UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14C INFORMATION

Information Statement Pursuant to Section 14(c)

of the Securities Exchange Act of 1934

Check the appropriate box:

QSAM BIOSCIENCES, INC.

(Name of Registrant As Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

PRELIMINARY COPY - SUBJECT TO COMPLETION

QSAM BIOSCIENCES, INC.

9442 Capital of Texas Hwy N, Plaza 1, Suite 500

Austin, TX 78759

NOTICE OF ACTION BY WRITTEN CONSENT AND INFORMATION STATEMENT

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY

To the Stockholders of QSAM Biosciences, Inc.:

This notice of action by written consent and the accompanying information statement (this “Information Statement”) is being furnished by the Board of Directors (the “Board”) of QSAM Biosciences, Inc., a Delaware corporation (“QSAM,” the “Company,” “we,” “us” or “our”), to the holders of record at the close of business on [●, 2024] (the “Record Date”) of the outstanding shares of our common stock, par value $0.0001 per share (“Common Stock” or “QSAM Common Stock”), pursuant to Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The purpose of the accompanying Information Statement is to inform the Company’s stockholders that on February 6, 2024, holders of over 60% of the voting power of capital stock of the Company acted by an irrevocable written consent (the “Written Consent”) in lieu of a special meeting of stockholders to approve: (1) the Agreement and Plan of Merger (the “Merger Agreement”) by and among Telix Pharmaceuticals Limited, a public limited company registered under the laws of the Commonwealth of Australia (“Buyer” or “Telix”), Cyclone Merger Sub I, Inc., a Delaware corporation and direct wholly-owned subsidiary of Telix (“Merger Sub I”), Cyclone Merger Sub II, Inc., a Delaware corporation and direct wholly-owned subsidiary of Telix (“Merger Sub II”, and collectively with Merger Sub I, the “Merger Subs”) and David H. Clarke, as stockholder representative to the QSAM stockholders (the “QSAM Stockholder Representative”); and (2) a reverse stock split of outstanding shares of our Common Stock in a range between 1:1000 and 1:2000 (the “Reverse Split”), and to authorize the Board to determine the exact ratio at its discretion and to effectuate and file an amendment to the certificate of incorporation of the Company (the “Certificate of Amendment”) immediately prior to the consummation of the Merger.

Pursuant to the terms of the Merger Agreement and the Reverse Split, the aggregate consideration that QSAM stockholders will be entitled to receive pursuant to the Merger and the Reverse Split will be equal to:

(i) USD $33.1 million, reduced by (a) the amount of certain of QSAM’s unpaid expenses, indebtedness, change-of-control bonuses, and other payables as of the closing of the Merger, (b) a fee equal to 218,496 ordinary shares of Telix (“Telix Ordinary Shares”) payable to QSAM’s licensor, IGL Pharma, Inc. (“IGL”), upon the closing of the Merger, representing $1,655,000 (or 5% of the aggregate closing consideration) divided by the Buyer Stock Price (defined below), and (c) 66,011 ordinary shares of Telix (“Telix Ordinary Shares”), representing $500,000 divided by the Buyer Stock Price (defined below), as a source of recovery for post-closing purchase price adjustments (collectively, the “Closing Consideration”); and

(ii) contingent value rights (“CVRs”) which will represent the right to receive contingent payments of up to USD $90 million in the aggregate, in cash and/or Telix Ordinary Shares, without interest, upon the achievement of certain milestones, at the times and subject to the terms and conditions of the CVR Agreement (as defined below) (such contingent payments, the “Milestone Payments”).

The Closing Consideration will be paid to holders of whole numbers of shares of QSAM Common Stock in the Merger in the form of Telix Ordinary Shares, except in certain specified circumstances, while payments in connection with the Reverse Split will be paid in cash. The number of shares issuable to QSAM stockholders in the Merger shall be determined by reference to a deemed value of Telix Ordinary Shares equal to USD $7.5745 per share (the “Buyer Stock Price”), representing the volume weighted average price at which Telix Ordinary Shares traded on the Australian Securities Exchange over the ten (10) trading-day period ending on February 6, 2024, the business day prior to the date of the Merger Agreement, as converted from Australian dollars to United States dollars at the exchange rate published in the Wall Street Journal as of February 6, 2024, the business day prior to the date of the Merger Agreement.

In connection with and as a condition to the Merger, QSAM will effect the Reverse Split, in which any outstanding fractional shares of QSAM Common Stock (determined after determining the whole number of shares of QSAM Common Stock held by such holder, if any) after giving effect to the Reverse Split will be automatically exchanged for (i) the right to receive an amount of cash equal to such fractional share’s pro rata share of the Closing Consideration and (ii) one (1) CVR for each share of QSAM Common Stock that was converted into a fractional share (and not aggregated into a whole number of shares) pursuant to the Reverse Split. For additional details, see “The Merger Agreement – Merger Consideration” on page 44 of the accompanying Information Statement.

The Company’s Board carefully reviewed and considered the terms and conditions of the Merger Agreement and the transactions contemplated thereby, including the Merger and the Reverse Split (the “Transactions”). The Board (i)(A) determined that the Merger Agreement and the Transactions are fair and in the best interests of the Company and its stockholders, (B) approved and declared advisable the Transactions, on the terms and subject to the conditions set forth in the Merger Agreement, and (C) recommended that the stockholders of the Company approve the Transactions, and (ii) directed that the Transactions be submitted to the holders of the Common Stock for their approval.

The approval of the Transactions by the Company’s stockholders via Written Consent was effected in accordance with the Company’s Certificate of Incorporation, as amended (the “Company Charter”), the Amended and Restated Bylaws of the Company (the “Amended and Restated Bylaws”) and the General Corporation Law of the State of Delaware (the “DGCL”). No further approval of the stockholders under the DGCL is required to complete the Transactions. As a result, the Company has not solicited and will not be soliciting your vote for the Transactions and does not intend to call a meeting of stockholders for purposes of voting on the adoption thereof.

Pursuant to Rule 14c-2 of the Exchange Act, the actions contemplated by the Written Consent may not be taken until [●], 2024, which is 20 calendar days following the date we first mail the accompanying Information Statement to our stockholders.

This notice of action by written consent and the accompanying Information Statement shall constitute notice to you from the Company that the Transactions have been approved by the holders of a majority of the voting power of the Common Stock by written consent in lieu of a special meeting in accordance with Section 228(e) of the DGCL.

QSAM IS NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND QSAM A PROXY.

The Information Statement accompanying this letter provides you with more specific information concerning the Transactions. We encourage you to carefully read the accompanying Information Statement, copies of the Merger Agreement including the annexes and the schedules attached thereto, the Certificate of Amendment, and the other appendices attached to the accompanying Information Statement.

THE INFORMATION STATEMENT IS FOR YOUR INFORMATION ONLY. YOU DO NOT NEED TO DO ANYTHING IN RESPONSE TO THE INFORMATION STATEMENT. THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED IN THE INFORMATION STATEMENT.

QSAM BIOSCIENCES, INC.

9442 Capital of Texas Hwy N, Plaza 1, Suite 500

Austin, TX 78759

INFORMATION STATEMENT

ABOUT THIS INFORMATION STATEMENT

General

This Information Statement is being furnished by QSAM Biosciences, Inc., a Delaware corporation (“we,” “us”, “our”, “QSAM”, or the “Company”), in connection with action taken by an irrevocable written consent (the “Written Consent”) on February 6, 2024, by the holders of a majority of the voting power of the Company’s issued and outstanding capital stock entitled to vote thereon (the “Majority Stockholders”), approving: (1) the Agreement and Plan of Merger (the “Merger Agreement”) by and among Telix Pharmaceuticals Limited, a public limited company registered under the laws of the Commonwealth of Australia (“Buyer” or “Telix”), Cyclone Merger Sub I, Inc., a Delaware corporation and direct wholly-owned subsidiary of Telix (“Merger Sub I”), Cyclone Merger Sub II, Inc., a Delaware corporation and direct wholly-owned subsidiary of Telix (“Merger Sub II”, and collectively with Merger Sub I, the “Merger Subs”) and David H. Clarke, as stockholder representative to the QSAM stockholders (the “QSAM Stockholder Representative”); and (2) a reverse stock split of outstanding shares of our Common Stock in a range between 1:1000 and 1:2000 (the “Reverse Split”), and to authorize the Board to determine the exact ratio at its discretion and to effectuate and file an amendment to the certificate of incorporation of the Company (the “Certificate of Amendment”) immediately prior to the consummation of the Merger.

Pursuant to the Merger Agreement, the Buyer, the Merger Subs and the Company intend to effect a reorganization in which, as steps in a single, integrated transaction, (a) Merger Sub I will merge with and into the Company, Merger Sub I will cease to exist, and the Company will survive as a direct, wholly owned subsidiary of Buyer (the “First Merger”), and (b) as part of the same overall transaction, the Company will merge with and into Merger Sub II, the Company will cease to exist, and Merger Sub II will survive as a direct, wholly owned subsidiary of Buyer (the “Second Merger” and, collectively with the First Merger, as appropriate, the “Merger”). The closing of the First Merger is referred to herein as the “Closing”, the filing of the certificate of merger in connection with the First Merger, the “First Effective Time”, and the filing of certificate of merger in connection with the Second Merger, the “Second Effective Time.”

Vote Required

As the matters set forth in this Information Statement have been duly authorized and approved by the written consent of the holders of at least a majority of the voting power of the Company’s issued and outstanding capital stock entitled to vote thereon, we are not seeking any consent, vote or authorization. Section 228 of the DGCL provides that any action required or permitted to be taken by the stockholders of the Company may be effected by the consent in writing of the holders of outstanding capital stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

Holders of the Company’s Common Stock are entitled to one vote per share.

As of the close of business on the date of Written Consent, 4,387,282 shares of Common Stock were issued and outstanding. The Majority Stockholders together represented an aggregate of 2,694,512 shares of Common Stock, constituting over 60% of the voting power of the Company’s issued and outstanding capital stock. Accordingly, the Written Consent has been executed and delivered to the Company by the Majority Stockholders pursuant to Section 228 of the DGCL.

Notice Requirement

The purpose of this notice and the accompanying Information Statement is to (1) inform the Company’s stockholders of the action described above before it takes effect, in accordance with Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (2) provide the notice required under Section 228(e) of the Delaware General Corporation Law (the “DGCL”) of the taking of a corporate action by written consent to stockholders of the Company as of the Record Date who have not consented in writing to such action and who would have been entitled to notice of the meeting if the action had been taken at a meeting. This Information Statement serves as the notice required by Section 228(e) of the DGCL. In accordance with Rule 14c-2 under the Exchange Act, the actions described herein will become effective no earlier than the 20th calendar day after the date on which this definitive Information Statement has been provided to the Company’s stockholders. The Information Statement is being mailed on or about [●], 2024, to the Company’s stockholders of record as of the close of business on the Record Date.

Dissenter’s Rights of Appraisal

Stockholders of the Company’s Common Stock are entitled to exercise dissenter rights with respect to the Merger. These rights can be referenced on page 39 of this Information Statement.

Expenses

We will bear all expenses in connection with the distribution of this Information Statement.

Currency

Unless otherwise specified in this Information Statement, all monetary amounts are in U.S. dollars, all references to “$,” “US$,” “USD” and “dollars” mean U.S. dollars, and all references to “A$” and “AUD” mean Australian dollars.

Table of Contents

INFORMATION STATEMENT SUMMARY

This summary highlights selected information appearing elsewhere in this Information Statement and is, therefore, qualified in its entirety by the more detailed information appearing elsewhere in this Information Statement. It may not contain all the information that is important to you. The Company urges you to read carefully this entire Information Statement and the other documents to which it refers to understand fully the terms of the Merger. You should pay special attention to “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements.”

The Parties

Telix Pharmaceuticals Limited

Telix Pharmaceuticals Limited (“Telix” or “Buyer”), is a public limited company registered under the laws of the Commonwealth of Australia. Telix is a biopharmaceutical company focused on the development and commercialization of diagnostic and therapeutic radiopharmaceuticals and associated medical devices. Telix is headquartered in Melbourne, Australia with international operations in the United States, Europe (Belgium and Switzerland), and Japan. Telix is developing a portfolio of clinical-stage products that aims to address significant unmet medical needs in oncology and rare diseases. Telix’s ordinary shares are listed on the Australian Securities Exchange (ASX: TLX).

Telix’s principal executive offices are located at 55 Flemington Road, North Melbourne, Victoria, 3051, Australia, and its reception telephone number is +61 3-9093-3855. The corporate website address is www.telixpharma.com. Telix’s website and the information contained on, or that can be accessed through the website, is not deemed to be incorporated by reference in, and is not considered part of, this Information Statement.

Merger Sub I

Cyclone Merger Sub I, Inc., a Delaware corporation (referred to as “Merger Sub I”), is a wholly owned subsidiary of the Buyer. Merger Sub I was formed by the Buyer solely in contemplation of the Merger, has not conducted any business and has no assets, liabilities or obligations of any nature other than as set forth in the Merger Agreement.

Merger Sub II

Cyclone Merger Sub II, Inc., a Delaware corporation (referred to as “Merger Sub II”), is a wholly owned subsidiary of the Buyer. Merger Sub II was formed by the Buyer solely in contemplation of the transactions, has not conducted any business and has no assets, liabilities or obligations of any nature other than as set forth in the Merger Agreement.

QSAM

QSAM develops next-generation nuclear medicines for the treatment of cancer. QSAM’s technology is Samarium-153 DOTMP, a/k/a CycloSam® (“CycloSam®” or the “Technology”), a clinical-stage bone targeting radiopharmaceutical. CycloSam® features a patented, low specific activity form of Samarium-153, a beta-emitting radioisotope with a short 46-hour half-life, and the chelating agent DOTMP, which selectively targets sites of high bone mineral turnover and reduces off-site migration of the tumor-killing radiation. Improvements in formulation and manufacturing from a prior FDA-approved drug utilizing the same radioisotope (Quadramet®) has resulted in our drug candidate demonstrating significantly less impurities, lower costs and more frequent availability.

In August 2021, the Food & Drug Administration (FDA) cleared QSAM’s Investigational New Drug (IND) application to commence Phase 1 clinical trials for CycloSam® as a treatment for cancer that has metastasized to the bone from the lung, breast, prostate and other areas. QSAM initiated this trial in November 2021 and to date has dosed five patients. Also in August 2021, the FDA granted Orphan Drug Designation for the use of CycloSam® to treat a primary bone cancer called osteosarcoma, a devastating disease that mostly affects children and young adults; and in February 2022, the FDA granted Rare Pediatric Disease Designation for the same indication.

What is CycloSam^®. CycloSam^® is a targeted, bone seeking radiopharmaceutical that combines the beta-emitting radioisotope Samarium-153 (¹⁵³Sm) with a chelating agent, DOTMP (1, 4, 7, 10-tetraazacyclododecane-1, 4, 7, 10-tetramethylenephosphonic acid). Samarium-153 is acquired from a third-party nuclear reactor and the chelating agent is supplied in the form of kits. Chelating agents are organic compounds capable of linking together metal ions to form complex ring-like structures. This combination forms a stable complex which delivers a radioactive dose to sites of rapid bone mineral turnover such as bone cancers and tumors. CycloSam^® has a physical half-life of 46 hours (radiation decreases by half in 46 hours) and emits both medium-energy beta particles that produce the therapeutic effect, and gamma photons that make it possible to take images of the skeleton and locate and characterize the size and nature of tumors. The use of radioisotopes to both diagnose and treat disease is called “theranostics” and is a rapidly growing area of medical discovery.

QSAM’s principal executive offices are located at 9442 Capital of Texas Hwy N, Plaza 1, Suite 500, Austin, Texas 78759, and the telephone number is 512-343-4558. The corporate website address is www.qsambio.com. QSAM’s website and the information contained on, or that can be accessed through the website, is not deemed to be incorporated by reference in, and is not considered part of, this Information Statement.

The Merger

QSAM Board Recommendation and its Reasons for the Merger

The QSAM Board unanimously approved the Merger, adoption of the Merger Agreement, and the transactions and agreements arising out of the Merger.

In the course of reaching its decision to approve the Merger Agreement and the transactions contemplated thereby, the QSAM Board considered a number of factors. For a more complete discussion of these factors, see “The Merger—Rationale for the Merger” beginning on page 29.

Opinion of QSAM’s Financial Advisor

QSAM retained Newbridge Securities Corporation (“Newbridge”) to act as its financial advisor in connection with entering into a Merger Agreement with Telix. Pursuant to its engagement, QSAM’s Board requested that Newbridge render an opinion to the Board as to the fairness, from a financial point of view, to the holders of the outstanding shares of QSAM Common Stock (other than such holders who properly exercise appraisal rights with respect to their common stock), of the Closing Consideration to be paid to the QSAM stockholders pursuant to the terms and subject to the conditions set forth in the Merger Agreement. On February 2, 2024, Newbridge delivered its oral opinion to the Board (subsequently confirmed in its written opinion dated February 7, 2024) to the effect that, based upon and subject to the assumptions, qualifications and limitations stated in its written opinion, as of November 14, 2023 (the date on which QSAM and Telix first announced the signing of the term sheet contemplating the Merger), the Closing Consideration was fair, from a financial point of view, to the QSAM stockholders. The full text of Newbridge’s written opinion to QSAM’s Board, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Appendix C hereto and is incorporated by reference herein in its entirety. Newbridge provided its opinion, which was addressed to QSAM’s Board, for the information, assistance and use of the Board in connection with its consideration of the Merger Agreement.

For a further discussion of Newbridge’s opinion, see “The Merger—Opinion of QSAM’s Financial Advisor” beginning on page 31, which provides a summary of Newbridge’s opinion and the methodology that Newbridge used to render its opinion that is qualified in its entirety by reference to the full text of the opinion attached hereto as Appendix C.

Interests of QSAM Non-Employee Directors, Key Employees and Key Consultant in the Merger

In considering the recommendation of the QSAM Board with respect to the Merger, QSAM stockholders should be aware that QSAM’s executive officers, C. Richard Piazza, Douglas Baum and Christopher Nelson, and one key employee, Namrata Chand (collectively, the “Key Employees”), as well as two non-employee director members of QSAM’s Board, Charles J. Link and Adriann Sax (collectively, the “Directors”), and QSAM’s CFO, Adam King (the “Key Consultant”), have various interests in the Merger that may be in addition to, or different from, the interests of QSAM stockholders generally. The members of the QSAM Board were aware of these interests and considered them at the time they approved the Merger Agreement and in making their recommendation that QSAM stockholders adopt the Merger Agreement. The Majority Stockholders were also made aware by the Board of these interests and found them to be fair, just, and reasonable and in the best interest of the Company and its stockholders as indicated in the Written Consent. These interests include, but are not limited to:

● The Key Employees may be entitled to receive severance payments and benefits, as provided in their respective employment agreements, as amended, if their employment with the Company terminates without cause or following a material change, as such terms are defined in the applicable employment agreements. Such severance payments and benefits are not payable if the Key Employee is not subject to a termination of employment, such as would be the case if a Key Employee continues employment following the closing of the Merger. In addition, certain Key Employees may agree to forego the severance payments and benefits in part or in their entirety due to lack of financial resources at QSAM and the adverse impact it may have on the Closing Consideration; and

● The Key Employees and one Director, Charles J. Link, may receive transaction bonuses in the aggregate amount of 6.25% of the Closing Consideration (calculated after deduction of the IGL License Fee in the amount of $1,655,000 payable at the closing of the Merger and less any unpaid QSAM expenses that are not being assumed by Telix) in connection with the Merger, pursuant to, with respect to the Key Employees, the terms of their respective employment agreements, as amended, and, with respect to the Director, as provided in an agreement between the Director and the Company. These individuals may also be entitled to receive transaction bonuses in the aggregate of 6.25% of any Milestone Payments, after deduction of the amount of the IGL License Fee, that become payable in accordance with the terms of the Merger Agreement.

● The Directors, Key Employees and Key Consultant have been issued restricted shares of common stock (the “Restricted Shares”) that are subject to performance and time-based vesting and that will accelerate and become fully vested upon the closing of the Merger.

For additional information on the interests of the Directors, Key Employees and Key Consultant in the Merger, see “The Merger—Interests of QSAM Directors, Key Employees and Key Consultant in the Merger” beginning on page 36.

Regulatory Approvals

Telix and QSAM have each agreed to use their reasonable best efforts to take all actions and to do all things necessary, proper or advisable to consummate and make effective the Merger and the other transactions contemplated by the Merger Agreement.

Neither Telix nor QSAM is aware of any material regulatory approvals or actions that are required for completion of the Merger. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.

De-Listing and Deregistration of QSAM Common Stock After the Merger

Following the Merger, QSAM Common Stock currently trading on the OTCQB tier of the OTCMKTS will cease trading and will be deregistered under the Exchange Act as promptly as practicable after the Closing.

