251,192       -  
Increase in accrued interest     -       1,914  
Net cash used in operating activities     (627,800 )     (288,150 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Proceeds for the issuance of preferred stock – Series B     -       2,221,000  
Net cash provided by financing activities     -