QSAM Biosciences, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurement and Derivatives (Tables)

Fair Value Measurement and Derivatives (Tables)

9 Months Ended

Sep. 30, 2017

Schedule of Liabilities Measured at Fair Value

Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

	Fair value at
	September 30, 2017		Level 1		Level 2		Level 3
Convertible bridge notes	$	2,360,000	$	-	$	-	$	2,360,000
Total	$	2,360,000	$	-	$	-	$	2,360,000

	Fair value at
	December 31, 2016		Level 1		Level 2		Level 3
Preferred stock embedded conversion feature	$	123,266	$	-	$	-	$	123,266
Anti-dilution provision in common stock warrants included with preferred stock		52,904		-		-		52,904
Debenture embedded conversion feature		25,884		-		-		25,884
Anti-dilution provision in common stock warrants included with debentures		10,988		-		-		10,988
Total	$	213,042	$	-	$	-	$	213,042

Schedule of Reconciliation of Level 3 Conversion Option Liability

The following table presents a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that use significant unobservable inputs (Level 3) and the related realized and unrealized gains (losses) recorded in the condensed consolidated statement of operations during the period. The table also shows the cumulative change effect of the derivative liabilities that were recorded as an adjustment of the opening balance of accumulated deficit for the year:

	Preferred stock embedded conversion feature			Anti-dilution provision in common stock warrants included with preferred stock			Debenture embedded conversion feature			Anti-dilution provision in common stock warrants included with debentures			Convertible Bridge Notes			Total
Fair value, December 31, 2016	$	123,266		$	52,904		$	25,884		$	10,988		$	-		$	213,042
Reclassification of derivatives to equity upon adoption of ASU 2017-11		(123,266	)		(52,904	)		(25,884	)		(10,988	)		-			(213,042	)
Issuances of debt		-			-			-			-			1,841,908			1,841,908
Accrued interest		-			-			-			-			111,108			111,108
Unamortized debt issuance costs		-			-			-			-			(12,500	)		(12,500	)
Net unrealized loss on convertible bridge notes		-			-			-			-			419,484			419,484
Fair value, September 30, 2017	$	—		$	—		$	—		$	—		$	2,360,000		$	2,360,000