Appraisal Rights

QSAM Stockholders and beneficial owners will have the right to demand appraisal of their shares of QSAM Common Stock and obtain payment in cash for the fair value of their shares, only if they perfect their appraisal rights and comply with the applicable provisions of Delaware law. A copy of Section 262 (“Section 262”) of the General Corporation Law of the State of Delaware (the “DGCL”) related to appraisal rights is attached as Appendix D to this Information Statement, and a summary of these provisions can be found under “The Merger—Appraisal and Dissenters Rights” beginning on page 39. It is a condition precedent to the completion of the Merger that the aggregate number of dissenting shares shall not exceed two percent (2%) of the number of outstanding shares of Company capital stock, on a fully-diluted basis, as of the First Effective Time. Due to the complexity of the procedures for exercising the right to seek appraisal, QSAM stockholders and beneficial owners who are considering exercising such rights are encouraged to seek the advice of legal counsel. Failure to strictly comply with Section 262 may result in the loss of the right of appraisal.

Anticipated Accounting Treatment of the Merger

The Merger is expected to be accounted for as an asset acquisition pursuant to IFRS 3–Business Combinations as well as IAS 38-Intangible Assets.

The Merger Agreement

On February 7, 2024, Telix and QSAM entered into the Merger Agreement attached as Appendix A to this Information Statement. QSAM’s Board and the Telix Board of Directors (the “Telix Board”) have both unanimously approved the Merger pursuant to the terms of the Merger Agreement. You are encouraged to read the entire Merger Agreement carefully because it is the principal legal document governing the Merger.

Structure of the Merger (page 43)

Buyer, the Merger Subs and the Company intend to effect a reorganization in which, as steps in a single, integrated transaction, (a) Merger Sub I will merge with and into the Company, Merger Sub I will cease to exist, and the Company will survive as a direct, wholly owned subsidiary of Buyer, and (b) as part of the same overall transaction, the Company will merge with and into Merger Sub II, the Company will cease to exist, and Merger Sub II will survive as a direct, wholly owned subsidiary of Buyer.

The parties intend that the Merger qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and that the Merger be a “plan of reorganization” for purposes of Sections 354 and 361 of the Code and within the meaning of Section 1.368-2(g) of the United States Treasury regulations promulgated under the Code.

Merger Consideration (page 44)

Stock, Cash and CVR Consideration:

Pursuant to the terms of the Merger Agreement and the Reverse Split, the aggregate consideration that QSAM stockholders will be entitled to receive pursuant to the Merger and the Reverse Split will be equal to:

(i) USD $33.1 million, reduced by (a) the amount of certain of QSAM’s unpaid expenses, indebtedness, change-of-control bonuses, and other payables as of the closing of the Merger, (b) a fee equal to 5% of the aggregate closing consideration payable to QSAM’s licensor, IGL Pharma, Inc. (“IGL”), upon the closing of the Merger, and (c) 66,011 ordinary shares of Telix (“Telix Ordinary Shares”), representing $500,000 divided by the Buyer Stock Price (defined below), as a source of recovery for post-closing purchase price adjustments (collectively, the “Closing Consideration”); and

(ii) contingent value rights (“CVRs”) which will represent the right to receive contingent payments of up to USD $90 million in the aggregate, in cash and/or Telix Ordinary Shares, without interest, upon the achievement of certain milestones, at the times and subject to the terms and conditions of the CVR Agreement (as defined below).

The Closing Consideration will be paid to holders of whole numbers of shares of QSAM Common Stock in the Merger in the form of Telix Ordinary Shares, except in certain specified circumstances, while payments in connection with the Reverse Split will be paid in cash. The number of shares issuable to QSAM stockholders in the Merger shall be determined by reference to a deemed value of Telix Ordinary Shares equal to USD $7.5745 per share (the “Buyer Stock Price”), representing the volume weighted average price at which Telix Ordinary Shares traded on the Australian Securities Exchange over the ten (10) trading-day period ending on February 6, 2024, the business day prior to the date of the Merger Agreement, as converted from Australian dollars to United States dollars at the exchange rate published in the Wall Street Journal as of February 6, 2024, the business day prior to the date of the Merger Agreement. The Buyer Stock Price is a negotiated, agreed, fixed value, and the trading price of Telix’s Ordinary Shares could be, at the time of the Merger, higher or lower than the Buyer Stock Price.

Subject to the foregoing and the other risks and uncertainties set forth below under Forward-Looking Statements, QSAM management currently estimates the value payable at the closing of the Merger and/or in the Reverse Split with respect to each share of QSAM Common Stock that will be outstanding prior to the Reverse Split will be approximately $6.63, which would equate to approximately 0.876 Telix Ordinary Shares for each whole share of QSAM Common Stock (the “Exchange Ratio”) prior to giving effect to the Reverse Split. This estimate is based on QSAM’s estimate of its expenses through the closing of the Merger in excess of certain expenses, in an amount equal to $500,000 in the aggregate, that Telix has agreed to assume, as well as QSAM’s estimate of the total shares of QSAM Common Stock outstanding immediately prior to the Reverse Split and the closing of the Merger.

As described above, the amount of cash and/or shares of Telix Ordinary Shares payable with respect to each outstanding share of QSAM Common Stock is subject to adjustment prior to closing based on, among other things, (i) the amount of QSAM’s indebtedness, unpaid expenses, change-of-control, and similar payments, in each case in connection with the Merger, as well as (ii) the fully diluted number of shares of QSAM common stock issued and outstanding as of the date of closing of the Merger, which could increase if certain stock options are exercised or other reasons. As a result, the actual amount of Closing Consideration could be lower on the date of Closing than was previously estimated as of the date of the Merger Agreement and as of the date of this Information Statement. For illustration purposes only, if indebtedness, expenses or other payables at closing is $500,000 greater than the current estimate of $3.62 million, then the value payable at the closing of the Merger and/or in the Reverse Split with respect to each share of QSAM Common Stock that is outstanding prior to the Reverse Split would be approximately $6.52, which would equate to an Exchange Ratio of 0.861 Telix Ordinary Shares for each whole share of QSAM Common Stock prior to giving effect to the Reverse Split. Similarly, if the outstanding shares of QSAM Common Stock are greater by 100,000 shares at the time of Closing due to exercise of stock options, the value payable at the closing of the Merger and/or in the Reverse Split with respect to each share of QSAM Common Stock that is outstanding prior to the Reverse Split would be approximately $6.49, which would equate to an Exchange Ratio of 0.856 Telix Ordinary Shares for each whole share of QSAM Common Stock prior to giving effect to the Reverse Split. These two examples of possible changes to the Closing Consideration payable to QSAM shareholders are shown in the table below:

In connection with and as a condition to the Merger, QSAM will effect a reverse stock split of all the issued and outstanding shares of QSAM Common Stock, in a ratio between 1:1000 and 1:2000 (the “Reverse Split”) (as determined by the QSAM Board prior to closing), in which any outstanding fractional shares of QSAM Common Stock (determined after determining the whole number of shares of QSAM Common Stock held by such holder, if any) after giving effect to the Reverse Split will be automatically exchanged for (i) the right to receive an amount of cash equal to such fractional share’s pro rata share of the Closing Consideration and (ii) one (1) CVR for each share of QSAM Common Stock that was converted into a fractional share (and not aggregated into a whole number of shares) pursuant to the Reverse Split.

In connection with the Reverse Split, all per share values and exchange ratios set forth above would be proportionately increased. For instance, in the case of a 1:1000 Reverse Split, where every 1,000 shares will consolidate into one share, the currently estimated value per share of QSAM Common Stock would be $6.63 X 1,000 = $6,630, and the estimated Exchange Ratio would be 0.876 X 1,000 = 876.

All QSAM stockholders will receive one Contingent Value Rights (“CVR”) certificate for every share they held prior to the Reverse Split. The non-transferrable CVRs provide their holder with a right to receive contingent payments from the Buyer upon achievement of certain clinical, regulatory and commercial milestones described below, up to a total aggregate value of $90 million (the “Earnout Consideration”). There is no guarantee that the Buyer will achieve any of the milestones in the timeframe required, and the Earnout Consideration may never be paid. See “The Contingent Value Rights Agreement” beginning on page 56 below.

The Telix Ordinary Shares issued in the Merger or pursuant to the CVR Agreement will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) and will be issued pursuant to an exemption to the registration requirements thereunder. The Telix Ordinary Shares will be subject to escrow and held on the issuer sponsored subregister and subject to a holding lock for any required holding period under Rule 144 of the Securities Act. If Telix determines that a valid exemption to the registration requirements under the Securities Act would not be available with respect to the issuance of any Telix Ordinary Shares, it may, with the approval of the QSAM Stockholder Representative (not to be unreasonably withheld, conditioned or delayed) elect to pay such QSAM stockholders exclusively in cash in lieu of Telix Ordinary Shares.

Treatment of Options (page 36)

Pursuant to Merger Agreement, effective as of the date QSAM files the definitive Information Statement, each then-outstanding and unexercised option to purchase shares of QSAM Common Stock issued pursuant to any stock incentive or equity-related agreement or plan of QSAM (each such option, a “QSAM Option”) will vest in full and become exercisable up to and through the close of regular trading on the seventh business day after the date the definitive Information Statement is filed (such date, the “Last Exercise Date”) in accordance with the terms and conditions of such QSAM Option, and such QSAM Option will terminate for no consideration and be of no further force or effect as of immediately prior to closing if not exercised by the holder on or prior to the close of regular trading on the Last Exercise Date. According to the terms of the grants made by the Company, all QSAM Options were fully vested as of March 31, 2024 and will remain exercisable until the Last Exercise Date.

Conditions to Completion of the Merger (page 51)

The obligations of each of the parties to consummate the Merger are subject to the satisfaction (or waiver by each of Telix and QSAM if permissible under applicable law) prior to the First Effective Time, of certain conditions, including:

QSAM cannot be certain when, or if, the conditions to the Merger will be satisfied or waived, or that the Merger will be completed on the terms and conditions as provided in the Merger Agreement or at all.

Termination of the Merger Agreement (page 53)

The Merger Agreement may be terminated at any time prior to the First Effective Time under the following circumstances:

Fees and Expenses (page 55)

Generally, all fees and expenses incurred in connection with the Merger Agreement, the CVR Agreement and the transactions contemplated by the Merger Agreement will be paid by the party incurring such expenses, whether or not the Merger is consummated. See “The Merger Agreement—Fees and Expenses” beginning on page 55. Additionally, Telix has agreed to pay or assume specified items of indebtedness and transaction expenses of the Company in an amount not to exceed $500,000.

The Contingent Value Rights Agreement

At or prior to the First Effective Time, Telix and QSAM will enter into a CVR Agreement, substantially in the form attached as an exhibit to the Merger Agreement, with a rights agent designated by Telix (the “Rights Agent”) governing the terms of the CVRs that the holders of QSAM Common Stock as of the effective time of the Reverse Split and the Merger will be entitled to receive in connection with the Reverse Split and the Merger, respectively (the “CVR Agreement”). The right to the contingent consideration as evidenced by the CVR Agreement is a contractual right only and will not be transferable, except in the limited circumstances specified in the CVR Agreement.

Pursuant to the CVR Agreement, each CVR will entitle the holder thereof to receive such CVR’s ratable allocation (based on the total number of CVRs outstanding) of the Earnout Consideration from Telix upon the achievement of certain milestones (the “Milestones”), if achieved, by the date that is the ten-year anniversary of the closing of the Merger (“Milestone Period”). The Milestone Payments, if any become payable, will be made in Telix Ordinary Shares and/or cash, upon the terms and subject to the conditions set forth in the CVR Agreement. Telix has agreed to use commercially reasonable efforts, on terms specified in the CVR Agreement, to, among other things, develop an acquired product in the United States, France, Germany, Italy, Spain, Japan, United Kingdom, Australia, Canada, Brazil or China (each a “Major Market Country”) and to commercialize at least one acquired product in the Major Market Countries after receipt of the applicable regulatory approval. For more details, see “The Contingent Voting Rights Agreement” on page 56.

The amount of each Milestone Payment is subject to reduction in the event any amount is set-off pursuant to Telix’s indemnification rights under the Merger Agreement, including the amount of any additional fees owed pursuant to the IGL License Fee and any transaction bonuses to officers, directors or employees of QSAM payable in connection with any such milestone payment, or in the event the QSAM Stockholder Representative is entitled to reimbursement from or indemnification by the QSAM stockholders pursuant to the Merger Agreement.

If and when a Milestone Payment becomes due pursuant to the terms of the CVR Agreement, Telix will pay the Rights Agent the aggregate amount of such Milestone Payment, who will then distribute the Milestone Payment among the holders of CVRs.

Reverse Stock Split (page 60)

On February 6, 2024, the Board approved and recommended that its stockholders approve, and on February 6, 2024, the Majority Stockholders took action by written consent to approve an amendment to the Certificate of Incorporation, as amended (the “Company Charter”) to effect a reverse stock split of outstanding shares of the Company’s Common Stock at a ratio in the range of 1:1000 and 1:2000, such ratio to be determined by the Board at a later date at its sole discretion, but prior to the Closing, if at all, and only in connection with the Merger. The Board may choose not to undertake the Reverse Split at all if it finds it to be unnecessary to complete the Merger.

QSAM stockholders will receive Telix Ordinary Shares in the Merger. The Telix Ordinary Shares will be issued pursuant to an exemption from registration of shares under Section 4(a)(2) or Regulation D of the Securities Act to “accredited investors” as that term is defined thereunder. Regulation D provides that there be no more than 35 non-accredited investors in an offering utilizing the safe harbor exemption in connection with a private placement. Accordingly, the Merger Agreement contemplates that there be no more than 27 non-accredited investors at the time of Closing, who may receive Telix Ordinary Shares. However, the Buyer may, with the approval of the QSAM Stockholder Representative, elect to pay a non-accredited investor in lieu of Telix Ordinary Shares, cash in an amount equal to the shareholder’s pro rata share of the Closing Consideration. The Reverse Split will be conducted in order to assure that the issuance of Telix Ordinary Shares complies with these U.S. securities regulations.

Pursuant to the Reverse Split, any outstanding fractional shares of QSAM Common Stock (determined after determining the whole number of shares of QSAM Common Stock held by such holder, if any) after giving effect to the Reverse Split will be automatically exchanged for (i) the right to receive an amount of cash equal to such fractional share’s pro rata share of the Closing Consideration and (ii) one (1) CVR for each share of QSAM Common Stock that was converted into a fractional share (and not aggregated into a whole number of shares) pursuant to the Reverse Split.

Our Board authorized, and the Majority Stockholders have approved the Reverse Split, which may be effected only in connection with the Merger immediately preceding the First Effective Date.

Risk Factors (page 12)

You should consider all the information contained in or incorporated by reference into this Information Statement. In particular, you should consider the factors described under “Risk Factors” beginning on page 12. Some of the risks related to QSAM, Telix and the Merger are summarized below:

COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

Market Prices

Telix Ordinary Shares are listed on the Australian Stock Exchange (ASX) under the symbol “TLX.” QSAM Common Stock is traded on the OTCQB under the symbol “QSAM.” The following table sets forth the Buyer Stock Price, i.e. the price utilized to determine the number of Telix Ordinary Shares issuable to QSAM stockholders, as of February 6, 2024 (one day prior to the date of execution of the Merger Agreement) and the closing price of QSAM Common Stock on the same date, and the closing price per share of Telix Ordinary Shares and QSAM Common Stock on [●], 2024, the most recent practicable trading day prior to the date of this Information Statement for which this information was available. Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. The table also shows the implied value of the stock consideration for each share of QSAM Common Stock as of the same dates. This implied value was calculated by multiplying the closing price of a Telix Ordinary Share on the relevant date by the estimated Exchange Ratio. All values in the following section are in United States dollars; the conversion price from Australian dollars to United States dollars is at the exchange rate published in the Wall Street Journal as of the relevant date.

The market prices of Telix Ordinary Shares and QSAM Common Stock have fluctuated since the date of execution of the Merger Agreement and will continue to fluctuate from the date of this Information Statement to the date the Merger is completed. No assurance can be given concerning the market prices of Telix Ordinary Shares and shares of QSAM Common Stock before completion of the Merger or shares of Telix Ordinary Shares after completion of the Merger. Except as mentioned elsewhere in this Information Statement, the Closing Consideration will not be adjusted prior to Closing due to fluctuations in the market prices of QSAM Common Stock or Telix Ordinary Shares. As such, fluctuations in the market price of Telix Ordinary Shares between the date of execution of the Merger Agreement and Closing may change the implied total stock consideration and the per share value of the stock consideration at Closing. For example, prior to the Closing Date, every USD $1.00 increase or decrease in the value of Telix Ordinary Share relative to the Buyer Stock Price will result in an adjustment of USD $0.876 in the implied per share value of the stock consideration presented in the table above based on the currently estimated Exchange Ratio, which as discussed above, may change prior to the closing of the Merger. After the Closing, QSAM stockholders are cautioned that the market value of the Telix Ordinary Shares may vary significantly from its market value as of the date of execution of the Merger Agreement and the date of this Information Statement. Additionally, since fractional shares of QSAM Common Stock resulting from the Reverse Split will be exchanged for cash equal to such fractional share’s pro rata share of the Closing Consideration, and such value is not affected by fluctuations in the stock price of Telix Ordinary Shares, it is possible that the cash received for fractional shares may be higher or lower than the value of the stock consideration received by QSAM stockholders. See “Risk Factors—Risks Related to the Merger” beginning on page 12.

Following the Merger, there will be no further market for shares of QSAM Common Stock and QSAM anticipates that its stock will be delisted from OTCMKTS and deregistered under the Exchange Act. As a result, following the Merger and such deregistration, QSAM would no longer file periodic reports with the SEC.

Dividends

QSAM has never declared or paid any cash dividends on shares of QSAM Common Stock. Under the terms of the Merger Agreement, during the period before completion of the Merger, QSAM is not permitted to declare, set aside, make or pay any dividend or other distribution, other than dividends or distributions by wholly-owned subsidiaries of QSAM to QSAM or another wholly-owned subsidiary of QSAM.

After completion of the Merger, any former QSAM stockholder who holds shares of Telix Ordinary Shares into which shares of QSAM Common Stock have been converted in connection with the Merger will receive whatever dividends are declared and paid on Telix Ordinary Shares. Notwithstanding the foregoing, any determination to pay cash dividends subsequent to the Merger will be at the discretion of the Telix Board and will depend upon a number of factors, including Telix’s results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors the Telix Board deems relevant. There can be no assurance that any future dividends will be declared or paid by Telix or as to the amount or timing of those dividends, if any.

Telix has never declared or paid any cash dividends on shares of Telix Ordinary Shares. Telix anticipates that it will retain its future earnings, if any, to finance the development of Telix’s business and does not anticipate paying cash dividends in the foreseeable future.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

Statements contained in this Information Statement and the documents incorporated by reference herein that are not strictly historical may be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act and involve a number of risks and uncertainties. There are a number of important factors that could cause actual events to differ materially from those suggested or indicated by such forward-looking statements, many of which are outside of the control of Telix and QSAM, and you should not place undue reliance on any such forward-looking statements. These factors include risks and uncertainties related to, among other things:

The forward-looking statements made herein speak only as of the date hereof and QSAM or any of its affiliates assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise, except as required by law.

RISK FACTORS

In addition to the other information included in, or incorporated by reference into, this Information Statement, including the matters addressed in the section titled “Cautionary Statement Concerning Forward-Looking Statements” beginning on page 11 and QSAM’s Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC, you should carefully consider the following risk factors. This summary of risks is not exhaustive. New risks may emerge from time to time and it is not possible to predict all risk factors, nor can QSAM or Telix assess the impact of all factors on the Merger and the combined company following the Merger or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in or implied by any forward-looking statements. Please also see “Where You Can Find More Information” beginning on page 129.

Risks Related to the Merger

The number of shares of Telix Ordinary Shares that QSAM stockholders will receive as stock consideration is based on a fixed aggregate purchase price and will not be adjusted in the event of any change in the price of either Telix Ordinary Shares or QSAM Common Stock. Because the market price of Telix Ordinary Shares will fluctuate, QSAM stockholders cannot be certain of the value of the stock consideration that they will receive at the Closing in the Merger.

At the First Effective Time, each share of QSAM Common Stock (other than shares held by the Buyer, Telix, Merger Subs, QSAM or their respective direct or indirect wholly owned subsidiaries) issued and outstanding immediately prior to the First Effective Time, will be automatically entitled to receive stock or cash consideration in connection with the Merger or Reverse Split and one CVR for every share held pre-Reverse Split, which CVR will represent the right to receive the Earnout Consideration upon the achievement of certain milestones, if and to the extent achieved. See “The Merger Agreement—Merger Consideration” beginning on page 44. The formula to calculate the number of Telix Ordinary Shares is based on the Buyer Stock Price. This price was fixed as of the date of the Merger Agreement and will not change based on fluctuation in the price of Telix Ordinary Shares between the date of Merger Agreement and Closing. As a result, the actual market value of Telix Ordinary Shares may be lower than the Buyer Stock Price at the time of Closing. You should consider that if the market price of Telix Ordinary Shares declines between the date the Merger Agreement and the Closing, including for any of the reasons described below, QSAM stockholders will receive overall less value in stock consideration than expected. Further, the Telix Ordinary Shares are restricted securities and may not be sold immediately at Closing. Accordingly, there is no certainty that the shares will be trading at a price equal to or higher than the Buyer Stock Price at the time of QSAM stockholders are able to sell their Telix Ordinary Shares. In other words, if the value of Telix Ordinary Shares drops on or after the date of Closing, QSAM stockholders may not realize the expected gains.

