NOTE 10 – SUBSEQUENT EVENTS

Merger Agreement

On February 7, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Telix Pharmaceuticals Limited, a public limited company registered under the laws of the Commonwealth of Australia (“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”), pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, Telix will acquire the Company through the merger of Merger Sub I with and into the Company, with the Company surviving as a direct, wholly-owned subsidiary of Telix (“First Merger”), and as part of the same overall transaction, the Company will merge with and into Merger Sub II, at which time the Company shall cease to exist and Merger Sub II will remain as the surviving corporation (“Second Merger”, collectively with First Merger, the “Merger”). A full description of the Merger Agreement, inclusive of the other agreements included as exhibits thereto, as well as the agreements themselves, have been included in our Form 8-K filed with the SEC on February 8, 2024.

Our board of directors unanimously approved on February 6, 2024, the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, and QSAM stockholders adopted and approved, by written consent dated February 6, 2024, the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.

Reverse Stock Split, Options and Preferred Stock

In connection with and as a condition to the Merger, our Board and a majority of our stockholders on February 6, 2024 approved a reverse stock split of all the issued and outstanding shares of our common stock, in a ratio between 1:1000 and 1:2000 (the “Reverse Split”). The exact ratio of the Reverse Split will be determined by the Board prior to closing the Merger.

Pursuant to the Merger Agreement, effective as of the date QSAM files an Information Statement describing the Merger to our stockholders, each then-outstanding and unexercised option to purchase shares of our 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 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.

As of February 6, 2024, all holders of our Series B Preferred Stock exchanged the remaining outstanding 1,509 shares plus all accrued dividends for 658,967 shares of common stock pursuant to their respective Exchange Agreements signed in October 2023. As of February 8, 2024, all holders of our Series A Preferred Stock converted their remaining shares plus all accrued dividends into common stock, which included conversions into 80,000 shares in 2023 and 169,133 shares in 2024. As of the date of this filing, no shares of Series A or Series B Preferred Stock remain outstanding. As of March 19, 2024, there are 4,445,469 shares of common stock outstanding, not inclusive of 150,611 stock options that must be exercised or will terminate as described above.

Amendment to the License Agreement

As a condition to the execution of the Merger Agreement, QSAM and IGL have entered into the Second Amendment to the License Agreement (the “Second Amendment”), which provides among other terms: (i) modifications to sublicense fees, royalties and other amounts payable to IGL; (ii) modifications to the definitions of “Commercially Reasonable Efforts,” “Products” and “Patents” described in the License Agreement; and (iii) an additional payment to IGL of $100,000, payable half upon the execution of the Second Amendment and the balance upon the closing of the Merger. The Second Amendment will only become effective upon the closing, and shall become null and void if the closing does not occur.

Lock-Up Agreement

Concurrently with the execution of the Merger Agreement, all of our officers, directors, and a key employee have agreed to enter into lock-up agreements (the “Lock-Up Agreements”), pursuant to which they accepted certain restrictions on transfers of shares of the Telix Ordinary Shares they would receive in connection with the Transaction until 12 months after the Closing upon the terms set forth in the Lock-Up Agreements.

Dissolution of Q2Power Corp.

On January 11, 2024, the Company dissolved its wholly-owned subsidiary, Q2Power Corp., with the State of Delaware. This company had previously been inactive.