Stock price changes may result from a variety of factors (many of which are beyond the control of Telix and QSAM), including the following:

Total Closing Consideration may be lower if indebtedness or number of QSAM shares outstanding is higher.

The amount of cash and/or shares of Telix Ordinary Shares payable with respect to each outstanding share of QSAM Common Stock as of the date hereof is subject to adjustment prior to closing based on, among other things, (i) the amount of indebtedness, unpaid expenses, change-of-control, and similar payments, in each case in connection with the Merger, as well as (ii) the fully diluted number of shares of QSAM common stock issued and outstanding as of the date of closing of the Merger, which could increase if certain stock options are exercised or other reasons. As a result, the amount of Closing Consideration payable with respect to each outstanding share of QSAM Common Stock could be lower on the date of Closing than was previously estimated as of the date of the Merger Agreement and as of the date of this Information Statement. For illustration purposes only, if indebtedness, expenses or other payables at closing is $500,000 greater than the current estimate of $3.62 million, then the value payable at the closing of the Merger and/or in the Reverse Split with respect to each share of QSAM Common Stock that is outstanding prior to the Reverse Split would be approximately $6.52, which would equate to 0.861 Telix Ordinary Shares for each whole share of QSAM Common Stock prior to giving effect to the Reverse Split. Similarly, if the outstanding shares of QSAM Common Stock are greater by 100,000 shares at the time of Closing due to exercise of stock options, the value payable at the closing of the Merger and/or in the Reverse Split with respect to each share of QSAM Common Stock that is outstanding prior to the Reverse Split would be approximately $6.49, which would equate to 0.856 Telix Ordinary Shares for each whole share of QSAM Common Stock prior to giving effect to the Reverse Split.

Your Telix Ordinary Shares will be “restricted securities” and will not be available for sale for at least a period of one year under Rule 144 of the U.S. Securities Act unless Telix chooses to become a reporting company under U.S. securities law, which is not guaranteed.

As indicated elsewhere in this Information Statement, Telix Ordinary Shares are being issued to QSAM stockholders pursuant to a private placement exemption from registration set forth in section 4(a)(2) and Regulation D of the Securities Act. Shares issued in private placements are considered “restricted securities” as that term is defined under Rule 144 of the Securities Act and may not be sold except pursuant to registration or an exemption from registration. However, a shareholder may sell “restricted securities” utilizing the safe harbor conditions of Rule 144. Typically, under Rule 144, a person that is not an affiliate of the issuer (Telix being the issuer) at the time of, or at any time during the three months preceding, a sale and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six (6) months, may sell shares subject only to the availability of current public information about the issuer, and any such person who has beneficially owned restricted shares of issuer’s common stock for at least one year may sell shares without restriction; provided that the issuer is a public reporting company under the Exchange Act. Since Telix is not a public reporting company under the Exchange Act in the United States, the holding period for its restricted securities is currently one year. While Telix has publicly disclosed its intention of becoming a reporting company in the United States, there is no guarantee that will happen within the six months following the closing of the Merger, or at all. As such, while the Telix Ordinary Shares have a market in Australia, due to their restricted nature under the United States securities laws, they are not available for sale and there will be no liquidity to QSAM stockholders until the shares become eligible for sale or alternatively are registered for sale. We cannot guarantee that the stock price of Telix Ordinary Shares will be higher than the value attributable to them at the time of Closing, and if the price declines, QSAM stockholders may not realize the expected gains.

The market price of Telix Ordinary Shares may decline as a result of or following the completion of the Merger.

The market price of Telix Ordinary Shares may decline as a result of the completion of the Merger for a number of reasons, including if the Merger is viewed as an unsuitable investment by financial and industry analysts or by Telix shareholders, or if the effect of the Merger on Telix’s financial results is not consistent with market expectations. In addition, if the Merger is consummated, Telix stockholders, including the former QSAM stockholders, will own interests in a company operating an expanded business with a different mix of assets, risks and liabilities. Current stockholders of Telix and former QSAM stockholders may not wish to continue to invest in Telix, or for other reasons may wish to dispose of some or all of their shares of Telix Ordinary Shares. Further, Telix’s share price may decline independent of the Merger due to adverse changes in its business operations, product regulatory approval or commercialization of Telix’s products, or market conditions. Further, while QSAM’s stockholders cannot sell their Telix Ordinary Shares for an extended period post-Closing due to lock-up and restrictions under Rule 144, if, following the consummation of the Merger, there is selling pressure on Telix Ordinary Shares that exceeds demand at the market price, the price of Telix Ordinary Shares could decline.

The consummation of the Merger is subject to a number of conditions, and if these conditions are not satisfied or waived on a timely basis, the Merger Agreement may be terminated and the Merger may not be completed.

The Merger is subject to certain closing conditions set forth in the Merger Agreement, including: (i) the Reverse Split is effected; (ii) no more than two (2%) of the stockholders have exercised their dissenters’ rights in connection with the Merger; (iii) no more than 27 company stockholders are not “accredited investors”; and (iv) the absence of any law or order of any governmental authority of competent jurisdiction that enjoins, prohibits or makes illegal the consummation of the Merger. In addition, each of Telix’s and QSAM’s obligations to complete the Merger is subject to certain other conditions, such as (a) the accuracy of the representations and warranties of the other party, subject to the standards set forth in the Merger Agreement; (b) compliance by the other party with its covenants in all material respects; and (c) the absence of a material adverse effect on QSAM. See “The Merger Agreement—Conditions to Completion of the Merger” beginning on page 51. The failure to satisfy all of the required conditions could delay the completion of the Merger by a significant period of time or prevent it from occurring. Any delay in completing the Merger could cause the parties to not realize some or all of the benefits that are expected to be achieved if the Merger is successfully completed within the expected timeframe. There can be no assurance that the conditions to closing of the Merger will be satisfied or waived or that the Merger will be completed.

Failure to complete the Merger would adversely affect the stock price, future business and financial results of QSAM.

There can be no assurance that the conditions to the Closing will be satisfied or waived or that the Merger will be completed. If the Merger is not completed, the ongoing business of QSAM would be adversely affected and QSAM will be subject to a variety of risks and possible consequences associated with the failure to complete the Merger, including the following:

If the Merger is not completed, these risks could materially affect the business and financial results of QSAM and its stock price, including to the extent that the current market price of QSAM Common Stock is positively affected by a market assumption that the Merger will be completed.

QSAM will need additional capital to meet its current obligations and continue to operate its business if the Merger is not completed in a timely fashion or at all.

QSAM’s management has indicated that if QSAM had adequate funding in a timely manner, it may be able to complete its current Phase 1 safety trial of approximately 17 patients in 2024. Management has estimated that an additional $3 million to $4 million will be required to complete this phase of its study. The next step in QSAM’s clinical trial program, if cleared by the FDA, is expected to be a study designed to show both safety and efficacy in the treatment of bone tumors utilizing a multi-dose regimen of CycloSam®. Management estimates that an additional $12 million to $14 million will be required to complete the first portion of this critical phase of the study over the next 24 to 30 months.

Advancement of current and future plans for our technology requires significant additional funding, which would most likely result in the issuance of more common stock, preferred stock or debt in subsequent raises. There is no guaranty that we would be successful in raising such funding on terms acceptable to our shareholders, if at all, and if we were not successful, we may be required to slow down or cease our clinical trials, or in a worst-case scenario, shut down the Company. Our independent registered public accounting firm has issued a going concern opinion for the year ended December 31, 2023. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next 12 months. Management expects expenses to increase in 2024 as our drug technology advances through clinical trials, and as a result, we will need to raise significant additional capital to support these operations. There is no assurance, however, that the Company will be successful in raising the needed capital and, if funding is available, that it will be available on terms acceptable to the Company. Any funds raised will likely result in material dilution to our current shareholders (in addition to dilution caused by conversion of the Option Payment (defined below in this Information Statement) to shares of Common Stock) or be in the form of debt which poses other risks of default. Our current cash or cash equivalents can enable us to fund our operations through the second quarter of 2024. If we are not successful in completing this Merger prior to June 30, 2024, or raising additional capital, or providing other options to support operations and our trials, we may need to delay clinical trials, reduce overhead, or in the most extreme scenario, shut down operations.

While the Merger is pending, QSAM will be subject to business uncertainties and certain contractual restrictions that could adversely affect the business and operations of QSAM.

In connection with the pending Merger, some operators, managers, suppliers, vendors or other third parties of QSAM may react unfavorably, delay or defer decisions concerning their business relationships or transactions with QSAM, which could adversely affect the clinical stages of QSAM, regardless of whether the Merger is completed. In addition, due to certain restrictions in the Merger Agreement on the conduct of business prior to completing the Merger, QSAM may be unable (without Telix’s prior written consent), during the pendency of the Merger, to pursue strategic transactions, undertake significant capital projects, undertake certain financing transactions and otherwise pursue other actions, even if such actions would prove beneficial and may cause QSAM to forego certain opportunities it might otherwise pursue. In addition, the pendency of the Merger may make it more difficult for QSAM to effectively retain and incentivize key personnel and may cause distractions from QSAM’s strategy and day-to-day operations for its current employees and management.

QSAM will incur substantial transaction fees and Merger-related costs in connection with the Merger.

QSAM expects to incur non-recurring transaction fees, which include legal and advisory fees and substantial Merger-related costs associated with completing the Merger. These fees will be payable by QSAM even if the Merger does not close, and therefore, will impose a significant financial burden on QSAM which would materially impair its ability to continue operations in the instance the Merger is terminated. Further, QSAM will continue to bear the costs and expenses of its operations prior to the Closing, and any delays in the anticipated closing date will result in additional indebtedness and/or payables existing at Closing which QSAM may not have the available cash resources to pay. In this instance, Telix would have the right to reduce the Closing Consideration payable to the QSAM stockholders in the amount of any additional indebtedness that it is required to pay or assume.

QSAM stockholders will have a substantially smaller ownership and voting interest in Telix upon completion of the Merger compared to their ownership and voting interest in QSAM prior to the Merger.

Upon completion of the Merger, each QSAM stockholder at the First Effective Time will become a Telix stockholder with a percentage ownership of Telix that is substantially smaller than the QSAM stockholder’s current percentage ownership of QSAM. Upon completion of the Merger, based on the number of shares of Telix Ordinary Shares and QSAM Common Stock outstanding on March 31, 2024, the latest practicable date prior to the filing of this Information Statement, it is estimated that continuing Telix stockholders will own greater than 98% of the issued and outstanding ordinary shares of Telix, and former QSAM stockholders will collectively own less than 2% of the issued and outstanding ordinary shares of Telix. Accordingly, the former QSAM stockholders will exercise significantly less influence over Telix after the Merger relative to their influence over QSAM prior to the Merger, and thus will have a less significant impact on the approval or rejection of future Telix proposals submitted to a Telix stockholder vote.

Litigation against QSAM, Telix or the members of their respective boards could prevent or delay the completion of the Merger or result in the payment of damages following completion of the Merger.

It is a condition to the Merger that no temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the Merger Agreement or the transactions contemplated thereby shall have been issued by any court of competent jurisdiction or other governmental authority of competent jurisdiction and remain in effect. It is possible that Telix or QSAM stockholders may file lawsuits challenging the Merger or the other transactions contemplated by the Merger Agreement, which may name Telix, members of the Telix Board, QSAM and/or members of the QSAM Board as defendants. The outcome of such lawsuits cannot be assured, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. If plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the Merger on the agreed-upon terms, such an injunction may delay the consummation of the Merger in the expected timeframe, or may prevent the Merger from being consummated at all. Whether or not any plaintiff’s claim is successful, this type of litigation can result in significant costs and divert management’s attention and resources from the Closing and ongoing business activities, which could adversely affect the operation of Telix’s and QSAM’s businesses.

Directors, Key Employees and Key Consultant of QSAM have interests in the Merger that are different from, or in addition to, the interests of other QSAM stockholders.

Directors, Key Employees and a Key Consultant of QSAM have interests in the Merger that may be different from, or in addition to, the interests of other QSAM stockholders, generally. These interests include, among others: severance payments; transaction bonuses; the acceleration of vesting of Restricted Shares; and rights to ongoing indemnification and insurance coverage by the surviving company for acts or omissions occurring prior to the Merger. The QSAM Board was aware of and considered those interests, among other matters, in reaching its decision to approve and adopt the Merger Agreement, approve the Merger and recommend the approval of the Merger Agreement to QSAM stockholders. These interests, among other factors, may have influenced the directors and executive officers of QSAM to support or approve the Merger. See “The Merger—Interests of QSAM Directors and Officers in the Merger” beginning on page 36.

QSAM stockholders may not receive any payments under the CVRs, which makes it difficult to value the CVRs.

Under the Merger Agreement, holders of QSAM Common Stock have the right to receive one CVR for each pre-Reverse Split share of QSAM Common Stock held by such person. Each CVR will entitle its holder to receive one or more contingent payments in cash or Telix Ordinary Shares or a combination of both from the Earnout Consideration upon the achievement of certain milestones, if achieved. See “Agreements Related to the Merger—The Contingent Value Rights Agreement” beginning on page 56. Therefore, QSAM stockholders’ right to receive any future payment with respect to the CVRs will be contingent upon whether the milestones are achieved.

Telix is obligated to use commercially reasonable efforts to satisfy the milestone events on the terms specific in the CVR Agreement. A variety of factors can affect the ability, timing and success of these milestones. If any milestones are not achieved within the tenth anniversary of the date of the CVR Agreement (the deadline period), any unachieved milestone payments will not be made under the CVRs and the CVRs will expire. Accordingly, the value, if any, of the CVRs is highly speculative and uncertain, and the CVRs may ultimately have no value at all.

The CVRs are nontransferable.

The CVRs are nontransferable, meaning that they may not be sold, assigned, transferred, pledged, encumbered or in any other manner transferred or disposed of either in whole or in part, other than in certain limited circumstances. The CVRs will not be registered as securities and they will not be listed or traded on any stock exchange in the United States or elsewhere. Therefore, the CVRs are not liquid and QSAM stockholders will not be permitted to sell or transfer them, except in certain limited circumstances.

The Merger may not qualify as a “reorganization” under Section 368(a) of the Code or may be taxable under Section 367(a) of the Code.

As discussed in “Material U.S. Federal Income Tax Considerations” beginning on page 119 of this Information Statement, the Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code and not to be subject to Section 367(a)(1) of the Code. Subject to the qualifications, exceptions, assumptions and limitations contained in “Material U.S. Federal Income Tax Considerations,” if the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, is not subject to Section 367(a)(1) of the Code, and is treated as a “closed transaction” rather than an “open transaction” for U.S. federal income tax purposes, then, generally, gain will be recognized by a U.S. Holder (as defined in “Material U.S. Federal Income Tax Considerations”) equal to the lesser of (i) the fair market value of the CVRs received in connection with the Merger, and (ii) the difference, if any, between (x) the sum of the fair market values of the Telix Ordinary Shares and the CVRs received in connection with the Merger, and (y) such holder’s adjusted tax basis in the shares of Common Stock surrendered in the Merger. The tax treatment of the receipt of the CVRs and payments thereunder is uncertain, and the alternative treatments are described in “Material U.S. Federal Income Tax Considerations” beginning on page 119 of this Information Statement.

Subject to the qualifications, exceptions, assumptions and limitations contained in “Material U.S. Federal Income Tax Considerations” beginning on page 119 of this Information Statement, if the Merger is treated as a closed transaction but does not qualify as a “reorganization” under Section 368(a) of the Code, then, for U.S. federal income tax purposes, a U.S. Holder would recognize gain or loss in an amount equal to the difference, if any, between (i) the sum of the fair market values of the Telix Ordinary Shares received at Closing and the CVRs, and (ii) such U.S. Holder’s adjusted tax basis in the shares of Common Stock surrendered. If the Merger is treated as a closed transaction and is subject to Section 367(a)(1) of the Code, then, a U.S. Holder would recognize gain, but not loss, in an amount equal to the difference, if any, between (i) the sum of the fair market values of the Telix Ordinary Shares received at Closing and the CVRs, and (ii) such U.S. Holder’s adjusted tax basis in the shares of Common Stock surrendered.

Each QSAM Stockholder is urged to read the discussion in the section entitled “Material U.S. Federal Income Tax Considerations” beginning on page 119 of this Information Statement and to consult its tax advisor to determine the particular U.S. federal, state or local or non-U.S. income or other tax consequences to it of the Merger.

The U.S. federal income tax treatment of the CVRs is uncertain.

There is no legal authority directly addressing the U.S. federal income tax treatment of the CVRs or the treatment of payments that may be received pursuant to the CVRs. Accordingly, the amount, timing and character of any gain or loss with respect to the CVRs are uncertain. For a more detailed summary of the material U.S. federal income tax consequences of the Merger, see “Material U.S. Federal Income Tax Considerations” beginning on page 119 and “Material Federal Income Tax Consequences of the Reverse Stock Split” beginning on page 62.

The fairness opinion obtained from Newbridge, the financial advisor to the QSAM Board, will not reflect subsequent developments between the signing of the Merger Agreement and the Closing.

In connection with the proposed Merger, the QSAM Board received an opinion on February 7, 2024, from Newbridge as to the fairness, from a financial point of view, and as of such date, of the Stock Consideration to be paid to the holders (other than holders of cancelled or dissenting shares) of QSAM Common Stock, which opinion was based on and subject to various assumptions, procedures, considerations, limitations and qualifications, more fully described in the section titled “The Merger—Opinion of QSAM’s Financial Advisor” beginning on page 31. The opinion does not reflect developments that may occur or may have occurred after the date of the opinion, including changes in the market prices of Telix Ordinary Shares and QSAM Common Stock, changes to the operations and prospects of Telix or QSAM, changes in general market and economic conditions or regulatory or other factors. Any such changes, or other factors on which the opinions are based, may materially alter or affect the relative values of Telix or QSAM.

If the Merger is not consummated by August 7, 2024, either QSAM or Telix may terminate the Merger Agreement.

Either QSAM or Telix may terminate the Merger Agreement if the Merger has not been consummated by August 7, 2024, six months from the date of signing the Merger Agreement. However, this termination right will not be available to a party if that party failed to fulfill its obligations under the Merger Agreement and that failure was the principal cause of, or directly resulted in, the failure to consummate the Merger on time. See “The Merger Agreement—Termination of the Merger Agreement” beginning on page 53. In the event the Merger Agreement is terminated by either party due to the failure of the Merger to close by August 7, 2024, QSAM will have incurred significant costs and will have diverted significant management focus and resources from other strategic opportunities and ongoing business activities without realizing the anticipated benefits of the Merger.

Risks Related to the Combined Company Following the Merger

Following the Merger, Telix may be unable to integrate the QSAM business successfully or realize the anticipated synergies and related benefits of the Merger.

Telix and QSAM entered into the Merger Agreement with the expectation that the Merger will result in various benefits and synergies. However, the Merger involves the combination of two companies that currently operate as independent public companies. Telix may be unable to successfully operate QSAM’s business or integrate it into its own operations as a combined company.

After the Closing, Telix will be required to devote significant management attention and resources to integrating the portfolio and operations of QSAM. Potential difficulties that Telix may encounter in the integration process include the following:

It is possible that the integration process could result in the distraction of Telix’s management, the disruption of Telix’s ongoing business or inconsistencies in Telix’s operations, services, standards, controls, procedures and policies, any of which could adversely affect the ability of Telix to maintain relationships with third parties and employees or to achieve the anticipated benefits of the Merger, or could otherwise adversely affect the business and financial results of Telix.

Telix Ordinary Shares to be received by QSAM stockholders in the Merger will have rights different from the shares of QSAM Common Stock.

After the First Effective Time, QSAM stockholders who receive Telix Ordinary Shares in connection with the Merger will no longer be stockholders of QSAM but instead will hold shares of Telix. The two corporations operate in separate legal and geographical jurisdictions – QSAM is a Delaware corporation whereas Telix is an Australian corporation. As stockholders of Telix, former QSAM stockholders will have different rights under the terms of Telix’s governance documents, and those rights may be, or may be perceived to be, less favorable than their current rights as QSAM stockholders. See “Comparison of Rights of Holders of Telix Ordinary Shares and QSAM Common Stock” beginning on page 111.

There can be no assurance that Telix will not be a passive foreign investment company for any taxable year, which could result in adverse U.S. federal income tax consequences to QSAM Stockholders who receive Telix Ordinary Shares in the Merger.

In general, a corporation organized outside the U.S. will be classified for U.S. federal tax purposes as a passive foreign investment company, or PFIC, for any taxable year in which either (i) 75% or more of its gross income consists of “passive income,” or (ii) 50% or more of the value of its assets (generally determined on an average quarterly basis) consists of assets that produce, or are held for the production of, passive income. For purposes of the above calculations, a foreign corporation that owns (or is treated as owning) at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets of that other corporation and received directly its proportionate share of the income derived by that other corporation. “Passive income” generally includes dividends, interest, rents, royalties and certain gains. Cash is a passive asset for these purposes.

Based on the expected nature and amount of Telix’s estimated gross income, the anticipated nature and estimated average value of its gross assets, the anticipated cash needs of its group’s operations and the nature and extent of the active businesses conducted by its “25% or greater” owned subsidiaries, Telix does not expect that it will be classified as a PFIC in the current taxable year or for foreseeable future. However, Telix’s PFIC status for any taxable year can be determined only after the end of such year and will depend on the composition of its income and assets and the value of its assets from time to time (which may be determined, in part, by reference to the market price of the Telix Ordinary Shares, which could be volatile). Furthermore, the composition of Telix’s income and assets for the current and future taxable years will be affected by how, and how quickly, Telix spends the cash it has on hand. Accordingly, there can be no assurance that Telix will not be a PFIC for its current or any future taxable year. If Telix is a PFIC for any taxable year during which a U.S. person is treated as owning Telix Ordinary Shares, such U.S. person generally would be subject to adverse U.S. federal income tax consequences, possibly including increased tax liability on disposition gains and “excess distributions,” and additional reporting requirements. See “Material U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Considerations” beginning on page 126.

Risks Relating to Telix’s Business

Telix has a history of significant net losses, may increase operating expenses in the future, and may not maintain profitability in future periods.

Until 2023, Telix incurred significant operating losses. Telix’s operating profit was A$15.8 million and net operating cash inflow was A$23.9 million for the year ended December 31, 2023. As of December 31, 2023, Telix had an accumulated deficit of A$263.7 million. Although Telix launched Illuccix® in April 2022 and has recognized revenue from its sales, Telix cannot be certain that it will sustain profitability or positive cash flows from operations in future periods.

Telix has invested most of its resources in developing technology and product candidates, building intellectual property portfolio, developing supply chains, conducting business planning, raising capital and providing general and administrative support for these operations. Telix expects to continue to incur significant expenses as it continues to commercialize Illuccix® in the United States, Australia, New Zealand, and Canada and engage in activities to prepare for the potential approval and commercialization of other product candidates. Because of the numerous risks and uncertainties associated with pharmaceutical product development and commercialization, Telix is unable to accurately predict the timing or amount of our revenue and expenses or if it will be able to maintain profitability. Telix cannot be certain that revenue from sales of Illuccix® alone, in the currently approved indications, will be sufficient for Telix to remain profitable in future periods. Telix may not generate revenues that are significant or large enough to sustain or increase profitability on an annual basis. Telix’s failure to remain profitable would decrease the value of the company and could impair its ability to raise capital, maintain research and development and commercialization efforts, expand business and/or continue operations.

Telix may not be able to effectively integrate the businesses that it has acquired and/or may acquire in the future.

Telix’s ability to realize the anticipated benefits of acquisitions it has completed and/or may complete in the future will depend on its ability to integrate those businesses with its own. The combination of multiple independent businesses is a complex, costly and time-consuming process and there can be no assurance that Telix will be able to successfully integrate businesses into its business, or if such integration is successfully accomplished, that such integration will not be costlier or take longer than presently contemplated. If Telix cannot successfully integrate and manage the businesses within a reasonable time, Telix may not be able to realize the potential and anticipated benefits of such acquisitions, which could have a material adverse effect on its business, financial position, and results of operations. Telix faces numerous risks relating to the integrated of acquired businesses, including:

Telix may need to raise additional capital to achieve its business objectives if it is unable to fund its operations with its cash flows from the sale of its products. If Telix is unable to raise capital when needed or on acceptable terms, Telix would be forced to delay, reduce or eliminate its research and development programs and/or commercialization efforts.

Discovering, developing and commercializing products involve time-consuming, expensive and uncertain processes that take years to complete. Telix has used substantial funds to develop Illuccix® and expects its operating expenses to continue to increase as it continues to commercialize Illuccix® or any future approved products, conduct further research and development of its product candidates, seek approval and prepare for commercialization of TLX250-CDx, seek approval of TLX101-CDx and continue to conduct clinical trials for its other product candidates. Furthermore, Telix will continue to incur additional costs associated with operating as a public company, hiring additional personnel and expanding its geographical reach. Although currently Illuccix® is commercially available in four jurisdictions, Telix cannot be certain that its revenue from product sales of Illuccix® will be sufficient for it to remain profitable on an annual basis. Accordingly, Telix may need to continue to rely on additional financing to achieve its business objectives.

As of December 31, 2023, Telix had A$123.2 million in cash and cash equivalents. The amount and timing of its future capital requirements will depend on many factors, including, but not limited to:

In addition, the terms of any financing may adversely affect the holdings or the rights of Telix’s shareholders. If Telix raises additional funds by issuing equity securities, dilution to its existing shareholders will result. In addition, as a condition to providing additional funding to Telix, future investors may demand, and may be granted, rights superior to those of existing shareholders. Moreover, any debt financing, if available, may involve restrictive covenants that could limit Telix’s flexibility in conducting future business activities and, in the event of insolvency, would be paid before holders of equity securities received any distribution of corporate assets. Telix’s ability to satisfy and meet any future debt service obligations will depend upon our future performance, which will be subject to financial, business and other factors affecting its operations, many of which are beyond its control.

Even if Telix believes it has sufficient funds for its current or future operating plans, Telix may seek additional capital due to favorable market conditions or strategic considerations. Any future fundraising efforts could divert Telix’s management’s attention away from its day-to-day activities. Further, adequate additional financing may not be available to it on acceptable terms, or at all. In addition, raising funds in the current economic environment may present additional challenges. For example, any sustained disruption in the capital markets from adverse macroeconomic conditions, such as the disruption and uncertainty caused by rising inflation, increasing interest rates and slower economic growth or recession, could negatively impact Telix’s ability to raise capital and it cannot predict the extent or duration of such macro-economic disruptions. If adequate funds are not available to Telix on a timely basis or on attractive terms, Telix may be required to delay, reduce or eliminate its research and development programs or any current or future commercialization efforts for one or more of its products or product candidates, any of which could have a material adverse effect on its business, operating results and prospects.

THE MERGER

Relevant Historical Background of QSAM

Commencement of Operations to Develop CycloSam^®

The Company was incorporated on August 26, 2004 under the name Telecomm Sales Network, Inc. The Company engaged in successive legacy businesses, including listing on the OTCQB in 2015 under the name Q2Power Technologies, Inc., before we commenced our current business of developing CycloSam^® in April 2020, when we established QSAM Therapeutics Inc. (“QSAM Therapeutics”) as a wholly-owned subsidiary incorporated in the state of Texas, and through QSAM Therapeutics, executed a Patent and Technology License Agreement and Trademark Assignment (the “License Agreement”) for Samaium-153 DOTMP aka CycloSam® (the “Technology”) with IGL. The License Agreement, as amended, provides the Company, through QSAM Therapeutics with exclusive, worldwide and sub-licensable rights to all of IGL’s patents, product data and know-how with respect to the Technology, a clinical stage novel radiopharmaceutical meant to treat different types of bone cancer. In connection with the commencement of our current business of developing CycloSam^®, we changed our name to QSAM Biosciences, Inc., and we divested our legacy assets and terminated our legacy business.

As with all early-stage biotech companies, the advancement of the Company’s Technology has and will require significant capital expenditures. The drug development process is long and expensive, requiring capital for pre-clinical studies, human clinical trials, intellectual property protection, and other critical activities including general operations and overhead. Since the beginning of 2021, the Company has raised approximately $7.3 million in four main financing rounds of preferred stock, debt, and common stock, as follows:

Series B Round. The Company completed its first capital raise to advance the Technology in January 2021 with the closing of its Series B Preferred Stock offering (the “Series B Round”). In the Series B Round, the Company issued a total of 2,500 Series B Preferred shares at a price of $1,000 per share (“Series B Stock”), raising an aggregate amount of $2.5 million, inclusive of $156,000 in debt conversion. The Series B Round was led by Checkmate Capital Group, LLC, a California based investment firm focused on biotechnology and other technology investments.

 In July and August 2021, 15 holders of 991 shares of Series B Stock converted their Series B Stock plus all accrued dividends into 163,134 shares of Company common stock. In October 2023, all remaining Series B stockholders, representing 1,509 shares of Series B Stock, signed agreements with the Company providing that if the Company lists its common stock on Nasdaq or otherwise signs an agreement to be acquired or merged with another company, such shareholders will automatically and without any further action on their part exchange their shares of Series B Stock into common stock at an exchange ratio of $3.00, inclusive of all accrued dividends. As a result of the signing of the Merger Agreement, the total principal and dividend amount of the Series B Stock was exchanged into 658,968 shares of common stock, and all Series B shares were retired.

In connection with this Series B Round closing, we issued in 2021 approximately 150,000 common stock warrants, which were originally exercisable prior to July 8, 2021 at an exercise price of $14.00 per share, and later modified by our Board to expire on October 15, 2021 and be exercisable at $10.00 per share. As of October 15, 2021, seven holders of the Series B warrants exercised those warrants and received a total of 46,786 common shares for total consideration to the Company of $467,858.

Convertible Note Round. In the fourth quarter of 2021, we entered into convertible note purchase agreements with eight accredited investors, pursuant to which we issued an aggregate of $605,000 of 6% annual interest, unsecured convertible notes (the “Convertible Notes”). The Convertible Notes were due to mature on December 31, 2023, and were originally convertible into shares of common stock of the Company at a conversion price of $8.00 per share. On March 31, 2023, our Board approved a reduction of the conversion price from $8.00 to $3.50 as an inducement to immediate conversion. All outstanding Convertible Notes were converted into 164,446 shares of common stock. As of the date of signing the Merger Agreement, we had no Convertible Notes outstanding.

Common Stock and Warrant Unit Round. On March 31, 2023, we closed a total of $2.86 million in a common stock and warrant unit offering, which consisted of 381,500 shares of common stock at $4.50 and the issuance and exercise of 381,500 two-year common stock warrants (the “Warrants”). The Warrants originally had an exercise price of $6.00 per share, but on March 31, 2023, our Board approved a reduction of the price to $3.00 as an inducement to immediate exercise of the Warrants. All Warrant holders exercised at this reduced price, which raised an additional $1.14 million for the Company, inclusive of $342,669 in subscription receivables which were received in April 2023.

Common Stock Round. In the third quarter of 2023, the Company issued 176,470 shares of common stock to three accredited investors, one of whom is a family member of our Executive Chairman, for a total of $600,000 in funding. In December 2023, a fourth investor purchased 50,000 shares of common stock for $250,000, which funds were received in early January 2024.

Many of the investors in our first Series B Round were also investors in the Convertible Note Round, the Common Stock and Warrant Unit Round and the latest Common Stock Round. As such, these investors have provided significant capital resources to the Company over the last three years to assist the Company in its development efforts. After the closing of this last round, many of these investors informed the Company’s management that their desire and ability to continue to fund the Company was limited and, if any future investments would be considered, they would be conditioned upon the uplisting of the Company’s common stock to Nasdaq to provide greater liquidity for their investments.

Attempted Underwritten Offering and NASDAQ Uplisting. In December 2021, the Company filed a registration statement on Form S-1 with the SEC to raise up to $20 million through a common stock offering underwritten by an investment bank based in New York. Concurrently, the Company submitted an application with the Nasdaq Stock Market LLC to list its common shares on the Nasdaq Capital Market. Due to difficult market conditions, especially for micro-cap, early-stage biotech companies at this time, in May 2022, the Company chose to terminate this offering.

Strategy to Advance Technology Development

We are actively advancing the development of our Technology through clinical trials. If we had adequate funding in a timely manner, QSAM management believes that we can complete the current Phase 1 safety trial of approximately 17 patients in 2024. We have estimated that an additional $3 million to $4 million will be required to complete this phase of our study. The next step that we envision in our clinical trial program, if cleared by the FDA, is expected to be a study designed to show both safety and efficacy in the treatment of bone tumors utilizing a multi-dose regimen of CycloSam®. Management estimates that an additional $12 million to $14 million will be required to complete the first portion of this critical phase of our study over the next 24 to 30 months.

Beyond our current focus of studying CycloSam® in the treatment of metastatic bone cancer, management has indicated its desire to advance other potential indications for our Technology, including the treatment of pediatric osteosarcoma and Ewing’s sarcoma, and the use of CycloSam® to treat the debilitating pain from cancer that has metastasized to the bone. Such trials would require initiating separate protocols and/or studies for these important indications.

Advancement of our Technology requires significant funding, which has in the past and would most likely in the future result in the issuance of more common stock, preferred stock or debt in subsequent raises. There is no guaranty that we would be successful in raising such funding on terms acceptable to our shareholders, if at all, and if we were not successful, we may be required to slow down or cease our clinical trials, or in a worst-case scenario, shut down the Company. Our independent registered public accounting firm had issued a going concern opinion for each of the years ended December 31, 2021, 2022 and 2023. This means that our auditors believed there was substantial doubt that we could continue as an on-going business for the next 12 months.

Against the backdrop of these financial viability concerns, the Company’s prior funding rounds, the then active Common Stock and Warrant Unit Round, and the need to raise additional capital in the future to continue to advance the Technology, the Company’s Board of Directors (“Board”) tasked management in the fall of 2022 with presenting options to properly fund the Company and its operations through the completion of Phase 2 clinical trials and/or the partnership of the Company with a larger pharmaceutical concern with substantially greater capital assets, including the potential of a co-funded, co-development agreement. As noted above, management estimated that an additional $3 to $4 million would be needed to complete Phase 1 of the ongoing trials, and an additional $12 to $14 million for the first stage of Phase 2 trials, not inclusive of general overhead and public company expenses. Such Phase 2 budget was estimated to be sufficient to advance the trial far enough along to demonstrate meaningful Phase 2 data, but not fully complete that stage of the trial. In its deliberations, the Board also considered the Company’s stock price and market capitalization, and the current state of the economy and the capital markets including the widespread difficulty small, early-stage biotech companies were having in attracting capital. Given the reluctancy of the Company’s prior investors to provide additional capital in future private offerings, the Board considered the option of conducting additional PIPE transactions while trading on the OTCQB to be highly uncertain. Further, if funds were available to the Company through a PIPE, the Board believed that such terms would be highly dilutive to prior investors and current shareholders.

In early spring 2023, after multiple Board meetings to discuss the findings of management, the Board concluded that there were two viable paths forward for the Company: (1) seek a Nasdaq uplisting with a concurrent underwritten offering with an investment bank, or (2) seek a partnership or co-development agreement with a larger pharmaceutical concern that could off-set or assume the expenses of our clinical trials. Both these paths had considerable risks and uncertainties, and therefore, the Board decided to pursue both in parallel.

Investment Banking – Nasdaq Uplisting Efforts

In March 2023, after the closing of its Common Stock and Warrant Unit Round, management began contacting investment banks to inquire about the possibility of completing a Nasdaq uplisting with a concurrent underwritten offering during the following six to 12 months. Several of these banks were under consideration or involved with the Company’s 2021/2022 attempt to list on Nasdaq; others were recommendations of consultants and shareholders or were firms otherwise known to members of management.

Between March and May 2023, management spoke with over 12 investment banks which management believed would be interested in engaging with the Company to pursue this type of transaction. Of these, six of the banks informed the Company that (1) market conditions were not conducive to Nasdaq uplisting transactions and/or micro-cap, early-stage biotech public transactions, (2) they were doubtful whether they could successfully raise the required funds for the Company to uplist to Nasdaq, and/or (3) they were not interested in pursuing such a transaction with QSAM at that time. Management pursued further discussions with the remaining six banks that expressed cautious optimism that an uplisting transaction could be completed.

In late April 2023, the Company received unsigned, draft Letters of Engagement (“LOE”) from three investment banks to raise capital in a firm underwriting to be completed concurrently with a Nasdaq uplisting (Bank #1, Bank #2, and Bank #3). In May 2023, the Company received a similar unsigned LOE with a fourth investment bank (Bank #4); and in July 2023 another draft LOE from Bank #5. The final LOE was received in September 2023 from Bank #6, and was separately considered by the Company’s Board, as discussed below.

Banks #1, #2 and #3 were all similar in size, reputation, and track record for the types of transactions that the Company was considering. The terms provided in the three LOE’s were reasonably similar in fees, expense caps, terms of engagement and follow-on funding rights (such as rights of first refusal and “tail” fees, “Follow-On Rights”). With respect to Bank #4, while the proposed terms of their engagement were in line with the other three banks, this bank had been established recently as a growth division of foreign brokerage operation, and management had limited data to determine their ability to close an underwritten Nasdaq uplisting transaction. Similarly, Bank #5, which provided its draft LOE in July, had not engaged in a Nasdaq uplisting transaction in several years and, as a result, they lacked an ascertainable track record for the Board to consider. However, the terms of Bank #5’s proposal were more beneficial to the Company with respect to fees and Follow-On Rights.

In early June through late August 2023, management continued its discussions with the five banks from which we had received draft LOE’s. In July, Bank #2 informed the Company that it would not be able to proceed with an underwritten offering as they felt market conditions were not improving, and in August, the Company decided not to proceed with Bank #4 because of their failure to provide information to allow the Board to assess their ability to close an uplisting transaction.

In our analysis of the relative strengths and weaknesses of Banks #1, #3 and #5, the Board considered the following items:

In its deliberations the Board also sought the recommendations on a confidential basis of certain of the Company’s larger investors and financial consultants, as well as its outside securities counsel and regulatory experts.

Management estimated that the Company would need to raise at least $8 million to have the required minimum shareholder equity to qualify for the Nasdaq Capital Market for a potential end of 2023 closing. This funding was only a portion of the capital that management forecasted would be needed to advance the Technology through Phase 2 trials; however, all four banks at this time were concerned with the potential for success of larger capital raises, especially on structure terms that were not highly dilutive to current shareholders. Additionally, management had concerns about the Company’s stock price, which was trading near the $4.00 range at that time on the OTCQB. To qualify for a Nasdaq uplisting, the Company would need to have a minimum $4.00 bid price. Several of the banks warned that another reverse split of our common stock may be needed to qualify for Nasdaq.

Due to these concerns and recommendations from advisors that market conditions could possibly improve in the fourth quarter 2023 or first quarter 2024, the Board decided to wait until after the Labor Day holiday at the earliest to make any decision on engaging an investment bank. Furthermore, generally around this time, two other investment banking options had arisen, and more importantly, our discussions with Telix were becoming more visible with respect to a potential a strategic partnership or acquisition (see “Discussions with Telix” below).

In August 2023, management began discussions with Bank #6. This group had certain advantages over the other three still in consideration. Firstly, Bank #6 had a dedicated and large retail investor basis through a partner group with a strong track record of successful fund raises in the $10 million to $15 million range. Secondly, their LOE contained no Follow-On Rights, including no right of first refusal or “tail” fee rights. Thirdly, Bank #6 was recommended by several parties that were consulting with the Company.

Also in late summer 2023, management began discussions with a separate division of Bank #1 – a wealth management / merchant banking group with a solid reputation for funding private biotech transactions. As part of these discussions, the merchant banking group engaged in preliminary technical and scientific due diligence with the Company, including holding two fairly detailed and lengthy diligence calls with the group’s scientific advisor. By mid-August 2023, we were informed by Bank #1, and specifically their merchant banking group, that they wanted to pursue a funding transaction; however, public underwriting was not their area of expertise, and therefore, they would need to work with their capital markets team to figure out a structure for engagement. We were informed that this would take a few weeks.

In September 2023 after the Labor Day holiday, the Board had narrowed down its choices of potential banks to Bank #1 and Bank #6. Bank #3 had expressed confidence in closing a $10 million underwriting, but our Board was concerned with the structure of that proposed transaction and the short-term investment strategies of investors that would likely lead the round. Bank #5 had been wavering over the prior month on their ability to complete a funding round large enough to meet Nasdaq minimum shareholder equity requirements, and as a result, the Board terminated further discussions.

By late September, management heard back from Bank #1 regarding the terms it would require to lead a $15 to $20 million financing through its merchant banking division. The fees and structure proposed were not in line with market terms, and the Board felt that they put the Company at risk. Further, they would not be able to commence a funding transaction until Q3 2024, which also put the Company at risk and in need of completing another private offering prior to the Nasdaq uplisting. As a result, by October 2023, only Bank #6 remained a viable option; however, this group had not yet committed as to timing for our contemplated offering.

Activities to Seek Partnership or Co-Development

Through mostly the efforts and contacts of our Executive Chairman, the Company had conducted several discussions with larger pharmaceutical companies over the previous three years. The nature of almost all these conversations was informative in substance, namely making sure potential future partners knew about CycloSam® and were keeping track of our clinical progress. It is common in the biotech industry for large pharmaceutical companies to monitor the progress of smaller, early-stage companies like QSAM. Typically, but not always, partnership or acquisition transactions are not pursued in earnest until the smaller entity has demonstrated sufficient clinical data to mark a “de-risking” of the technology. This often happens during or after Phase 2 trials, which the Company had not yet achieved, and as noted above, required additional funding to pursue.

In the spring of 2023, when the Board determined it to be in the best interest of the shareholders to pursue in parallel both a Nasdaq uplisting and potential strategic partnerships, our Executive Chairman redoubled his efforts in attracting the attention of larger firms in the sector. As part of these efforts, certain members of management attended the June 4-6, 2023 American Society of Clinical Oncology (ASCO) Conference in Chicago, and then all members of our management attended the June 24-27, 2023 Society of Nuclear Medicine and Medical Imaging (SNMMI) Conference, also in Chicago.

During the summer of 2023, the Company was in contact with six potential strategic partners in addition to Telix. These companies were:

The elements of the Company’s contact with these firms included telephone calls, emails and delivery of technology presentations, and meetings at the ASCO and/or SNMMI conferences. The feedback that the Company received from five of the six potential partners was that they were interested in the Company’s Technology but they would require Phase 2 data to proceed with more meaningful partnership discussions. The sixth company did not express an interest in pursuing indications in bone cancer.

Discussions with Telix

On May 5, 2023, our VP-Operations was invited by IsoTherapeutics Group, a company closely affiliated with our Licensor and who provides certain advisory and contracted manufacturing services for the Company, to meet with representatives of Telix at IsoTherapeutics’ office in Angleton, TX. IsoTherapeutics had been engaged by Telix for several years to perform research, development and manufacturing services for Telix. Among the Telix attendees at this initial meeting were its CEO; SVP Global Manufacturing, Supply Chain and Logistics; VP of Business Development; and Director of R&D. At this meeting the parties discussed the Company’s Technology, general clinical strategy, the ongoing CycloSam® trials and early data therefrom. Telix provided no ascertainable initial feedback from this first meeting.

On May 12, 2023, our VP Operations emailed Telix’s CEO to follow up on certain clinical items that arose during the initial meeting, including sending a corporate presentation which included early data from our current trial focused on metastatic bone disease, and our near-term strategic plans. Telix’s CEO responded to this email stating his interest in having a more strategic discussion accompanied by an invitation to meet at ASCO (June 2-6, 2023) in Chicago with him and Telix’s Chief Commercial Officer.

The Company’s CEO, General Counsel and VP-Operations met with Telix in Chicago on June 6, 2023. This was meant to be an introductory visit so that Telix could meet other key members of our management team. At this meeting, Telix’s CEO expressed his openness in holding strategic discussions around a possible partnership or an acquisition. The parties agreed to meet at the SNMMI conference later that month to further this conversation.

On June 8, 2023, the parties signed a mutual Confidential Disclosure Agreement.

On June 25, the Company’s Executive Chairman, CEO, General Counsel and VP-Operations met with Telix’s CEO at the SNMMI Conference in Chicago. Telix’s Chief Commercial Officer was also in attendance. At this meeting, the parties discussed in more detail what a possible strategic transaction may look like, including the benefits and downsides of a partnership structure versus an outright acquisition. The meeting ended with Telix’s CEO saying he would provide in the following two weeks general written terms of how he suggests a transaction could be structured.

On July 6, we received an initial draft of a term sheet from Telix. It consisted of a stock for stock acquisition with a commercial sales royalty-based earnout structure. Our Executive Chairman called a Board meeting for the following week to discuss the terms and next steps.

On July 13, we held a Board meeting to discuss the terms provided by Telix. The Board tasked the Company’s General Counsel to develop a financial model and provide relevant market and deal comparables to analyze Telix’s offer and provide the foundation for a counter proposal.

On July 21, the Board convened twice to review modeling and comparables provided by the General Counsel, and to review and finalize a draft counter proposal to Telix. Generally, the Board believed the upfront purchase price that had been offered was too low based upon risk-adjusted net present value analysis of the Company’s technology and market potential, as well as our analysis of comparable market transactions; and also, the offer was based on a premium to market that did not account for our fully diluted capitalization. Further, the Board felt that the earnout potential was too uncertain and undefinable. The Board determined that a clinical and commercial milestone-based earnout structure was more in line with market structures and would potentially provide a better outcome for our stockholders. Finally, from a structural standpoint, our General Counsel noted that a stock-for-stock transaction would be difficult to consummate, and that if the Board wanted to pursue an acquisition of QSAM by Telix, a merger structure would be more appropriate.

On July 22, we provided Telix with our initial counter proposal to their July 6 term sheet, which included the structural and financial term changes discussed in the July 21 Board meetings, including materially higher up-front consideration and defined milestones for future earnout payments.

Telix responded to our counter proposal on July 31, indicating that the parties were very far apart in valuation and other terms, but the CEO would entertain another discussion to understand our position. This was accomplished via a video call held on August 8. In addition to the full management team, Dr. Charles Link, our Director, participated in this meeting.

During the August 8 video conference, the Company led by its General Counsel, presented its analysis of the valuation of CycloSam®, inclusive of a risk adjusted net present value model, market comps and other factors for Telix’s consideration. Telix’s CEO questioned certain aspects of the Company’s assumptions in its modeling, and provided his own thoughts on the value of the Technology, including the costs, time and risks to bring it to market, market size and possible commercial pricing. The call ended with Telix’s CEO saying he would respond formally to our counter proposal within the next few days.

Telix responded to our counter proposal on August 13. In this correspondence, Telix provided materially higher upfront consideration, an earnout structure based on clinical, regulatory and commercial milestones, and a $2 million option and pre-closing collaboration fee that would be paid upon the signing of a formal term sheet. Telix’s CEO also mentioned that several important diligence items related to the supply chain and other technical items needed to be resolved before we could proceed any further. The response ended with a statement indicating that if we could not meet his terms, maybe the parties should discuss a license or partnership arrangement instead of acquisition, or otherwise, terminate discussions.

Over the following two weeks, the Company’s management worked to answer Telix’s diligence concerns, and the parties exchanged several emails on those technical and scientific topics. Management kept the Board informed during this period with several individual calls and a Board meeting held on August 24. On September 7, Telix’s CEO sent an email to the Company’s General Counsel saying that Telix was still “struggling” with several diligence items. Our Executive Chairman suggested that the parties meet in Indianapolis at Telix’s US headquarters when the CEO was there. This meeting took place on September 13.

The Company’s Executive Chairman and General Counsel attended the meeting in Indianapolis on September 13. Telix’s CEO was present in person at that meeting, and he had arranged for a video conference of approximately eight other key members of his scientific, marketing, sales and communications team. The Company’s CEO and VP-Operations attended the video conference. During that meeting, Telix’s team posed many questions on the diligence items they had previously flagged and on which the Company had provided materials in response. The meeting was followed up with a dinner with Telix’s CEO, and the Company’s Executive Chairman and General Counsel.

On September 20, upon the return to Australia of Telix’s CEO, the parties had a follow-up video call. On this call, Telix’s CEO mentioned that the Company had answered most of Telix’s initial diligence questions and that he would respond within the week with their decision on next steps. The Company held a Board meeting on September 22 to update the Directors on the current status of the transaction.

On September 24, Telix’s CEO sent the Company’s General Counsel an email saying that they would like to proceed towards completing the acquisition term sheet.

On September 27 and September 29, the Board met to discuss business and legal items in the term sheet and provide management with direction on changes needed in that document. On October 2, the Company sent a revised version of the term sheet back to Telix containing the business and legal terms that had been discussed and agreed in principle over the last month. Several emails were exchanged over the following week, and the Company’s Board met again on October 6 to discuss additional items in the term sheet. By October 10, the parties had appeared to reach agreement on the remaining material business terms.

Between October 10 and November 12, the Company’s General Counsel and outside securities counsel worked with Telix’s General Counsel and outside US securities counsel to get the term sheet ready to be executed. There were several complicated securities law issues dealing with the issuance of Australian securities to US holders that needed to be resolved with Australian counsel, as well as other tax and structural issues that the parties wanted to resolve in the term sheet prior to Telix paying the Company the option fee.

On October 25, the Company was informed that Telix’s Board minutes had been published and that the Telix Board had met on October 18 and approved the transaction in principle subject to final agreements.

On November 14, the Company’s Board approved by means of unanimous consent the term sheet. Later that day the parties signed the term sheet providing the material business, legal and structural terms of the proposed merger. The term sheet signed on November 14 provided the basis for the Merger Agreement that was signed on February 7, 2024; and the terms of the Merger Agreement mirrored closely the terms provided in that initial term sheet.

Rationale for the Merger with Telix

In making its decision to proceed with the proposed acquisition of the Company by Telix, the Company’s Board considered many factors, including but not limited to the following:

In addition to its own internal discussion with management, the Board also weighed the opinions of certain key advisors, legal counsel and other key stakeholders. The general consensus of these advisors was that the proposed transaction with Telix presented a good potential outcome for the Company’s shareholders with the possibility of considerable upside, and it gave CycloSam^® the best chance of ultimate commercialization where it could improve the lives of many people living with bone cancer.

Opinion of QSAM’s Financial Advisor

On November 30, 2024, QSAM retained Newbridge Securities Corporation (“Newbridge”) to act as its financial advisor in connection with providing a fairness opinion on the Merger Agreement with Telix. Newbridge, as part of its investment banking business, is continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. QSAM selected Newbridge to act as its financial advisor in connection with the fairness opinion on the basis of Newbridge’s experience in similar transactions and its reputation in the investment community.

On February 2, 2024, at a meeting of the Board held to evaluate entering into a Merger Agreement with Telix, Newbridge delivered to the Board an oral opinion, which was confirmed by delivery of a written opinion, dated February 7, 2024, to the effect that, as of the date of November 14, 2023, the opinion and based on and subject to various assumptions and limitations described in its written opinion, that the Initial Consideration (i.e., the $33.1 million defined in the Merger Agreement as payable to QSAM stockholders upon Closing, plus the $2 million option fee and the assumption of $500,000 in closing payables) to be paid by Telix is fair, from a financial point of view, to QSAM’s common stockholders (the “Opinion”). Newbridge used the date of November 14, 2023, because that is the date that QSAM and Telix signed and made public a term sheet which contains substantially the same terms as in the definitive Merger Agreement.

The full text of Newbridge’s written opinion to QSAM’s board of directors, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Appendix C hereto and is incorporated by reference herein in its entirety. The following summary of Newbridge’s opinion is qualified in its entirety by reference to the full text of the opinion. Newbridge delivered its opinion to the Board for the benefit and use of the Board (in its capacity as such) in connection with and for purposes of its evaluation of entering into a Merger Agreement with Telix. Newbridge’s opinion also does not address the relative merits of entering in a Merger Agreement with Telix as compared to any alternative business strategies or transactions that might exist for QSAM, or the underlying business decision of QSAM whether to proceed with those business strategies or transactions.

In connection with rendering its opinion, Newbridge, among other things:

Newbridge’s analysis was focused on the “Initial Consideration” (defined above), and not the future value to shareholders that may be gained through the Contingent Value Rights. Newbridge determined that these are deferred payments that may not occur, and therefore not included in its calculations.

In conducting its review and arriving at its opinion, Newbridge did not independently verify any of the foregoing information and Newbridge assumed and relied upon such information being accurate and complete in all material respects, and Newbridge further relied upon the assurances of management of QSAM that they are not aware of any facts that would make any of the information reviewed by Newbridge inaccurate, incomplete or misleading in any material respect. In addition, Newbridge has not assumed any responsibility for any independent valuation or appraisal of the assets or liabilities, including any ongoing litigation and administrative investigations, if any, of QSAM, nor has Newbridge been furnished with any such valuation or appraisal. In addition, Newbridge has not assumed any obligation to conduct, nor has it conducted, any physical inspection of the properties or facilities of QSAM.

The issuance of Newbridge’s opinion was approved by an authorized internal committee of Newbridge. Newbridge’s opinion is necessarily based on economic, market and other conditions as they exist and can be evaluated on, and the information made available to it on, the date thereof. Newbridge expressed no opinion as to the underlying valuation, future performance or long-term viability of QSAM or Telix and its successors. Further, Newbridge expressed no opinion as to the prices at which shares of Common Stock of QSAM or Telix will trade at any time. It should be understood that, although subsequent developments may affect Newbridge’s opinion, Newbridge does not have any obligation to update, revise or reaffirm its opinion and has expressly disclaimed any responsibility to do so.

Summary of Financial Analyses

The following represents a brief summary of the material financial analyses reviewed by the Board and performed by Newbridge in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by Newbridge, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by Newbridge. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by Newbridge.

The preparation of analyses and a fairness opinion is a complex analytic process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, this summary does not purport to be a complete description of the analyses performed by Newbridge or of its presentation provided to QSAM’s board of directors on February 2, 2024.

The order in which these analyses are presented below, and the results of those analyses, should not be taken as an indication of the relative importance or weight given to these analyses by Newbridge or QSAM’s board of directors. Except as otherwise noted, the following quantitative information, to the extent it is based on market data, is based on market data as it existed on or before November 14, 2023, and is not necessarily indicative of current market conditions. All analyses conducted by Newbridge were going-concern analyses and Newbridge expressed no opinion regarding the liquidation value of any entity.

Comparable Public Company Analysis

Newbridge analyzed the current market valuations of comparable publicly listed companies (“peers”). Obtaining a meaningful valuation result from this method depends on ensuring a good level of comparability between QSAM and its peers.

To calculate the implied equity value of QSAM, Newbridge obtained the average equity value of six comparable public companies determined by Newbridge to be similar to QSAM. The comparable public companies were selected using the following criteria: (i) listed on the OTC Markets, (ii) operate in the biotech and pharmaceuticals sector, (iii) lead clinical drug candidate is in the “oncology” space, (iv) lead clinical drug candidate is early-stage (between Phase I and Phase II), and (v) were still in the “pre-commercialization” stage, with less than $1 million in revenue and either zero or negative EBITDA in its last fiscal year. The average equity value using this analysis was $21.6 million.

The tables below summarize certain observed historical financial performance and equity values of the selected comparable public companies, which were sourced from S&P Capital IQ data as of February 1, 2024, as well as qualitative research performed by Newbridge on QSAM’s business model and lead clinical drug candidate.

Industry (Early-Stage Oncology Biotech) 11/13/2023

Comparable Public Company Analysis OTC Early-Stage Oncology

Source: S&P Capital IQ (as of February 1st, 2024) and company SEC filings

The comparable public company analysis uses data from comparable guideline companies to develop a measure of current value for QSAM. The theory underlying the comparable public companies’ valuation is that companies in the same industry with similar operating characteristics should have certain valuation benchmarks in common. The goal of the analysis is to develop a premise for relative value, which when coupled with other valuation approaches, presents a foundation for determining an approximate equity value for QSAM.

Premiums Paid Transaction Analysis

Newbridge performed a Premiums Paid Transaction analysis that reviewed the variance between purchase price paid and the market capitalization as of the Pre-Announcement Date for public companies that met certain criteria. Newbridge analyzed the last year (since January 2023) of transaction data in the Pharmaceutical / Biotechnology sectors to find similar transactions where the public targets were being acquired.

The criteria used for the selected transactions were those in which the targets and scenarios most resembled QSAM included: (i) targets with businesses within the “Pharmaceutical / Biotechnology” sector, (ii) companies that trade on a Senior U.S. Exchange (the NYSE American / NASDAQ / NYSE), (iii) where an outside party is crossing the threshold of owning >51% of the company, and (iv) the transaction was not considered a reverse merger.

Newbridge obtained the average “Premium Paid” for this peer group (+48.9%) and compared it to the premium being paid for QSAM (on a fully-diluted basis) on the Pre-Announcement Date (+57.6%). The Premium Paid for QSAM is higher than the average Premium Paid for this peer group.

Newbridge also reviewed the trading history of QSAM to compare where it was valued in the public markets at the time of the deal announcement versus the rest of calendar year 2023. The fully-diluted market value of QSAM at market close on November 13, 2023, was approximately $22.6M, and the trading volume weighted average fully-diluted market capitalization of the company throughout 2023 until the deal announcement was approximately $20.9M. The equity value of QSAM at the time of announcement was approximately 8.2% higher than where it had been trading all year.

Source: S&P Capital IQ (as of February 1st, 2024)

Miscellaneous

The discussion set forth above is a summary of the material financial analyses presented by Newbridge to QSAM’s board of directors in connection with its opinion and is not a comprehensive description of all analyses undertaken by Newbridge in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. Newbridge believes that its analyses summarized above must be considered as a whole. Newbridge further believes that selecting portions of its analyses and the factors considered, or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Newbridge’s analyses and opinion. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.

The estimates of the future performance of QSAM and Telix in or underlying Newbridge’s analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by Newbridge’s analyses. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to substantial uncertainty and should not be taken to be Newbridge’s view of the actual values of the Common Stock.

Newbridge, as part of its investment banking business, is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, related party transactions, going private transactions, negotiated underwritings, secondary distributions of listed and unlisted securities, debt restructurings, private placements, and valuations for corporate and other purposes. Newbridge in the future may provide financial advisory or investment banking services to QSAM, Telix or their respective affiliates and may receive compensation for the rendering of these services. During the past two years, (i) QSAM has not engaged Newbridge to provide, and Newbridge has not provided, investment banking, financial advisory or other financial services to Telix unrelated to entering into a Merger Agreement for which QSAM has paid or expects to pay fees to Newbridge, and (ii) neither Newbridge nor any of its affiliates have provided investment banking services or other financial services to Telix or its affiliates unrelated to entering into a Merger Agreement for which Newbridge and its affiliates have received, or may receive, compensation.

Conclusion

The implied equity value of QSAM derived from the Comparable Public Company Analysis that Newbridge used showed a value of approximately $21.6M. The Initial Consideration to be received by QSAM’s shareholders of $35.6M (inclusive of both the Purchase price of $33.1 million, contributions to expenses of $500,000 and the $2 million option and collaboration fee paid to QSAM upon signing the term sheet) is higher than Newbridge’s estimates of the implied equity value of QSAM.

The Premium Paid for QSAM of +57.6% is higher than the Premium Paid for a comparable transaction peer group of +48.9%.

Based upon and subject to the forgoing, it is Newbridge’s Opinion that, as of the date of November 14th, 2023, the Initial Consideration to be paid by Telix is fair, from a financial point of view, to QSAM’s common stockholders.

The type and amount of consideration payable in the Merger Agreement was determined through negotiations between QSAM and Telix, and was approved by the board of directors of QSAM and Telix. As described above, Newbridge’s opinion and analyses were only one of many factors considered by QSAM’s board of directors in its evaluation of whether to enter the Merger Agreement and should not be viewed as determinative of the views of QSAM’s board of directors or management with respect to the entry into a Merger Agreement.

Fees and Expenses

As compensation for Newbridge’s services in connection with the rendering of its opinion to QSAM’s board of directors, QSAM agreed to pay Newbridge a fee of $70,000. $10,000 of the fee was paid as an upfront retainer and the remaining $60,000 was paid upon delivery of the opinion. No portion of the Newbridge fee is refundable or contingent upon the conclusion reached in the opinion. QSAM has also agreed to indemnify Newbridge against certain liabilities and other items that may arise out of QSAM’s engagement of Newbridge. The QSAM board of directors did not limit Newbridge in any way in the investigations it made or the procedures it followed in rendering its opinion.

Interests of QSAM Directors, Key Employees and Key Consultant in the Merger

The Directors, Key Employees and Key Consultant have various interests in the Merger described in this section that may be in addition to, or different from, the interests of QSAM stockholders, generally. The names and positions of each such Director, Key Employee and Key Consultant are set forth below.

Common Stock Ownership

QSAM’s directors, officers and executive officers will receive the same consideration for any shares of QSAM Common Stock that they hold on the same terms and conditions as other QSAM stockholders. As of March 31, 2024, the latest practicable date prior to the filing of this Information Statement, QSAM’s directors, officers and executive officers beneficially owned, in the aggregate, approximately 26% of the shares of QSAM Common Stock. See “Security Ownership of Certain Beneficial Owners and Management” on page 66 for the QSAM Common Stock ownership of each QSAM director, officer and executive officer.

Treatment of Outstanding Stock Options

Pursuant to Merger Agreement, effective as of the date QSAM files this definitive Information Statement, each QSAM Option will vest in full and become exercisable up to and through the close of regular trading on the Last Exercise Date in accordance with the terms and conditions of such QSAM Option, and such QSAM Option will terminate for no consideration and be of no further force or effect as of immediately prior to closing if not exercised by the holder on or prior to the close of regular trading on the Last Exercise Date. According to the terms of the grants made by the Company, all QSAM Options were fully vested as of March 31, 2024 and will remain exercisable until the Last Exercise Date.

The following table sets forth, for each of the Directors, Key Employees and Key Consultant, the number of QSAM Options held by such individual as of March 31, 2024, the latest practicable date prior to the filing of this Information Statement, along with the weighted average exercise price of such outstanding stock options. All such QSAM Options are fully vested. All QSAM Options have exercise prices that are higher than the current trading price of QSAM on OTCQB as well as the estimated Closing Consideration being paid by Telix per share of QSAM Common Stock.

Severance Benefits

Each Key Employee has entered into an employment agreement with QSAM pursuant to which the Key Employee is entitled to severance benefits upon a qualifying termination of employment. More specifically, if the employment of such Key Employee is terminated without cause or following a material change, as such terms are defined in the applicable employment agreements, the Key Employee will receive his/her salary through the date of termination and for an additional period following termination ranging from 12 to 24 months, as provided in the respective employment agreement. Such Key Employee is also entitled to receive a pro-rated portion of any annual bonus that would have been earned for the year in which the termination is effective (or, if greater, a lump sum payment of 50% of the full target bonus). In addition, all stock options and restricted stock held by such Key Employee vest immediately upon such termination, and any healthcare benefits continue for 18 months (or 12 months in the case of Namrata Chand) following such termination.

Assuming that each Key Employee experiences a termination that results in severance payments and benefits becoming payable at the closing of the Merger, each Key Employee would be entitled to receive the following amount of severance payments and benefits under the employment agreements described above:

To the extent a Key Employee’s employment is not terminated and the Key Employee continues employment following the closing of the Merger, severance payment and benefits would not be payable pursuant to the applicable employment agreement. In addition, certain Key Employees may agree to forego all severance payments and benefits, in part or in their entirety, due to lack of financial resources at QSAM and the adverse impact it may have on the Closing Consideration.

Transaction Bonuses Upon Change in Control

The Key Employees and one Director, Charles Link, are entitled to receive a transaction bonus in connection with the Merger pursuant to, in the case of the Key Employees, the terms of their employment agreements, as amended, and, in the case of the Director, under an agreement entered into between the Director and the Company. Such transaction bonuses are intended to equal in the aggregate 6.25% of the Closing Consideration (calculated after deduction of the IGL License Fee in the amount of $1,655,000 payable at the closing of the Merger and less any unpaid QSAM expenses that are not being assumed by Telix) of approximately $1,965,313, as currently estimated, in total payments. This estimate assumes that there will be no unpaid QSAM expenses at the closing of the Merger that are not being assumed by Telix. The transaction bonus shall be paid in the form of Telix Ordinary Shares, less appropriate tax withholdings. The value of the transaction bonus attributable to these individuals with respect to the Closing Consideration, assuming there will be no unpaid QSAM expenses at the closing of the Merger that are not being assumed by Telix, is estimated as follows:

These individuals may also be entitled to receive transaction bonuses, determined based on their transaction bonus percentages listed above, with respect to any Milestone Payments, after deduction of the amount of the IGL License Fee payable in connection with such Milestone Payments. The estimated value of the potential transaction bonus attributable to these individuals with respect to the possible Milestone Payments, calculated as a percentage of the Milestone Payments, assuming aggregate Milestone Payments of $90,000,000 (and after deducting the $4,500,000 in the aggregate of stock and/or cash that would be payable to IGL in connection with such Milestone Payments as the IGL License Fee) is as follows:

The actual amount of the aggregate transaction bonuses payable in connection with the Milestone Payments may be lower than the amounts estimated above in the event not all of the Milestones are achieved or there are any deductions to the Milestone Payments pursuant to the terms of the CVR Agreement.

Acceleration of Restricted Shares

The Directors, Key Employees and Key Consultant have been issued Restricted Shares that are subject to performance and time-based vesting and that will accelerate and become fully vested upon the closing of the Merger. The following table sets forth the total number of Restricted Shares that will be subject to accelerated vesting upon the closing of the Merger for each individual:

New Employment or Consulting Arrangements

None of the Key Employees have entered into an ongoing employment agreement with Telix as of the date hereof concerning terms and conditions of employment following closing of the Merger. While it is anticipated that some Key Employees will be offered employment agreements with Telix after the date of closing, and others will receive consulting agreements, none of these agreements or terms have been finalized.

Indemnification; Directors’ and Officers’ Insurance

QSAM’s Amended and Restated Bylaws provide for indemnification of QSAM’s directors and executive officers for certain types of expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by persons in any action or proceeding, including any action by QSAM or in QSAM’s right, arising out of their services as a director or executive officer. Further, pursuant to the Merger Agreement, the Company shall obtain prior to the Closing a prepaid, non-cancelable six-year “tail” policy containing terms not less favorable than the terms of the Company’s current directors’ and officers’ liability insurance coverage with respect to matters existing or occurring at or prior to the First Effective Time.

Golden Parachute Compensation

In accordance with Item 402(t) of Regulation S-K, the table below presents the estimated amounts of compensation that each named executive officer (“Named Executive Officer”) could receive that are based on or otherwise relate to the Merger. This compensation is referred to as “golden parachute” compensation by the applicable SEC disclosure rules and in this section.

The amounts set forth below on based on the following assumptions:

The amounts indicated below are estimates of amounts that would be payable to the named executive officers and are based on multiple assumptions that may or may not actually occur. The actual amounts, if any, to be received by a named executive officer may differ in material respects from the estimated amounts below. All dollar amounts have been rounded to the nearest whole number.

(1) Represents cash severance payments that would be payable in connection with a termination of employment that results in severance payments under the Named Executive Officers’ employment agreements. The Named Executive Officers are not entitled to severance payments as a result of the consummation of the Merger.

(2) The amounts in this column reflect the aggregate dollar value of Restricted Stock subject to acceleration pursuant to the terms of QSAM’s 2016 Omnibus Equity Incentive Plan as well as amendments to the Named Executive Officers’ employment agreements (each, a “single trigger” benefit).

(3) The amounts in this column do not ascribe any value to QSAM Options held by the Named Executive Officers because all QSAM Options are fully vested and have exercise prices that are higher than the current trading price of QSAM on OTCQB as well as the estimated Closing Consideration being paid by Telix per share of QSAM Common Stock.

(4) The amounts in this column reflect the transaction bonuses payable in the form of Telix Ordinary Shares, assuming that the transaction results in net proceeds of $31,445,000 at the closing of the Merger, and all $90,000,000 of the contingent future Milestone Payments are made by Telix.

Regulatory Approvals

The Buyer and QSAM have each agreed to use their reasonable best efforts to take all actions and to do all things necessary, proper or advisable to consummate and make effective the Merger and the other transactions contemplated by the Merger Agreement.

The parties’ respective obligations to complete the Merger are conditioned, among other matters, upon the absence of any law, decree, injunction or other legal restraint, prohibition or binding order of any governmental authority that restrains, prohibits or otherwise makes the Merger illegal. Neither the Buyer nor QSAM is aware of any material regulatory approvals or actions that are required for completion of the Merger except for compliance with the federal and state securities laws in connection with the issuance of Telix Ordinary Shares to the stockholders of QSAM. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.

De-Listing and Deregistration of QSAM Common Stock after the Merger

Pursuant to the Merger Agreement, when the Merger is completed, the QSAM Common Stock currently listed on the OTCMKTS will be delisted on OTCMKTS subject to the procedure set forth by the Financial Industry Regulatory Authority and will be deregistered under the Exchange Act as promptly as practicable after the First Effective Time.

QSAM Stockholder Representative

Company Stockholder Representative is a representative designated by the parties to act on behalf of the pre-Reverse Split Company stockholders and the Company stockholders, as the exclusive agent and attorney-in-fact for and on behalf of such persons, for certain limited purposes, as specified in the Merger Agreement. The initial Company Stockholder Representative is David H. Clarke.

Mr. Clarke, through entities that he has sole voting authority, is the largest beneficial shareholder of QSAM Common Stock. He presently runs his family real estate development and investment company, GSB Holdings, Inc. From June 2010 until September 2014, Mr. Clarke was Chairman and Chief Executive officer and a controlling shareholder of Hong Kong Exchange listed United Pacific Industries Limited, engaged in diversified manufacturing. Prior that time, he was Vice Chairman of the company. From June 1995 until September 2006, Mr. Clarke served as Chairman and Chief Executive Officer of NYSE listed Jacuzzi Brands, Inc. Jacuzzi Brands was sold to Apollo Management in October 2006. Prior to his appointment at Jacuzzi Brands, Mr. Clarke was with London and New York listed Hanson PLC for 25 years. In later years, he was a director, Vice Chairman of Hanson and CEO of Hanson Industries, Inc., the United States arm of Hanson PLC. Mr. Clarke has served as a director of a number of listed companies including Newmont Mining Corporation, International Protein Corporation, Fiduciary Trust Company International and Omega Protein, Inc. He was chairman of the Fiduciary Trust Audit Committee for over 10 years.

Appraisal and Dissenters Rights

Under Delaware law, QSAM stockholders and beneficial owners are entitled to appraisal rights in connection with the Merger, provided that they meet all of the conditions set forth in Section 262. Pursuant to Section 262, QSAM stockholders and beneficial owners who do not vote in favor of the Merger and who comply with the applicable requirements of Section 262 will have the right to seek appraisal of the fair value of such shares as determined by the Delaware Chancery Court if the Merger is completed. It is possible that the fair value as determined by the Delaware Chancery Court may be more or less than, or the same as, the Closing Consideration. QSAM stockholders and beneficial owners should note that investment banking opinions as to the fairness from a financial point of view of the consideration payable in a sale transaction, such as the Merger, are not opinions as to, and do not in any manner address, fair value under the DGCL.

QSAM stockholders and beneficial owners electing to exercise appraisal rights must comply with the strict procedures set forth in Section 262 in order to exercise and perfect their rights. ANY STOCKHOLDER OR BENEFICIAL OWNER WISHING TO PRESERVE THEIR RIGHTS TO APPRAISAL MUST MAKE A DEMAND FOR APPRAISAL AS DESCRIBED BELOW.

The following is intended as a brief summary of the material provisions of Section 262 required to be followed by dissenting QSAM stockholders or beneficial owners wishing to demand and perfect their appraisal rights. This summary, however, is not a complete statement of all applicable requirements and is subject to and qualified in its entirety by reference to Section 262, the full text of which appears in Appendix D to this Information Statement.

Under Section 262, QSAM is required to notify each stockholder who is entitled to appraisal rights that appraisal rights will be available and include in the notice a copy of Section 262 of the DGCL.

THIS INFORMATION STATEMENT CONSTITUTES QSAM’S NOTICE TO ITS STOCKHOLDERS AND BENEFICIAL OWNERS OF THE AVAILABILITY OF APPRAISAL RIGHTS IN CONNECTION WITH THE MERGER UNDER SECTION 262 AND A COPY OF SECTION 262 IS ATTACHED TO THIS INFORMATION STATEMENT AS APPENDIX D.

If you wish to consider exercising your appraisal rights, you should carefully review the text of Section 262 set forth in Appendix D to this Information Statement and consult your legal advisor. If you fail to timely and properly comply with the requirements of Section 262, your appraisal rights may be lost. To exercise appraisal rights with respect to your shares of QSAM Common Stock:

A demand for appraisal must be executed by or on behalf of the QSAM stockholder of record or beneficial owner and must state that such person intends thereby to demand appraisal of his, her or its shares of QSAM Common Stock issued and outstanding immediately prior to the First Effective Time in connection with the proposed Merger.

Failure to strictly follow the procedures set forth in Section 262 may result in the loss, termination or waiver of appraisal rights. QSAM stockholders or beneficial owners who vote in favor of the adoption and approval of the Merger Agreement will not have a right to have the fair market value of their shares of QSAM Common Stock determined. However, failure to vote in favor of the Merger Agreement is not sufficient to perfect appraisal rights. If you desire to exercise your appraisal rights, you must also submit to QSAM a written demand for appraisal of the QSAM Common Stock held by you.

Written Demand and Notice

Any person wishing to exercise his, her or its appraisal rights must make a written demand for appraisal to QSAM within 20 days from the date of this [definitive] Information Statement. The demand notice shall be sufficient if it reasonably informs QSAM of your identity and that you wish to seek appraisal with respect to your shares of QSAM Common Stock. In addition, in the case of a demand for appraisal made by a beneficial owner of QSAM Common Stock, the demand must also reasonably identify the holder of record of the shares for which the demand is made, be accompanied by documentary evidence of the beneficial owner’s ownership of QSAM Common Stock (such as a brokerage or securities account statement containing such information or a letter from the broker or other record holder of such shares confirming such information) and a statement that such documentary evidence is a true and accurate copy of what it purports to be, and provide an address at which such beneficial owner consents to receive notices given by QSAM and to be set forth on the verified list required by Section 262. All demands should be delivered to:

QSAM Biosciences Inc.

9442 Capital of Texas Hwy N, Plaza 1,

Suite 500 Austin, TX 78759

Attention: Christopher Nelson, General Counsel

With a copy emailed to: cnelson@qsambio.com

The surviving corporation, within ten days after the First Effective Time, will notify each person who has complied with Section 262 that the Merger has become effective.

Judicial Appraisal

Within 120 days after the First Effective Time, the surviving corporation or any person who is entitled to appraisal rights under Section 262 may file a petition with the Delaware Court of Chancery (the “Court of Chancery”) demanding a determination of the value of the shares of QSAM Common Stock. If no petition is filed by either the surviving corporation or any dissenting stockholder or beneficial owner within the 120-day period, the rights of all dissenting persons to appraisal will cease. Persons seeking to exercise appraisal rights should not assume that the surviving corporation will file a petition with respect to the appraisal of the fair value of their shares or that the surviving corporation will initiate any negotiations with respect to the fair value of those shares. The surviving corporation will be under no obligation to take any action in this regard and has no present intention to do so. Accordingly, it is the obligation of persons who wish to seek appraisal of their shares of QSAM Common Stock to initiate all necessary action with respect to the perfection of their appraisal rights within the time periods and in the manner prescribed in Section 262. Failure to file the petition on a timely basis will cause the person’s right to an appraisal to cease.

Upon the filing of the petition described above by any such stockholder or beneficial owner of shares of QSAM Common Stock, service of a copy thereof must be made upon QSAM. The surviving corporation will then be obligated within 20 days to file with the Delaware Register in Chancery (the “Register in Chancery”) a duly verified list, referred to as the “Verified List”, containing the names and addresses of all persons that have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached. Upon the filing of any such petition, the Court of Chancery may order that notice of the time and place fixed for the hearing on the petition be mailed to QSAM and all of the QSAM stockholders or beneficial owners shown on the Verified List. The costs of these notices are borne by QSAM.

After notice to such persons as required by the Court of Chancery, the Court of Chancery is empowered to conduct a hearing on the petition to determine those persons that have complied with Section 262 and that have become entitled to appraisal rights thereunder. At the hearing on such petition, the Court of Chancery shall determine which QSAM stockholders or beneficial owners are entitled to an appraisal of their shares and may require the QSAM stockholders or beneficial owners who have demanded appraisal to submit their certificates to the Register in Chancery so an appropriate legend can be placed on them. Failure to comply with this requirement may result in the dismissal of the appraisal proceedings with respect to you. If immediately before the Merger the shares of QSAM Common Stock are listed on a national securities exchange, the Court of Chancery will dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless (i) the total number of shares entitled to appraisal exceeds 1% of the outstanding shares of the class or series eligible for appraisal or (ii) the value of the merger consideration for such total number of shares exceeds $1 million.

After the Court of Chancery determines which QSAM stockholders or beneficial owners are entitled to appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding, the Court of Chancery shall determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with a fair rate of interest to be paid, if any, upon the amount determined to be the fair value (or, in certain circumstances described below, on the difference between the amount determined to be the fair value and the amount paid by the surviving corporation in the Merger to each person entitled to appraisal prior to the entry of judgment in the appraisal proceeding). Unless the Court of Chancery, in its discretion, determines otherwise for good cause shown, interest from the First Effective Time through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the First Effective Time and the date of payment of the judgment. At any time before the entry of judgment in the proceedings, the surviving corporation may pay to each stockholder or beneficial owner entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as provided herein only upon the sum of (i) the difference, if any, between the amount so paid and the fair value of the shares as determined by the Court of Chancery, and (ii) interest theretofore accrued, unless paid at that time.

In determining fair value, the Court of Chancery is to take into account all relevant factors. In Weinberger v. UOP, Inc., et al., the Delaware Supreme Court discussed the considerations that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court stated that in making this determination of fair value, the court must consider “market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts which were known or which could be ascertained as of the date of merger which throw any light on future prospects of the merged corporation.” The Delaware Supreme Court construed Section 262 to mean that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.” However, Section 262 provides that fair value is to be determined “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Supreme Court of Delaware also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”

QSAM stockholders or beneficial owners who consider seeking appraisal should consider that the fair value of their shares as determined under Section 262 could be more than, the same as, or less than, the Closing Consideration without the exercise of appraisal rights. No representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery. Delaware courts have decided that the statutory appraisal remedy, depending on factual circumstances, may or may not be a dissenter’s exclusive remedy. The Court of Chancery may determine the costs of the appraisal proceeding (which do not include attorneys’ or experts’ fees) and assess it against the parties as the Court of Chancery deems equitable. Upon application of a dissenting person, the Court of Chancery may order that all or a portion of the expenses incurred by any dissenting QSAM stockholder or beneficial owner in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, be charged pro rata against the value of all shares of QSAM Common Stock entitled to appraisal. In the absence of a court determination or assessment, each party will bear its own expenses.

Any QSAM stockholder or beneficial owner who has demanded appraisal in compliance with Section 262 will not, after the First Effective Time, be entitled to vote such stock for any purpose or receive payment of dividends or other distributions, if any, on the QSAM Common Stock, except for dividends or distributions, if any, payable to QSAM stockholders of record at a date before the Merger.

Request for Appraisal Information

If you timely submit a written demand for appraisal of your shares of QSAM Common Stock and otherwise properly perfect your appraisal rights, you may, upon written request mailed to QSAM within 120 days after the First Effective Time, receive a written statement identifying (1) the aggregate number of shares of QSAM Common Stock which were not voted in favor of the adoption and approval of the Merger and with respect to which QSAM has received written demands for appraisal and (2) the aggregate number of QSAM stockholders or beneficial owners holding or owning such shares. QSAM will mail this statement to you within ten days after receiving your written request.

Withdrawal

Even if you submit a written demand for appraisal of your shares of QSAM Common Stock and otherwise properly perfect your appraisal rights, you may withdraw your demand at any time after the First Effective Time except that any such attempt to withdraw made more than 60 days after the First Effective Time will require the written approval of QSAM and, once a petition for appraisal is filed, the appraisal proceeding may not be dismissed as to any person absent court approval. The foregoing, however, will not affect the right of any person who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such person’s demand for appraisal and to accept the terms offered under the Merger Agreement within 60 days after the First Effective Time. If you withdraw your demand, you will be deemed to have accepted the terms of the Merger Agreement, which are summarized in this Information Statement and which is attached in its entirety as Appendix A.

In view of the complexity of Section 262, QSAM stockholders who may wish to dissent from the Merger and seek apprise rights should consult their legal advisors.

Tax Considerations

If you elect to exercise your appraisal rights, the payment in cash of the fair value of your shares of QSAM Common Stock will be a taxable transaction to you.

QSAM stockholders and beneficial owners considering exercising appraisal rights should consult with their tax advisors with regard to the tax consequences of such actions.

The foregoing summary is not intended to be a complete statement of the procedures for exercising appraisal rights under Section 262 and is qualified in its entirety by reference to the full text of Section 262, a copy of which is attached as Appendix D to this Information Statement. QSAM urges any person wishing to exercise appraisal rights, if any, to read this summary and Section 262 carefully, and to consult legal counsel before attempting to exercise appraisal rights. Failure to comply strictly with all of the procedures set forth in Section 262 may result in the loss of your statutory appraisal rights, if any.

Anticipated Accounting Treatment of the Merger

The Merger is expected to be accounted for as an asset acquisition pursuant to IFRS 3–Business Combinations as well as IAS 38-Intangible Assets.

THE MERGER AGREEMENT

The following is a summary of the material terms of the Merger Agreement. This summary and the descriptions of the Merger Agreement and Merger included elsewhere in this Information Statement are qualified in their entirety by reference to the complete text of the Merger Agreement, a copy of which is attached to this Information Statement as Appendix A and is incorporated by reference into this Information Statement. Capitalized terms in this section that are not defined have the meaning defined in the Merger Agreement. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is important to you. The rights and obligations of the parties are governed by the express terms and conditions of the Merger Agreement and not by the following summary or any other information contained in this Information Statement. You are encouraged to read the Merger Agreement carefully and in its entirety before making any decisions regarding the Merger Agreement and the Merger.

This summary and the Merger Agreement attached to this Information Statement as Appendix A are included in this Information Statement to provide you with information regarding the terms and conditions of the Merger Agreement, and not to provide any other factual information about QSAM or Telix or their respective subsidiaries or businesses. Factual disclosures about QSAM and Telix contained in this Information Statement or in the public reports of QSAM and Telix filed with the SEC and/or the ASX may supplement, update or modify the factual disclosures about QSAM and Telix contained in the Merger Agreement. The Merger Agreement contains representations, warranties and covenants by QSAM, on the one hand, and by Telix and Merger Subs, on the other hand. Such representations, warranties and covenants are qualified and subject to important limitations agreed to by QSAM, Merger Subs and Telix. In particular, in your review of the representations and warranties contained in the Merger Agreement and described in this summary and elsewhere in this Information Statement, it is important to bear in mind that the representations and warranties were negotiated with the principal purpose of establishing circumstances in which a party to the Merger Agreement may have the right not to consummate the Merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the Merger Agreement, rather than establishing matters as facts. The representations and warranties also may be subject to a contractual standard of materiality different from that generally applicable to stockholders and reports and documents filed with the SEC, and certain of the representations and warranties were qualified by the matters contained in the confidential disclosure schedule that QSAM, Merger Subs and Telix each delivered in connection with the Merger Agreement in addition to certain documents filed with the SEC. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this Information Statement, may have changed since the date of the Merger Agreement. The representations and warranties in the Merger Agreement will not survive the completion of the Merger.

For the foregoing reasons, the representations and warranties contained in the Merger Agreement or any descriptions of those provisions contained in this Information Statement should not be read alone or relied upon as characterizations of the actual state of facts or condition of QSAM or Telix or any of their respective subsidiaries or businesses. Instead, such provisions or descriptions should be read only in conjunction with the other information provided elsewhere in this Information Statement or incorporated by reference into this Information Statement. See “Where You Can Find More Information” beginning on page 129.

Structure of the Merger

Telix, the Merger Subs and QSAM intend to effect a reorganization in which, as steps in a single, integrated transaction, (a) Merger Sub I will merge with and into QSAM, Merger Sub I will cease to exist, and QSAM will survive as a direct, wholly owned subsidiary of Telix (the “First Merger”), and (b) as part of the same overall transaction, QSAM will merge with and into Merger Sub II, QSAM will cease to exist, and Merger Sub II will survive as a direct, wholly owned subsidiary of Telix (the “Second Merger” and, collectively or ad seriatim with the First Merger, as appropriate, the “Merger”).

Merger Consideration

Pursuant to the terms of the Merger Agreement and the Reverse Split (as defined below), the aggregate consideration that QSAM stockholders will be entitled to receive pursuant to the Merger and the Reverse Split will be equal to:

(i) USD $33.1 million, reduced by (a) the amount of certain of QSAM’s unpaid expenses, indebtedness, change-of-control bonuses, and other payables as of the closing of the Merger, (b) a fee equal to 5% of the aggregate closing consideration payable to QSAM’s licensor, IGL Pharma, Inc., upon the closing of the Merger (the “Closing IGL License Fee”), and (c) 66,011 ordinary shares of Telix (“Telix Ordinary Shares”), representing $500,000 divided by the Buyer Stock Price (defined below), as a source of recovery for post-closing purchase price adjustments (collectively, the “Closing Consideration”); and

(ii) contingent value rights (“CVRs”) which will represent the right to receive contingent payments of up to USD $90 million in the aggregate, in cash and/or Telix Ordinary Shares, without interest, upon the achievement of certain milestones, at the times and subject to the terms and conditions of the CVR Agreement (as defined below).

The Closing Consideration will be paid to holders of whole numbers of shares of common stock of QSAM (“QSAM Common Stock”) in the Merger in the form of Telix Ordinary Shares, except in certain specified circumstances, while payments in connection with the Reverse Split will be paid in cash. The number of shares issuable to QSAM stockholders in the Merger shall be determined by reference to a deemed value of Telix Ordinary Shares equal to USD $7.5745 per share (the “Buyer Stock Price”), reflecting the volume weighted average price at which Telix Ordinary Shares traded on the Australian Securities Exchange over the ten (10) trading-day period ending on February 6, 2024, the business day prior to the date of the Merger Agreement, as converted from Australian dollars to United States dollars at the exchange rate published in the Wall Street Journal as of February 6, 2024, the business day prior to the date of the Merger Agreement. The number of Telix Ordinary Shares to be issued in the Closing Consideration is based on the Buyer Stock Price, which is a negotiated, agreed, fixed value, and the trading price of Telix’s Ordinary Shares could be, at the time of the Merger, higher or lower than the Buyer Stock Price.

Pursuant to the Merger Agreement, effective as of the date QSAM files this Information Statement, each QSAM Option will vest in full and become exercisable up to and through the close of regular trading on the  Last Exercise Date in accordance with the terms and conditions of such QSAM Option, and such QSAM Option will terminate for no consideration and be of no further force or effect as of immediately prior to closing if not exercised by the holder on or prior to the close of regular trading on the Last Exercise Date. According to the terms of the grants made by the Company, all QSAM Options were fully vested as of March 31, 2024 and will remain exercisable until the Last Exercise Date. As of the Reverse Split and the First Effective Time, the outstanding shares of QSAM Common Stock will constitute the only outstanding equity interests of QSAM, and is currently estimated to be 4,445,469 shares of common stock on a fully diluted basis, excluding 148,611 QSAM Options that have exercise prices that are higher than the estimated consideration payable with respect to each share of QSAM common stock as of the closing.

Subject to the foregoing and the other risks and uncertainties set forth below under Forward-Looking Statements, QSAM management currently estimates the value payable at the Closing of the Merger and/or in the Reverse Split with respect to each share of QSAM Common Stock that will be outstanding prior to the Reverse Split will be approximately $6.63, which would equate to an Exchange Ratio of approximately 0.876 Telix Ordinary Shares for each whole share of QSAM Common Stock prior to giving effect to the Reverse Split. This estimate is based on QSAM’s estimate of its expenses through the closing of the Merger in excess of certain expenses, in an amount equal to $500,000 in the aggregate, that Telix has agreed to assume, as well as QSAM’s estimate of the total shares of QSAM Common Stock outstanding immediately prior to the Reverse Split and the closing of the Merger.

As described above, the amount of cash and/or shares of Telix Ordinary Shares payable with respect to each outstanding share of QSAM Common Stock as of the date hereof is subject to adjustment prior to closing based on, among other things, (i) the amount of indebtedness, unpaid expenses, change-of-control, and similar payments, in each case in connection with the Merger, as well as (ii) the fully diluted number of shares of QSAM common stock issued and outstanding as of the date of closing of the Merger, which could increase if certain stock options are exercised or other reasons. As a result, the amount of Closing Consideration payable with respect to each outstanding share of QSAM Common Stock could be lower on the date of Closing than was previously estimated as of the date of the Merger Agreement and as of the date of this Information Statement. For illustration purposes only, if indebtedness, expenses or other payables at closing is $500,000 greater than the current estimate of $3.62 million, then the value payable at the closing of the Merger and/or in the Reverse Split with respect to each share of QSAM Common Stock that is outstanding prior to the Reverse Split would be approximately $6.52, which would equate to an Exchange Ratio of 0.861 Telix Ordinary Shares for each whole share of QSAM Common Stock prior to giving effect to the Reverse Split. Similarly, if the outstanding shares of QSAM Common Stock are greater by 100,000 shares at the time of Closing due to exercise of stock options, the value payable at the closing of the Merger and/or in the Reverse Split with respect to each share of QSAM Common Stock that is outstanding prior to the Reverse Split would be approximately $6.49, which would equate to an Exchange Ratio of 0.856 Telix Ordinary Shares for each whole share of QSAM Common Stock prior to giving effect to the Reverse Split. These two examples of possible changes to the Closing Consideration payable to QSAM shareholders are further illustrated in the table below:

In connection with and as a condition to the Merger, QSAM will effect a reverse stock split of all the issued and outstanding shares of QSAM Common Stock, in a ratio between 1:1000 and 1:2000 (the “Reverse Split”) (as determined by the QSAM Board prior to closing), in which any outstanding fractional shares of QSAM Common Stock (determined after determining the whole number of shares of QSAM Common Stock held by such holder, if any) after giving effect to the Reverse Split will be automatically exchanged for (i) the right to receive an amount of cash equal to such fractional share’s pro rata share of the Closing Consideration and (ii) one (1) CVR for each share of QSAM Common Stock that was converted into a fractional share (and not aggregated into a whole number of shares) pursuant to the Reverse Split.

In connection with the Reverse Split, all per share values and exchange ratios set forth above would be proportionately increased. For instance, in the case of a 1:1000 Reverse Split, where every 1,000 shares of a holder would be consolidated into one share, the currently estimated value per share of QSAM Common Stock would be $6.63 X 1,000 = $6,630, and the estimated Exchange Ratio would be 0.876 X 1,000 = 876.

Treatment of Fractional Shares

No fractional ordinary shares of Telix will be issued to the QSAM Stockholders under the Merger Agreement, and any fraction of an ordinary share of Telix shall be rounded to the nearest whole number.

Treatment of Stock Options

Upon the terms and subject to the conditions set forth in the Merger Agreement, outstanding QSAM equity awards will be treated as follows:

Pursuant to the Merger Agreement, effective as of the date QSAM files the definitive Information Statement, each QSAM Option will vest in full and become exercisable up to and through the close of regular trading on the Last Exercise Date in accordance with the terms and conditions of such QSAM Option, and such QSAM Option will terminate for no consideration and be of no further force or effect as of immediately prior to Closing if not exercised by the holder on or prior to the close of regular trading on the Last Exercise Date. According to the terms of the grants made by the Company, all QSAM Options were fully vested as of March 31, 2024 and will remain exercisable until the Last Exercise Date.

All QSAM Options have exercise prices that are higher than the estimated Closing Consideration being paid by Telix per share of QSAM Common Stock and the current trading price of QSAM on OTCQB.

Closing and Effective Time of the Merger

Subject to the terms and conditions of the Merger Agreement, the closing of the First Merger (the “Closing”) shall take place by the electronic exchange of executed counterpart documents as soon as practicable on or after the execution and delivery of the Merger Agreement, but in any event no later than the date which is two (2) Business Days after the date on which all conditions set forth in Merger Agreement shall have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions) or such other time and place as Telix and QSAM may mutually agree in writing. The First Merger shall become effective at the time when the First Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware or at such later time as may be agreed by Telix and QSAM in writing and specified in the First Certificate of Merger (the “First Effective Time”). Promptly following the First Effective Time, but in no event later than two (2) Business Days thereafter, Telix, the First Step Surviving Corporation and Merger Sub II shall cause the Second Certificate of Merger to be filed with the Secretary of State of Delaware (the “Second Effective Time”).

Organizational Documents; Directors and Officers

Certificate of Incorporation and Bylaws. At the First Effective Time, the QSAM charter shall be amended to read in its entirety as the certificate of incorporation of Merger Sub I reads as in effect immediately prior to the First Effective Time, provided, that such certificate of incorporation shall reflect, as of the First Effective Time, “Telix QSAM, Inc.” as the name of the First Step Surviving Corporation, and, as so amended, shall become the certificate of incorporation of the First Step Surviving Corporation until thereafter amended in accordance with the applicable provisions of the DGCL and such certificate of incorporation. At the Second Effective Time, the certificate of incorporation of the First Step Surviving Corporation shall be amended as of the Second Effective Time to read in its entirety as the certificate of incorporation of Merger Sub II reads as in effect immediately prior to the Second Effective Time, provided, that such certificate of incorporation shall reflect, as of the Second Effective Time, “Telix QSAM, Inc.” as the name of the Final Surviving Corporation, and, as so amended, shall become the certificate of incorporation of the Final Surviving Corporation until thereafter amended in accordance with the applicable provisions of the DGCL and such certificate of incorporation.

Directors and Officers. The directors of Merger Sub I immediately prior to the First Effective Time shall be the directors of the First Step Surviving Corporation immediately after the First Effective Time. The officers of Merger Sub I immediately prior to the First Effective Time shall be the officers of the Final Surviving Corporation immediately after the First Effective Time. The directors of Merger Sub II immediately prior to the Second Effective Time shall be the directors of the Final Surviving Corporation immediately after the Second Effective Time, each to hold office in accordance with the certificate of incorporation and bylaws of the Final Surviving Corporation until their respective successors are duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation and bylaws of the Final Surviving Corporation. The officers of Merger Sub II immediately prior to the Second Effective Time shall be the officers of the Final Surviving Corporation immediately after the Second Effective Time, each to hold office in accordance with the certificate of incorporation and bylaws of the Final Surviving Corporation until their respective successors are duly appointed or until their earlier death, resignation or removal in accordance with the certificate of incorporation and bylaws of the Final Surviving Corporation.

Exchange of Shares in the Merger

By virtue of the First Merger, each share of QSAM Capital Stock held by Telix, Merger Subs or QSAM in treasury or otherwise, shall be cancelled and retired and shall cease to exist, and no consideration shall be delivered or receivable in exchange therefor (such shares, “Cancelled Shares”). Each share of QSAM Capital Stock (a “Share”) that is issued and outstanding immediately prior to the First Effective Time, other than (A) Cancelled Shares and (B) shares of Company Capital Stock held by persons who validly exercise their statutory appraisal rights, shall thereupon be cancelled and converted into and become the right to receive a number of ordinary shares of Telix and CVRs equal to such Share’s pro rata share of the transaction consideration, in each case subject to the terms of the Merger Agreement.

At the First Effective Time, each share of common stock, par value $0.0001 per share, of Merger Sub I issued and outstanding immediately prior to the First Effective Time shall be cancelled and, in exchange for the cancellation of such shares of Merger Sub I common stock and the payment of the Merger Consideration by Telix, the First Step Surviving Corporation shall issue an equivalent number of shares of common stock, par value $0.0001 per share, all of which shares shall be held by Telix, and which shall constitute the only outstanding shares of common stock of the First Step Surviving Corporation immediately following the First Effective Time.

At the Second Effective Time, each share of common stock, par value $0.0001 per share, of the First Step Surviving Corporation issued and outstanding immediately prior to the Second Effective Time shall be cancelled and, in exchange for the cancellation of such shares of First Step Surviving Corporation common stock, the Final Surviving Corporation shall issue an equivalent number of shares of common stock, par value $0.0001 per share, all of which shares shall be held by Telix, and which shall constitute the only outstanding shares of common stock of the Final Surviving Corporation immediately following the Second Effective Time.

Representations and Warranties

The Merger Agreement contains customary representations and warranties made by QSAM, Telix and Merger Subs. The representations and warranties described below and included in the Merger Agreement were made only for purposes of the Merger Agreement and as of specific dates, may be subject to a contractual standard of materiality different from what might be viewed as material to stockholders, and may be subject to limitations agreed upon by the parties, including being qualified by disclosures filed with or furnished to the SEC and the confidential disclosure letters exchanged by the parties in connection with the execution of the Merger Agreement. The representations and warranties contained in the Merger Agreement were solely for the benefit of the parties to the Merger Agreement and should not be relied upon as characterizations of the actual state of facts or condition of any party or any of their respective subsidiaries, affiliates or businesses. The following is a description of certain of the representations and warranties of the parties contained in the Merger Agreement:

Definition of “Material Adverse Effect”

Certain representations and warranties of QSAM are qualified by a “material adverse effect” standard. “Material Adverse Effect” means (i) with respect to QSAM, any event, occurrence, fact, condition or change that, individually or in the aggregate, (x) has had or would reasonably be expected to have a material adverse effect on the business, assets, liabilities, results of operations or condition (financial or otherwise) of QSAM and its subsidiaries, taken as a whole; provided, however, that, in no event will any of the following (or the effect of any of the following), alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Material Adverse Effect” on or in respect of QSAM, in each case to the extent first arising after the date hereof: (A) any change in Law, regulatory policies, accounting standards or principles (including GAAP) or any guidance relating thereto or interpretation thereof, (B) any change in interest rates or economic, political, business or financial market conditions generally (including any changes in credit, financial, commodities, securities or banking markets), (C) any change generally affecting any of the industries in which QSAM operates or the economy as a whole, (D) any natural disaster, (E) any acts of terrorism, sabotage, war, the outbreak or escalation of hostilities, weather conditions, change in geopolitical conditions or other force majeure events, or (F) any failure of QSAM to meet any projections or forecasts, provided that this clause (F) shall not prevent a determination that any change or effect underlying such failure to meet projections or forecasts has resulted in a Material Adverse Effect (to the extent such change or effect is not otherwise excluded from this definition of Material Adverse Effect); except, in the case of clauses (A), (B), (C), (D) and (E) above, to the extent that any such change, condition, event or effect has a materially disproportionate and adverse effect on the business of QSAM relative to other businesses in the industries in which the Company operates or (y) would or would reasonably be expected to prevent or materially delay or impair QSAM from consummating the transactions contemplated by this Agreement or from performing its material obligations under this Agreement; and (ii) with respect to Telix or Merger Subs, any event, occurrence, fact, condition or change that would or would reasonably be expected to prevent or materially delay or impair Telix from consummating the transactions contemplated by the Merger Agreement or from performing its material obligations under the Merger Agreement.

Conduct of QSAM’s Business Pending the Merger

QSAM has agreed to certain covenants in the Merger Agreement restricting the conduct of its business between the date of the Merger Agreement and the First Effective Time. In general, except as contemplated by the Merger Agreement, as would constitute a violation in applicable law or with the prior written consent of Telix, QSAM has agreed to operate its business in the ordinary course of business and maintain in all material respects satisfactory relationships with its material business relationships.

In addition to the foregoing, between the date of the Merger Agreement and the Effective Time, except as would constitute a violation in applicable law, or as otherwise consented to by Telix in writing or otherwise contemplated by the Merger Agreement, QSAM will not, and will cause each of its subsidiaries not to:

Covenants of the Parties

The Merger Agreement contains certain covenants and agreements made jointly by the parties, including:

The Merger Agreement also contains certain covenants and agreements made by QSAM, including:

Directors’ and Officers’ Indemnification and Insurance

The Merger Agreement provides for certain indemnification and insurance rights in favor of QSAM’s former and current officers, directors and employees. Specifically, Telix has agreed to maintain provisions in QSAM’s certificate of incorporation, bylaws or other organizational documents concerning the indemnification and exoneration (including provisions relating to expense advancement) of such persons that are no less favorable to those persons than the provisions of the certificate of incorporation, bylaws or other organizational documents of QSAM, in each case, as of the date of the Merger Agreement, and not to amend, repeal or otherwise modify such provisions in any respect that would adversely affect the rights of those persons, in each case, except as required by law. In addition, QSAM has agreed to obtain a prepaid, non-cancelable six-year “tail” policy containing terms not less favorable than the terms of QSAM’s current directors’ and officers’ liability insurance coverage with respect to matters existing or occurring at or prior to the First Effective Time.

Conditions to Completion of the Merger

The obligations of each of the parties to consummate the Merger are subject to the satisfaction (or waiver by each of QSAM and Telix if permissible under applicable law), prior to the First Effective Time, of the following condition:

In addition, the obligation of each of Telix and the Merger Subs to consummate the Merger is subject to the satisfaction (or waiver by Telix) prior to the Effective Time, of each of the following additional conditions:

In addition, the obligation of QSAM to consummate the Merger is subject to the satisfaction (or waiver by QSAM) prior to the Effective Time, of each of the following additional conditions:

Termination of the Merger Agreement

The Merger Agreement may be terminated at any time prior to the Effective Time under the following circumstances:

Effect of Termination

In the event of the termination of the Merger Agreement, the Merger Agreement shall forthwith become void and have no effect, without any liability on the part of any party hereto or its respective Affiliates, officers, directors, employees or stockholders, other than liability of QSAM, Telix or Merger Subs, as the case may be, for any intentional and willful breach of the Merger Agreement occurring prior to such termination; provided, however, that any such termination shall not relieve any party from liability for damages for any willful breach on the part of Telix or QSAM, as the case may be, including such party’s obligation to close if it was otherwise obligated to do so under the terms of the Merger Agreement.

Indemnification

From and after the Closing, the QSAM stockholders will severally (and not jointly) indemnify Telix and its affiliates for any and all losses incurred by them relating to or constituting:

Any amounts owed or claimed in good faith to be owed by any QSAM stockholder to Telix or any of its affiliates pursuant to Telix’s indemnification rights under the Merger Agreement will be automatically offset or set off against any amount that is or may become payable to the QSAM stockholders pursuant to the CVR Agreement.

Telix’s rights to indemnification under the Merger Agreement are subject to customary limitations.

Fees and Expenses; No Termination Fee

Except as provided below, all fees and expenses incurred in connection with the Merger Agreement, the CVR Agreement and the transactions contemplated by the Merger Agreement will be paid by the party incurring such expenses, whether or not the Merger is consummated. Additionally, Telix has agreed to pay $500,000 in excess transaction expenses to the extent left unpaid by QSAM at the time of Closing. Neither party will pay the other a termination fee; however, in the instance of a termination, the $2 million option and pre-closing collaboration fee paid to QSAM by Telix upon the signing of the term sheet shall be automatically deemed an equity investment in QSAM made by Telix Pharmaceuticals (US) Inc., and QSAM will promptly issue to Telix Pharmaceuticals (US) Inc. 298,507 duly authorized, validly issued, fully paid, nonassessable shares of Company Common Stock, free of preemptive rights, in respect thereof.

Governing Law; Jurisdiction; Waiver of Jury Trial

The Merger Agreement is governed by the laws of the State of Delaware (without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of Delaware). Each of the parties irrevocably submits, for itself and with respect to its property, to the exclusive jurisdiction of the Court of Chancery, or, if such court finds it lacks subject matter jurisdiction, any federal or state court in the State of Delaware. Each party also irrevocably waives any right it may have to a trial by jury in respect of any litigation arising out of or relating to the Merger Agreement or the transactions contemplated by the Merger Agreement.

Amendment; Waiver

The Merger Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing executed in the same manner as the Merger Agreement and which makes reference to the Merger Agreement. The approval of the Merger Agreement by the stockholders of QSAM shall not restrict the ability of the Board of Directors of QSAM to terminate the Merger Agreement or to cause QSAM to enter into an amendment to the Merger Agreement to the extent permitted under Section 251(d) of the DGCL.

Any party to the Merger Agreement may, at any time prior to the Closing, by action taken by its Board of Directors, or officers thereunto duly authorized, waive any of the terms or conditions of the Merger Agreement or agree to an amendment or modification to the Merger Agreement by an agreement in writing executed in the same manner (but not necessarily by the same persons) as the Merger Agreement. No waiver by any of the parties to the Merger Agreement of any default, misrepresentation or breach of representation, warranty, covenant or other agreement hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver by any of the parties to the Merger Agreement of any of the provisions hereof shall be effective unless explicitly set forth in writing and executed by the party sought to be charged with such waiver.

AGREEMENTS RELATED TO THE MERGER

The Contingent Value Rights Agreement

The following is a summary of the material terms of the CVR Agreement, which will be entered into at or prior to the time the Merger becomes effective by and between Telix, QSAM and a rights agent mutually designated by Telix and QSAM, substantially in the form attached as Appendix B to this Information Statement, subject to any revisions that are reasonably requested by such rights agent or are required by applicable law. This summary and the descriptions of the CVR Agreement included elsewhere in this Information Statement are qualified in their entirety by reference to the complete text of the form of the CVR Agreement which is attached as Appendix B to this Information Statement and is incorporated by reference herein. The rights and obligations of the parties and of holders of CVRs are governed by the express terms and conditions of the CVR Agreement and not by the following summary or any other information contained in this Information Statement. The CVR Agreement should not be read alone, but should instead be read in conjunction with the Merger Agreement attached as Appendix A and the other information provided elsewhere in this Information Statement, including the appendices and the documents incorporated by reference into this Information Statement. The CVR Agreement is described in this Information Statement only to provide you with information regarding its terms and conditions and this summary is not intended to provide any factual information about Telix, QSAM or their respective businesses.

Overview

At or prior to the Effective Time, Telix, QSAM and a rights agent mutually agreeable to Telix and QSAM (the “Rights Agent”) will enter into the CVR Agreement substantially in the form attached as Appendix B to this Information Statement, subject to any revisions to the CVR Agreement that are reasonably requested by such rights agent or are required by applicable law. Pursuant to the CVR Agreement and as provided in the Merger Agreement, each share of QSAM Common Stock that is issued and outstanding immediately prior to the Reverse Split (excluding shares owned by Telix, Merger Sub, Company, or any wholly-owned subsidiary of the Company, which shares will automatically be cancelled and extinguished without consideration being delivered in exchange therefor, and any shares where the holder properly demands their statutory appraisal rights) will be automatically converted into the right to receive, in addition to the Closing Consideration, one CVR at the time of Closing.

Each CVR represents the non-transferable contractual right to receive one or more contingent payments, if any, upon the achievement of certain milestones, subject to and in accordance with the terms of the CVR Agreement. If any milestone is achieved during the ten year period from the date of the CVR Agreement (the “Milestone Period”), then, in each case, on a date that is no later than thirty (30) days following the achievement of such milestone, Telix will deliver to the Rights Agent (i) a notice (a “Milestone Notice”) indicating (A) the achievement of such milestone, and (B) a calculation of the amount of cash and/or number of Telix Ordinary Shares, as applicable, payable as the applicable milestone payment (the “Milestone Payment”), including, if applicable, the amount of any permitted deductions from such Milestone Payment (including the IGL License Fee and any transaction bonuses payable to the QSAM Key Employees and Directors), and (ii) for payment to the shareholders, cash and/or shares equal to the applicable Milestone Payment (in each case less any applicable withholding tax, if any).

The Rights Agent shall promptly, and in no event later than ten (10) business days after receipt of a Milestone Notice, send each CVR holder at its address set forth in the CVR Register (defined below) a copy of such Milestone Notice. At the time the Rights Agent sends a copy of such Milestone Notice to CVR holders, the Rights Agent shall also pay to each CVR holder, subject to any applicable withholding tax, the applicable Milestone Payment. The portion of each such Milestone Payment payable to each CVR holder will be calculated as (i) (A) the applicable Milestone Payment divided by (B) the aggregate number of CVRs registered in the CVR Register at such time, multiplied by (ii) the number of CVRs held by such CVR holder as reflected on the CVR Register.

Characteristics of the CVRs; Restrictions on Transfer

The CVRs may not be sold, assigned, transferred, pledged, encumbered or in any other manner transferred or disposed of, in whole or in part, other than pursuant to any of the following: (i) upon death of a holder, by will or intestacy; (ii) by instrument to an inter vivos or testamentary trust in which the CVRs are to be passed to beneficiaries upon the death of the trustee; (iii) pursuant to a court order (such as in connection with divorce, bankruptcy or liquidation); (iv) by operation of law (including a consolidation or merger) or without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; (v) in the case of CVRs payable to a nominee, from a nominee to a beneficial owner (and, if applicable, through an intermediary) or from such nominee to another nominee for the same beneficial owner, in each case as permitted by The Depository Trust Company; or (vi) upon abandonment of a CVR by the holder thereof in accordance with the CVR Agreement.

The CVRs will not be evidenced by a certificate or any other instrument. The CVRs will not have any voting or dividend rights, and interest will not accrue on any amounts payable in respect of the CVRs. The CVRs will not represent any equity or ownership interest in Telix, any constituent company to the Merger, or any of their affiliates. The sole right of each holder of a CVR is the right to receive the Milestone Payment amounts, if any, in accordance with the CVR Agreement. The Rights Agent will maintain an up-to-date register (the “CVR Register”) for the purposes of registering the CVRs and permitted transfers thereof for each holder.

Milestones and Payment

Pursuant to the CVR Agreement, a CVR holder is entitled to receive payments in cash or Telix Ordinary Shares (each a “Milestone Payment”) from Telix upon the achievement of up to four milestone events. If applicable, each Milestone Payment would be paid only once, upon first achievement of the corresponding milestone, regardless of the number of times such event is achieved. Telix shall use commercially reasonable efforts to achieve the milestones.

There are up to four potential milestone events that trigger Milestone Payments. Such milestones, if achieved, and the associated the Milestone Payments are as follows:

Composition of Milestone Payments

All Milestone Payments after the fifth anniversary of closing will be payable exclusively in cash. For payments during the first five years of the CVR Agreement term, Milestone Payments will generally be payable in Telix Ordinary Shares (with the number of shares determined using the volume weighted average price at which Telix Ordinary Shares traded on the ASX over the twenty trading-day period ending on the business day immediately prior to the date on which Telix delivers a Milestone Notice, as converted from AUD to USD in accordance with CVR Agreement), except for in certain specified circumstances where the holders of certain CVRs will be paid exclusively in cash, including CVRs issued in lieu of fractional shares of QSAM common stock resulting from the Reverse Split.

Withholding

Telix and the rights agent will be entitled to deduct and withhold, or cause to be deducted and withheld, from any Milestone Payment otherwise payable pursuant to the CVR Agreement, such amounts as each is required to deduct and withhold with respect to the making of such payment under any provision of law. To the extent that amounts are so deducted and withheld, such deducted and withheld amounts will be treated for all purposes of the CVR Agreement as having been paid to the holder of CVRs in respect of which such deduction and withholding was made.

Audit Rights

Until the earlier of achievement of the Net Sales Milestone or the expiration of the Milestone Period, upon reasonable advance written notice, at the cost and election of the QSAM Stockholder Representative, Telix shall permit an independent certified public accounting firm of nationally recognized standing mutually agreed by the QSAM Stockholder Representative and Telix (the “Independent Accountant”) to access the books and records of Telix and its affiliates to evaluate and verify Telix’s calculation of the Net Sales Milestone.

The Independent Accountant will keep all books and records of Telix and its affiliates strictly confidential, and will provide only a report of the results of its findings to QSAM Stockholder Representative. The Independent Accountant shall provide Telix with a copy of all disclosures made to the QSAM Stockholder Representative. The decision of such accounting firm shall be final, conclusive and binding on Telix, the QSAM Stockholder Representative and the QSAM stockholders, shall be non-appealable and shall not be subject to further review, absent manifest error. This audit right may not be exercised by the QSAM Stockholder Representative more than once; provided however, if a discrepancy greater than 10% in Telix’s favor is uncovered in the audit, the QSAM Stockholder Representative may exercise these audit rights a second time no sooner than 12 months after the completion of the first audit.

Commercially Reasonable Efforts

The CVR Agreement provides that Telix will use “Commercially Reasonable Efforts” (as defined below) to achieve each of the milestones.

The CVR Agreement defines Commercially Reasonable Efforts as, with respect to Telix’s obligations to develop or commercialize the acquired products, the level of efforts consistent with the efforts normally used by similarly situated biotechnology or biopharmaceutical company relating to the development and commercialization of a product with similar market potential as the acquired product at a similar stage of development or commercialization and taking into all relevant factors, including: (a) efficacy and safety clinical data; (b) patent and regulatory exclusivity; (c) target product profile; (d) market competition (including generic or biosimilar competition); (e) anticipated or approved labelling; (f) present and future market potential; (g) the likelihood of and scope obtained for regulatory approval; (h) the likelihood of and scope obtained for pricing and reimbursement; (i) the profitability and commercial potential of the product; and (j) all necessary medical, sales, marketing and other costs required for successful commercialization. For the avoidance of doubt, Commercially Reasonable Efforts shall be determined on a market-by-market and product-by-product basis, and it is anticipated that the level of effort will be different for different markets, and will change over time, reflecting changes in the status of the product and the market(s) involved.

Amendment and Termination of the CVR Agreement

Telix may, at any time and from time to time, unilaterally enter into one or more amendments to the CVR Agreement for any of the following purposes without the consent of any of the holders of CVRs or the Rights Agent:

Promptly after the execution by Telix and the Rights Agent of any amendment pursuant to the provisions of the CVR Agreement, Telix shall mail or otherwise transmit (or cause the Rights Agent to mail or otherwise transmit) a notice thereof through the facilities of DTC in accordance with DTC’s procedures and/or by first class mail to QSAM stockholders at their addresses as set forth on the CVR Register, setting forth in general terms the substance of such amendment.

With the consent of QSAM Stockholder Representative, Telix and the Rights Agent may enter into one or more amendments for the purpose of adding, eliminating or changing any provisions of the CVR Agreement, even if such addition, elimination or change is adverse to the interests of the CVR holders.

The CVR Agreement shall terminate upon the earlier to occur of (a) the payment of all Milestone Payments and (b) the expiration of the Milestone Period.

The Lock-Up Agreements

Concurrently with the execution of the Merger Agreement, each of QSAM’s directors, executive officers, a key employee, and certain stockholders have entered into a lock-up agreement, pursuant to which each of them agreed that, subject to limited exceptions, each of them will not (i) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Telix Ordinary Shares such person will be issued in connection with the Merger (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of such ownership, or (iii) publicly disclose the intention to do any of the foregoing for a period of 12 months following the Closing under the Merger Agreement.

THE REVERSE STOCK SPLIT

Reasons for the Reverse Stock Split

On February 6, 2024, the Board approved and recommended that its stockholders approve, and on February 6, 2024, the Majority Stockholders took action by written consent to approve an amendment to the Company Charter to effect a reverse stock split of outstanding shares of the QSAM Common Stock at a ratio in the range of 1:1000 to 1:2000 (the “Reverse Split”), such ratio to be determined by the Board at a later date at its sole discretion, but prior to the First Effective Date, and only in connection with the Merger. The Board may choose to not undertake the Reverse Split at all if it finds it to be unnecessary to complete the Merger.

Purpose of the Reverse Split and Timing

As indicated above in this Information Statement, QSAM stockholders will receive Telix Ordinary Shares upon closing of the Merger. The Telix Ordinary Shares will be issued pursuant to an exemption from registration of shares under Section 4(a)(2) or Regulation D of the Securities Act to “accredited investors” as that term is defined thereunder. In accordance with Regulation D, QSAM and Telix do not intend to issue Telix Ordinary Shares to more than 35 non-accredited investors, and in any case, to no more than 27 non-accredited investors pursuant to the terms of the Merger Agreement. Accordingly, the QSAM Board deemed it advisable and in the best interest of the Company and its stockholders to conduct a reverse stock split to reduce the number of non-accredited investors holding QSAM Common Stock. Based on the receipt of accredited investor questionnaires from approximately 90 of QSAM’s stockholders, QSAM Board determined the appropriate range of reverse stock split to be between 1:1000 and 1:2000. Notwithstanding the Reverse Split, Telix may, with the approval of the QSAM Stockholder Representative, elect to pay a non-accredited investor in lieu of Telix Ordinary Shares, cash in an amount equal to the stockholder’s pro rata share of the Closing Consideration.

Pursuant to the Reverse Split, any outstanding fractional shares of QSAM Common Stock (determined after determining the whole number of shares of QSAM Common Stock held by such holder, if any) after giving effect to the Reverse Split will be automatically exchanged for (i) the right to receive an amount of cash equal to such fractional share’s pro rata share of the Closing Consideration and (ii) one (1) CVR for each share of QSAM Common Stock that was converted into a fractional share (and not aggregated into a whole number of shares) pursuant to the Reverse Split.

The Reverse Split will be effected immediately prior to Closing of the Merger and at least 20 calendar days after the mailing of this Information Statement.

Our Board authorized, and the Majority Stockholders approved the Reverse Split under the condition that it may be effected only in connection with the Merger immediately preceding the First Effective Date.

Effects of the Reverse Stock Split

The principal result of the Reverse Split will be to decrease proportionately the number of outstanding shares of Common Stock based on the reverse stock split ratio determined by the Board and to cause the holders of all fractional shares resulting from the Reverse Split to receive cash consideration in lieu of Telix Ordinary Shares.

The Reverse Split would affect all holders of the Company’s Common Stock uniformly (i.e. regardless of their status as accredited or non-accredited investor), except that holders of a number of shares of QSAM common stock less than the Reverse Split ratio will not hold any shares following the Reverse Split, and as a result, would receive the non-CVR portion of their transaction consideration exclusively in cash. The Reverse Split will be effectuated after exercise of outstanding stock options, if any. Due to the retirement of fractional shares resulting from the Reverse Split, the voting power of remaining QSAM’s stockholders will increase proportional to the reduction of issued and outstanding shares of QSAM during the short period between the effectiveness of the Reverse Split and the Closing; however, the Company does not anticipate any matters would be subject to a stockholder vote during such period.

The Reverse Split is not intended as, and will not have the effect of, a “going private transaction” covered by Rule 13e-3 promulgated under the Exchange Act. The Reverse Split is not intended to modify the rights of existing stockholders in any material respect.

Fractional Shares

No fractional shares will be issued in the Reverse Split. If the Reverse Split is effected, each fractional share of Common Stock, as applicable, will be eligible to receive the cash consideration and the CVRs described above and elsewhere in this Information Statement. See “The Merger Agreement – Merger Consideration” on page 44.

Accounting Matters

Pursuant to the Reverse Split, the par value of our Common Stock will remain $0.0001 per share. As a result of the Reverse Split, upon the effectiveness of a certificate of amendment to the Company Charter, the stated capital on the Company’s balance sheet attributable to the Common Stock will be reduced to the aggregate par value of the issued shares of such class, and the additional paid-in capital account shall be credited with the amount by which the stated capital is reduced, if any. The Company’s stockholders’ equity (deficit), in the aggregate, will remain unchanged.

Also, if the Reverse Split is effected, the reported per share net loss would be higher because there will be fewer shares of the Company’s Common Stock outstanding. The Reverse Split would be reflected retroactively for all periods presented in the Company’s financial statements prepared following the effectiveness of the Reverse Split. The Company does not anticipate that any other material accounting consequences, including changes to the amount of stock-based compensation expense to be recognized in any period, would arise as a result of the Reverse Split.

Procedures

The Reverse Split, if effected, would become effective upon the filing of a certificate of amendment to the Company Charter with the Secretary of State of the State of Delaware. The following are descriptions of how the Reverse Split would be effected for beneficial holders and registered book entry holders.

Beneficial Holders of Common Stock

Upon the implementation of the Reverse Split, we intend to treat shares held by stockholders through a bank, broker or other agent in the same manner as registered stockholders whose shares are registered in their names. Banks, brokers and other agents would be instructed to effect the Reverse Split for their beneficial holders holding shares of Common Stock in street name. However, these banks, brokers and other agents may have different procedures than registered stockholders for processing the Reverse Split. Stockholders who hold shares of Common Stock with a bank, broker or other agent and who have any questions in this regard are strongly encouraged to contact their banks, brokers or other agents for more information.

Registered “Book-Entry” Holders of Common Stock

Certain registered holders of common stock may hold some or all their shares electronically in book-entry form with Transfer Online, Inc. (“Transfer Online”), the Company’s transfer agent. These stockholders do not have stock certificates evidencing their ownership of the Common Stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts. If the Reverse Split is effected, stockholders who hold shares electronically in book-entry form with Transfer Online will not need to take action to receive whole shares of post-Reverse Split common stock as the exchange will be automatic.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT

The following general summary discusses the material U.S. federal income tax consequences of the Reverse Split to U.S. Holders (as defined below) whose shares of Common Stock are exchanged for (i) shares of Common Stock, and/or (ii) in lieu of a fractional share of Common Stock, the right to receive an amount of cash equal to such fractional share’s pro rata share of the Closing Consideration (the “Company Share Cash Value”) and CVRs, pursuant to the Reverse Split. This discussion is for general information only and is not tax advice. This summary is based upon the Code, applicable U.S. Treasury regulations promulgated thereunder, judicial authority, and administrative rulings effective as of the date hereof. These laws and authorities are subject to change, possibly with retroactive effect, or different interpretations. Any such change could alter the tax consequences to U.S. Holders as described herein. No ruling from the IRS has been or will be requested in connection with the Reverse Split. The discussion below does not address any aspects of U.S. taxation other than U.S. federal income taxation, and as such does not address any state, local or foreign tax consequences or any estate, gift or other non-income tax consequences of the Reverse Split.

This discussion is for general information only and does not purport to address all aspects of U.S. federal income taxation that may be relevant to a particular beneficial owner of Common Stock (“Holder”) in light of its particular facts and circumstances. This discussion applies only to U.S. Holders that hold their shares of Common Stock as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a Holder’s particular circumstances, including the impact of the alternative minimum tax or the unearned income Medicare contribution tax. This discussion also does not address consequences relevant to Holders that are subject to special rules under U.S. federal income tax laws including, without limitation, banks or other financial institutions; dealers or traders in securities or currencies; insurance companies; tax-exempt entities; entities or arrangements treated as partnerships for U.S. federal income tax purposes or other flow-through entities (and investors therein); retirement plans, individual retirement accounts or other tax-deferred accounts; real estate investment trusts; regulated investment companies; mutual funds; controlled foreign corporations; passive foreign investment companies; certain former citizens, former long-term residents of the United States, or entities covered by the anti-inversion rules under the Code; Holders having a functional currency other than the U.S. dollar; Holders who hold shares of Common Stock as part of a hedge, straddle, constructive sale, conversion transaction or other integrated transaction; Holders who own (or are deemed to own) 5% or more of the outstanding stock of QSAM; Holders subject to special tax accounting as a result of any item of gross income with respect to Common Stock being taken into account in an “applicable financial statement” (as defined in the Code); Holders that are non-U.S. persons or entities; and Holders who acquired their shares of Common Stock through the exercise of employee stock options or otherwise as compensation or through a tax-qualified retirement plan.

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of Common Stock that is for U.S. federal income tax purposes: