Costs and Effects of Compliance with Environmental Laws

Federal, state, and international environmental laws may impose certain costs and restrictions on our business. We do not believe that we have ~~yet~~ spent or lost money due to these laws and regulations.

Product Liability and Insurance

We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and the eventual sale and use of any product candidates, and claims could be brought against us if use or misuse of one of our product candidates causes, or merely appears to have caused, personal injury or death. While we have and intend to maintain product liability insurance relating to our clinical trials, our coverage may not be sufficient to cover claims that may be made against us and we may be unable to maintain such insurance. Any claims against us, regardless of their merit, could severely harm our financial condition, strain our management and other resources or destroy the prospects for commercialization of the product which is the subject of any such claim. We are unable to predict if we will be able to obtain or maintain product liability insurance for any products that may be approved for marketing. Additionally, we have entered into various agreements where we indemnify third parties for certain claims relating to our product candidates. These indemnification obligations may require us to pay significant sums of money for claims that are covered by these indemnifications. We ~~currently do not maintain~~had product liability ~~insurance.~~

insurance in place at the time of product launch.

Employees

As of ~~December 31, 2017,~~May 24, 2023, we had ~~2 employees~~seven consultants and 6 management ~~consultants.~~

~~Properties~~

~~We do not own any properties. We have leased office space in the Cayman Islands.~~

~~Legal Proceedings~~

~~We are not a party to any material pending legal proceeding, arbitration or governmental investigation,~~consultants, two of whom we consider full time and ~~to the best~~five of ~~our knowledge, no such proceedings have been initiated against us.~~

whom we consider part time.

I~~TEM~~

ITEM 1A. RISK FACTORS

~~Investing in our securities involves a high degree~~

Although risk factors are not required for smaller reporting companies, we stress the following risk:

We note that this annual report does not meet fully the requirements of ~~risk. You should carefully consider and evaluate all of~~annual reports as required by Form 10-K. Particularly, we note that the information included and incorporated by reference or deemed to be incorporated by reference in this report. Our business, results of operations or financial condition could be adversely affected by any of these risks or by additional risks and uncertainties not currently known to us or that we currently consider immaterial.

~~Risks Related to our Company~~

~~If we do not obtain additional financing, our business may be at risk or execution of our business plan may be delayed.~~

As of the date hereof, we have raised our operating funds through contacts, high net-worth individuals and strategic investors situated in the United States and Cayman Islands. We have not generated any revenue from operations since inception. We have limited assets upon which to commence our business operations and to rely otherwise. At November 30, 2017, we had cash and cash equivalents of approximately $825,000. On February 2, 2018, we netted approximately $4,915,000 from the registered sale of common stock and warrants to purchase common stock. As we have a monthly burn rate of approximately $600,000, we anticipate that we will have to raise additional funds and/or generate revenue from drug sales within twelve months to continue operations. Additional funding will be needed to implement our business plan that includes various expenses such as fulfilling our obligations under licensing agreements, legal, operational set-up, general and administrative, marketing, employee salaries and other related start-up expenses. Obtaining additional funding will be subject to a number of factors, including general market conditions, investor acceptance of our business plan and initial results from our business operations. These factors may impact the timing, amount, terms or conditions of additional financing available to us. If we are unable to raise sufficient funds, we will be forced to scale back or cease our operations.

Our independent registered public accountant has issued a going concern opinion after auditing our consolidated financial statements; our ability to continue depends on our ability to raise additional capital and our operations could be curtailed if we are unable to obtain required additional funding when needed.

We will be required to expend substantial amounts of working capital in order to acquire and market our proposed products and establish the necessary relationships to implement our business plan. We were incorporated on November 22, 2013. Our operations to date were funded entirely by capital raised from our private offering of securities. Notwithstanding the offering, we will continue to require additional financing to execute our business strategy. We totally depend on external sources of financing for the foreseeable future. Failure to raise additional funds in the future will adversely affect our business operations, and may require us to suspend our operations, which in turn may result in a loss to the purchasers of our common stock. We entirely depend on our ability to attract and receive additional funding from either the sale of securities or the issuance of debt securities. Needed funds might never be available to us on acceptable terms or at all. The inability to obtain sufficient funding of our operations in the future could restrict our ability to grow and reduce our ability to continue to conduct business operations. The report of our independent registered public accounting firm on our consolidated financial statements included ~~herein, raised substantial doubt about our ability~~in this Form 10-K have not been audited and no audit report regarding such financial statements have been included herein. Although we believe that these financial statements satisfy the current public information requirements of Rule 144(c)(2), these are not the type of financial statement that an investor would expect to ~~continue~~see from a company that has had its financial statements audited by an independent accounting firm per the Securities Exchange Act of 1934, as ~~a going concern. Our ability~~amended, and the rules and regulations promulgated thereunder. This annual report is unaudited, incomplete and should not be relied upon as accurate, timely or fit for any purpose. Although the Company intends to ~~continue~~amend this annual report as ~~a going concern depends on our ability~~soon as practicable and invites any inquiries to ~~raise additional capital. If we are unable~~be directed to obtain necessary financing, we will likely be required to curtail our development plans which could cause us to become dormant. Any additional equity financing may involve substantial dilution to our then existing stockholders.

Our business relies on intellectual property owned by third parties, and this reliance exposes us to the termination of the right to use that intellectual property and may result in inadvertent infringement of patents and proprietary rights of others.

~~Currently, we have four assets. Our business depends on:~~

●	~~our ability to continuously use the technology related to an eye drop treatment for glaucoma, our Mannin platform, that we have licensed from Mannin Research Inc.,~~

●	~~our ability to continuously use our intellectual property relating to generic Strontium Chloride-89, our BioNucleonics platform, that we have licensed from Bio-Nucleonics, Inc.,~~

●	~~our ability to continuously use our intellectual property relating to a rare pediatric condition (nonverbal disorder), our ASDERA platform, that we have licensed from ASDERA LLC and~~

●

~~our ability to continuously use our intellectual property relating to a chemical compound derived from the plant~~ ~~Solanum nigrum Linn, also known as Black Nightshade or Makoi, that we seek to use to create a~~ ~~chemotherapeutic agent against liver cancer, our uttroside platform, and that we have licensed from~~ ~~the Rajiv Gandhi Centre for Biotechnology, an autonomous research institute under the Government of India, known as RGCB, and the Oklahoma Medical Research Foundation, or the OMRF.~~

If the licenses were to terminate, we would lose the ability to conduct our business pursuant to our plan of operations. Our ability to pursue our business plan would then depend on finding alternative platforms to license. WeCompany management, it may not be able to find an attractive platform on a timely and cost effective basis, and even if we did, such platform might be inferior to the ones we currently have a license to use and may not be attractive to potential customers.

Many entities, including some of our competitors, have or may obtain patents and other intellectual property rights that cover or affect products or services related to those assets that we license. If a court determines that one or more aspect of the licensed platform infringes on intellectual property owned by others, we may be required to cease using that platform, to obtain licenses from the owners of the intellectual property or to redesign the platform in such a way as to avoid infringing the intellectual property rights. If a third party holds intellectual property rights, it may not allow us to use its intellectual property at any price, which could materially adversely affect our competitive position.

The Mannin platform, BioNucleonics platform, the ASDERA platform and the Uttroside platform may potentially infringe other intellectual property rights. U.S. patent applications are generally confidential until the Patent and Trademark Office issues a patent. Therefore, we cannot evaluate the extent to which the licensed platform may infringe claims contained in pending patent applications. Further, without lengthy litigation, it is often not possible to determine definitively whether a claim of infringement is valid. We may not be in a position to protect the intellectual property that we license as we are not the owners of that intellectual property and do not currently have the financial resources to engage in lengthy litigation.

Failure to maintain the license for, or to acquire, the intellectual property underlying any license or sublicense on which our plan of operations is based may force us to change our plan of operations.

We have to meet certain conditions to maintain the licenses for the intellectual property underlying the Mannin platform, the BioNucleonics platform, the ASDERA platform and the Uttroside platform and to acquire such intellectual property. Such conditions include payments of cash and shares of common stock, obtaining certain governmental approvals, initiating sales of products based on the intellectual property and other matters. We might not have the resources to meet these conditions and as a result may lose the licenses to the intellectual property that is vital to our business.

We lack an operating history and have not generated any revenues to date. Future operations might never result in revenues. If we cannot generate sufficient revenues to operate profitably, we may have to cease operations.

As we were incorporated on November 22, 2013 and more recently changed business direction, we do not have any operating history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow depends upon our ability to manufacture a product and to earn profit by attracting enough clients who will buy our products or services. We might never generate revenues or, if we generate revenues, achieve profitability. Failure to generate revenues and profit will eventually cause us to suspend, curtail or cease operations.

~~We may be exposed to potential risks and significant expenses resulting from the requirements under section 404 of the Sarbanes-Oxley Act of 2002.~~

~~We are required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, to include in our~~ever amend this annual report our assessment of the effectiveness of our internal control over financial reporting. We expect to incur significant continuing costs, including accounting fees and staffing costs, in order to maintain compliance with the internal control requirements of the Sarbanes-Oxley Act of 2002. Our management concluded that our internal controls and procedures were not effective to detect the inappropriate application of US GAAP for our most recent fiscal year. As we develop our business, hire employees and consultants and seek to protect our intellectual property rights, our current design for internal control over financial reporting must be strengthened to enable management to determine that our internal controls are effective for any period, or on an ongoing basis. Accordingly, as we develop our business, such development and growth will necessitate changes to our internal control systems, processes and information systems, all of which will require additional costs and expenses.

In the future, if we fail to complete the annual Section 404 evaluation in a timely manner, we could be subject to regulatory scrutiny and a loss of public confidence in our internal controls. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations.

~~Limited oversight of our management may lead to corporate conflicts.~~

We have only two directors who are also officers. Accordingly, we cannot establish board committees comprised of independent members to oversee functions like compensation or audit issues. In addition, since we only have two directors, they have significant control over all corporate issues.

Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our shareholders have limited protections against interested director transactions, conflicts of interest and similar matters. The Sarbanes-Oxley Act of 2002, as well as rules enacted by the SEC, the New York Stock Exchange and the Nasdaq Stock Market, requires the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities which are listed on the New York Stock Exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions, we have not yet adopted these measures and, currently, would not be able to comply with such corporate governance provisions. We do not have an audit or compensation committee comprised of independent directors. Our two directors perform these functions and are not independent directors. Thus, there is a potential conflict in that our directors are also engaged in management and participate in decisions concerning management compensation and audit issues that may affect management performance.

Until we have a larger board of directors that would include some independent members, if ever, there will be limited oversight of our directors’ decisions and activities and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the best interests of minority shareholders.

Additionally, these two directors beneficially own approximately 37% of our common stock. Although it is possible for them to be outvoted by the remaining shareholders at a general or special meeting if the two directors voted together, the size of their shareholdings and the absence of any other person beneficially owning more than 10% of our common stock would make this a difficult undertaking.

Because the results of preclinical studies and early clinical trials are not necessarily predictive of future results, any product candidate we advance into clinical trials may not have favorable results in later clinical trials, if any, or receive regulatory approval.

Pharmaceutical development has inherent risk. We will be required to demonstrate through well-controlled clinical trials for our product candidates for our Mannin platform, the ASDERA platform and the Uttroside platform and any additional uses based on the BioNucleonics platform that our product candidates are effective with a favorable benefit-risk profile for use in their target indications before we can seek regulatory approvals for their commercial sale. Success in early clinical trials does not mean that later clinical trials will be successful as product candidates in later-stage clinical trials may fail to demonstrate sufficient safety or efficacy despite having progressed through initial clinical testing. We also may need to conduct additional clinical trials that are not currently anticipated. Companies frequently suffer significant setbacks in advanced clinical trials, even after earlier clinical trials have shown promising results. In addition, only a small percentage of drugs under development result in the submission of a New Drug Application or Biologics License Application, known as BLA, to the U.S. Food and Drug Administration and even fewer are approved for commercialization.

Any product candidates we advance into clinical development are subject to extensive regulation, which can be costly and time consuming, cause unanticipated delays or prevent the receipt of the required approvals to commercialize our product candidates.

The clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution of our product candidate, Man-01, are subject to extensive regulation by the FDA in the United States and by comparable health authorities in foreign markets. In the United States, we are not permitted to market our product candidates until we receive approval of a BLA from the FDA. The process of obtaining BLA approval is expensive, often takes many years and can vary substantially based upon the type, complexity and novelty of the products involved. In addition to the significant clinical testing requirements, our ability to obtain marketing approval for these products depends on obtaining the final results of required non-clinical testing, including characterization of the manufactured components of our product candidates and validation of our manufacturing processes. The FDA may determine that our product manufacturing processes, testing procedures or facilities are insufficient to justify approval. Approval policies or regulations may change and the FDA has substantial discretion in the pharmaceutical approval process, including the ability to delay, limit or deny approval of a product candidate for many reasons. Despite the time and expense invested in clinical development of product candidates, regulatory approval is never guaranteed.

~~The FDA or another regulatory agency can delay, limit or deny approval of a product candidate for many reasons, including, but not limited to:~~

	●		~~the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;~~
	●		~~we may be unable to demonstrate to the satisfaction of the FDA that a product candidate is safe and effective for any indication;~~
	●		~~the FDA may not accept clinical data from trials which are conducted by individual investigators or in countries where the standard of care is potentially different from the United States;~~
	●		~~results of clinical trials may not meet the level of statistical significance required by the FDA for approval;~~
	●		~~we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;~~
	●		~~the FDA may disagree with our interpretation of data from preclinical studies or clinical trials;~~
	●		~~the FDA may fail to approve our manufacturing processes or facilities or those of third-party manufacturers with which we or our collaborators contract for clinical and commercial supplies; or~~
	●		~~the approval policies or regulations of the FDA may significantly change in a manner rendering our clinical data insufficient for approval.~~

With respect to foreign markets, approval procedures vary among countries and, in addition to the aforementioned risks, can involve additional product testing, administrative review periods and agreements with pricing authorities. In addition, recent events raising questions about the safety of certain marketed pharmaceuticals may result in increased cautiousness by the FDA and comparable foreign regulatory authorities in reviewing new pharmaceuticals based on safety, efficacy or other regulatory considerations and may result in significant delays in obtaining regulatory approvals. Any delay in obtaining, or inability to obtain, applicable regulatory approvals would prevent us from commercializing our product candidates.

Any product candidate we manufacture or advance into clinical trials may cause unacceptable adverse events or have other properties that may delay or prevent their regulatory approval or commercialization or limit their commercial potential.

Unacceptable adverse events caused by any of our product candidates that we manufacture or advance into clinical trials could cause us or regulatory authorities to interrupt, delay or halt production or clinical trials and could result in the denial of regulatory approval by the FDA or other regulatory authorities for any or all targeted indications and markets. This, in turn, could prevent us from commercializing the affected product candidate and generating revenues from its sale.

Except for our Strontium Chloride 89, known as SR89, product candidate, we have not yet completed testing of any of our product candidates for the treatment of the indications for which we intend to seek product approval in humans, and we currently do not know the extent of adverse events, if any, that will be observed in patients who receive any of our product candidates. If any of our product candidates cause unacceptable adverse events in clinical trials, we may not be able to obtain regulatory approval or commercialize such product or, if such product candidate is approved for marketing, future adverse events could cause us to withdraw such product from the market.

~~Delays in the commencement of our clinical trials could result in increased costs and delay our ability to pursue regulatory approval.~~

~~The commencement of clinical trials can be delayed for a variety of reasons, including delays in:~~

	●		~~obtaining regulatory clearance to commence a clinical trial;~~
	●		~~identifying, recruiting and training suitable clinical investigators;~~
	●		reaching agreement on acceptable terms with prospective clinical research organizations (“CROs”) and trial sites, the terms of which can be subject to extensive negotiation, may be subject to modification from time to time and may vary significantly among different CROs and trial sites;
	●		~~obtaining sufficient quantities of a product candidate for use in clinical trials;~~
	●		~~obtaining Investigator Review Board, or IRB, or ethics committee approval to conduct a clinical trial at a prospective site;~~
	●		~~identifying, recruiting and enrolling patients to participate in a clinical trial; and~~
	●		~~retaining patients who have initiated a clinical trial but may withdraw due to adverse events from the therapy, insufficient efficacy, fatigue with the clinical trial process or personal issues.~~

Any delays in the commencement of our clinical trials will delay our ability to pursue regulatory approval for our product candidates. In addition, many of the factors that cause, or lead to, a delay in the commencement of clinical trials may also ultimately lead to the denial of regulatory approval of a product candidate.

~~Suspensions or delays in the completion of clinical testing could result in increased costs to us and delay or prevent our ability to complete development of that product or generate product revenues.~~

Once a clinical trial has begun, patient recruitment and enrollment may be slower than we anticipate. Clinical trials may also be delayed as a result of ambiguous or negative interim results or difficulties in obtaining sufficient quantities of product manufactured in accordance with regulatory requirements and on a timely basis. Further, a clinical trial may be modified, suspended or terminated by us, an IRB, an ethics committee or a data safety monitoring committee overseeing the clinical trial, any clinical trial site with respect to that site, or the FDA or other regulatory authorities due to a number of factors, including:

	●		~~failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols;~~
	●		~~inspection of the clinical trial operations or clinical trial sites by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;~~
	●		~~stopping rules contained in the protocol;~~
	●		~~unforeseen safety issues or any determination that the clinical trial presents unacceptable health risks; and~~
	●		~~lack of adequate funding to continue the clinical trial.~~

Changes in regulatory requirements and guidance also may occur and we may need to amend clinical trial protocols to reflect these changes. Amendments may require us to resubmit our clinical trial protocols to IRBs for re-examination, which may impact the costs, timing and the likelihood of a successful completion of a clinical trial. If we experience delays in the completion of, or if we must suspend or terminate, any clinical trial of any product candidate, our ability to obtain regulatory approval for that product candidate will be delayed and the commercial prospects, if any, for the product candidate may suffer as a result. In addition, any of these factors may also ultimately lead to the denial of regulatory approval of a product candidate.

~~Our product candidates (if approved) or any other product candidates that we may develop and market may be later withdrawn from the market or subject to promotional limitations.~~

We may not be able to obtain the labeling claims necessary or desirable for the promotion of our product candidates if approved. We may also be required to undertake post-marketing clinical trials. If the results of such post-marketing studies are not satisfactory or if adverse events or other safety issues arise after approval, the FDA or a comparable regulatory agency in another country may withdraw marketing authorization or may condition continued marketing on commitments from us that may be expensive and/or time consuming to complete. In addition, if we or others identify adverse side effects after any of our products are on the market, or if manufacturing problems occur, regulatory approval may be withdrawn and reformulation of our products, additional clinical trials, changes in labeling of our products and additional marketing applications may be required. Any reformulation or labeling changes may limit the marketability of our products if approved.

~~Our dependence on third party suppliers or our inability to successfully produce any product could adversely impact our business.~~

We rely on third parties to supply us with component and materials required for the development and manufacture of our product candidates. If they fail to provide the required components or we are unable to find a partner to manufacture the necessary products, there would be a significant interruption of our supply, which would materially adversely affect clinical development and potential commercialization of the product. In the event that the FDA or such other agencies determine that we or any third-party suppliers have not complied with cGMP, our clinical trials could be terminated or subjected to a clinical hold until such time as we or any third party are able to obtain appropriate replacement material. Furthermore, if any contract manufacturers who supply us cannot successfully manufacture material that conforms to our specifications and with FDA regulatory requirements, we will not be able to secure and/or maintain FDA approval for our product candidates. We, and any third-party suppliers are and will be required to maintain compliance with cGMPs and will be subject to inspections by the FDA or comparable agencies in other jurisdictions to confirm such compliance.

We do and will also rely on our partners and manufacturers to purchase from third-party suppliers the materials necessary to produce our product candidates for our anticipated clinical trials. We do not have any control over the process or timing of the acquisition of raw materials by our manufacturers. Moreover, we currently do not have any agreements for the commercial production of these raw materials. Any significant delay in the supply of a product candidate or the raw material components thereof for an ongoing clinical trial could considerably delay completion of our clinical trials, product testing and potential regulatory approval of our product candidates.

We may not have the resources or capacity to commercially manufacture our product candidates, and we will likely continue to be dependent upon third party manufacturers. Our current inability, or our dependence on third parties, to manufacture and supply us with clinical trial materials and any approved products may adversely affect our ability to develop and commercialize our product candidates on a timely basis or at all.

We intend to contract with third parties either directly or through our licensors for the manufacture of our product candidates. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or that such supply will not be available to us at an acceptable cost, which could delay, prevent or impair our commercialization efforts.

We do not have any manufacturing facilities. We expect to use third-party manufacturers for the manufacture of our product candidates and have entered into contracts with manufacturers through the licensor of our radio-pharmaceutical product, SR89. Even with such contracts in place, reliance on third-party manufacturers entails additional risks, including:

	●		~~reliance on the third party for regulatory compliance and quality assurance;~~

	●		~~the possible breach of the manufacturing agreement by the third party;~~

	●		~~the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us; and~~

	●		~~reliance on the third party for regulatory compliance, quality assurance, and safety and pharmacovigilance reporting.~~

Third-party manufacturers may not be able to comply with current good manufacturing practices, or cGMP, regulations or similar regulatory requirements outside the United States. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or medicines, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our medicines and harm our business and results of operations.

Any product that we may produce may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us.

Any performance failure on the part of future manufacturers could result in a decrease or end to revenue. If any a contract manufacturer cannot perform as agreed, we may be required to replace that manufacturer. We may incur added costs and delays in identifying and qualifying any such replacement.

Our anticipated future dependence upon others for the manufacture of our product candidates may adversely affect our future profit margins and our ability to commercialize any medicines that receive marketing approval on a timely and competitive basis.

We will likely rely on third parties to conduct our clinical trials. If these third parties do not meet our deadlines or otherwise conduct the trials as required, our clinical development programs could be delayed or unsuccessful and we may not be able to obtain regulatory approval for or commercialize our product candidates when expected or at all.

We do not have the ability to conduct all aspects of our preclinical testing or clinical trials ourselves. We intend to use and do use Mannin, BioNucleonics, ASDERA, RGCB, OMRF and CROs to conduct our planned clinical trials and will and do rely upon such CROs, as well as medical institutions, clinical investigators and consultants, to conduct our trials in accordance with our clinical protocols. Our CROs, investigators and other third parties will and do play a significant role in the conduct of these trials and the subsequent collection and analysis of data from the clinical trials.

There is no guarantee that any CROs, investigators and other third parties upon which we rely for administration and conduct of our clinical trials will devote adequate time and resources to such trials or perform as contractually required. If any of these third parties fail to meet expected deadlines, fail to adhere to our clinical protocols or otherwise perform in a substandard manner, our clinical trials may be extended, delayed or terminated. If any of our clinical trial sites terminate for any reason, we may experience the loss of follow-up information on patients enrolled in our ongoing clinical trials unless we are able to transfer the care of those patients to another qualified clinical trial site. In addition, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive cash or equity compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, the integrity of the data generated at the applicable clinical trial site may be jeopardized.

If our competitors develop treatments for the target indications of our product candidates that are approved more quickly, marketed more successfully or demonstrated to be more effective than our product candidates, our commercial opportunity will be reduced or eliminated.

We operate in highly competitive segments of the biotechnology and biopharmaceutical markets. We face competition from many different sources, including commercial pharmaceutical and biotechnology enterprises, academic institutions, government agencies, and private and public research institutions. Our product candidates, if successfully manufactured and/or developed and approved, will compete with established therapies, as well as new treatments that may be introduced by our competitors. Many of our competitors have significantly greater financial, product development, manufacturing and marketing resources than us. Large pharmaceutical companies have extensive experience in clinical testing and obtaining regulatory approval for drugs. In addition, many universities and private and public research institutes are active in cancer research, some in direct competition with us. We also may compete with these organizations to recruit management, scientists and clinical development personnel. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. New developments, including the development of other biological and pharmaceutical technologies and methods of treating disease, occur in the pharmaceutical and life sciences industries at a rapid pace. Developments by competitors may render our product candidates obsolete or noncompetitive. We will also face competition from these third parties in recruiting and retaining qualified personnel, establishing clinical trial sites and patient registration for clinical trials and in identifying and in-licensing new product candidates.

~~If competitors introduce their own generic equivalent of our SR89 product candidate, our revenues and gross margin from such products could decline rapidly.~~

Revenues and gross margin derived from generic pharmaceutical products often follow a pattern based on regulatory and competitive factors that we believe are unique to the generic pharmaceutical industry. As the patent(s) for a brand name product or the statutory marketing exclusivity period (if any) expires, the first generic manufacturer to receive regulatory approval for a generic equivalent of the product often is able to capture a substantial share of the market. However, as other generic manufacturers receive regulatory approvals for their own generic versions, that market share, and the price of that product, will typically decline depending on several factors, including the number of competitors, the price of the branded product and the pricing strategy of the new competitors. The number of our competitors producing a generic version equivalent to our SR89 product candidate could increase to such an extent that we may stop marketing our product for which we previously obtained approval, which would have a material adverse impact on our revenues, if we ever achieve revenues, and gross margin.

If we are unable to establish sales and marketing capabilities or fail to enter into agreements with third parties to market, distribute and sell any products we may successfully develop, we may not be able to effectively market and sell any such products and generate product revenue.

We do not currently have the infrastructure for the sales, marketing and distribution of any of our product candidates, and must build this infrastructure or make arrangements with third parties to perform these functions in order to commercialize any products that we may successfully develop. The establishment and development of a sales force, either by us or jointly with a partner, or the establishment of a contract sales force to market any products we may develop will be expensive and time-consuming and could delay any product launch. If we, or our partners, are unable to establish sales and marketing capability or any other non-technical capabilities necessary to commercialize any products we may successfully develop, we will need to contract with third parties to market and sell such products. We may not be able to establish arrangements with third parties on acceptable terms, or at all.

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications for which there may be a greater likelihood of success.

Because we have limited financial and managerial resources, we will focus on a limited number of research programs and product candidates for specific indications. As a result, we may forego or delay pursuit of opportunities with other product candidates for other indications for which there may be a greater likelihood of success or may prove to have greater commercial potential. Notwithstanding our investment to date and anticipated future expenditures on MAN 01 (Mannin), Uttroside-B (OMRF), QBM001 (Asdera) and the BioNucleonics IP, we have not yet developed, and may never successfully develop, any marketed treatments using these products other than the SR89 product candidate for which there is FDA approval. Research programs to identify new product candidates or pursue alternative indications for current product candidates require substantial technical, financial and human resources. Although we intend to, and do, support certain investigator-sponsored clinical trials of MAN 01, Uttroside-B, QBM001 evaluating various indications, as well as other uses of SR89, these activities may initially show promise in identifying potential product candidates or indications, yet fail to yield product candidates or indications for further clinical development.

~~We depend upon the services of our key management personnel, and the loss of their services would likely result in disruptions of our operations and have a material adverse effect on our business.~~

Our management and operations are dependent on the services of our management team, namely Mr. Denis Corin, our Chief Executive Officer and Chairman, and Mr. William Rosenstadt, our Chief Legal Officer and a Director. We do not have employment or non-compete agreements with or maintain key-man life insurance in respect of either of these individuals. Because of their knowledge of the industry and our operations and their experience with us, we believe that our future results depend upon their efforts, and the loss of the services of either of these individuals for any reason could result in a disruption of our operations which will likely have a material adverse effect on our business.

Other than our Chief Executive Officer, we currently do not have full-time employees, but we retain the services of independent contractors/consultants on a contract-employment basis. Our ability to manage growth effectively will require us to continue to implement and improve our management systems and to recruit and train new employees. We might not be able to successfully attract and retain skilled and experienced personnel.

~~If we fail to attract and retain key management and clinical development personnel, we may be unable to successfully develop or commercialize our product candidates.~~

We will need to expand and effectively manage our managerial, operational, financial and other resources in order to successfully pursue our clinical development and commercialization efforts. As a company with a limited number of personnel, we highly depend on the development, regulatory, commercial and financial expertise of the members of our senior management and advisors, in particular Denis Corin, our chairman and chief executive officer. The loss of this individual or the services of any of our other senior management could delay or prevent the further development and potential commercialization of our product candidates and, if we are not successful in finding suitable replacements, could harm our business. Our success also depends on our continued ability to attract, retain and motivate highly qualified management and scientific personnel and we may not be able to do so in the future due to the intense competition for qualified personnel among biotechnology and pharmaceutical companies, as well as universities and research organizations. If we are not able to attract and retain the necessary personnel, we may experience significant impediments to our ability to implement our business strategy.

Applicable regulatory requirements, including those contained in and issued under the Sarbanes-Oxley Act of 2002, may make it difficult for us to retain or attract qualified officers and directors, which could adversely affect the management of our business and our ability to retain listing of our common stock.

We may be unable to attract and retain those qualified officers, directors and members of board committees required to provide for effective management because of the rules and regulations that govern publicly-held companies, including, but not limited to, certifications by principal executive officers. The enactment of the Sarbanes-Oxley Act has resulted in the issuance of a series of related rules and regulations and the strengthening of existing rules and regulations by the SEC, as well as the adoption of new and more stringent rules by the stock exchanges. The perceived increased personal risk associated with these changes may deter qualified individuals from accepting roles as directors and executive officers.

Further, some of these changes heighten the requirements for board or committee membership, particularly with respect to an individual’s independence from our business and level of experience in finance and accounting matters. We may have difficulty attracting and retaining directors with the requisite qualifications. If we are unable to attract and retain qualified officers and directors, the management of our business and our ability to obtain or retain listing of our shares of common stock on any stock exchange could be adversely affected.

~~We may be exposed to potential risks and significant expenses resulting from the requirements under section 404 of the Sarbanes-Oxley Act of 2002.~~

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, to include in our annual report our assessment of the effectiveness of our internal control over financial reporting. We expect to incur significant continuing costs, including accounting fees and staffing costs, in order to maintain compliance with the internal control requirements of the Sarbanes-Oxley Act of 2002. Our management concluded that our internal controls and procedures were not effective to detect the inappropriate application of US GAAP for our most recent fiscal year. As we develop our business, hire employees and consultants and seek to protect our intellectual property rights, our current design for internal control over financial reporting must be strengthened to enable management to determine that our internal controls are effective for any period, or on an ongoing basis. Accordingly, as we develop our business, such development and growth will necessitate changes to our internal control systems, processes and information systems, all of which will require additional costs and expenses.

Because of the small size of our company, we do not have separate Chairman, Chief Executive Officer and Chief Financial Officer positions, which may expose us to potential risks, including our failure to produce reliable financial reports and prevent and/or detect fraud.

We have not adopted a formal policy to separate or combine the positions of Chairman and Chief Executive Officer, both of which are currently held by Denis Corin who is also our acting principal financial officer. In addition, our two employees also comprise our Board of Directors. As such, there is no division of labor between our management and of our Board of Directors. This structure exposes us to a number of risks, including a failure to maintain adequate internal controls, our failure to produce reliable financial reports and our failure to prevent and/or detect financial fraud. Any such failures would adversely affect our financial condition and overall business operations.

	●		increase the cost of raising, or decrease our ability to raise, additional funds; as we do not anticipate generating sufficient revenue in the next twelve months to cover our operating costs, we may need to raise additional funding to implement our business if we do not raise sufficient funds in this offering. A recession or other negative economic factors could make this more difficult or prohibitive; or
	●		interfere with services provided by third parties; we use third parties for research purposes and intend to use third parties for the production and distribution of our generic SR89 product candidate, and a general recession or other economic conditions could jeopardize the ability of any third parties to fulfill their obligations to us;

~~Risks Related to our Industry~~

~~We are subject to general economic conditions outside of our control.~~

Projects for the acquisition and development of our products are subject to many factors, which are outside our control. These factors include general economic conditions in North America and worldwide (such as recession, inflation, unemployment, and interest rates), shortages of labor and materials and price of materials and competitive products and the regulation by federal and state governmental authorities. If any or several of these facts develop in a way that is adverse to our interest, we will not be in a position to reverse them, and we may not be able to survive such a development.

If any product candidate that we successfully develop does not achieve broad market acceptance among physicians, patients, healthcare payors and the medical community, the revenues that it generates from their sales will be limited.

Even if we successfully produce product candidates, they may not gain market acceptance among physicians, patients, healthcare payors and the medical community. Coverage and reimbursement of our product candidates by third-party payors, including government payors, generally is also necessary for commercial success. The degree of market acceptance of any approved products will depend on a number of factors, including:

	●		~~the efficacy and safety as demonstrated in clinical trials;~~
	●		~~the clinical indications for which the product is approved;~~
	●		~~acceptance by physicians, major operators of hospitals and clinics and patients of the product as a safe and effective treatment;~~
	●		~~acceptance of the product by the target population;~~
	●		~~the potential and perceived advantages of product candidates over alternative treatments;~~
	●		~~the safety of product candidates seen in a broader patient group, including its use outside the approved indications;~~
	●		~~the cost of treatment in relation to alternative treatments;~~
	●		~~the availability of adequate reimbursement and pricing by third parties and government authorities;~~
	●		~~relative convenience and ease of administration;~~
	●		~~the prevalence and severity of adverse events;~~
	●		~~the effectiveness of our sales and marketing efforts; and~~
	●		~~unfavorable publicity relating to the product.~~

If any product candidate is approved but does not achieve an adequate level of acceptance by physicians, hospitals, healthcare payors and patients, we may not generate sufficient revenue from these products and may not become or remain profitable.

~~We may incur substantial product liability or indemnification claims relating to the clinical testing and/or use of our product candidates.~~

We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials, as well as related to the manufacture and consumption of product candidates that we successfully commercialize. Claims could be brought against us if use or misuse of one of our product candidates causes, or merely appears to have caused, personal injury or death. While the manufacturer of our SR89 product maintains a $5 Million product liability policy, and the holder of the ANDA (BioNucleonics) are responsible for having their own coverage, we intend to obtain supplemental coverage, but do not currently have our own product liability insurance. When we initiate clinical trials, we intend to obtain the relevant coverage. As a result, such coverage may not be sufficient to cover claims that may be made against us and we may be unable to maintain such insurance. Any claims against us, regardless of their merit, could severely harm our financial condition, strain our management and other resources or destroy the prospects for commercialization of the product which is the subject of any such claim. We are unable to predict if we will be able to obtain or maintain product liability insurance for any products that may be approved for marketing. Additionally, we have entered into various agreements where we indemnify third parties for certain claims relating to our product candidates. These indemnification obligations may require us to pay significant sums of money for claims that are covered by these indemnifications.

~~Healthcare reform and restrictions on reimbursements may limit our financial returns.~~

Our ability or the ability of our collaborators to commercialize any of our product candidates that we successfully develop may depend, in part, on the extent to which government health administration authorities, private health insurers and other organizations will reimburse consumers for the cost of these products. These third parties are increasingly challenging both the need for and the price of new drug products. Significant uncertainty exists as to the reimbursement status of newly approved therapeutics. Adequate third-party reimbursement may not be available for our product candidates to enable us or our collaborators to maintain price levels sufficient to realize an appropriate return on their and our investments in research and product development.

Our success depends upon intellectual property, proprietary technologies and regulatory market exclusivity periods, and the intellectual property protection for our product candidates depends significantly on third parties.

Our success depends, in large part, on obtaining and maintaining patent protection and trade secret protection for our product candidates and their formulations and uses, as well as successfully defending these patents against third-party challenges. The parties from which we license our intellectual property are responsible for prosecuting and maintaining patent protection relating to the intellectual property to which we have a license from that party. If any of these parties fails to appropriately prosecute and maintain patent protection for the intellectual property, our ability to develop and commercialize the respective product candidate may be adversely affected and we may not be able to prevent competitors from making, using and selling competing products. This failure to properly protect the intellectual property rights could have a material adverse effect on our financial condition and results of operations.

The patent application process is subject to numerous risks and uncertainties, and we or our partners might not be successful in protecting our product candidates by obtaining and defending patents. These risks and uncertainties include the following:

	●		~~patent applications may not result in any patents being issued;~~

	●		~~patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable, or otherwise may not provide any competitive advantage;~~

	●		our competitors, many of which have substantially greater resources than we or our partners and many of which have made significant investments in competing technologies, may seek, or may already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use and sell our potential products;

	●		there may be significant pressure on the U.S. government and other international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful as a matter of public policy regarding worldwide health concerns; and

	●		countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop, and market competing products.

In addition to patents, we and our partners also rely on trade secrets and proprietary know-how. Although we have taken steps to protect our trade secrets and unpatented know-how, including entering into confidentiality agreements with third parties, and confidential information and inventions agreements with employees, consultants and advisors, third parties may still obtain this information or come upon this same or similar information independently.

We also intend to rely on our ability to obtain and maintain a regulatory period of market exclusivity for any of our biologic product candidates that are successfully developed and approved for commercialization. Although this period in the United States is currently 12 years from the date of marketing approval, there is a risk that the U.S. Congress could amend laws to significantly shorten this exclusivity period, as proposed by President Obama. Once any regulatory period of exclusivity expires, depending on the status of our patent coverage and the nature of the product, we may not be able to prevent others from marketing products that are biosimilar to or interchangeable with our products, which would materially adversely affect us.

In addition, U.S. patent laws may change which could prevent or limit us from filing patent applications or patent claims to protect our products and/or technologies or limit the exclusivity periods that are available to patent holders. For example, on September 16, 2011, the Leahy-Smith America Invents Act, or the America Invents Act, was signed into law, and includes a number of significant changes to U.S. patent law. These include changes to transition from a “first-to-invent” system to a “first-to-file” system and to the way issued patents are challenged. These changes may favor larger and more established companies that have more resources to devote to patent application filing and prosecution. The U.S. Patent and Trademark Office implemented the America Invents Act on March 16, 2013, and it remains to be seen how the judicial system and the U.S. Patent and Trademark Office will interpret and enforce these new laws. Accordingly, it is not clear what impact, if any, the America Invents Act will ultimately have on the cost of prosecuting our patent applications, our ability to obtain patents based on our discoveries and our ability to enforce or defend our issued patents.

If we or our partners are sued for infringing intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome in that litigation would have a material adverse effect on our business.

Our success also depends on our ability and the ability of any of our current or future collaborators to develop, manufacture, market and sell our product candidates without infringing the proprietary rights of third parties. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing products, some of which may be directed at claims that overlap with the subject matter of our intellectual property. Because patent applications can take many years to issue, there may be currently pending applications, unknown to us, which may later result in issued patents that our product candidates or proprietary technologies may infringe. Similarly, there may be issued patents relevant to our product candidates of which we are not aware.

There is a substantial amount of litigation involving patent and other intellectual property rights in the biotechnology and biopharmaceutical industries generally. If a third-party claims that we or any of our licensors, suppliers or collaborators infringe the third party’s intellectual property rights, we may have to:

	●		~~obtain licenses, which may not be available on commercially reasonable terms, if at all;~~
	●		~~abandon an infringing product candidate or redesign our products or processes to avoid infringement;~~
	●		pay substantial damages, including the possibility of treble damages and attorneys’ fees, if a court decides that the product or proprietary technology at issue infringes on or violates the third party’s rights;
	●		~~pay substantial royalties, fees and/or grant cross licenses to our technology; and/or~~
	●		~~defend litigation or administrative proceedings which may be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources.~~

~~We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time consuming and unsuccessful.~~

Competitors may infringe our patents or the patents of our licensors. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated, found to be unenforceable, or interpreted narrowly and could put our patent applications at risk of not issuing. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

~~We may be subject to claims that our consultants or independent contractors have wrongfully used or disclosed alleged trade secrets of their other clients or former employers to us.~~

As is common in the biotechnology and pharmaceutical industry, we engage the services of consultants to assist us in the development of our product candidates. Many of these consultants were previously employed at, or may have previously been or are currently providing consulting services to, other biotechnology or pharmaceutical companies, including our competitors or potential competitors. We may become subject to claims that we or these consultants have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers or their former or current customers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

~~Risks Related to our Securities~~

Our shares of common stock are subject to the “penny stock’ rules of the securities and exchange commission and the trading market in our securities will be limited, which will make transactions in our stock cumbersome and may reduce the value of an investment in our stock.

The U.S. Securities and Exchange Commission has adopted rules that regulate broker-dealer practices in connection with transactions in "penny stocks.” Penny stocks generally are equity securities with a price of less than $5 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC, which specifies information about penny stocks and the nature and significance of risks of the penny stock market. A broker-dealer must also provide the customer with bid and offer quotations for the penny stock, the compensation of the broker-dealer, and sales person in the transaction, and monthly account statements indicating the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for stock that becomes subject to those penny stock rules. If a trading market for our common stock develops, our common stock will probably become subject to the penny stock rules, and shareholders may have difficulty in selling their shares.

~~Any additional financing may dilute existing shareholders and decrease the market price for shares of our common stock.~~

If we raise additional capital, our existing shareholders may incur substantial and immediate dilution. We estimate that we will need approximately $20,000,000 in additional funds over the next 2 years to complete our business plan. The most likely source of future funds available to us is through the sale of additional shares of common stock. Such sales might occur below market price and below the price of which existing shareholders purchased their shares.

~~Our Articles of Incorporation provide indemnification for officers, directors and employees.~~

Our governing instruments provide that officers, directors, employees and other agents and their affiliates shall only be liable to our Company for losses, judgments, liabilities and expenses that result from the negligence, misconduct, fraud or other breach of fiduciary obligations. Thus certain alleged errors or omissions might not be actionable by us. The governing instruments also provide that, under the broadest circumstances allowed under law, we must indemnify our officers, directors, employees and other agents and their affiliates for losses, judgments, liabilities, expenses and amounts paid in settlement of any claims sustained by them in connection with our Company, including liabilities under applicable securities laws.

~~The market price of our common stock may be volatile and may fluctuate in a way that is disproportionate to our operating performance.~~

Our shares of common stock trading on the OTCQB will fluctuate significantly. There is a volatility associated with Bulletin Board securities in general and the value of your investment could decline due to the impact of any of the following factors upon the market price of our common stock:

	●		~~sales or potential sales of substantial amounts of our common stock;~~
	●		~~delay or failure in initiating or completing pre-clinical or clinical trials or unsatisfactory results of these trials;~~
	●		~~announcements about us or about our competitors, including clinical trial results, regulatory approvals or new product introductions;~~
	●		~~developments concerning our licensors, product manufacturers or our ability to produce Man-01;~~
	●		~~developments concerning our licensors, product manufacturers or our ability to produce SR89;~~
	●		~~litigation and other developments relating to our patents or other proprietary rights or those of our competitors;~~
	●		~~conditions in the pharmaceutical or biotechnology industries;~~
	●		~~governmental regulation and legislation;~~
	●		~~variations in our anticipated or actual operating results;~~
	●		~~change in securities analysts’ estimates of our performance, or our failure to meet analysts’ expectations;~~
	●		~~change in general economic trends; and~~
	●		~~investor perception of our industry or our prospects.~~

Many of these factors are beyond our control. The stock markets in general, and the market for pharmaceutical and biotechnological companies in particular, have historically experienced extreme price and volume fluctuations. These fluctuations often have been unrelated or disproportionate to the operating performance of these companies. These broad market and industry factors could reduce the market price of our common stock, regardless of our actual operating performance.

~~Sales of a substantial number of shares of our common stock, or the perception that such sales may occur, may adversely impact the price of our common stock.~~

~~A large number of our shares may be sold without restriction in public markets. These include:~~

●	~~approximately 6,660,000 of our outstanding shares of common stock recorded by our transfer agent as of November 30, 2107 as unrestricted and freely tradable;~~

●	shares of our common stock that are, or are eligible to be, unrestricted and free trading pursuant to Rule 144 or other exemptions from registration under the Securities Act that have not yet been recorded by our transfer agent as such;

●	~~1,711,875 shares of our common stock that were sold pursuant to a registration statement on Form S-1 on February 1, 2018; and~~

●	~~1,711,875 shares of our common stock underlying warrants that were sold pursuant to a registration statement on Form S-1 on February 1, 2018.~~

A large portion of the shares that are freely tradable, were issued at a price that is significantly below the closing price of $2.99 as of February 26, 2018. If the holders of our free trading shares wanted to make a profit on their investment (or if they wish to sell for a loss), there might not be enough purchasers to maintain the market price of our common stock on the date of such sales. Any such sales, or the fear of such sales, could substantially decrease the market price of our common stock and the value of your investment.

~~We have not paid dividends to date and do not intend to pay any dividends in the near future.~~

~~We have never paid dividends on our common stock and presently intend to retain any future earnings to finance the operations of our business. You may never receive any dividends on our shares.~~

~~The exercise of warrants and options or future sales of our common stock may further dilute the shares of common stock you receive in this offering.~~

As of the date hereof, we have outstanding vested and unvested options and warrants exercisable into 3,583,995 shares of common stock. The issuance of any shares of common stock pursuant to exercise of such options and warrants or the conversion of such notes would dilute your percentage ownership of our Company, and the issuance of any shares of common stock pursuant to exercise of such options and warrants or the conversion of such notes at a per share price below the offering price of shares being acquired in this offering which would dilute the net tangible value per share for such investor.

Our Board of Directors is authorized to sell additional shares of common stock, or securities convertible into shares of common stock, if in their discretion they determine that such action would be beneficial to us. Approximately 95% of our authorized shares of common stock and 100% of our shares of preferred stock are available for issuance. Any such issuance would dilute the ownership interest of persons acquiring common stock in this offering, and any such issuance at a share price lower than then net tangible book value per share at the time an investor purchased its shares would dilute the net tangible value per share for such investor.

report.

I~~TEM~~

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

I~~TEM~~

ITEM 2. ~~DESCRIPTION OF PROPERTY~~

PROPERTIES

The Company maintains a corporate office at ~~501~~366 Madison Avenue, ~~14th~~3rd Floor, New York, NY ~~10022.~~10017. Such office is solely for the purpose of maintaining a physical presence to receive correspondence, and it is at no cost as our ~~general counsel~~Chief Legal Officer maintains his offices at that location. The company also maintains ~~a single month to month~~an office in Grand Cayman, where the Company’s President and Chairman, Mr. Denis Corin, resides, ~~and it is~~ at ~~no cost.~~

the cost of $30,000 per annum.

I~~TEM~~

ITEM 3. LEGAL PROCEEDINGS

As previously reported, on July 12, 2022 the Company was notified that WSI PBG, LLC (“WSI”) filed a complaint against the Company seeking to recover $196,216 in unpaid consulting fees, plus costs and expenses of litigation. The Company elected not to litigate this suit so as not to increase its liability exposure. Not unexpectedly, on August 24, 2022, WSI obtained a judgment against the Company in the amount of $203,784. The Company is exploring its options in addressing this judgment, including terms of settlement that would result in a satisfaction of this Judgment over a limited period of time.

Table of Contents

The issuances of the securities mentioned above qualified for the exemption from registration contained in Section 4(2) of the Securities Act of 1933.

ITEM 6. ~~SELECTED FINANCIAL DATA~~

~~We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.~~

[RESERVED]

I~~TEM~~

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report. This discussion contains certain forward-looking statements that involve risk and uncertainties. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those set forth under the Section entitled ~~"Risk Factors"~~“Risk Factors”, and other documents we file with the Securities and Exchange Commission. Historical results are not necessarily indicative of future results.

Overview

Q BioMed Inc. (or “the Company”) was incorporated in the State of Nevada on November 22, 2013 and is a commercial stage biomedical acceleration and development company focused on licensing, acquiring and providing strategic resources to life sciences and healthcare companies. We intend to mitigate risk by acquiring multiple assets over time and across a broad spectrum of healthcare related products, companies and sectors. We intend to develop these assets to provide returns via organic growth, revenue production, out-licensing, sale or spin out.

~~Recent Developments~~

~~Capital Raising~~

~~On August 1, 2017 we closed~~ Our mission is to solve problems by accelerating the development of important therapies and availability of those therapies to patients.

Our intent is to monetize the current pipeline and build a ~~$3,050,390~~platform for future growth. There are 4 areas of focus:. commercial product revenue growth, partnerships, joint venture equity ~~financing. The financing with a small group of accredited investors provides~~value and future development platform.

Commercial Product

We believe that Strontium89 has great potential in the necessary capital to meet near term milestones and catalysts in its most advanced product portfolio assets, including the commercialization of Strontium Chloride 89, multiple IND enabling studies, CMC manufacturing and at least one IND filing.

On February 1, 2018 we closed a $5.48 million equity financing. This financing with a small group of hedge funds and accredited investors provides the capital to advance all assets and the capital to meet near term catalysts, including the expected initiation of sales of SR89 and the filing of an IND for QBM001.

~~Strontium 89 Chloride commercialization~~

On September 6, 2016, we announced the closing of a definitive agreement to exclusively license worldwide and ultimately acquire all the assets from a private company related to an FDA approved generic drug for the treatment of pain associated with metastatic bone cancer ~~Generic Strontium Chloride Sr-89 Injection USP (“SR89”).~~

This licensed radiopharmaceutical agent is indicated for the treatment of pain associated with metastatic bone cancer. SR89 provides long lasting relief for patients suffering from bone pain due to metastatic cancer, typically caused by advanced-stage breast, prostate or lung cancer. The drug is preferentially absorbed in bone metastases. It has been proven to provide a long-term effect resulting in non-narcotic cancer pain relief and enhanced quality of life.

We have initiated final drug product manufacturing however as a result of the 2 major hurricanes in both Texas and Florida and their impact on the logistics and in particular the contract manufacturing facilities in those states, we are taking additional steps to ensure that the manufacturing process meets our strict standards and safety is never compromised. We are building additional redundancies into our supply chain, including adding new manufacturing sites and securing the required FDA approval for those sites. We will work with the regulators to affect those changes as soon as possible.palliation space. As a result of ~~these measures SR89 may not~~a world in which opioids were a treatment of choice for those patients unlucky enough to be ~~commercially available until~~diagnosed with painful metastatic cancers in the bone, we felt that Strontium89 had become a neglected and forgotten drug. We have stayed committed to our belief that Strontium89 was a valuable treatment and have focused on advancing that asset from concept, a neglected drug, to a fully approved, reimbursed commercial product. Since we acquired Strontium89, we have built an infrastructure to commercialize the 2nd~~quarter of 2018, pending approval of~~product, including manufacturing, branding, pharmacovigilance, reporting, federal supply contract, and entering into distribution agreements in the ~~FDA. A new website, www.PainFreeCancer.com~~United States and several other countries.

Partnership Opportunities

UTTROSIDE B - Liver Cancer Chemotherapeutic

Along with our developmental partners, we are advancing an innovative treatment for liver cancer, a disease indication that currently has a high unmet need. This molecule was ~~recently announced~~identified in ~~anticipation of the commercial launch.~~

~~We intend~~India, traditionally used to ~~make this drug as widely available as possible and to ensure~~treat liver ailments. Subsequent research on that isolated molecule showed promising data, indicating that the ~~drug will be priced competitively. In light of~~molecule was more cytotoxic, killing cancer cells more effectively, in liver cancer cells lines than the current ~~opiate overuse~~first line liver cancer chemotherapeutic. We have advanced this from a naturally occurring unsustainable plant product to a commercially viable and ~~abuse crisis, we are pleased to be offering this non-narcotic cancer pain palliation~~scalable synthetic drug ~~to patients suffering from this debilitating condition.~~

There are approximately 300,000 – 400,000 new cases of bone metastases in patients with prostate, breast and lung cancer per year in the U.S. alone with 1 in 3 of those being ideal candidates for SR89. Approximately 80% of patients using SR89 have reported experiencing a substantial decrease in pain, an increase in physical activity and a reduction in the need for opiate analgesics. In the body, strontium acts similarly to calcium and is preferentially taken up in osteoblastic tissue while the unabsorbed isotope is excreted in the urine the first 2 to 3 days following injection, clearing rapidly from the blood and selectively localizing in bone mineral. Uptake of strontium by bone occurs preferentially in sites of active osteogenesis; thus primary bone tumors and areas of metastatic involvement (blastic lesions) can accumulate significantly greater concentrations of strontium than surrounding normal bone.

Generic Strontium Chloride Sr-89 Injection USP can be used in combination with (and reduce the dosage of) opiate based drugs like Oxycotin®, Morphine, Percocet® or replace them entirely. It can also be used in combination with cancer therapeutic drugs. Clinical studies have demonstrated that the combination of alternating weekly chemohormonal therapies with SR89 demonstrated a prolonged progression-free and overall survival with acceptable toxicity.

~~We believe there is~~candidate. This provides an opportunity to ~~invest additional resources into the program by conducting~~partner this asset with a post-marketing phase 4 trial to expand the indication and label to a primary cancer therapeutic. This would grow the revenue potential significantly and place our drug in the multi-billion dollar cancer therapy market.

~~License Agreement in Rare Pediatric Autistic Spectrum Disorder~~

On April 25, 2017, we entered into a licensing agreement that provides us with the worldwide exclusive rights to ASDERA’s ASD-002 (now annotated as QBM-001). QBM-001 is being developed to treat a rare pediatric nonverbal disorder. Under the terms of the agreement, the Company receives global rights to develop and commercialize the drug in the rare pediatric disease market.

We recently announced a partnership with Sphaera Pharma to develop a new and proprietary analog of QBM-001 for pediatric developmental nonverbal disorder. Sphaera Pharma will employ its proprietary and patented platform to produce a novel analog that aims to reduce or eliminate potential side effects and can reduce the amount of product a toddler needs to take on a daily basis. Preclinical testing of the new analog is currently underway to support a pre-IND and subsequent IND filing expected in the 2nd~~quarter of 2018. We plan to initiate a phase 2/3 pivotal clinical trial in the Summer of 2018.~~

The proprietary analog will also allow Q BioMed to apply for a global composition of matter patent for QBM-001, while still ensuring Q BioMed can pursue the 505(b)2 regulatory pathway in the US to ensure toddlers can possibly benefit from QBM-001 as soon as possible.

Among the more than 60,000 US children who develop autism spectrum disorders (ASD) every year, 20,000 become nonverbal or lose the ability to speak. The numbers are similar in Europe and this nonverbal group will have to rely on assisted living for the rest of their life.

Given the severity of this disorder and the immense emotional toll on these children and their families, our goal is to move the product forward quickly by using all the regulatory tools available to us to expedite the advancement of this drug candidate.

The cost for treatment and assisted living in the US alone can equal or exceed ten million dollars per patient over a lifetime. The estimated cost to the US healthcare system and lost productivity is estimated at 200 billion dollars.larger oncology focused institution. Currently, there ~~is no treatment for this disorder. EEG, behavioral,~~are only two approved first-line liver cancer therapies. We have received Orphan Drug Designation, and ~~genetic testing can identify a targeted population of children in their second year of life that we believe would respond to this treatment.~~

Research published in 2014 by Wittkowski et al. in the Nature journal Translational Psychiatry and independently confirmed in 2015 by Guglielmi et al. indicated that certain ion channels were not active enough in this targeted population. Given that we are ~~developing an analogue of a well-known approved drug that regulates these channels, we expect~~now preparing to advance this ~~clinically through a 505(b)2 pathway~~toward clinical partnership. We have been successfully prosecuting our patent portfolio and have received patents or notice of allowance in ~~2018 with a single Phase 2/3 pivotal trial, which, if successful, could have the drug ready for market in less than 2 years.~~

~~License Agreement in Liver Cancer Chemotherapeutic Drug Candidate~~

~~On June 15, 2017, we signed a final license agreement with The Oklahoma Medical Research Foundation (OMRF)~~several countries including Japan, Canada, USA and ~~the Rajiv Gandhi Centre for Biotechnology (RGCB). Under the agreement Q BioMed has the global exclusive rights to develop and market a novel chemotherapeutic drug to treat liver cancer.~~

~~The compound was isolated and characterized from the leaves of~~ ~~Solanum nigrum~~ Linn, or black nightshade, a plant widely used in traditional medicine. In animal models, the compound, called uttrocide B, was shown to be 10 times more cytotoxic to HepG2 liver cancer cells than the only drug currently on the market for the condition and caused no noticeable side effects.

Liver cancer is the second most common cause of cancer deaths worldwide, according to the Centers for Disease Control and Prevention, and claims approximately 750,000 lives each year. The American Cancer Society estimates that 39,000 people in the U.S. will be diagnosed with primary liver cancer in 2017 and that 27,000 will die from the disease this year.

just recently Europe. We are currently working on synthesizing the molecule chemically to ensure commercial availability and scalability. We anticipate that pre-IND work will be done by the middle of this year, and the IND is expected to be filed in the second half of 2018.

~~Mannin License Update~~

~~Additionally, Mannin Research Inc. (“Mannin”), our technology partner company focused on drug candidate MAN-01~~looking for treatment of Primary Open Angle Glaucoma (POAG), has initiated pre-clinical lead candidate optimization of a small molecule for topical application. Lead candidate selection is progressing on-time and on-budget. The topical application in the form of an easy to administer eye drop is a key differentiator for Mannin and aims to solve the compliance problems and invasive procedures currently available to patients suffering from glaucoma.

Mannin is continuing its focus on research and discovery on the biology of Tie2/TEK signaling and its relationship with Schlemm’s Canal function and regulation of intra-ocular pressure. Additional data sets and IP have been developed around this novel mechanism of action. Mannin is evaluating strategicclinical partnerships opportunities to grow its intellectual property portfolio within the Tie2/TEK signaling market, and is seeking complementary technologies to strengthen its product pipeline. The Ties/TEK platform is applicable to other indications and we have made progress in identifying potential treatments for cardiovascular diseases as well as kidney diseases using this innovative approach.

In February 2017, Mannin was accepted into Johnson & Johnson Innovation, JLABS @ Toronto. JLABS @ Toronto is a 40,000 square-foot life science innovation center. The labs provide a flexible environment for start-up companies pursuing new technologies and research platforms to advance medical care. Through a “no strings attached” model, Johnson & Johnson Innovation does not take an equity stake in the companies occupying JLABS @ Toronto and the companies are free to develop products – either on their own, or by initiating a separate external partnership with Johnson & Johnson Innovation or any other company.

Mannin will utilize JLABS @ Toronto as complementary lab space to conduct commercial research and development as it relates to its MAN-01 program for Glaucoma and to the greater Tie2 platform technology. As a resident, Mannin will have access to the development and commercialization expertise provided by JLABS @ Toronto. Mannin has been utilizing its presence in JLABS @Toronto to increase its visibility within the biotechnology community in Toronto. Since taking up residency in JLABS in January 2017, Mannin has participated in numerous events hosted at the JLABS @ Toronto site. These events have provided Mannin with one-on-one interactions with investors, media, government agencies, and industry executives. Being a JLABS resident company provides Mannin with access to a world class network of investors and industry partners. Mannin is establishing research and development partnerships with companies and organizations to provide direct support for the MAN-01 program and Mannin’s other research and development initiatives.

~~We are pleased with the progress Mannin research teams have achieved over the past several months and look forward to putting the final drug candidates into IND enabling studies.~~

We continue to advance all the assets in our pipeline. We have executed on our plan to build a pipeline of considerable inherent value with several catalysts expected for 2018. We aim to have a commercial drug on the market by the 2nd~~quater of 2018 and 2 new INDs filed in 2018 including a Phase 4 and a Phase 2/3 pivotal trial. We remain committed to advancing our assets~~this product towards the patients that need ~~them and driving value for our shareholders.~~it.

Table of Contents

Development Platform - Rare Disease Focus

During 2023 we will focus our future development platform on the Rare Disease Space. This focuses our resources on an area in which we already have a presence. Our liver cancer drug candidate, Uttroside B, has already received Orphan Drug Designation. We expect to partner this asset in 2023 and will grow our development platform through in-licensing or acquisition once we have the capital to do so.

This rare disease platform will also complement our early-stage treatment for young minimally verbal children on the Autism Spectrum. While our immediate focus is on the above-mentioned assets, we are also developing a new drug candidate to treat young children with pediatric minimally verbal autism. The advancement of this program will depend on the availability of funds and resources as we prioritize our clinical development milestones. There is no effective treatment available to help an estimated 250,000 children born with the condition worldwide each year, 20,000 of them in the United States. We are working on a discovery and development program to address this highly unmet need.

Corporate Strategic Goals

Our mission is to solve problems by accelerating the development of important therapies and the availability of those therapies to patients. We have been busy building a portfolio that we believe has significant value ranging from blockbuster potential drugs to revenue-producing opportunities.

Historical Pipeline Overview

Strontium-89 - FDA Approved Drug Launched

In January 2021, we announced that treatment with Strontium-89 in the hospital out-patient setting is fully reimbursed by Medicare. In March 2021, we were approved as a federal supplier which allows us to sell into federal hospital systems, notably the U.S. Department of Veteran Affairs and the U.S. Department of Defense. We have deployed a VA sales force, and we are preparing to launch an institutional contract sales force to increase our presence and uptake in non-government hospitals Revenue for our fiscal 2021, while still fairly low, is up by over 600% over our fiscal 2020. In January 2021, we received full reimbursement from Medicare and Medicaid, were approved as a federal supplier in March 2021, and engaged a federal sales team working mostly with the U.S Departments of Veterans’ Affairs, the Department of Defense and Indian Health Services.

In mid-2020, we began the regulatory registration process for full commercial access in the European Union. These efforts have seen some delay due to Brexit related regulatory requirements. In parallel, we are midway through the registration process in many other countries. Due to some legacy data from previous owners not being available in current reporting standards to complete the filings, we have begun the process of creating our own source documents to complete the filings in non-US jurisdictions. We expect this to be complete in the first half of our fiscal 2022. We have already identified and contracted with a few international distribution partners in anticipation of approval in those countries.

We are assessing several potential clinical trial programs that may expand the indication beyond palliation into a therapeutic use that may increase utilization in years to come.

Mannin Platform Drugs for ARDS, Glaucoma, Kidney Diseases and others

In March 2021, our technology partner Mannin Research Inc. (Mannin) was granted an additional CAD$1.7 million from the Canadian governments COVID response budget, adding to the approximate $7.7 million granted in Europe, which together will fund 65-75 percent of every dollar incurred to advance the Acute Respiratory Distress Syndrome therapy for COVID patients as well as a portfolio of therapeutic assets for vascular diseases currently in development at Mannin, including: glaucoma, cardiovascular diseases, acute kidney disease, and other infectious diseases.

With the uptake of vaccines for COVID-19 growing, the infection numbers are still soaring around the world due to new variants and communities growing apathy and resistance to mandates and social restrictions. Together with Mannin Research Inc., our technology partner, we are pursuing a treatment for Acute Respiratory Distress Syndrome, the condition that causes the most severe symptoms in COVID patients usually resulting in hospitalization and death. The treatment is not dependent on targeting any specific viral variant but

Table of Contents

rather is virus agnostic, which we believe makes it an invaluable treatment for Corona viruses and other viral diseases like influenza, pneumonia and any future viral pandemic outbreaks.

The MAN-19 therapeutic is a recombinant fusion protein that treats the patient, instead of targeting the virus. It is not a cure for COVID-19, but it strengthens a patient’s blood vessels and protects them against ARDS, breathing problems, sepsis and other infections that may cause the body’s organs to begin shutting down. It is designed to keep COVID-19 or other ARDS patients out of the ICU and off a ventilator. Pending upcoming toxicology testing, we believe that clinical trials for the drug will start in 2023. If the drug proves both safe and effective, our goal is to have it available for use by patients by mid 2024.

The market for this kind of treatment in the current and future pandemic climate is substantial and global. COVID-19 is not going away any time soon. As a result, there is a need to develop more effective treatments. We believe that this technology will play a role in the broader treatment landscape and not only for COVID-19, but also for other infectious diseases that cause ARDS.

GDF 15 Diagnostic for Glaucoma – In Clinical Trial and Product Development and FDA approval anticipated early 2022

In early 2019, we licensed a diagnostic biomarker known as GDF-15 for determining the severity of glaucoma from Washington University in St. Louis. GDF-15 is a perfect companion diagnostic for the MAN-01 and MAN-11 drugs, as well as a novel tool for practicing ophthalmologists and drug developers, because it is designed to assess the efficacy of the treatment or disease progression in their practice. This product represents a unique opportunity, and we believe that current clinical trials are yielding promising results. In partnership with Mannin Research Inc. and McMaster University, we are nearing the completion of development of an in-vitro-diagnostic (IVD) with both point-of-care (detection in a doctor’s office) as well as an external laboratory-based detection (i.e. for use in existing CLIA laboratories using existing diagnostic equipment). With appropriate funding, we anticipate completion of the IVD device and submission to the FDA (510K) for in vitro diagnostic approval.

UTTROSIDE B - Liver Cancer Chemotherapeutic

Along with our developmental partners, we are advancing an innovative treatment for liver cancer, a disease indication that currently has a high unmet need. Currently, there are only two approved first-line therapies. Uttroside-B was discovered in the leaf of the Black Nightshade plant in India. As it is not feasible to use the plant as the source for a drug, we successfully synthesized the molecule thereby creating an exact replica of the naturally occurring chemical compound. We have received several patents for this drug candidate and Orphan Drug Designation from the FDA.

QBM-001 - Early Stage Treatment for young minimally verbal children on the Autism Spectrum

While our immediate focus is on the above-mentioned assets, we are also developing a new drug candidate to treat young children with pediatric minimally verbal autism. The advancement of this program will depend on the availability of funds and resources as we prioritize our clinical development milestones. There is no effective treatment available to help an estimated 250,000 children born with the condition worldwide each year, 20,000 of them in the United States. We are working on a discovery and development program to address this highly unmet need.

We believe we have significant value in our commercial and pipeline assets and we are seeking partnership and the requisite funding in order to fully realize the value therein.

Financial Overview

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Our ~~management's~~management’s discussion and analysis of our financial condition and results of operations is based on our audited consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported

Table of Contents

amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported revenue generated, and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving ~~management's~~management’s judgments and estimates.

~~Fair~~

Intangible Assets

Intangible assets subject to amortization include acquired intellectual property for a marketable product acquired in November 2018.

The intellectual property is being amortized over the estimated life remaining at the time of acquisition, which is 10 years.

Intangible assets are monitored for potential impairment whenever events or circumstances indicate that the carrying amount may not be recoverable and are also reviewed annually to determine whether any impairment is necessary. Management has assessed the economic life of our Metastron asset to be at least equal to its remaining use life of eight years. As such, management modelled the recoverability test using seven years of estimated future cash flows. Based on this projection, the $350,000 net carrying value of ~~financial instruments~~

~~Fair value estimates discussed herein are based upon certain market assumptions~~our Metastron asset is fully recoverable and ~~pertinent information available to management~~therefore there was no impairment loss as of November 30, ~~2017~~2023 and 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and accounts payable because they are short term in nature.

~~FASB Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures~~” (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

●

~~Level 1~~: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.

●

~~Level 2~~: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.

●

~~Level 3~~: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the years ended November 30, 2017 and 2016. The respective carrying value of cash and accounts payable approximated their fair values as they are short term in nature.

~~Embedded Conversion Features~~

We evaluate embedded conversion features within convertible debt to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in the Statement of Operations. If the conversion feature does not require recognition of a bifurcated derivative, the convertible debt instrument is evaluated for consideration of any beneficial conversion feature (“BCF”) requiring separate recognition. When we record a BCF, the intrinsic value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument (offset to additional paid-in capital) and amortized to interest expense over the life of the debt.

2022.

Derivative Financial Instruments

We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the Statement of Operations. Depending on the features of the derivative financial instrument, we use either the Black-Scholes option-pricing model or a binomial model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

The Company evaluates embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion features.

Stock Based Compensation

Effective December 1, 2018, the Company adopted ASU 2018-07, by which the accounting for share-based payments to non-employees and employees is substantially aligned. Non-employee share-based payment awards are measured at grant-date fair value of the equity instruments that the Company is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. There was no cumulative effect of the adoption of this standard.

Share-based compensation cost is recorded for all option grants and awards of non-vested stock based on the grant date fair value of the award and is recognized over the service period required for the award.

Stock-based compensation expense is recognized in the consolidated financial statements based on the fair value of the awards granted. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which generally represents the vesting period. We calculate the fair value of stock options using the Black-Scholes option-pricing model at grant date.

Table of Contents

~~Stock Based Compensation Issued to Nonemployees~~

Common stock issued to non-employees for acquiring goods or providing services is recognized at fair value when the goods are obtained or over the service period. If the award contains performance conditions, the measurement date of the award is the earlier of the date at which a commitment for performance by the non-employee is reached or the date at which performance is reached. A performance commitment is reached when performance by the non-employee is probable because of sufficiently large disincentives for nonperformance.

Research and Development

We expense the cost of research and development as incurred. Research and development expenses comprise costs incurred in funding research and development activities, license fees, and other external costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with ASC 730, Research and Development.

~~Income Taxes~~

~~Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis~~

Recent accounting pronouncements

For a summary of ~~assets and liabilities using the enacted marginal tax rate~~recent accounting pronouncements applicable ~~when the related asset or liability is expected~~ to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

We apply a more-likely-than-not recognition threshold for all tax uncertainties, which only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of November 30, 2017, we reviewed our tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on us.

Our policy for recording interest and penalties associated with audits is to record such expense as a component of income tax expense. There were no amounts accrued for penalties or interest during the years ended November 30, 2017. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

~~On December 22, 2017, the United States enacted new tax legislation, the Tax Cuts and Jobs Act. We are currently in the process of evaluating the impact this law will have on~~ our consolidated financial statements, and calculating the related impact to our tax expense. We expect the largest impact from this legislation to the Company to be from the provisions that lower the corporate tax rate to 21% beginning on January 1, 2018, and impose tax on earnings outside the United States that have previously not been subject to United States tax, which must be paid beginning in fiscal 2019 through fiscal 2026. The adjustments to the Company’s tax expense for this legislation will be recorded beginning in the periodsee Note 3, Summary of ~~enactment and are not expected to materially affect the consolidated financial statements, given the Company’s net deferred tax asset position has a full valuation allowance.~~

~~Recent accounting pronouncements~~

~~In March 2016, the FASB issued ASU No. 2016-06,~~ ~~Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments~~. This new standard simplifies the embedded derivative analysis for debt instruments containing contingent call or put options by removing the requirement to assess whether a contingent event is related to interest rates or credit risks. We adopted ASU No. 2016-06 in the fiscal year ended November 30, 2017 and its adoption did not have a material impact on our consolidated financial statements.

~~In August 2016, the FASB issued ASU No. 2016-15,Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~.This new standard clarifies certain aspects of the statement of cash flows, including the classification of debt prepayment or debt extinguishment costs or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees and beneficial interests in securitization transactions. This new standard also clarifies that an entity should determine each separately identifiable source of use within the cash receipts and payments on the basis of the nature of the underlying cash flows. In situations in which cash receipts and payments have aspects of more than one class of cash flows and cannot be separated by source or use, the appropriate classification should depend on the activity that is likely to be the predominant source or use of cash flows for the item. This new standard will be effective for us on January 1, 2018. We do not expect the adoption of this new standard to have a material impact on our consolidated financial statements.

In January 2017, the FASB issued an ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this Update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Update may be adopted early. We adopted the provisions of ASC 2017-01 effective December 1, 2016. Adoption did not have a material impact on our financial position, results of operations, or cash flows.

~~In May 2017, the FASB issued ASU 2017-09,Compensation – Stock Compensation (Topic 718): Scope of Modification~~Significant Accounting. The new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The new standard will be effective on January 1, 2018; however, early adoption is permitted. The Company adopted ASU 2017-09 as of January 1, 2018. The adoption of this standard did not impact the Company’s consolidated financial statements.

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments Policies, in Part II, ~~of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification,~~Item 8, Notes to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. We are currently assessing the impact the adoption of ASU 2017-11 will have on our consolidated financial statements.

Consolidated Financial Statements.

Results of Operation for the years ended November 30, ~~2017~~2022 and ~~2016~~

For the year ended November 30,

2017

2016

Operating expenses:

General and administrative expenses
$9,271,804
$5,032,257
Research and development expenses
  3,099,971
  1,314,250
Total operating expenses
  12,371,775
  6,346,507



Other income (expenses):


Interest expense
  (760,314)
  (480,285)
Interest income
  138
  -
Loss on conversion of debt
  (463,578)
  (85,123)
Gain (loss) on extinguishment of debt
  (76,251)
  134,085
Loss on issuance of convertible notes
  -
  (481,000)
Change in fair value of embedded conversion option
  (810,017)
  121,000
Change in fair value of warrant liability
  (59,870)
  7,587
Loss on modification of Private Placement Units
  -
  (41,268)
Total other expenses
  (2,169,892)
  (825,004)



Net loss
$(14,541,667)
$(7,171,511)



Net loss per share - basic and diluted
$(1.39)
$(0.81)



Weighted average shares outstanding, basic and diluted
  10,466,648
  8,861,212

~~Revenues~~

Q BioMed Inc. was incorporated, in the State of Nevada on November 22, 2013, focusing on licensing, acquiring and providing strategic resources to life sciences and healthcare companies. Revenue will only be possible when we have acquired licenses for commercially ready assets that can be sold. 2021


	For the twelve months ended
	November 30, 2022		November 30, 2021
Net Sales	$	284,352	$	195,597
Cost of sales		293,340		246,846
Gross loss		(8,988)		(51,249)
Operating expenses:
General and administrative expenses		3,311,249		6,263,475
Research and development expenses		125,378		1,073,841
Total operating expenses		3,436,628		7,337,316
Loss from operations		(3,445,616)		(7,388,565)
Other (income) expenses:
Interest expense		1,384,465		506,922
Change in fair value of derivatives		(273,782)		304,153
Loss on debt extinguishment		384,311		40,910
Loss on issuance of convertible note		12,809		—
Settlement of registration liability		241,875		—
Total other (income) expenses		(1,393,523)		851,985
Net loss		(2,052,093)		(8,240,550)

Net Sales

During the ~~years~~year ended November 30, ~~2017~~2022 and ~~2016,~~2021, we ~~did not generate any revenues.~~

recognized approximately $271,000 and $196,000 of revenue from sales of Strontium89, respectively. This increase was due to more doses being sold during the year ended November 30, 2022, compared to the prior year.

Cost of Sales

During the year ended November 30, 2022, we recognized approximately $293,000 in cost of sales. These costs were related to raw materials cost, manufacturing cost, distribution cost and write-offs of expired inventory.

During the year ended November 30, 2021, we recognized approximately $247,000 in cost of sales. These costs were related to raw materials cost, manufacturing cost and distribution cost.

Operating expenses

We incur various costs and expenses in the execution of our business. ~~During~~The decrease in operating expenses was mainly due to significantly less stock-based compensation recognized in the year ended November 30, 2017, we incurred approximately $12.4 million in total expenses, including approximately $9.3 million in general and administrative expenses and approximately $3.1 million in research and development expenses. During the year ended November 30, 2016, we incurred approximately $6.3 million in total expenses, including approximately $5.0 million in general and administrative expenses and approximately $1.3 million in research and development expenses. The increase in general and administrative expenses was mainly due to an increase in professional services, financing costs and marketing activities in fiscal year 2017 as2022, compared to the ~~prior~~2021 fiscal year. ~~The increase~~In addition, the common stock price traded relatively higher in ~~research and development was mainly due~~2021 compared to ~~the investment in manufacturing SR89 and development of Man01, pursuant to the related agreements, in fiscal 2017.~~2022.

Table of Contents

~~Other (income) expenses~~

~~Our total other expenses increased to $2.2 million~~

Interest expense

The following table summarizes interest expense incurred during the year ended November 30, ~~2017~~2022 and 2021, respectively (amounts are rounded to nearest thousand):


	For the Years ended
	November 30, 2022		November 30, 2021
Interest expense based on the coupon interest rate of the outstanding debt	$	252,000	$	96,000
Accretion of debt discount		1,073,000		408,000
Other		60,000		3,000
Total interest expense	$	1,385,000	$	507,000

Change in fair value of embedded derivatives

We recognized a gain of approximately $274,000 and a loss of approximately $304,000 resulting from ~~$825,000 during the prior year, primarily as the result of increases in interest expense, losses on the conversion and extinguishment of debt, and~~ the change in fair value of ~~bifurcated conversion~~embedded contingent put options ~~of certain~~in convertible ~~notes.~~

~~During~~notes during the ~~year~~years ended November 30, ~~2017, interest expense increased~~2022 and 2021 respectively. The fluctuation is mainly due to ~~$760,000 from $480,000~~the change in stock price during the ~~prior year. Interest expense in the year ended November 30, 2017 is comprised~~reporting periods.

Loss on debt extinguishment

We recognized a loss of approximately ~~$628,000 accretion~~$384,000 and $41,000 due to the conversion of ~~debt discount and approximately $132,000~~outstanding debentures into shares of accrued interest expense based on the coupon interest rate of the debt. Interest expense in the year ended November 30, 2016 is comprised of approximately $414,000 accretion of debt discount and approximately $66,000 of accrued interest expense based on the coupon interest rate of the debt. The increase in interest expense results from the increase in the weighted average debt balance in fiscal year 2017 compared to fiscal year 2016. All of the Company’s outstanding debt was either converted or extinguished as of November 30, 2017.

During the year ended November 30, 2016, we recognized losses upon the issuance of convertible notes of $481,000. In connection with the issuance of our Series A, B, C Notes, and the original issuance of our Series D Notes,common stock during the year ended November 30, ~~2016, the embedded conversion feature in each note was separately measured at fair value. The initial recognition resulted in an aggregate debt discount of approximately $750,000,~~2022 and ~~an aggregate~~2021, respectively.

Net loss ~~of $481,000, which represented the excess of the fair value of the embedded conversion at initial issuance of $1.2 million over the aggregate principal amount of convertible debt issued.~~

During the year ended November 30, 2017, losses on conversion of debt increased to approximately $464,000 from approximately $85,000 in the prior year. The recognized losses result for the conversion of notes where the conversion option has been bifurcated for accounting purposes. As a result, conversions are recognized as an extinguishment of the bifurcated conversion option and of the loan host, which results in a gain or loss based on the difference between the carrying value of the conversion option and loan host compared to the fair value of the common stock issued to convert the note.

During the year ended November 30, 2016, we recognized a gain of approximately $134,000 resulting from a modification of outstanding Series D convertible notes that was recognized as an extinguishment.

During the year ended November 30, 2017, we recognized a loss of $810,000 as compared to a gain of $121,000 in the prior year, for the aggregate increase in fair value of conversion options embedded in convertible notes. In connection with the issuance of our Series A, B, C Notes, and the original issuance of our Series D Notes, in the years ended November 30, ~~2017~~2022 and 2016, the embedded conversion feature in each note was separately measured at fair value with subsequent changes in fair value recognized in current operations. We use a binomial valuation model, with fourteen steps of the binomial tree, to estimate the fair value of the embedded conversion options.

~~Net loss~~

~~In the years ended November 30, 2017 and 2016,~~2021, we incurred net losses of approximately ~~$14.5~~$ 2.1 million and ~~$7.2~~$8.2 million, respectively. Our management expects to continue to incur net losses for the foreseeable future, due to our need to continue to ~~open~~establish a ~~new head office, improve our website~~broader pipeline of assets, expenditure on R&D and to implement other aspects of our business plan.

Liquidity and Capital Resources

We have not yet established an ongoing source of revenues sufficient to cover our operating costs and allow us to continue as a going concern. We had a working capital of approximately $356,000 as of November 30, 2017.

We prepared the accompanying consolidated financial statements assuming that we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

We ~~had~~have not yet established a ~~net loss~~significant ongoing source of ~~approximately $14.5 million~~revenues and ~~$7.2 million during the years ended November 30, 2017~~must cover our operating through debt and 2016, respectively, and had net cash used in operating activities of approximately $5.6 million and $1.5 million during years ended November 30, 2017 and 2016, respectively. These matters, among others, raise substantial doubts about our abilityequity financings to allow us to continue as a going concern.

We had approximately $50,000 in cash as of November 30, 2022. Our ability to continue as a going concern depends on ~~the~~our ability to obtain adequate capital to fund operating losses until we generate adequate cash flows from operations to fund ~~its~~our operating costs and obligations. If we are unable to obtain adequate capital, we could be forced to cease operations.

We depend upon our ability, and will continue to attempt, to secure equity and/or debt financing. We ~~might not~~cannot be ~~successful, and without sufficient financing it would~~certain that additional funding will be ~~unlikely for us~~available on acceptable terms, or at all. Our management determined that there was substantial doubt about our ability to continue as a going ~~concern.~~ concern within one year after the consolidated financial statements were issued, and management’s concerns about our ability to continue as a going concern within the year following this report persist.

The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

Table of Contents

Cash Flows

The following table sets forth the significant sources and uses of cash for the periods addressed in this report:

For the years ended November 30,
2017 2016
Net cash provided by (used in):
Operating activities $ (5,584,451 ) $ (1,545,259 )
Financing activities

4,940,510 2,882,575
Net increase (decrease) in cash

$ (643,941) $ 1,337,316


	For the twelve months ended
	November 30, 2022		November 30, 2021
Net Cash (used in) provided by
Operating activities	$	1,941,404	$	(4,302,036)
Investing activities		(3,143,201)		—
Financing Activities		907,761		4,468,900
Net (decrease) increase in cash		(294,036)		166,864

Net cash used in operating activities was approximately ~~$5.6~~$1.2 million for the year ended November 30, ~~2017~~2022, as compared to approximately ~~$1.5~~$4.3 million for the year ended November 30, ~~2016. The increase~~2021. During the year ended November 30, 2022, operating activities proveded $1.9 million of cash, resulting from a net loss of $2.1 million, partially offset by loss on debt extinguishment of $384,000, loss on issuance of convertible note of $13,000, settlement on registration liability of $242,000, shared based compensation related to stock options modification of $212,000, share based compensation related to warrants modification of $300,000, share based compensation for services of $392,000, amortization expense of $50,000, and non-cash interest expense resulting from accretion of debt discounts of $0.9 million, offset by change is fair value of derivatives of $273,000 and changes in our operating assets and liabilities of approximately $1.8 million. During the year ended November 30, 2021, net cash used in operating activities results from the net loss of approximately ~~$14.5~~$8.2 million for the year ended November 30, ~~2017,~~2021, partially offset by ~~aggregate~~$2.3 million of share-based compensation, change in fair value of embedded conversion options of $0.3 million, loss on extinguishment of debt of $41,000, and non-cash ~~expenses~~interest expense resulting from accretion of debt discounts of $0.4 million and changes in our operating assets and liabilities of approximately ~~$8.9~~$0.8 million. ~~The net~~

Net cash used ~~in operating~~by investing activities ~~for the year ended November 30, 2016 results primarily from~~was approximately $3.1 million which relates to the ~~net loss of approximately $7.2 million, partially offset by a non-cash expense of $5.1 million.~~

investment in Mannin.

Net cash provided by financing activities was approximately ~~$4.9 million~~$910k for the year ended November 30, ~~2017, resulting mainly from~~2022 as compared to approximately $4.5million for the year ended November 30, 2021. During the year ended November 30, 2022, net cash provided by financing activities relates to proceeds received from the issuance of ~~convertible notes payable and note payable and issuance of~~ common stock and debentures, cash advances and proceeds received for warrants ~~through~~modification. During the ~~private placement. Net~~year ended November 30, 2021, net cash provided by financing activities ~~was approximately $2.9 million for the year ended November 30, 2016, resulting mainly from~~relates to proceeds received from the issuance of ~~convertible notes payable and note payable and issuance of~~ common stock and ~~warrants through~~debentures and is offset by the ~~private placement.~~

repayment of notes to related parties.

Obligations and Commitments

~~Advisory Agreements~~

We entered into customary consulting arrangements with various counterparties to provide consulting services, business development and investor relations services, pursuant to which we agreed to issue shares of common stock as services are received. We expect to issue an aggregate of approximately 27,000 shares of common stock subsequent to November 30, 2017 through the term of arrangements, June 2018.

~~Lease Agreement~~

In December 2016, the Subsidiary entered into a lease agreement for its office space located in Cayman Islands for $30,000 per annum. The initial term of the agreement ends in December 2019 and can be renewed for another three years.

~~Rent expenses was classified within general and administrative expenses and was approximately $27,000 for the year ended November 30, 2017.~~

Legal

We are not currently involved in any legal matters arising in the normal course of business. From time to time, we could become involved in disputes and various litigation matters that arise in the normal course of business. These may include disputes and lawsuits related to intellectual property, licensing, contract law and employee relations matters.

Periodically, we review the status of significant matters, if any exist, and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, we accrue a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. As additional information becomes available, we reassess the potential liability related to pending claims and litigation.

~~Finder’s~~

Advisory Agreements

Lease Agreement

In ~~October~~December 2016, we entered into ~~two agreements~~a lease agreement for office space located in Cayman Islands for $30,000 per annum. The initial term of the agreement ended in December 2019 and has been further renewed in 2023 for another three years, at a reduced rate of $15000 per year. This agreement does not identify a specific asset and does not convey the use of substantially all of the shared office capacity. As such, this agreement does not contain a lease under ASC 842. We recognize monthly license payments as incurred over the term of the arrangement.

Table of Contents

Rent expense is classified within general and administrative expenses on a straight-line basis and included in the accompanying Consolidated Statements of Operations as follows:

License Agreements

Mannin

On October 29, 2015, we entered into a Patent and Technology License and Purchase Option Agreement (“Exclusive License”) with a vendor whereby we were granted a worldwide, exclusive, license on, and option to, ~~engage two financial advisors~~acquire certain intellectual property (“Mannin IP”) which initially focused on developing a first-in-class eye drop treatment for glaucoma within the four-year term of the Exclusive License. Pursuant to ~~assist~~the exclusive license from Mannin, we may purchase the Mannin IP within six years of entry into the agreement. During the years ended November 30, 2021 and 2020, we respectively incurred approximately $0.8 million and $1.0 million of research and development expenses under our license with Mannin. The purchase option under the license agreement has now expired.

On March 26, 2019, we entered into an amendment to the Patent and Technology License and Purchase Option Agreement that it initially entered into with Mannin Research Inc. on October 29, 2015 (the “Mannin Agreement”). Under such amendment, the term of the option granted under the Mannin Agreement was extended to October 29, 2021 in exchange for our issuing 100,000 shares to Mannin Research Inc. on April 9, 2019.

On September 1, 2020, we further amended the license agreement allowing Mannin to grant an exclusive license to Mannin GmbH (its wholly owned German subsidiary) in order fully take advantage of the German government grant to Mannin. The agreement also confirms our ongoing investment into the Tie2 platform to create, and therefore maintain economic value for us inand our ~~search for potential investors, vendors or partners to engage in a license, merger, joint venture or other business arrangement. As a compensation for their efforts, we~~shareholders. We have agreed to ~~pay the financial advisors a fee equal to 7% and 8%~~contribute funds in Mannin GmbH. We paid Mannin $1.5 million in cash ~~and~~payable in three instalments. In addition, we paid to ~~pay one~~Mannin $0.75 million in shares of our common stock valued as of June 15, 2020, in full satisfaction of R&D payables, contracted by Mannin in development of the ~~financial advisors an additional fee equal~~Tie2 platform. We continue to 7%have the right to 100% of the revenues derived from the Mannin Tie2 technology platform, until such time that Mannin and its subsidiaries have independently raised at least $2 million in ~~warrants~~funds, expected to happen in 2022, at which time the parties have agreed to a profit share structure reducing our future capital commitments to Mannin R&D.

During the years ended November 30, 2022 and 2021, we incurred approximately $180,000 million and $0.8 million, respectively, in research and development expenses to fund the costs of ~~all consideration received by us. We have not incurred any finders’ fees~~development of the eye drop treatment for glaucoma pursuant to the ~~agreements to-date.~~Exclusive License.

Washington University

On March 9, 2019, we entered into an Exclusive License Agreement with Washington University for license of a diagnostic marker for determining the severity of glaucoma using the expression levels of Growth Differentiation Factor 15. The agreement calls for us to pay an initial fee of approximately $88,000, pay annual maintenance fees ranging from $15,000 to $75,000, make additional payments upon the following milestones:

·The first commercial sale of a companion diagnostic product;

·Initiation of a clinical trial for a diagnostic product to support FDA PMA or 510(k) regulatory approval or the foreign equivalent;

·PMA or 510(k) regulatory approval by the FDA or the foreign equivalent; and

·The first commercial sale of a diagnostic product.

In additional to the above payments, royalty payments based upon sales of a companion diagnostic product or diagnostic product are required.

Table of Contents

Related Party Transactions

We entered into consulting agreements with certain management personnel and stockholders for consulting and legal services. Consulting and legal expenses resulting from such agreements were ~~approximately $420,000 and $300,000 for the year ended November 30, 2017 and 2016, respectively, and were~~ included within general and administrative expenses in the accompanying Consolidated Statements of ~~Operations.~~

Operations as follows:

On May 29, 2022 the company issued 250,000 shares at a nominal value of 10c per share to Mr Rosenstadt , the company’s Chief Legal Officer and director, in lieu of cash for his monthly services.

On, May 29, 2022 the company issued 200,000 shares at a nominal value of 10c per share to Mr Corin, the company’s Chief Executive Officer, as partial payment of his monthly salary in lieu of cash.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

I~~TEM~~

ITEM 8. ~~CONSOLIDATED~~ FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following documents (pages F-1 to F-23) form part of the report on the Consolidated Financial Statements

	~~PAGE~~
~~Report of Independent Registered Public Accounting Firm (fiscal year ended in 2017)~~	~~F-2~~
		PAGE
Consolidated Balance Sheets	~~F-3~~	F-2
Consolidated Statements of Operations	~~F-4~~	F-3
Consolidated Statement of Changes in Stockholders’ ~~Equity (Deficit)~~Deficit	~~F-5~~	F-4
Consolidated Statements of Cash Flows	~~F-6~~	F-5
Notes to Consolidated Financial Statements	~~F-7~~	F-6

I~~TEM~~

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

We have not had any disagreements with our accountants or auditors that would need to be disclosed pursuant to Item 304 of Regulation S-K promulgated under the Securities Act of 1933.

ITable of Contents~~TEM~~

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management is required to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports, filed under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

As required by the SEC Rules 13a-15(b) and 15d-15(b), an evaluation is required to be carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described ~~below.~~

below, including the lack of audited financial statements in this annual report.

To address these material weaknesses, management engaged financial consultants, performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Management’s Annual Report on Internal Control Over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”) for the Company. Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~Our~~

As of November 30, 2020, management ~~assessed the effectiveness~~has completed a proper evaluation, risk assessment and monitoring of the Company’s internal ~~control~~controls over financial reporting ~~as of November 30, 2017. The framework used by management in making that assessment was~~based on the ~~criteria set forth in the document entitled “2013 Internal Control – Integrated Framework” issued by the~~2013 Committee of Sponsoring Organizations ~~of the Treadway Commission. Based on that assessment, management~~(COSO) framework. Management concluded that, during the period covered by this report, ~~such~~that our internal controls and procedures were ~~not~~ effective asto detect the inappropriate application of ~~November 30, 2017 and that material weaknesses in ICFR existed as more fully described below.~~

A material weakness is a deficiency, or a combination of deficiencies, within the meaning of Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard AS 2201, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.US GAAP. Management has identified the following material weaknesses ~~which have caused management to conclude that as of December 31, 2017 our internal controls over financial reporting were not effective at the reasonable assurance level:~~

~~We do not have written documentation of~~set forth below in our internal control ~~policies and procedures. Written documentation of key internal controls~~ over financial ~~reporting is a requirement~~reporting.

Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible, however segregation of duties has been implemented, with regards to the initiation of transactions, the custody of assets and the recording of transactions performed by separate individuals.

We do not have in-house personnel with sufficient experience with United States generally accepted accounting principles to address complex transactions. These functions have been outsourced.

We have determined that oversight over our external financial reporting and internal control over our financial reporting is ineffective as we do not have an audit committee in place.

We have not had our independent accountants audit our financial statements for the year ended November 30, 2022 and provide us with a report for such audit.

Table of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the year ended November 30, 2017. Failure to have written documentation signifies that management could not evaluate the design adequacy of our internal controls nor perform tests over their operating effectiveness.

Contents

We do not have sufficient resources in our accounting function, which restricts the Company’s ability to gather, analyze and properly review information related to financial reporting in a timely manner. In addition, due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals.

~~We do not have personnel with sufficient experience with United States generally accepted accounting principles to address complex transactions.~~

We have inadequate controls to ensure that information necessary to properly record transactions is adequately communicated on a timely basis from non-financial personnel to those responsible for financial reporting.

We have determined that oversight over our external financial reporting and internal control over our financial reporting by our audit committee is ineffective. The audit committee has not provided adequate review of the Company’s SEC’s filings and consolidated financial statements and has not provided adequate supervision and review of the Company’s accounting personnel or oversight of the independent registered accounting firm’s audit of the Company’s consolidated financial statement.

We have begun to take steps to remediate some of the weaknesses described above, including by engaging a financial reporting advisor with expertise in accounting for complex transactions. We have drafted a full set of compliance documents and will be rolling those out in due course. We intend to continue to address these weaknesses as resources permit.

Notwithstanding the ~~assessment that our ICFR was not effective and that there are~~ material weaknesses as identified herein, we believe that our consolidated financial statements contained in this Annual Report fairly present our financial position, results of operations and cash flows for the years covered thereby in all material respects.

This annual report does not include an attestation report of ~~the Company’s~~our registered public accounting firm regarding internal control over financial reporting. ~~Management’s report was not subject to attestation by the Company’s registered public accounting firm as we are a smaller reporting company and are not required to provide the report.~~

Changes in Internal Control Over Financial Reporting

Our internal control over financial reporting has not changed during the fourth quarter covered by this Annual Report on Form 10-K.

ITEM 9B. OTHER INFORMATION

Not Applicable.

PART III

I~~TEM~~

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth information with respect to persons who are serving as directors and officers of the Company. Each director holds office until the next annual meeting of shareholders or until his successor has been elected and qualified.

Held

Position

Name

Age

Positions

Since

Denis Corin
  44
Chief Executive Officer and Director (Chairman)
  2015




William Rosenstadt
  49
General Counsel and Director
  2015




Rick Panicucci
  57

Director
  2018


			Held
			Position
Name	Age	Position	Since
Denis Corin	50	Chief Executive Officer and Director (Chairman)	2015

William Rosenstadt	54	Chief Legal Officer and Director	2015

Rick Panicucci	62	Director	2018

Biography of Directors and Officers

Mr. Denis Corinhas been the Chief Executive Officer and Chairman of the Board of the Company since April 21, 2015. Mr. Corin is a management consultant. He has worked for large pharmaceutical (Novartis) and diagnostic instrumentation companies (Beckman Coulter) in their sales organizations responsible for sales in multi-product disciplines including pharmaceuticals and diagnostics and diagnostic automation equipment. After Novartis and Beckman Coulter, he served as Director of Investor Relations in the small-cap biotech arena at MIV Therapeutics Inc, a company specializing in next generation drug delivery and drug eluting cardiovascular stents. Mr. Corin served as an executive and on the board of directors of TapImmune Inc. from July 2009 to May 2012. He received his ~~Bachelor~~Bachelor’s degrees in Economics and Marketing from the University of Natal, South Africa in 1996.

Mr. William Rosenstadtwas appointed as the Company’s ~~general counsel~~Chief Legal Officer and member of the Company’s board of directors on June 1, 2015. Mr. Rosenstadt is a practicing corporate and securities lawyer. He is also the founding member and the managing partner of Ortoli Rosenstadt LLP, a law firm, formed in 2006. Mr. Rosenstadt received his Juris Doctorate from Benjamin N. Cardozo School of Law in 1995 and his Bachelor of Arts from Syracuse University in 1990.

Table of Contents

Dr. Rick Panicucci was appointed as a member of the Company’s board of directors on February 13, 2018. Dr. Panicucci specializes in the early stages of drug discovery for various companies. His responsibilities include solid state chemistry and formulation development of all small molecule therapeutics in early development and developing novel drug delivery technologies for small molecules and large molecules including siRNA. Since September 2015, Dr. Panicucci has been working with one of our licensors, Mannin Research Inc., in the development plan for MAN-01, a novel drug candidate that we license for the topical treatment of open-angle glaucoma. Since February 2015, he has served as the Vice President of Pharmaceutical Development at WuXi AppTec, where he is responsible for providing scientific leadership in the areas of Developability, Formulation Development and GMP Manufacturing. Prior to WuXi he held the position of Global Head of Chemical and Pharmaceutical Profiling (CPP) at Novartis from 2004 to 2015, where he led the development and implementation of innovative dosage form designs and continuous manufacturing paradigms. He has also held positions as the Director of Formulation Development at Vertex Pharmaceuticals and Senior Scientist at Biogen.

Dr. Panicucci received his Ph.D. in Physical Organic Chemistry at the University of Toronto and has two postdoctoral fellowships at the University of California at Santa Barbara and the Ontario Cancer Institute. Dr. Panicucci will continue advise on the scientific and commercial development of our MAN-01 glaucoma drug with Mannin Research Inc. He will also now provide insight and guidance on all our pipeline assets.

In connection with his service as a director, we have entered into an agreement with Dr. Panicucci pursuant to which he will earn options to acquire up to 50,000 shares of our common stock. The options will vest in quarterly installments of 12,500 each and are exercisable for 5 years at $3.00 per option.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3, 4 and 5, we believe that those persons who, at any time during our most recent fiscal year, were either a director, officer or beneficial owner of more than ten percent of our common stock filed those reports required by section 16(a) of the Exchange Act. We do not believe that all of those reports were filed on a timely basis.

ITEM 11. EXECUTIVE COMPENSATION

Our directors do not receive any stated salary for their services as directors or members of committees of the board of directors, but have received stock options for director services and, by resolution of the board, a fixed fee may be allowed for attendance at each meeting. Directors may also serve the Company in other capacities as an officer, agent or otherwise, and may receive compensation for their services in such other capacity. No such fees have been paid to any director since incorporation. Reasonable travel expenses are reimbursed.

Summary Compensation Table

The following table sets forth information concerning all cash compensation awarded to, earned by or paid to all individuals serving as the Company’s principal executive officers during the last two completed fiscal years ended November 30, ~~2017~~2022 and ~~2016,~~2021, respectively and all non-cash compensation awarded to those same individuals in those time periods.


						Stock		Warrant		Options		All other
Name and Principal Position	Year	Salary ($)		Bonus ($)		Awards ($)		Awards ($)		Awards ($)		compensations ($)		Total ($)
Denis Corin	2022	$	300,000	$	—	$	—	$	—	$	—	$	—	$	300,000
Chief Executive Officer	2021	$	300,000	$	—	$	—	$	—	$	72,000	$	—	$	372,000
William Rosenstadt	2022	$	—	$	—	$	—	$	—	$	—	$	300,000	$	300,000
General Counsel and Director	2021	$	—	$	—	$	34,825	$	—	$	72,000	$	300,000	$	406,825

Name and Principal Position Year

Salary ($)

Bonus ($)

Stock Awards ($)

Option Awards ($) (4)

Non-Equity Incentive Plan Compensation ($)

Non-qualified Deferred Compensation Earnings ($)

All Other Compensations ($) (1)

Total ($)

Denis Corin (2) 2017
$45,000.00
$-
$-
$1,545,000
$-
$-
$175,000
$1,765,000
Chief Executive Officer 2016
$-
$-
$-
$195,000
$-
$-
$63,655
$258,655
William Rosenstadt (3) 2017
$-
$-
$-
$1,545,000
$-
$-
$280,248
$1,825,248
General Counsel and Director 2016
$-
$-
$-
$1,055,000
$-
$-
$112,147
$1,167,147

~~(1)~~

The amounts represent fees paid or accrued by us to the executive officers during the past year pursuant to various employment and consulting services agreements, as between us and the executive officers, which are described below. Our executive officers are also reimbursed for any out-of-pocket expenses incurred in connection with corporate duties. We presently have no pension, health, annuity, insurance, profit sharing or similar benefit plans.

~~(2)~~

(1)Mr. Denis Corin was appointed as Chief Executive Officer and Director on April 21, 2015.

(2)Mr. William Rosenstadt was appointed as Chief Legal Officer and Director on June 5, 2015.

~~(3)~~

~~Mr. William Rosenstadt was appointed as General Counsel and Director on June 5, 2015.~~

~~(4)~~

Represents the aggregate grant date fair value of warrants to purchase 50,000 common stock issued on July 15, 2016 to Mr. Corin and warrants to purchase 250,000 and 200,000 common stock issued on January 4, 2016 and July 15, 2016 to Mr. Rosenstadt, respectively, in accordance with FASB ASC.

Table of Contents

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER ~~MATTERS~~

MATTERS

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of February ~~26, 2018,~~10, 2022, certain information regarding the ownership of our common stock by (i) each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock, (ii) each of our directors, (iii) our Principal Executive Officer and (iv) all of our executive officers and directors as a group. Unless otherwise indicated, the address of each person shown is c/o Ortoli Rosenstadt LLP, ~~501~~366 Madison Avenue 14th3rd Floor, New York, New York ~~10022.~~10017. Beneficial ownership, for purposes of this table, includes options to purchase common stock that are either currently exercisable or will be exercisable within 60 days of the date of this annual report.


	Amount
	and
	Nature of
	Beneficial	Deemed	Percent of			Percent of
Name and Address of Beneficial Owner	Owner ⁽¹⁾	Outstanding	Class ⁽²⁾		Votes	voting rights
Directors and Officers:
Denis Corin ⁽³⁾	38,525,133	177,427,864	21.7	%	71,858,466	20.9	%
William Rosenstadt ⁽⁴⁾	37,388,704	177,427,864	21.1	%	70,721,666	20.6	%
Rick Panicucci ⁽⁵⁾	475,000		0.001	%		*0.0	%

Directors and Officers as a Group (3 persons)	76,388,837	210,761,197	36.2	%	145,580,704	41.4	%

Major Stockholders:
Ari Jatwes ⁽⁶⁾	35,533,333	177,427,864	20.0	%	68,866,666	20.0	%

Name and Address of Beneficial Owner

Amount and Nature of
Beneficial Owner (1)

Percent of Class (2)

Directors and Officers:

Denis Corin (3)
  3,112,500
  21.4%
William Rosenstadt (4)
  1,502,500
  10.1%
Rick Panicucci
  50,000
  0.4%



Directors and Officers as a Group (3)(4)
  4,665,000
  33.5%



Major Stockholders:


Ari Jatwes
  860,000
  6.1%
Alan Lindsay
  1,136,000
  8.2%

*less than 1%

(1)

Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, , understanding, relationship, or otherwise has or shares: (1) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares. In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon the exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the ~~person's~~person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding as of ~~February 26, 2018.~~May 24, 2022.

(2)

This percentage is based upon ~~13,918,284~~144,094,531 shares of common stock and 1,000,000 Series C Pref Shares convertible into 200,000,000 common shares outstanding as of ~~February 26, 2018~~May 24, 2023 and any warrants exercisable by such person within 60 days of the date as of which the information is provided.

The percentage is therefore based on 244,000,000 shares on a deemed converted basis.

(3)

~~Includes~~In addition to 2,641,800 shares, includes shares underlying (i) 150,000 five-year warrants ~~exercisable at $1.45 which expire on~~issued in July ~~15, 2021~~2016 for director fees, ~~through June 1, 2017,~~ (ii) 350,000 five-year warrants ~~exercisable at $4.00 which expire on~~issued in June 5, ~~2022~~2017 as a bonus for officer services through the date thereof, ~~and~~ (iii) ~~112,500~~150,000 five-year options issued on June 5, 2017 for services as a director and officer through June 1, 2018, (iv) 150,000 five-year options issued in June 2018 for services as a director and officer through June 1, 2019, (v) 150,000 five-year options issued in June 2019 for services as a director and officer through June 1, 2020, all of which are exercisable within 60 days of the date as of which the information is ~~provided. This amount excludes those~~provided, (vi) 750,000 five year warrants issued on February 2, 2020, (vii) 300,000 options ~~that have been granted but that have not vested~~issued on August 28, 2020, (viii) 500,000 options issued on October 27, 2020 and ~~do not vest within~~(ix) 50,000 options issued on November 26, 2021 and 333,333,333 pref C shares convertible into 33,333,333 common shares as of the ~~next 60 days.~~closing price of $0.01 on May 24th. Each Pref C Share has 200 votes.

(4)

~~Includes~~In addition to 926,910 shares, includes shares underlying (i) 250,000 five-year warrants ~~exercisable at $4.15 which expire on~~issued in January ~~1, 2021 which were issued~~2016 to the law firm atwhere Mr. Rosenstadt is a partner, (ii) 50,000 five-year warrants ~~exercisable at $1.45 which expire on~~issued in July ~~15, 2021~~2016 which were issued to the law firm atwhere Mr.

Table of Contents

Rosenstadt is a partner, (iii) 150,000 five-year warrants ~~exercisable at $1.45 which expire on~~issued in July 15, ~~2021~~2016 for director fees through June 1, 2017, (iv) 350,000 five-year warrants ~~exercisable at $4.00 which expire on~~issued in June ~~5, 2022~~2017 as a bonus for officer services through the date thereof, ~~and~~ (v) ~~112,500~~150,000 five-year options issued on June 5, 2017 for services as a director and officer through June 1, 2018, (vi) 150,000 five-year options issued in June 2018 for services as a director and officer through June 1, 2019, (vii) 150,000 five-year options issued in June 2019 for services as a director and officer through June 1, 2020, all of which are exercisable within 60 days of the date as of which the information is ~~provided. An aggregate of 450,000~~provided, (vii) 173,641 options issued on October 16, 2019, (viii) 750,000 options issued on the February 10, 2020, (ix) 225,000 warrants ~~are exercisable within 60 days~~issued on April 7, 2020, (x) 300,000 options issued August 28, 2020, (xi) 500,000 options issued on October 27, 2020 and (xii) 50,000 options issued on November 26, 2021. and 333,333,333 pref C shares convertible into 33,333,333 common shares as of the ~~date~~closing price of $0.01 on May 24th. Each Pref C Share has 200 votes.

(5)	Includes (i) 50,000 five-year warrants issued in September 2019 for director fees, (ii) 50,000 options issued in February 2018, (iii) 150,000 options issued in December 2019, (iv) 200,000 options issued in October 2020, and (v) 25,000 options issued on November 26, 2021.

(6)

In addition to 765,000 shares, includes shares underlying (i) 75,000 warrants issued in July 2016, (ii) 85,000 warrants issued in June 2017, (iii) 150,000 options issued in June 2017, (iv) 50,000 options issued in July 2018, (v) 50,000 options issued in September 2019, (vi) 300,000 warrants issued in February 2020, (vii) 200,000 options issued in August 2020, (viii) 500,000 options issued in October 2020 and (ix) 25,000 options issued on November 26, 2021. and 333,333,333 pref C shares convertible into 33,333,333 common shares as of ~~which~~ the ~~information is provided.~~closing price of $0.01 on May 24th. Each Pref C Share has 200 votes.

TEM

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

We entered into consulting agreements with certain management personnel and stockholders for consulting and legal services. Consulting and legal expenses resulting from such agreements were approximately ~~$420,000~~$308,333 and ~~$300,000~~$420,000 for the year ended November 30, ~~2017~~2022 and ~~2016,~~2021, respectively. In addition to the arrangements, discussed in the sections titled “Directors, Executive Officers & Corporate Governance” and “Executive Compensation”, we pay our securities counsel Ortoli Rosenstadt LLP, where our director William Rosenstadt serves as managing partner, a monthly fee of $25,000 and a per transaction fee on certain extraordinary transactions. We do not have any obligations outstanding to other persons who beneficially own more than 10% of our common stock.

I~~TEM~~

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table sets forth fees billed to us by our independent auditors for the years ended November 30, ~~2017~~2022 and ~~2016~~2021 for (i) services rendered for the audit of our annual consolidated financial statements and the review of our quarterly consolidated financial statements, (ii) services rendered that are reasonably related to the performance of the audit or review of our consolidated financial statements that are not reported as Audit Fees, and (iii) services rendered in connection with tax preparation, compliance, advice and assistance.

Marcum LLP

SERVICES

2017

2016

Audit fees
$85,000
$80,000
Audit-related fees
  10,000
  -
Tax fees
  -
  -
All other fees

  -
  -
Total fees

$95,000
$80,000


SERVICES	2022		2021
Audit fees	$	92,000	$	61,000
Audit-related fees		—		—
Tax fees	$	3,296		—
All other fees		—		—
Total fees	$	95,296	$	61,000

Audit fees and audit related fees represent amounts billed for professional services rendered for the audit of our annual consolidated financial statements and the review of our interim consolidated financial statements. Before our independent accountants were engaged to render these services, their engagement was approved by our Directors.

Table of Contents

PART IV

I~~TEM~~

ITEM 15. EXHIBITS, CONSOLIDATED FINANCIAL STATEMENTS SCHEDULE

The following exhibits are filed as part of this registration statement. Exhibit numbers correspond to the exhibit requirements of Regulation S-K.

Exhibit No.	~~Description~~	Description
3.1		Articles of Incorporation filed as Exhibit 3 (a) to Form S-1 filed on January 13, 2014 and incorporated herein by reference
3.2		Amendment to Articles of Incorporation, dated July 20, 2015, filed as Exhibit 3.1 to our periodic report filed on Form 8-K on August 3, 2015 and incorporated herein by reference
3.3		Amendment to Articles of Incorporation, dated October 27, 2015, filed as Exhibit 3.1 to our periodic report filed on Form 8-K on October 29, 2015 and incorporated herein by reference
3.4		Articles of Incorporation filed as Exhibit 3 (b) to Form S-1 filed on January 13, 2014 and incorporated herein by reference
4.1		Form of Warrant in connection with our February 1, 2018 offering filed as Exhibit 4.1 to our registration statement on Form S-1 filed on January 12, 2018
4.2		Form of Warrant as filed as Exhibit 4.2 to our current report on Form 8-K filed on June 9, 2017 and incorporated herein by reference
4.3		Form of Warrant as filed as Exhibit 10.3 to our current report on Form 8-K filed on August 2, 2017 and incorporated herein by reference
10.1	~~Form of Non-Institutional Promissory Note filed as Exhibit 10.1 to our current report on Form 8-K filed on January 13, 2016 and incorporated herein by reference~~
~~10.2~~		Stock Purchase Agreement for Institutional Promissory Note, dated January 8, 2016, with CMGT filed as Exhibit 10.2 to our current report on Form 8-K filed on January 13, 2016 and incorporated herein by reference
~~10.3~~		~~Form of Institutional Promissory Note filed as Exhibit 10.4 to our current report on Form 8-K filed on January 13, 2016 and incorporated herein by reference~~
~~10.4~~		~~Advisory Agreement, dated September 8, 2015, with Wombat Capital Ltd. filed as Exhibit 10.5 to our current report on Form 8-K filed on January 13, 2016 and incorporated herein by reference~~
~~10.5~~		Advisory Agreement, dated June 1, 2015, with Ari Jatwes filed as Exhibit 10.6 to our current report on Form 8-K filed on January 13, 2016 and incorporated herein by reference
~~10.6~~ 10.3	~~Consulting Agreement, dated November 13, 2015, Pharmafor Ltd. filed as Exhibit 10.7 to our current report on Form 8-K filed on January 13, 2016 and incorporated herein by reference~~
~~10.7~~		Executive Services Agreement, dates June 1, 2017, between Denis Corin and Q BioMed Cayman SEZC filed as Exhibit 10.1 to our current report on Form 8-K filed on June 9, 2017 and incorporated herein by reference
~~10.9~~ 10.4		Form of Non-Qualified Stock Option Agreement filed as Exhibit 4.1 to our current report on Form 8-K filed on June 9, 2017 and incorporated herein by reference
~~10.10~~ 10.5		Patent and Technology License and Purchase Option Agreement, dated October 29, 2015, with Mannin Research Inc. filed as Exhibit 10.1 to our annual report on Form 10-K filed on March 11, 2016 and incorporated herein by reference +
~~10.11~~ 10.6	Patent and Technology License and Purchase Option Agreement, dated May 30, 2016, with Bio-Nucleonics Inc., filed as Exhibit 10.1 to our quarterly report on Form 10-Q filed on October 17, 2016 and incorporated herein by reference +
~~10.12~~		First Amendment to Patent and Technology License and Purchase Option Agreement, dated September 6, 2016, with Bio-Nucleonics Inc., filed as Exhibit 10.2 to our quarterly report on Form 10-Q filed on October 17, 2016 and incorporated herein by reference +
~~10.13~~		License Agreement on Patent & Know-How Technology, dated April 21, 2017, between Q BioMed Inc. and ASDERA LLC filed as Exhibit 10.1 to our quarterly report on Form 10-Q filed on April 25, 2017 and incorporated herein by reference +
~~10.14~~		Executive Services Agreement, dated June 5, 2017, between Q BioMed Cayman SEZC and Denis Corin filed as Exhibit 10.1 to our current report on Form 8-K filed on June 9, 2017 and incorporated herein by reference
~~10.15~~		Technology License Agreement, dated June 15, 2017, among Q BioMed Inc., Oklahoma Medical Research Foundation and Rajiv Gandhi Centre for BioTechnology filed as Exhibit 10.1 to our current report on Form 8-K filed on June 15, 2017 and incorporated herein by reference +
~~10.16~~ 10.7	~~Form of Placement Agent~~	Securities Purchase Agreement, ~~in connection with our February 1, 2018 offering~~dated August 28, 2019, filed as Exhibit ~~10.15~~10.1 to our ~~registration statement~~current report on Form ~~S-1 filed~~8-K (as amended) on ~~January 12, 2018~~	September 6, 2019 and incorporate herein by reference
~~10.17~~ 10.8		Form of Debenture pursuant to the Securities Purchase Agreement entered into on August 28, 2019, filed as Exhibit 10.2 to our current report on Form 8-K (as amended) on September 6, 2019 and incorporate herein by reference
10.9		Securities Purchase Agreement, dated October 11, 2019, filed as Exhibit 10.1 to our current report on Form 8-K on October 15, 2019 and incorporate herein by reference
10.10		Form of Debenture pursuant to the Securities Purchase Agreement entered into on October 11, 2019, filed as Exhibit 10.2 to our current report on Form 8-K on October 15, 2019 and incorporate herein by reference
10.11		Securities Purchase Agreement, dated December 5, 2019, filed as Exhibit 10.1 to our current report on Form 8-K on December 12, 2019 and incorporate herein by reference
10.12		Form of Debenture pursuant to the Securities Purchase Agreement entered into on December 5, 2019, filed as Exhibit 10.2 to our current report on Form 8-K on December 12, 2019 and incorporate herein by reference
10.13		Securities Purchase Agreement in connection with our ~~February 1, 2018 offering~~April 6, 2020 private placement of Preferred Shares filed as Exhibit ~~10.16~~10.1 to our ~~registration statement~~current report on Form ~~S-1~~8-k filed on ~~January 12, 2018~~	April 7, 2020
31 10.14		Registration Rights Agreement filed as Exhibit 10.2 to our current report on Form 8-k filed on April 7, 2020
10.15		Form of Securities Purchase Agreement entered into with the Selling Stockholders, filed as Exhibit 10.4 to our current report on Form 8-k filed on December 29, 2020
10.16		Securities Purchase Agreement, dated December 23, 2020, filed as Exhibit 10.1 to our current report on Form 8-k filed on December 29, 2020
10.17		Form of Debenture filed as Exhibit 10.2 to our current report on Form 8-k filed on December 29, 2020
10.18		Amendment Agreement, dated December 23, 2020, filed as Exhibit 10.3 to our current report on Form 8-k filed on December 29, 2020

Table of Contents

10.19	Form of Securities Purchase Agreement with Selling Stockholders, filed as Exhibit 10.4 to our current report on Form 8-k filed on December 29, 2020
10.20	Form of Resale Warrant filed as Exhibit 10.5 to our current report on Form 8-k filed on December 29, 2020
10.21	Securities Purchase Agreement, dated February 12, 2021, filed as Exhibit 10.1 to our current report on Form 8-k filed on February 16, 2021
10.22	Form of Debenture filed as Exhibit 10.2 to our current report on Form 8-k filed on February 16, 2021
10.23	Amendment To Patent and Technology License and Purchase Option Agreement, dated March 26, 2019, among the Company and Mannin Research Inc.
31	Certification of Principal Executive Officer and Acting Principal Accounting Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)*
32	Certification of Principal Executive Officer and Acting Principal Accounting Officer pursuant to 18 U.S.C. Section 1350*	1350

101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*
104	Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit)

*Filed herewith

+ Portions of this exhibit have been omitted pursuant to a request for confidential treatment, and the SEC has granted confidential treatment pursuant to Rule 406 under the Securities Act. Confidential information has been omitted from the exhibit in places marked “****”and has been filed separately with the SEC.

ITEM 16. FORM 10-K SUMMARY

We have elected not to provide a summary of the information provided in this annual report on Form 10-K.

Table of Contents

S~~IGNATURES~~

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Q BioMed Inc.

Date: ~~February 28, 2018~~May 26, 2023	By:	/s/ Denis Corin
	Name:	Denis Corin
	Title:	President, Chief Executive Officer and Acting Principal Financial and Accounting Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated.

~~Signature~~	~~Title~~	~~Date~~
Signature		Title		Date
/s/ Denis Corin		President, Chief Executive Officer and Director	~~February 28, 2018~~	May 26, 2023
Denis Corin		(Principal Executive Officer and Acting Principal Financial and Accounting Officer)

/s/ William Rosenstadt	~~General Counsel~~	Chief Legal Officer and Director	~~February 28, 2018~~	May 26, 2023
William Rosenstadt

		Director		May 26, 2023
Rick Panicucci

Table of Contents

Q BIOMED INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page No.
~~Report of Independent Registered Public Accounting Firm~~	~~F-2~~

Consolidated Financial Statements: (PCAOB ID # 688)
Consolidated Balance Sheets as of November 30, ~~2017~~2022 and ~~2016~~2021	~~F-3~~	F-2
Consolidated Statements of Operations for the years ended November 30, ~~2017~~2022 and ~~2016~~2021	~~F-4~~	F-3
Consolidated Statements of Changes in ~~Shareholders' Equity (Deficit)~~Stockholders’ Deficit for the years ended November 30, ~~2017~~2022 and ~~2016~~2021	~~F-5~~	F-4
Consolidated Statements of Cash Flows for the years ended November 30, ~~2017~~2022 and ~~2016~~2021	~~F-6~~	F-5
Notes to Consolidated Financial Statements	~~F-7~~	F-6

F-1

Table of Contents

R~~EPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

~~To the Board of Directors and Shareholders~~

~~of Q BioMed Inc.~~

~~We have audited the accompanying consolidated balance sheets of Q BioMed Inc. (the “Company”) as of November 30, 2017 and 2016, and the related consolidated statements of operations~~, changes in stockholders’ equity (deficit) and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Q BioMed Inc., as of November 30, 2017 and 2016, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered losses from operations and relies on the capital markets to fund operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans concerning these matters are also discussed in Note 2 to the consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~/s/ Marcum LLP~~

~~Marcum LLP~~

~~New York, NY~~

~~February 28, 2018~~

~~F-2~~

Q BIOMED INC.

C~~onsolidated~~

Consolidated Balance Sheets

As of November 30,

2017

2016

ASSETS

Current assets:

Cash
$824,783
$1,468,724
Prepaid expenses
  2,500
  -
Total current assets
  827,283
  1,468,724
Total Assets
$827,283
$1,468,724



LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)


Current liabilities:


Accounts payable and accrued expenses
$463,539
$497,936
Accrued expenses - related party
  7,500
  70,502
Accrued interest payable
  -
  48,813
Convertible notes payable (See Note 5)
  -
  2,394,849
Note payable
  -
  100,152
Warrant liability
  -
  168,070
Total current liabilities
  471,039
  3,280,322



Long-term liabilities:


Convertible notes payable (See Note 5)
  -
  231,517
Total long term liabilities
  -
  231,517
Total Liabilities
  471,039
  3,511,839



Commitments and Contingencies (Note 6)





Stockholders' Equity (Deficit):


Preferred stock, $0.001 par value; 100,000,000 shares authorized; no shares issued and outstanding as of November 30, 2017 and 2016
  -
  -
Common stock, $0.001 par value; 250,000,000 shares authorized; 12,206,409 and 9,231,560 shares issued and outstanding as of November 30, 2017 and 2016, respectively
  12,206
  9,231
Additional paid-in capital
  23,187,408
  6,249,357
Accumulated deficit
  (22,843,370)
  (8,301,703)
Total Stockholders' Equity (Deficit)
  356,244
  (2,043,115)
Total Liabilities and Stockholders' Equity (Deficit)
$827,283
$1,468,724


	As of November 30,		As of November 30,
	2022		2021
	(Unaudited)
ASSETS
Current assets:
Cash	$	49,973	$	344,009
Accounts receivable		11,535		80,097
Inventory		—		22,253
Prepaid expenses and other current assets		10,808		13,121
Total current assets		72,316		459,480
Investment		3,143,201		—
Intangible assets, net		300,000		350,000
Total Assets	$	3,515,517	$	809,480

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	2,132,063	$	1,345,319
Accrued expenses		1,545,052		954,309
Accrued expenses - related party		—		71,500
Accrued interest payable		254,686		70,677
Debt		4,109,981		3,053,037
Derivative liabilities		91,158		—
Total current liabilities		8,132,940		5,494,842
Total Liabilities		8,132,940		5,494,842

Commitments and Contingencies (Note 8)

Stockholders' Deficit:
Preferred stock, $0.001 par value; 100,000,000 shares authorized as of November 30, 2022 and 2021		—		—
Convertible Series A, 500,000 shares designated - 227,998 shares issued and outstanding at November 30, 2022 and 2021, respectively		2,160,916		2,161,195
Convertible Series B, 1,000,000 shares designated - 345,000 and 400,000 shares issued and outstanding at November 30, 2022 and 2021, respectively		2,874,623		3,915,512
Convertible Series C, 100,000,000 shares designated – 1,000,000 and no shares issued and outstanding at November 30, 2022 and November 30, 2021, respectively		50,000		—
Common stock, $0.001 par value; 250,000,000 shares authorized; 84,328,041 and 28,647,788 shares issued and outstanding as of November 30, 2022 and 2021, respectively		84,328		28,648
Additional paid-in capital		56,308,513		53,335,901
Accumulated deficit		(66,095,802)		(64,126,618)
Total Stockholders' Deficit		(4,617,422)		(4,685,362)
Total Liabilities and Stockholders' Deficit	$	3,515,517	$	809,480

The accompanying notes are an integral part of these consolidated financial statements.

~~F-3~~

F-2

Table of Contents

Q BIOMED INC.

C~~onsolidated~~

Consolidated Statements of Operations


	For the years ended
	November 30, 2022
	(Unaudited)		November 30, 2021
Net Sales	$	284,352	$	195,597
Cost of sales		293,340		246,846
Gross loss		(8,988)		(51,249)
Operating expenses:
General and administrative expenses		3,311,249		6,263,475
Research and development expenses		125,378		1,073,841
Total operating expenses		3,436,628		7,337,316
Loss from operations		(3,445,616)		(7,388,565)

Other (income) expenses:
Interest expense		1,384,465		506,922
Change in fair value of embedded derivatives		(273,782)		304,153
Gain on Mannin conversion		(3,143,201)		—
Loss on debt extinguishment		384,311		40,910
Loss on issuance of convertible note		12,809		—
Settlement of registration liability		241,875		—
Total other expenses		(1,393,523)		851,985

Net loss		(2,052,093)		(8,240,550)
Accumulated dividend on convertible preferred stock		(473,831)		(500,724)
Deemed dividend for induced conversion of convertible preferred stock		(968,160)		—
Net loss attributable to common stockholders	$	(3,494,084)	$	(8,741,274)

Net loss per share - basic and diluted	$	(0.08)	$	(0.33)
Weighted average shares outstanding, basic and diluted		44,756,818		26,779,270

The accompanying notes are an integral part of these consolidated financial statements.

~~F-4~~

F-3

Table of Contents

Q BIOMED INC.

C~~onsolidated~~

Consolidated Statement of Changes in ~~Shareholders’ Equity (Deficit)~~

Common Stock



Accumulated

Total Stockholders'

Shares

Amount

Additional Paid in Capital

Deficit

Equity (Deficit)

Balance as of November 30, 2015
  8,597,131
$8,597
$865,690
$(1,130,192)
$(255,905)
Issuance of common stock and warrants for services
  341,543
  342
  3,300,772
  -
  3,301,114
Issuance of common stock for acquired in-process research and development
  50,000
  50
  160,450
  -
  160,500
Issuance of common stock and warrants in connection with Private Placement, net of warrant liabilities
  102,256
  102
  80,578
  -
  80,680
Modification of Private Placement Units
  7,502
  7
  22,499

  22,506
Issuance of warrants for services to related party
  -
  -
  830,000
  -
  830,000
Issuance of warrants to settle accounts payable to related party
  -
  -
  30,000
  -
  30,000
Issuance of common stock upon conversion of convertible notes payable
  118,128
  118
  380,768
  -
  380,886
Beneficial conversion feature in connection with issuance of convertible notes
  -
  -
  526,400
  -
  526,400
Issuance of common stock in connection with OID Note
  15,000
  15
  52,200
  -
  52,215
Net loss
  -
  -
  -
  (7,171,511)
  (7,171,511)
Balance as of November 30, 2016
  9,231,560
$9,231
$6,249,357
$(8,301,703)
$(2,043,115)
Issuance of additional common stock to convertible notes holders
  25,641
  26
  98,179
  -
  98,205
Issuance of common stock, warrants and options for services
  153,705
  154
  6,399,431
  -
  6,399,585
Issuance of common stock for acquired in-process research and development
  125,000
  125
  487,375
  -
  487,500
Beneficial conversion feature in connection with issuance of convertible notes
  -
  -
  645,000
  -
  645,000
Issuance of common stock upon conversion of convertible notes payable
  1,650,379
  1,650
  5,972,236
  -
  5,973,886
Issuance of common stock and warrants in exchange for extinguishment of convertible notes payable
  162,000
  162
  518,238
  -
  518,400
Issuance of common stock in exchange for extinguishment of OID Note
  46,875
  47
  149,953
  -
  150,000
Issuance of common stock and warrants for cash, net of offering costs
  791,249
  791
  2,369,719
  -
  2,370,510
Reclassification of warrant liability to equity
  -
  -
  227,940
  -
  227,940
Exercise of warrants
  20,000
  20
  69,980
  -
  70,000
Net loss
  -
  -
  -
  (14,541,667)
  (14,541,667)
Balance as of November 30, 2017
  12,206,409
$12,206
$23,187,408
$(22,843,370)
$356,244

Stockholders’ Deficit


	For the Twelve Months Ended November 30, 2022
																	Total
	Series A Preferred Stock			Series B Preferred Stock			Series C Preferred Stock			Common Stock			Additional Paid		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		in Capital		Deficit		Deficit
Balance as of November 30, 2020	227,998	$	2,161,980	503,134	$	4,968,368	—	$	—	23,816,489	$	23,816	$	47,656,423	$	(55,886,068)	$	(1,075,481)
Issuance of common stock for cash	—		—	—		—	—		—	100,000		100		99,900		—		100,000
Issuance of common stock and warrants for cash	—		—	—		—	—		—	1,213,333		1,213		908,787		—		910,000
Issuance common stock for dividend payment on preferred stock	—		(182,398)	—		(340,627)	—		—	533,610		534		522,491		—		—
Issuance of common stock to convert notes payable	—		—	—		—	—		—	945,631		946		702,668		—		703,614
Issuance of common stock to convert Series B preferred stock	—		—	(103,334)		(1,031,340)	—		—	1,245,089		1,245		1,030,095		—		—
Issuance cost related to issuance of convertible notes	—		—	—		—	—		—	35,000		35		34,790		—		34,825
Beneficial conversion feature related to convertible notes	—		—	—		—	—		—	—		—		290,967		—		290,967
Issuance of warrants in conjunction with convertible note	—		—	—		—	—		—	—		—		252,683		—		252,683
Accumulated dividend on preferred stock	—		181,613	—		319,111	—		—	—		—		(500,724)		—		—
Share based compensation for services	—		—	—		—	—		—	758,636		759		2,337,821		—		2,338,580
Net loss	—		—	—		—	—		—	—		—		—		(8,240,550)		8,240,550
Balance as of November 30, 2021	227,998	$	2,161,195	400,000	$	3,915,512	—		—	28,647,788	$	28,648	$	53,335,901	$	(64,126,618)	$	(4,685,362)
Issuance of common stock and warrants for cash	—		—	—		—	—		—	400,000		400		99,630		—		100,030
Cash proceeds from warrants modification	—		—	—		—	—		—	—		—		20,000		—		20,000
Issuance common stock for dividend payment on preferred stock	—		(182,399)	—		(292,600)	—		—	5,497,333		5,497		469,501		—		—
Issuance of common stock to convert Series B preferred stock	—		—	(104,000)		(1,040,000)	—		—	25,655,298		25,655		1,982,505		—		968,160
Issuance of common stock to convert notes payable	—		—	—		—	—		—	21,025,054		21,025		2,056,361		—		2,077,386
Issuance of common stock to extinguish accrued liabilities	—		—	—		—	—		—	676,627		676		73,223		—		73,899
Issuance of common stock to settle derivative liability	—		—	—		—	—		—	545,000		545		61,810		—		62,355
Accumulated dividend on preferred stock	—		182,120	—		291,711	—		—	—		—		(473,831)		—		—
Share based compensation for services	—		—	—		—	—		—	1,880,941		1,881		390,121		—		392,002
Share based compensation for warrants modification	—		—	—		—	—		—	—		—		277,897		—		277,897
Share based compensation for options modification	—		—	—		—	—		—	—		—		182,436		—		182,436
Adoption of ASU 2020-06	—		—	—		—	—		—	—		—		(290,967)		82,909		(208,058)
Reclassification of warrants and options from equity to liability	—		—	—		—	—		—	—		—		(907,914)		—		(907,914)
Deemed dividend for induced conversion of Series B preferred	—		—	—		—	—		—	—		—		(968,160)		—		(968,160)
Issuance of preferred stock to extinguish loan payable	—		—	—		—	1,000,000		50,000	—		—		—		—		50,000
Net loss	—		—	—		—	—		—	—		—		—		(2,052,093)		(2,052,093)
Balance as of November 30, 2022 (Unaudited)	227,998	$	2,160,916	296,000	$	2,874,623	1,000,000	$	50,000	84,328,041	$	84,328	$	56,308,513	$	(66,095,802)	$	(4,617,422)

The accompanying notes are an integral part of these consolidated financial statements.

~~F-5~~

F-4

Table of Contents

Q BIOMED INC.

C~~onsolidated~~

Consolidated Statement of Cash Flows

For the year ended November 30,

2017

2016

Cash flows from operating activities:

Net loss
$(14,541,667)
$(7,171,511)
Adjustments to reconcile net loss to net cash used in operating activities


Issuance of common stock, warrants and options for services
  6,399,585
  4,131,114
Issuance of common stock for acquired in-process research and development
  487,500
  160,500
Change in fair value of embedded conversion option
  810,017
  (121,000)
Change in fair value of warrant liability
  59,870
  (7,587)
Loss on modification of Private Placement Units
  -
  41,268
Accretion of debt discount
  628,026
  413,894
Loss on conversion of debt
  463,578
  85,123
(Gain) loss on extinguishment of debt
  76,251
  (134,085)
Loss on issuance of convertible debt
  -
  481,000
Changes in operating assets and liabilities:


Prepaid expenses
  (2,500)
  -
Accounts payable and accrued expenses
  (34,397)
  439,134
Accrued expenses - related party
  (63,002)
  70,502
Accrued interest payable
  132,288
  66,389
Net cash used in operating activities
  (5,584,451)
  (1,545,259)



Cash flows from financing activities:


Proceeds received from issuance of convertible notes
  2,500,000
  2,495,000
Proceeds received from exercise of warrants
  70,000
  -
Proceeds received from issuance of note payable
  -
  150,000
Proceeds received for issuance of common stock and warrants , net of offering costs
  2,370,510
  237,575
Net cash provided by financing activities
  4,940,510
  2,882,575



Net increase (decrease) in cash
  (643,941)
  1,337,316



Cash at beginning of period
  1,468,724
  131,408
Cash at end of period
  824,783
$1,468,724



Non-cash financing activities:


Issuance of common stock upon conversion of convertible notes payable
$5,608,514
$295,764
Issuance of common stock and warrants in exchange for extinguishment of convertible notes payable
$442,149
$-
Issuance of common stock in exchange for extinguishment of OID Note
$150,000
$-
Issuance of warrants to settle accounts payable to related party
$-
$30,000
Modification of Series D convertible note recognized as extinguishment
$-
$294,085
Reclassification of warrant liability to equity
$227,940
$-



Cash paid for interest
$-
$-
Cash paid for income taxes
$-
$-


	For the years ended
	November 30, 2022
	(Unaudited)		November 30, 2021
Cash flows from operating activities:
Net loss	$	(2,052,093)	$	(8,240,550)
Adjustments to reconcile net loss to net cash used in operating activities
Share based compensation for services		392,002		2,338,580
Share based consideration related to warrants modification		299,883		—
Share based compensation related to stock options modification		211,936		—
Change in fair value of derivatives		(273,783)		—
Change in fair value of embedded conversion option		—		304,153
Accretion of debt discount		922,599		408,009
Amortization expense		50,000		50,000
Settlement on registration liability		241,875		—
Loss on issuance of convertible note		12,809		—
Loss on debt extinguishment		384,311		40,910
Changes in operating assets and liabilities:
Accounts receivable		68,563		(80,097)
Prepaid expenses and other current assets		24,566		10,965
Accounts payable and accrued expenses		1,474,728		838,693
Accrued interest payable		184,009		27,301
Net cash provided by (used in) operating activities		1,941,404		(4,302,036)

Cash flows from investing activities:
Investment	$	(3,143,201)	$	—
Net cash used by investing activities		(3,143,201)		—

Cash flows from financing activities:
Proceeds received from issuance of convertible notes, net		652,731		3,458,900
Proceeds received from issuance of common stock and warrants		100,030		1,010,000
Proceeds received from issuance of notes to related parties		—		30,000
Cash advances		135,000		—
Proceeds received for warrants modification		20,000		—
Repayment of notes to related parties		—		(30,000)
Net cash provided by financing activities		907,761		4,468,900

Net (decrease) increase in cash		(294,036)		166,864

Cash at beginning of the year		344,009		177,145
Cash at end of the year	$	49,973	$	344,009

Supplemental disclosures:
Cash paid for interest to related parties	$	—	$	(441)
Cash paid for income taxes	$	—	$	—

Supplemental disclosures for noncash investing and financing activities:
Issuance of common stock to convert notes payable and accrued interest	$	2,077,386	$	703,614
Issuance of common stock to convert Series B preferred stock	$	1,040,000	$	1,031,340
Deemed dividend for induced conversion of Series B preferred stock	$	968,160	$	—
Accumulated dividend on convertible preferred stock	$	473,831	$	500,724
Issuance of common stock for dividend payment on preferred stock	$	474,799	$	523,025
Issuance of common stock to extinguish accrued liabilities	$	73,899	$	—
Issuance of common stock to settle derivative liability	$	62,355	$	—
Reclassification of warrants and options from equity to liability due to reassessment under ASC 815	$	907,914	$	—
Adoption of ASU 2020-06	$	208,058	$	—
Beneficial conversion feature related to convertible notes	$	—	$	290,967
Offering cost	$	—	$	69,825

The accompanying notes are an integral part of these consolidated financial statements.

~~F-6~~

F-5

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

N~~ote~~

Note 1 - Organization of the Company and Description of the Business

Q BioMed Inc. (“Q BioMed” or), and its wholly owned subsidiaries Q BioMed Cayman SEZC and QBMG Q BioMed Germany UG (collectively, “the Company”), ~~incorporated in the State of Nevada on November 22, 2013,~~ is a biomedical acceleration and development company focused on licensing, acquiring and providing strategic resources to life sciences and healthcare companies. Q BioMed intends to mitigate risk by acquiring multiple assets over time and across a broad spectrum of healthcare related products, companies and sectors. The Company intends to develop these assets to provide returns via organic growth, revenue production, out-licensing, sale or the spinoff of new public companies.

~~On December 7, 2016,~~

The accompanying consolidated financial statements include the ~~Company formed its~~accounts of the Company’s wholly-owned ~~subsidiary~~subsidiaries. All intercompany balances and transactions have been eliminated in ~~Cayman Islands, “Q BioMed Cayman SEZC” (the “Subsidiary”).~~

consolidation.

Note 2 - Basis of Presentation and Going Concern

The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”).

The Company currently operates in one business segment focusing on licensing, acquiring and providing strategic resources to life sciences and healthcare companies. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker, the Chief Executive Officer, who comprehensively manages the entire business. The Company does not currently operate any separate lines of business.

Going Concern

The accompanying consolidated financial statements are prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

The Company ~~had a~~has and is expected to incur net ~~loss~~losses and cash outflows from operations in pursuit of approximately $14.5 million and $7.2 million during the years ended November 30, 2017 and 2016, respectively, and had net cash used in operating activities of approximately $5.6 million and $1.5 million during years ended November 30, 2017 and 2016, respectively.extracting value from its acquired intellectual property. These ~~matter,~~matters, amongst others, raise doubt about the Company’s ability to continue as a going concern.

As of November 30, 2017, the Company has raised operating funds through contacts, high net-worth individuals and strategic investors. The Company has not generated any revenue from operations since inception and has limited assets upon which to commence its business operations. At November 30, 2017, the Company had cash and cash equivalents of approximately $825,000. On February 2, 2018, the Company netted approximately $4,915,000 from the registered sale of common stock and warrants to purchase common stock. The Company’s expected monthly burn rate is approximately $600,000. As such, management

Management anticipates that the Company will have to raise additional funds and/or generate revenue from drug sales within twelve months to continue operations. Additional funding will be needed to implement the Company’s business plan that includes various expenses such as fulfilling our obligations under licensing agreements, legal, operational set-up, general and administrative, marketing, employee salaries and other related start-up expenses. Obtaining additional funding will be subject to a number of factors, including general market conditions, investor acceptance of our business plan and initial results from our business operations. These factors may impact the timing, amount, terms or conditions of additional financing available to us. If the Company is unable to raise sufficient funds, management we will be forced to scale back the Company’s operations or cease ~~our~~its operations.

Management has determined that there is substantial doubt about the ~~Company's~~Company’s ability to continue as a going concern within one year after the consolidated financial statements are issued. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

COVID 19

The impact of the worldwide spread of a novel strain of coronavirus (“COVID-19”) has been unprecedented and unpredictable, but based on the Company’s current assessment, the Company does not expect any material impact on its long-term strategic plans, operations and its liquidity due to the worldwide spread of COVID-19. However, the Company is continuing to assess the effect on its operations by monitoring the spread of COVID-19 and the actions implemented to combat the virus throughout the world and its assessment of the impact of COVID-19 may change.

F-6

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

Note 3 – Summary of Significant Accounting Policies

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates, and such differences may be material to the consolidated financial statements. The more significant estimates and assumptions by management include among others: the valuation allowance of deferred tax assets resulting from net operating losses, the valuation of warrants on the Company’s stock and the valuation of embedded ~~conversion options~~derivatives within the Company’s convertible notes payable.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times ~~may exceed~~are insured by the Federal ~~depository insurance coverage ("FDIC"~~Deposit Insurance Corporation (“FDIC”) ofup to $250,000. At November 30, ~~2017,~~2022 and 2022, the Company had a cash balance ~~on deposit~~ that ~~exceeded the balance~~is insured by the FDIC ~~limit by approximately $471,000 with one bank and was exposed to credit risk for amounts held in excess of the FDIC~~ limit. ~~The Company does not anticipate nonperformance by these institutions.~~ The Company had not experienced losses on these ~~accounts and management believes the Company is not exposed to significant risks on such~~ accounts.

~~F-7~~

Fair ~~value~~Value of ~~financial instruments~~

Financial Instruments

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

●

Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

●

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

●

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the years ended November 30, ~~2017~~2022 and ~~2016.~~2021. The respective carrying value of cash and accounts payable approximated their fair values as they are short term in nature.

Intangible Assets

Intangible assets subject to amortization include acquired intellectual property for a marketable product acquired in November 2018. The intellectual property is being amortized over the estimated life remaining at the time of acquisition, which is 10 years.

Intangible assets are monitored for potential impairment whenever events or circumstances indicate that the carrying amount may not be recoverable and are also reviewed annually to determine whether any impairment is necessary. Management has assessed the economic life of the Company’s Metastron asset to be at least equal to its remaining use life of eight years. As such, management modelled the recoverability test using seven years of estimated future cash flows. Based on this projection, the $350,000 net carrying

F-7

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

value of the Company’s Metastron asset is fully recoverable and therefore there was no impairment loss as of November 30, 2022 and 2011.

Debt Issuance Costs

Direct costs incurred to issue non-revolving debt instruments are recognized as a reduction to the related debt balance in the accompanying Consolidated Balance Sheets and amortized to interest expense over the contractual term of the related debt using the effective interest method.

Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in the Statement of Operations. If the conversion feature does not require recognition of a bifurcated derivative, the convertible debt instrument is evaluated for consideration of any beneficial conversion feature (“BCF”) requiring separate recognition. When the Company records a BCF, the intrinsic value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument (offset to additional paid-in capital) and amortized to interest expense over the life of the debt.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the Statement of Operations. Depending on the features of the derivative financial instrument, the Company uses either the Black-Scholes option-pricing model or a binomial model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

Common Stock ~~Based Compensation Issued~~Warrants

The Company classifies as equity any warrants that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any warrants that (i) require net-cash settlement (including a requirement to ~~Nonemployees~~

~~Common~~net cash settle the contract if an event occurs and if that event is outside the Company’s control), (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement) or (iii) that contain reset provisions that do not qualify for the scope exception. The Company assesses classification of its common stock ~~issued~~warrants at each reporting date to ~~non-employees~~determine whether a change in classification between assets and liabilities is required. The Company evaluated these warrants to assess their proper classification and determined that the common stock warrants meet the criteria for ~~acquiring goods~~equity or ~~providing services is recognized~~liability classification in the balance sheet. The warrants classified as liability are initially recorded at fair value, with gains and losses arising from changes in fair value recognized in other income (expense) in the consolidated statements of operations at each period end while such instruments remain outstanding.

Revenue Recognition

The core principle of Topic 606 (FASB ASC 606) is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The revenue recognition guidance contained in Topic 606, to follow the five-step revenue recognition model along with other guidance impacted by this standard: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transportation price; (4) allocate the transportation price; (5) recognize revenue when or as the entity satisfies a

F-8

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

performance obligation. Previous practices were broadly consistent with this approach, and the company determined the amount of revenue based on the amount customer paid or promised to pay.

The Company satisfies its performance obligation to deliver products when the customer has received the products, which is when title to the goods has transferred and the customer has control of the products. Payments from customers are ~~obtained~~generally received within 90 days of when the product is delivered.

Because the Company’s agreements have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations.

Stock Based Compensation

Share-based compensation cost is recorded for all option grants and awards of non-vested stock based on the grant date fair value of the award and is recognized over the service ~~period. If~~period required for the ~~award contains performance conditions,~~award.

Stock-based compensation expense is recognized in the ~~measurement~~consolidated financial statements based on the fair value of the awards granted. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the ~~earlier~~requisite service period, which generally represents the vesting period. The Company calculates the fair value of stock options using the ~~date~~Black-Scholes option-pricing model at which a commitment for performance by the non-employee is reached or the date at which performance is reached. A performance commitment is reached when performance by the non-employee is probable because of sufficiently large disincentives for nonperformance.

grant date.

General and administrative expenses

The significant components of general and administrative expenses consist of ~~interest expense, bank~~stock-based compensation, investor relations fees, ~~printing, filing fees, other office expenses,~~consulting, and ~~business license and permit~~professional fees.

Research and development

The Company expenses the cost of research and development as incurred. Research and development expenses include costs incurred in funding research and development activities, license fees, and other external costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made.

~~F-8~~

For the year 2022, $3.6 million was converted from Licensing fees and Share awards expensed in Research and Development in recognition of shares received in Investment in an Associate - Mannin. We incurred a 500k loss between the value of shares received and the amount expended in Research and Development

Income Taxes

Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

F-9

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

The Company applies a more-likely-than-not recognition threshold for all tax uncertainties, which only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of November 30, ~~2017,~~2021 and 2020, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

The Company’s policy for recording interest and penalties associated with audits is to record such ~~expense~~expenses as a component of income tax expense. There were no amounts accrued for penalties or interest during the years ended November 30, ~~2017.~~2022 and 2021. Management is currently unaware of any issues under review that could result in significant payments, accruals, or material deviations from its position.

Modification of Equity Classified Awards

From time-to-time equity classified awards may be modified. On the modification date, the Company estimates the fair value of the awards immediately before and immediately after modification. The incremental increase in fair value is recognized as expense immediately to the extent the underlying equity awards are vested and on a straight-line basis over the same remaining amortization schedule as the unvested underlying equity awards. The classification of stock-based awards, including whether such instruments should be recorded as liabilities or as equity, is reassessed on the modification date.

Induced Conversion of Convertible Preferred Stock

The Company accounts for gains or losses on extinguishment of equity-classified preferred stock as deemed dividends, to be included in the net loss per common stockholder used to calculate earnings per share. The difference between (1) the fair value of the consideration transferred to the holders of the preferred stock and (2) the carrying amount of the preferred stock (net of issuance costs) is subtracted from (or added to) net loss to arrive at net loss available to common stockholders in the calculation of earnings per share.

Sequencing Policy

The Company adopted a sequencing policy under ASC 815-40-35 (“ASC 815”) whereby in the event that reclassification of contracts from equity to liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares as a result of certain financial instruments with a potentially indeterminable number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive financial instruments, with the earliest financial instruments receiving the first allocation of shares. Pursuant to ASC 815, issuance of stock-based awards to the Company’s employees, non-employees or directors recognized under ASC 718 are not subject to the sequencing policy. Any modifications of awards (e.g., options or warrants) that remain subject to vesting, or any modifications of awards that continue to be held by active employees, are not subject to the sequencing policy. Modifications of vested awards held by non-employees are subject to the sequencing policy.

Recent Accounting Standards

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. It specifically addresses: (1) how an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-

F-10

~~Recent accounting pronouncements~~

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

classified written call option that remains equity classified after modification or exchange; (2) how an entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; and (3) how an entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. This ASU will be effective for all entities for fiscal years beginning after December 15, 2021. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. Early adoption is permitted, including adoption in an interim period. The Company is still evaluating the impact of adoption the ASU 2021-04 on its condensed consolidated financial statements.

Recently Adopted Accounting Standards

In ~~March 2016,~~August 2020, the FASB issued ASU No. ~~2016-06,~~ 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and ~~Hedging (Topic 815)~~Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): ~~Contingent Put~~Accounting for Convertible Instruments and ~~Call Options~~Contracts in ~~Debt Instruments. This new standard~~an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the embedded derivative analysis for debt instruments containing contingent call or put options by removing the requirement to assess whether a contingent event is related to interest rates or credit risks. The Company adopted ASU No. 2016-06diluted earnings per share calculation in ~~the fiscal year ended November 30, 2017 and its adoption did not have a material impact on the Company's consolidated financial statements.~~

~~In August 2016, the FASB issued ASU No. 2016-15,Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~.~~This new standard clarifies~~ certain aspects of the statement of cash flows, including the classification of debt prepayment or debt extinguishment costs or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees and beneficial interests in securitization transactions.areas. This new standard also clarifies that an entity should determine each separately identifiable source of use within the cash receipts and payments on the basis of the nature of the underlying cash flows. In situations in which cash receipts and payments have aspects of more than one class of cash flows and cannot be separated by source or use, the appropriate classification should depend on the activity that is likely to be the predominant source or use of cash flows for the item. This new standard will be effective for the Company on December 1, 2018. The Company is currently evaluating the impact of the new standard on its consolidated financial statements.

In January 2017, the FASB issued an ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this Update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Update may be adopted early. The Company adopted the provisions of ASC 2017-01 effective December 1, 2016. Adoption did not have a material impact on the Company's financial position, results of operations, or cash flows.

~~In May 2017, the FASB issued ASU 2017-09,Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. The new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718.The~~ ASU is effective for annual reporting periods ~~including interim periods within those annual reporting periods,~~ beginning after December 15, ~~2017. Early adoption is permitted,~~2021, including ~~adoption in any interim period.The Company adopted ASU 2017-09 as of December 1, 2017. The adoption of this standard did not impact the Company’s consolidated financial statements.~~

~~In July 2017, the FASB issued ASU 2017-11,~~ Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The ASU allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted classified as liabilities. A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, such as warrants, an entity will treat the value of the effect of the down round, when triggered, as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. The guidance in ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, ~~and~~but no earlier than fiscal years beginning after December 15, 2020. This update permits the ~~guidance is to be applied using a full or~~use of either the modified retrospective ~~approach. Management is currently assessing~~or fully retrospective method of transition. The Company elected to early adopt this guidance on December 1, 2021, on a modified retrospective basis. The adoption resulted in approximately $291,000 decrease in additional paid in capital from the ~~impact~~derecognition of the ~~adoption~~bifurcated equity component, $208,000 increase in debt from the derecognition of ~~ASU 2017-11 will have on~~ the ~~Company’s consolidated financial statements.~~

~~F-9~~

discount associated with the bifurcated equity component and $83,000 decrease to the opening balance of accumulated deficit.

Note 4 – Loss per share

Basic net loss per share was calculated by dividing net loss by the weighted-average shares of common ~~shares~~stock outstanding during the period. Diluted net loss per share was calculated by dividing net loss by the weighted-average shares of common ~~shares~~stock outstanding during the period using the treasury stock method or the two-class method, whichever is more dilutive. The table below summarizes potentially dilutive securities that were not considered in the computation of diluted net loss per share because they would be ~~anti-dilutive.~~

Potentially dilutive securities

November 30, 2017

November 30, 2016

Warrants (Note 10)
  3,083,995
  1,047,500
Convertible debt (Note 5)
  -
  1,067,105
Options (Note 10)
  450,000
  -

anti-dilutive (amounts are rounded to nearest thousand).


Potentially dilutive securities	November 30, 2022	November 30, 2021
Series A convertible preferred stock	2,280,000	2,280,000
Series B convertible preferred stock	8,457,000	11,429,000
Series C convertible preferred stock	1,000,000	—
Common stock purchase warrants	11,752,000	11,752,000
Stock Options	4,450,000	4,450,000
Convertible Notes	86,360,000	4,898,000
Potentially dilutive securities	114,299,000	34,809,000

Note 5 – ~~Convertible Notes~~Intangible Asset Acquisition

On November 23, 2018, the Company entered into an Asset Sale Agreement (“ASA”) with GE Healthcare Limited (“GE”) whereby the Company acquired GE’s radiopharmaceutical drug, Metastron® and all related intellectual property including, but not limited to sales and distribution data, market authorizations and trademarks for Metastron® in various countries in exchange for an upfront payment of $0.5 million, a one-time milestone payment based on future sales, and royalty payments based on future sales. The Company did not acquire any workforce, manufacturing, inventory, sales agreements, or distribution agreements associated with Metastron®. The first commercial sale of Metastron™ by the Company will occur only after the successful transfer or assignment of all intellectual property,

	~~November 30, 2017~~	~~November 30, 2016~~
~~Series A Notes:~~
~~Principal value of 10%, convertible at $2.00 at November 30, 2016.~~	$-	$~~12,500~~
~~Fair value of bifurcated embedded conversion option of Series A Notes~~	-	~~12,000~~
~~Debt discount~~	-	~~(2,194~~)
~~Carrying value of Series A Notes~~	-	~~22,306~~

~~Series B Notes:~~
~~Principal value of 10%, convertible at $2.00 at November 30, 2016.~~	-	~~55,000~~
~~Fair value of bifurcated embedded conversion option of Series B Notes~~	-	~~55,000~~
~~Debt discount~~	-	~~(19,229~~)
~~Carrying value of Series B Notes~~	-	~~90,771~~

~~Series C Notes:~~
~~Principal value of 10%, convertible at $1.55 at November 30, 2016.~~	-	~~576,383~~
~~Fair value of bifurcated embedded conversion option of Series C Notes~~	-	~~838,000~~
~~Debt discount~~	-	~~(250,969~~)
~~Carrying value of Series C Notes~~	-	~~1,163,414~~

~~Series D Notes:~~
~~Principal value of 10%, convertible at $1.85 at November 30, 2016.~~	-	~~160,000~~
~~Debt discount~~	-	~~(140,961~~)
~~Carrying value of Series D Notes~~	-	~~19,039~~

~~Series E Notes:~~
~~Principal value of 10%, convertible at $2.50 at November 30, 2016.~~	-	~~180,000~~
~~Debt discount~~	-	~~(124,164~~)
~~Carrying value of Series E Notes~~	-	~~55,836~~

~~Secured Convertible Debenture:~~
~~Principal value of 5%, convertible at $2.98 at November 30, 2016.~~	-	~~1,500,000~~
~~Fair value of bifurcated contingent put option of Secured Convertible Debenture~~	-	~~72,000~~
~~Debt discount~~	-	~~(297,000~~)
~~Carrying value of Secured Convertible Debenture Note~~	-	~~1,275,000~~
~~Total short-term carrying value of convertible notes~~	$-	$~~2,394,849~~
~~Total long-term carrying value of convertible notes~~	$-	$~~231,517~~

~~F-10~~

F-11

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

~~During~~

material sales and distribution data, technical transfer, and the establishment of new manufacturing sites by the Company and under the appropriate regulatory filings required by the jurisdictions in which Metastron™ is sold.

The acquired assets are concentrated in a single asset and the set is not considered a business. As such, the transaction is recognized as the acquisition of a finite-lived intangible asset. The one-time milestone payment based on future sales, and royalty payments based on future sales will be recognized when the payments are probable and estimable, which is expected to be when the related sales targets are achieved and the payments payable to GE. The acquired asset is being amortized on a straight-line basis over its estimated 10-year life. Amortization expense for the years ended November 30, 2022, and 2021 was $50,000. The estimated remaining amortization expense for each of the five succeeding fiscal year:


Year ended November 30,
2023		50,000
2024		50,000
2025		50,000
2026		50,000
2027		50,000
Thereafter		50,000
	$	300,000

Note 6 – Investment

For the year ended November 30, ~~2017, all~~2022, $3.6 million was converted from Licensing fees and Share awards expensed in Research and Development in recognition of shares received in Investment in an Associate - Mannin. We incurred a $500k loss between the value of shares received and the amount expended in Research and Development.

Note 7 – Debt

The table below summarizes outstanding convertible notes ~~and secured convertible debentures were converted by the holders or extinguished. See discussion below.~~

~~During the year ended~~as of November 30, ~~2017~~2022, and ~~2016,~~2021 (amounts are rounded to nearest thousand):


	November 30, 2022		November 30, 2021
Convertible Notes Payable:
Principal value of 2021 Debentures	$	2,408,000	$	3,506,000
Fair value of bifurcated contingent put option		1,099,000		867,000
Debt discount		(70,000)		(1,320,000)
2021 Convertible notes payable, net		3,437,000		3,053,000
Principal value of 2022 Debentures		560,000		—
Fair value of bifurcated contingent put option		333,000		—
Debt discount		(305,000)		—
2022 Convertible notes payable, net		588,000		3,053,000
Cash advances		85,000		—
Total carrying value of convertible notes payable	$	4,110,000	$	3,053,000

2022 Convertible Notes Payable

2022 Debentures

July 2022 Debenture

F-12

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

On July 1, 2022, the Company ~~recognized interest expense~~entered into a Securities Purchase Agreement with an accredited investor (“DL”) pursuant to which the Company issued to DL a Convertible Promissory Note (the “DL Note”) in the aggregate principal amount of ~~approximately $628,000 and $414,000, respectively,~~$119,888. The DL Note includes an original issue discount of $16,888 (includes $1,250 due diligence fee retained by DL). The Company also incurred an additional $3,000 of issuance cost resulting from ~~amortization~~the payment of the ~~debt discount for Series A, B, C, D~~lender’s legal fees. The DL Note has a maturity date of July 1, 2023, and ~~E Notes.~~

~~Series A Notes~~

~~The Series A convertible notes payable~~the Company has agreed to pay interest on the unpaid principal balance of the DL Note at the rate of 10.0% per annum from the date on which the DL Note is issued (the ~~“Series A Notes”~~“Issue Date”) ~~are~~until the same becomes due and payable, ~~18 months after issuance and bear interest~~whether at ~~10% per annum. At~~maturity or upon acceleration or by prepayment or otherwise. The Company has the ~~election~~right to prepay the DL Note, provided it makes a payment including a prepayment to DL as set forth in the DL Note. The outstanding principal amount of the ~~holder, outstanding principal and accrued but unpaid interest under~~DL Note may not be converted prior to the ~~Series A Notes~~period beginning on the date that is ~~convertible~~180 days following the Issue Date. Following the 180th day, DL may convert the DL Note into shares of the Company’s common stock at ~~any time prior to maturity at~~ a conversion price ~~per share~~ equal to ~~the higher of: (i) forty percent (40%) discount to~~80% of the average ~~closing~~of 3 lowest trading price ~~for the ten (10) consecutive trading days~~with a 10-day look back immediately preceding the ~~notice~~date of ~~conversion or (ii) $1.25 per share. At maturity, any remaining outstanding principal~~conversion.

The contingent share-settled redemption feature, contingent acceleration upon merger, acquisition, and ~~accrued but unpaid interest outstanding under~~event of default within the ~~Series A Notes will automatically convert into shares~~DL Note are all contingent put options that are required to be bifurcated as a single compound embedded derivative at fair value, with subsequent changes in fair value recognized in the Condensed Consolidated Statement of Operations. The fair value estimate is a Level 3 measurement. The Company estimated the fair value of put option on the merger, acquisition, and event of default by estimating the probability of the ~~Company’s common stock under~~occurrence of triggering date (the “Probability factor”) and applying the ~~same terms. As~~probability to the discounted maximum redemption premium for any given payment with the following key inputs:


	July 1, 2022
Strike price	$	0.05
Terms (years)		1.0
Volatility		138	%
Risk-free rate		2.8	%
Dividend yield		0	%
Probability factor		20	%

The aggregate fair value of ~~November 30, 2017,~~the embedded put option on the issuance date was approximately $104,000, which exceeded the net proceeds of $100,000, resulting in an approximate loss of $4,000 upon the on issuance of the convertible note.

August 2022 Debenture

On August 10, 2022 (the “Effective Date’), the Company entered into a Securities Purchase Agreement with an accredited investor (“the Lender”) pursuant to which the Company issued to the Lender a Convertible Promissory Note (the “August Note”) in the aggregate principal amount of $275,000 for a purchase price of $250,000. The August Note has a maturity date of February 6, 2023, and the Company has ~~no Series A Notes outstanding.~~

~~Series B Notes~~

~~The Series B convertible notes payable (the “Series B Notes”) have~~agreed to pay interest on the ~~same terms as~~unpaid principal balance of the ~~Series A Notes. During~~August Note at the ~~year ended November 30, 2016, the Company issued an additional~~rate of ~~$105,000 in principal of Series B notes to third party investors. As of November 30, 2017, the Company has no Series B Notes outstanding.~~

~~Series C Notes~~

~~The Series C convertible notes payable (the “Series C Notes”) are due and payable 18 months after issuance and bear interest at 10%~~10.0% per annum. AtUpon the ~~election~~later of the ~~holder, outstanding principal~~date the obligations under this Note are satisfied or the 6-month anniversary and ~~accrued but unpaid~~for 30 days thereafter, the Lender has the exclusive right to elect conversion of any original issue discount or interest amount due under ~~the Series C Notes is convertible~~this August Note, into shares of the Company’s common stock at a conversion price per share equal to ~~the lesser of a 40% discount~~$0.035. The conversion option does not apply to the average closing price for the 10 consecutive trading days immediately preceding the notice of conversion or $1.55, but in no event shall the conversion price be lower than $1.25 per share. If the average VWAP, as defined in the agreement, for the ten trading days immediately preceding the maturity date $5.00 or more, any remaining outstanding principal ~~and accrued but unpaid interest outstanding under the Series C Notes will automatically convert into shares of the Company’s common stock under the same terms.~~

amount. The terms of the Series C Notes also provided that up until maturity date, the Company cannot enter into any additional, or modify any existing, agreements with any existing or future investors that are more favorable to such investor in relation to the Series D Note holders, unless, the Series C Note holders are provided with such rights and benefits (“Most Favored Nations Clause”).

During the year ended November 30, 2016, the Company issued an additional of $550,000 in principal of Series C notes to third party investors. As of November 30, 2017, the Company has no Series C Notes outstanding.

~~Series D Notes~~

The Series D convertible notes payable (the “Series D Notes”) are due and payable 18 months after issuance and bear interest at 10% per annum. At the election of the holder, outstanding principal and accrued but unpaid interest under the Series D Notes is convertible into shares of the Company’s common stock at a fixed conversion price per share equal to $1.85. The Series D Notes automatically convert upon maturity at $1.85 per share if the ten trading days VWAP immediately preceding maturity is $5.00 or greater. Additionally, if the Company’s common shares are up-listed to a senior exchange such as the AMEX or NASDAQ, all monies due under the Series D Notes will automatically convert at $1.85 per share. During the year ended November 30, 2016, the Company issued $160,000 in principal of Series D notes to third party investors.

The terms of the Series D Notes also included the Most Favored Nations Clause. The Most Favored Nations Clause was viewed as providing the Series D Note holder with down-round price protection. As such, the embedded conversion option ~~in the Series D Note was separately measured~~and contingent put upon an event of default are required to be bifurcated as a single compound embedded derivative at fair value ~~upon~~under ASC 815, because it is not considered to be classified in stockholders’ equity. The subsequent changes in fair value

F-13

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

are recognized in the Condensed Consolidated Statement of Operations. The fair value estimate is a Level 3 measurement. The Company estimated the fair value with the following key inputs:


	August 10, 2022
Strike price	$	0.04
Terms (years)		0.5
Volatility		200	%
Risk-free rate		3.1	%
Dividend yield		0	%

The aggregate fair value of the conversion option on the issuance date was approximately $23,000, which was recognized as an additional debt discount.

As additional consideration for making the August Note, the Company agreed to issue 300,000 unregistered common shares within 10 business days to the Lender (the “Commitment shares”). The commitment to issue the shares was valued at the Effective Date fair value of approximately $11,000 and recognized as an additional debt discount. The commitment is a forward contract, recognized at fair value, as a result of applying the Company’s sequencing policy, and recognized at fair value with ~~subsequent~~ changes in fair value recognized in ~~current earnings.~~

the Company’s Condensed Consolidated Statements of Operations until settled on August 24, 2022.

September 2022 Debenture

On September 30, 2016, the Company amended the Most Favored Nations Clause of the Series D Notes to restrict the Company from taking dilutive action without the Series D note holders’ consent, effectively removing the down-round price protection. The amendment of the Series D Notes was recognized as an extinguishment of the originally issued Series D Notes, resulting in a gain on extinguishment of approximately $134,000.

At the amendment date, the conversion price of the amended Series D Notes was below the quoted market price of the Company’s common stock. As such, the Company recognized a beneficial conversion feature equal to the intrinsic value of the conversion price on the amendment date, resulting in a discount to the amended Series D Notes of $160,000 with a corresponding credit to additional paid-in capital. The resulting debt discount is presented net of the related convertible note balance in the accompanying Consolidated Balance Sheets and is amortized to interest expense over the note’s term.

~~As of November 30, 2017, the Company has no Series D Notes outstanding.~~

~~F-11~~

~~Series E Notes~~

The Series E convertible notes payable (the “Series E Notes”) are due and payable 18 months after issuance and bear interest at 10% per annum. At the election of the holder, outstanding principal and accrued but unpaid interest under the Series E Notes is convertible into shares of the Company’s common stock at a fixed conversion price per share equal to $2.50. The Series E Notes automatically convert upon maturity at $2.50 per share if the ten trading days VWAP immediately preceding maturity is $5.00 or greater. Additionally, if the Company’s common shares are up-listed to a senior exchange such as the AMEX or NASDAQ, all monies due under the Series E Notes will automatically convert at $2.50 per share. During the year ended November 30, 2016, the Company issued $180,000 in principal of Series E Notes to third party investors.

At the issuance date, the conversion price of the Series E Notes was below the quoted market price of the Company’s common stock. As such, the Company recognized a beneficial conversion feature equal to the intrinsic value of the conversion price on the amendment date, resulting in a discount to the Series E Notes of approximately $141,000 with a corresponding credit to additional paid-in capital. The resulting debt discount is presented net of the related convertible note balance in the accompanying Consolidated Balance Sheets and is amortized to interest expense over the note’s term. As of November 30, 2017, the Company has no Series E Notes outstanding.

~~Secured Convertible Debentures~~

~~On November 29, 2016,~~15, 2022, the Company entered into a securities purchase agreement with an accredited investor, pursuant to ~~place Convertible Debentures~~which the Company sold a convertible debenture (the ~~“Debentures”~~“September Debenture”) ~~with a one-year term~~ in the ~~aggregate~~ principal amount of ~~up to $4,000,000.~~ $102,637.

The ~~initial closing occurred on November 30, 2016~~September Debenture has a maturity date of xxx, 2023, provided that in case of an event of default, the debenture may become at the holder’s election immediately due and payable. The September Debenture carries an interest rate of 6% per annum, provided that any principal or interest which is not paid when the Company issued a Debenture for $1,500,000. The second closing is scheduled for within three days of the date on which the Company registers for resale all of the shares of common stock into which the Debentures may be converted (the “Conversion Shares”). The Debenturesdue shall bear interest at the rate of 5%22% per ~~annum. In addition,~~annum from the due date until payment (the “Default Interest”). The Company ~~must pay to an affiliate of the holder a fee equal to 5% of the amount of~~may prepay the Debenture at ~~each closing.~~120% of the outstanding aggregate principal amount within the first 60 days of issuance and at 130% of the sum of the outstanding principal amount, the accrued and unpaid interest on the unpaid principal amount and any Default Interest from 61 to 180 days after issuance.

October 2022 Debenture

On October 18, 2022, the Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company sold a convertible debenture (the “October Debenture”) in the principal amount of $63,250.

The October Debenture has a maturity date of xxx, 2023, provided that in case of an event of default, the debenture may become at the holder’s election immediately due and payable. The October Debenture carries an interest rate of 6% per annum, provided that any principal or interest which is not paid when due shall bear interest at the rate of 22% per annum from the due date until payment (the “Default Interest”). The Company may prepay the Debenture at 120% of the outstanding aggregate principal amount within the first 60 days of issuance and at 130% of the sum of the outstanding principal amount, the accrued and unpaid interest on the unpaid principal amount and any Default Interest from 61 to 180 days after issuance.

November 2022 Debenture

On November 22, 2022, the Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company sold a convertible debenture (the “November Debenture”) in the principal amount of $62,387.

The November Debenture has a maturity date of xxx, 2023, provided that in case of an event of default, the debenture may become at the holder’s election immediately due and payable. The November Debenture carries an interest rate of 6% per annum, provided that

F-14

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

any principal or interest which is not paid when due shall bear interest at the rate of 22% per annum from the due date until payment (the “Default Interest”). The Company may prepay the Debenture at 120% of the outstanding aggregate principal amount within the first 60 days of issuance and at 130% of the sum of the outstanding principal amount, the accrued and unpaid interest on the unpaid principal amount and any Default Interest from 61 to 180 days after issuance.

2021 Debentures

February Debenture

On February 12, 2021, the Company issued a debenture for $0.5 million (the “February Debenture”) pursuant to a securities purchase agreement with an accredited investor dated February 12, 2021. The February Debenture may be converted at any time on or prior to maturity at the lower of ~~$4.00~~$1.15 or 93% of the average of the four lowest daily ~~VWAP of the Company’s common stock~~VWAPs during the ~~ten~~10 consecutive trading days immediately preceding the conversion date, provided that as long as ~~the Company is~~we are not in default under the 2020 Debenture, the conversion price may never be less than ~~$2.00.~~$1.00. The debenture has a maturity date of February 12, 2022, provided that in case of an event of default, the debenture may become at the holder’s election immediately due and payable. The debenture bears interest at the rate of 5.5% per annum, and on issuance, the Company paid to the holder a commitment fee equal to 2% of the amount of the debenture.

The aggregate fair value of the contingent put options on the issuance date was approximately $28,000, which was recognized as an additional debt discount.

On January 21, 2022, the Company issued 1,055,000 shares of common stock to convert $0.5 million of outstanding debt and interest and extinguished $95,000 of embedded derivative liability upon the conversion. The conversion price was reduced to $0.50. The Company recognized a loss on debt extinguishment of approximately $232,000 as a result of the reduction of conversion price for the nine months ended August 31, 2022.

July Debenture

On July 26, 2021, the Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company sold a convertible debenture (the “July Debenture”) in the principal amount of $806,250 and a warrant to purchase up to 645,000 shares of common stock (the “Warrant”) for a total purchase price of $750,000. The Company also paid $18,750 for the lender’s legal fee.

The July Debenture has a maturity date of April 26, 2022, provided that in case of an event of default, the debenture may become at the holder’s election immediately due and payable. The July Debenture carries an interest rate of 10% per annum, provided that any principal or interest which is not paid when due shall bear interest at the rate of 15% per annum from the due date until payment (the “Default Interest”). The Company may ~~not convert any portion~~prepay the Debenture at 120% of the ~~Debenture if such conversion would result in~~outstanding aggregate principal amount within the ~~holder beneficially owning more than 4.99%~~first 60 days of ~~the Company’s then issued common stock, provided that such limitation may be waived by the holder.~~

~~Any time after the six-month anniversary~~issuance and at 130% of the issuance of the Debenture, if the daily VWAP of the Company’s common stock is less than $2.00 for a period of twenty consecutive trading days (the “Triggering Date”) and only for so long as such conditions exist after a Triggering Date, the Company shall make monthly payments beginning on the last calendar day of the month when the Triggering Date occurred. Each monthly payment shall be in an amount equal to the sum of ~~(i)~~ the outstanding principal amount, ~~outstanding as of~~ the Triggering Date divided by the number of such monthly payments until maturity, (ii) a redemption premium of 20% in respect of such principal amount being paid (up to a maximum of $300,000 in redemption premium) and (iii) accrued and unpaid interest ason the unpaid principal amount and any Default Interest from 61 to 180 days after issuance.

The holder may convert the July Debenture in its sole discretion at any time on or prior to maturity at the lower of each payment date. The Company may, no more than twice, obtain a thirty-day deferral of a monthly payment due as a result of a Triggering Date through the payment of a deferral fee in the amount equal to 10% of the total amount of such monthly payment. Each deferral payment may be paid by the issuance of such number of shares as is equal to the applicable deferral payment divided by a price per share equal to 93%$1.00 or 85% of the average of the four (4) lowest ~~daily~~VWAPs during the 20 Trading Days prior to the date of such calculation. The “Variable Conversion Price” shall equal, subject to an initial floor price of $0.35 (the “Floor Price”), the lower of $1.00 and 85% of the average of the four (4) lowest VWAPs during the 20 Trading Days prior to the date of such calculation. The initial Floor Price shall be readjusted to $0.10 if following the Issue Date, VWAP of the ~~Company’s common stock during the~~Company shall be less than $0.35 for a total of ten ~~consecutive Trading Days immediately preceding the due date in respect~~days.

The Warrant has an exercise price of ~~such monthly payment begin deferred, provided that such shares issued will be immediately freely tradable shares in the hands of the holder.~~

~~The Company also executed a Registration Rights Agreement pursuant to which it is required to file a registration statement for the resale of the shares of common stock into which the Debenture~~$1.25 and may be ~~converted within 30 days of the initial closing.~~exercised in cash or via cashless exercise, exercisable for five (5) years from issuance. The ~~Company is required to use its best efforts to cause such registration statement to be declared effective within 90 days of the initial closing.~~

The Company also entered into a Security Agreement to secure payment and performance of its obligations under the Debenture and related agreements pursuant to which the Company granted the investor a security interest in all of its assets. The security interest granted pursuant to the Security Agreement terminates on (i) the effectiveness of the Registration Statement if the Company’s common stock closing price is greater than $2.00 for the twenty consecutive trading days prior to effectiveness or (ii) any time after the effectiveness of the registration statement that the Company’s common stock closing price is greater than $2.00 for the twenty consecutive trading days.

Upon issuance of the Debentures, the Company recognized an aggregate debt discount of approximately $1.028 million, resulting from the recognition of beneficial conversion features aggregating $870,000 and bifurcated embedded derivatives aggregating $158,000. The beneficial conversion features were recognized as the intrinsicgrant date relative fair value of the ~~conversion~~Warrant was estimated to be $253,000 as determined based on the relative fair value allocation of the proceeds received. The Warrant were valued using the Black-Scholes option ~~on issuance of each Debentures.~~ pricing model using the following inputs:

The ~~monthly payment~~contingent share-settled redemption feature and contingent prepayment provision within the ~~Debentures is a~~July Debenture are all contingent put ~~option~~options that isare required to be ~~separately measured~~bifurcated as a single compound embedded derivative at fair value, with subsequent changes in fair value

F-15

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

recognized in the Consolidated Statement of Operations. The Company estimated the fair value of the monthly payment provision, at issuance and at each reporting period, using probability analysis of the occurrence of a Triggering Date applied to the discounted maximum redemption premium for any given payment. The probability analysis utilized an expected volatility for the Company's common stock ranging from 101.58% to 146.26% and a risk free rates from 0.53% to 1.08%. The maximum redemption was discounted at 20%-22%, the calculated effective rate of the Debentures before measurement of the contingent put option. The fair value estimate is a Level 3 measurement.

~~On October 3, 2017,~~ The Company estimated the ~~Company amended~~fair value with the Debentures to extend the maturity date from November 30, 2017 to November 30, 2018, and issued 25,641 restricted shares of its common stock to the holder of the Debentures as consideration for conversion. following key inputs:


	July 1, 2022
Strike price	$	0.05
Terms (years)		1.0
Volatility		138	%
Risk-free rate		2.8	%
Dividend yield		0	%
Probability factor		20	%

The aggregate fair value of the ~~restricted shares~~contingent put options on the issuance date was approximately $209,000, which was recognized as an additional debt discount.

On December 15, 2021, the Company and the holder entered into a ~~loss on conversion. As~~Mutual Release Agreement pursuant to which the holder agreed to add the $241,875 to the outstanding principal balance of ~~November 30, 2017,~~July Debenture, for no ~~Debentures were outstanding.~~

~~F-12~~

~~Embedded Conversion Options~~

~~In connection with~~consideration received by the ~~issuance~~Company, in order to resolve a breach of certain registration provisions of the ~~Series A, B, C~~securities purchase agreement.

The July Debenture is past maturity and is currently in default. However, the ~~original issuance of~~Company has not received any default notice from the ~~Series D Notes during~~holder.

During the year ended November 30, ~~2016,~~2022, the Company issued an aggregate 3,633,862 shares of common stock to convert approximately $413,000 of outstanding debt and extinguished approximately $159,000 embedded derivative liability upon the conversion. The Company recognized a loss on debt extinguishment of approximately $152,000 as a result of the reduction of conversion price for the year ended November 30, 2022.

September Debenture

On September 29, 2021, the Company entered into a securities purchase agreement with an accredited investor (“Lender”), pursuant to which the Company sold a convertible debenture (the “September Debenture”) in the principal amount of $2,200,000 with twelve-months term. The September Debenture includes an original issue discount of ~~approximately $750,000,~~$185,000 and ~~a loss on issuance of $481,000, which represents~~$15,000 for the ~~excess~~payment of the Lender’s legal fees and carries an interest rate of 6% per annum. The Company also incurred other issuance costs of $247,350. On October 26, 2021, the September Debenture maturity date was extended for an additional 3 months to December 20, 2022.

The Company may prepay the September Debenture at 105% of the outstanding aggregate principal amount plus accrued interest within the first 60 days of issuance, at 112% of the outstanding aggregate principal amount plus accrued interest from 61-120 days after issuance and at 124% of the outstanding aggregate principal amount plus accrued interest from 121-180 days after issuance. The Debenture may not be prepaid after 180 days.

The Lender has the right to convert all or any amount of the outstanding aggregate principal amount at any time at a fixed conversion price of $1.00 per share. The conversion price after six months shall be fixed at $0.50 per share.

However, in the event the Company’s Common Stock trades below $0.50 per share for more than ten (10) consecutive trading days, the Lender is entitled to convert all or any amount of the outstanding aggregate principal amount into shares of the Company’s Common Stock at a Conversion Price for each share of Common Stock equal to 85% of the average of the 4 lowest VWAP’s in the prior 20 trading days. As a result of entering into the “September Debenture”, for which such instruments contained a variable conversion feature with no floor, the Company has adopted sequencing policy (see Note 3).

The contingent share-settled redemption feature and contingent prepayment provision within the September Debenture are all contingent put options that are required to be bifurcated as a single compound embedded derivative at fair value, with subsequent changes in fair

F-16

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

value recognized in the Condensed Consolidated Statement of Operations. The fair value estimate is a Level 3 measurement. The Company estimated the fair value with the following key inputs:


	September 29, 2021
Strike price	$	0.50
Terms (years)		1.0
Volatility		66	%
Risk-free rate		0.1	%
Dividend yield		—	%

The aggregate fair value of the ~~embedded conversion~~contingent put options on the issuance date was approximately $278,000, which was recognized as an additional debt discount.

On April 8, 2022, the Company issued 245,000 shares of common stock as commitment shares pursuant to the securities purchase agreement. The commitment to issue the shares was valued at ~~initial issuance~~the Effective Date fair value of ~~$1.2 million over~~approximately $177,000 and recognized as an additional debt discount. The commitment is a forward contract, recognized at fair value, as a result of applying the ~~principal amount of convertible debt issued. The embedded conversion feature is separately measured~~Company’s sequencing policy, and recognized at fair value with changes in fair value recognized in ~~current operations. Management used a binomial valuation model, with fourteen steps~~the Company’s Condensed Consolidated Statements of ~~the binomial tree, to estimate the fair value of the embedded conversion option at issuance of the Series A, B, C and the original issuance of the Series D Notes issued during~~Operations until settled on April 8, 2022.

For the year ended November 30, ~~2017~~2022, the Company issued 21,025,054 shares of common stock to convert approximately $305,000 of outstanding debt and ~~2016,~~extinguished $146,000 of embedded derivative liability upon the conversion.

The fair value of the contingent put option in all outstanding debentures with the ~~following key inputs:~~

Embedded derivatives in Convertible Notes at inception

For the years ended
November 30,

2017 2016
Stock price $ - $ 2.60 - $3.26
Terms (years) - 1.5
Volatility - 116.77 %
Risk-free rate - 0.51% - 0.76 %
Dividend yield - 0.00 %

Embedded derivatives in Convertible Notes at period end
As of November 30,
2017 2016
Stock price $ - $ 3.43
Term (years) - 0.25 - 1.05
Volatility - 156.74% - 163.49 %
Risk-free rate - 0.48% - 0.80 %
Dividend yield - 0.00 %

Asfeature are revalued as of November 30, ~~2017~~2022 and ~~2016,~~2021 based on the ~~embedded conversion options have an aggregate~~following weighted average key inputs:


	November 30, 2022			November 30, 2021
Strike price	$	0.55		$	0.71
Terms (years)		0.3			0.8
Volatility		200	%		71	%
Risk-free rate		2.9	%		0.2	%
Dividend yield		0	%		0	%

The following table presents changes in Level 3 liabilities measured at fair value for the years ended November 30, 2022, and 2021. Both observable and unobservable inputs were used to determine the fair value of $0positions that the Company has classified within the Level 3 category. Unrealized gains and ~~$977,000, respectively, and are presented on a combined basis~~losses associated with liabilities within the ~~related loan host in the Company’s Consolidated Balance Sheets. The tables below presents~~Level 3 category include changes in fair value ~~for the embedded conversion options, which is a Level 3 fair value measurement:~~that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs (amounts are rounded to nearest thousand).


Balance December 1, 2020	$	—
Additional derivative liability		603,000
Debt extinguishment		(40,000)
Change in fair value		304,000
Balance November 30, 2021	$	867,000
Issuance of convertible notes		271,000
Debt extinguishment		(425,000)
Change in fair value		721,000
Balance November 30, 2022	$	1,434,000

Rollforward of Level 3 Fair Value Measurement for the Year Ended November 30, 2017

Balance at November 30, 2016

Issuance

Net unrealized gain/(loss)

Conversion

Balance at November 30, 2017

$977,000
  86,000
  810,017
  (1,873,017)
$-

Rollforward of Level 3 Fair Value Measurement for the Year Ended November 30, 2016

Balance at November 30, 2015

Issuance

Net unrealized gain/(loss)

Settlements

Balance at November 30, 2016

$229,000
  1,303,000
  (121,000)
  (434,000)
$977,000

~~F-13~~

F-17

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

~~Conversions of debt~~

Debt Conversion

The following ~~conversions of occurred~~table summarizes debt conversion during the ~~year~~years ended November 30, ~~2017:~~

Principal

Shares

Series A conversions
$12,500
  5,936
Series B conversions
  55,000
  27,995
Series C conversions
  576,383
  407,484
Series D conversions
  160,000
  91,782
Series E conversions
  180,000
  76,455
Secured Debenture conversions
  4,000,000
  1,040,727
Total

$4,983,883
  1,650,379

2021, and 2020 (amounts are rounded to nearest thousand):

Debt Amendment

On October 26, 2021, the Company entered into an extension agreement with the holder of September 2021 Debenture (the “Holder”) to extend the maturity date from September 30, 2022, to December 29, 2022. The ~~following conversions debt occurred during the year ended November 30, 2016:~~

Principal

Shares

Series A conversions
$37,500
  22,148
Series B conversions
  100,000
  51,111
Series C conversions

  58,617
  44,869
Total

$196,117
  118,128

~~As the embedded conversion option in each convertible note and in each Debenture had been separately measured at fair value or separately~~amendment was recognized as a ~~beneficial conversion feature,~~troubled debt restructuring.

On July 22, 2021, the ~~conversion~~Company entered into an amendment agreement to the securities purchase agreement with the Holder, pursuant to which, the floor price of ~~each instrument~~the 2020 Debenture was reduced to $0.50 per share. Additionally, the maturity date of the 2020 Debenture was extended to December 31, 2021. The amendment was recognized as ana debt extinguishment, of debt. The Company recognized an aggregate loss on conversion of debt of approximately $464,000 as the difference between the aggregate fair value of common stock issued to the holders of approximately $6.6 million and the aggregate net carrying value of the convertible notes and debentures, including the bifurcated conversion options.

~~Note 6 – Note Payable~~

As of November 30, 2017, and 2016, the Company had an outstanding promissory note of $0 and $150,000 (“OID Note”), respectively. The OID Note does not pay interest and matured on November 3, 2017. At the issuance date, the $150,000 OID Note was issued together with 15,000 restricted shares of the Company’s common stock for cash proceeds of $150,000. As such, the Company recognized a beneficial conversion feature, resulting in a ~~discount to the OID Note~~gain on debt extinguishment of approximately $52,000 with a corresponding credit to additional paid-in capital. The resulting debt discount is presented net of the related convertible note balance in the accompanying consolidated balance sheet as of November 30, 2016 and was amortized to interest expense over the note’s term.

$15,000.


	For the Years ended
	November 30, 2022		November 30, 2021
Interest expense based on the coupon interest rate of the outstanding debt	$	252,000	$	96,000
Accretion of debt discount		1,073,000		408,000
Other		60,000		3,000
Total interest expense	$	1,385,000	$	507,000

Note 78 – Commitments and Contingencies

~~Legal~~

~~The~~

Equity Financing

On May 5, 2021, the Company isentered into an agreement with Aedesius Holdings Ltd. (“Aedesius”) pursuant to which the Company has agreed with Aedesius that the Company would sell it up to 16,000,000 units (the “Units”) for a total aggregate of up to $20,000,000.

Aedesius failed to perform on its obligation and to date has not ~~currently involved in~~invested any ~~legal matters arising~~monies in the ~~normal course of business. From time to time,~~Company. As a result, the Company ~~could become involved in disputes~~has terminated any and ~~various litigation matters that arise in~~all rights with respect to future fundings and will pursue whatever rights and remedies the ~~normal course~~Company has at its disposal for breach of ~~business. These may include disputes and lawsuits related to intellectual property, licensing, contract law and employee relations matters.~~ contract.

Legal

Periodically, the Company reviews the status of significant matters, if any exist, and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation.

As previously reported, on July 12, 2022, the Company was notified that WSI PBG, LLC (“WSI”) filed a complaint against the Company seeking to recover $196,216 in unpaid consulting fees, plus costs and expenses of litigation. The Company elected not to litigate this suit so as not to increase its liability exposure. Not unexpectedly, on August 24, 2022, WSI obtained a judgment against the Company in the amount of $203,784. The Company is exploring its options in addressing this judgment, including terms of settlement that would result in a satisfaction of this Judgment over a limited period of time.

F-18

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

On July 19, 2022, we received notice that the Activus Group (“Activus”) filed a complaint for fees it alleges are due in the amount of $129,600 plus fees and expenses for consulting services provided by Activus as a result of an agreement between the parties. We have not filed an answer and are currently determining our next steps in settlement.

On August 15, 2022, the Company received notice that another of its unpaid contractors, Diligent Health Solutions, LLC. (“DHS”), had filed suit against the Company seeking $106,000 in unpaid consulting fees. Here, too, the Company elected not to litigate this suit so as not to increase its liability exposure. As a result of the foregoing, DHS obtained a default judgment against the Company in the amount of $111,000. The company is exploring its options in addressing this judgment, including terms of settlement that would result in a satisfy of this Judgment over a limited period of time.

Advisory Agreements

On March 11, 2022, the Company entered into an engagement letter agreement (“Agreement”) with EF Hutton, division of Benchmark Investments, LLC (“EF Hutton”) to effectuate the Corporation’s Firm Commitment Public Offering and Uplisting and to engage EF Hutton to act as the placement agent for a bridge or other private offering consisting of approximately $2 million. The Company ~~expects~~shall be responsible for EF Hutton’s external counsel’s legal costs irrespective of whether the Offering is consummated or not, subject to ~~issue an aggregate~~a maximum of ~~approximately 27,000 shares~~$50,000 in the event that there is not a Closing. The Company incurred $15,000 of ~~common stock subsequent to~~expense for the year ended November 30, ~~2017 through the end term~~2022, and no payment was made as of ~~arrangements, February 2018.~~

November 30, 2022.

Lease Agreement

In December 2016, ~~the Subsidiary~~one of our subsidiaries entered into a lease agreement for its office space located in Cayman Islands for $30,000 per annum. The initial term of the agreement ~~ends~~ended in December 2019, and ~~can be~~the Company has renewed its office lease agreement for another three ~~years.~~

years with the same terms. This agreement does not identify a specific asset and does not convey the use of substantially all of the shared office capacity. As such, this agreement does not contain a lease under ASC 842. The Company recognizes monthly license payments as incurred over the term of the arrangement.

Rent ~~expenses was~~expense is classified within general and administrative expenses on a straight-line basis and ~~was approximately $27,000 and $0 for~~included in the ~~year ended November 30, 2017 and 2016.~~

~~F-14~~

accompanying Consolidated Statements of Operations as follows:

License Agreements

Mannin

On October 29, 2015, the Company entered into a Patent and Technology License and Purchase Option Agreement (“Exclusive License”) with a vendor whereby the Company was granted a worldwide, exclusive, license on, and option to, acquire certain intellectual property (“Mannin IP”) which initially focused on developing a first-in-class eye drop treatment for glaucoma within the four-year term of the Exclusive License. ~~The technology platform may be expanded in scope beyond ophthalmological uses and may include cystic kidney disease and others. Pursuant~~

On March 26, 2019, the Company entered into an amendment to the ~~Executive~~Patent and Technology License and Purchase Option Agreement that it initially entered into with Mannin Research Inc. on October 29, 2015 (the “Mannin Agreement”). Under such amendment, the

F-19

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

term of the option granted under the Mannin Agreement was extended to October 29, 2021, in exchange for the Company ~~has~~issuing 100,000 shares to Mannin Research Inc. on April 9, 2019.

On September 1, 2020, the Company further amended the license agreement allowing Mannin to grant an ~~option~~exclusive license to ~~purchase~~Mannin GmbH (its wholly owned German subsidiary) in order fully take advantage of the ~~Mannin IP within the next four years upon: (i) investing a minimum of $4,000,000~~German government grant to Mannin. The agreement also confirms our ongoing investment into the Tie2 platform to create, and therefore maintain economic value for us and our shareholders. The Company has agreed to contribute funds in Mannin GmbH. We shall pay Mannin $1.5 million in cash payable in three instalments, thereof $0.7 million of which has been paid, $0.4 million of which was due on December 31, 2020, and $0.4 million to be paid by June 30, 2021. In addition, we paid Mannin $0.75 million in shares of our common stock valued as of June 15, 2020, in full satisfaction of R&D payables, contracted by Mannin in development of the ~~intellectual property and (ii) possibly issuing additional shares~~Tie2 platform. We continue to have the right to 100% of the ~~Company’s common stock based on meeting pre-determined valuation~~revenues derived from the Mannin Tie2 technology platform, until such time that Mannin and ~~market conditions. The purchase price for~~its subsidiaries have independently raised at least $2.0 million in funds, at which time the ~~IP is $30,000,000 less the amount of cash paid by the Company for development and the value of the common stock issued~~parties have agreed to ~~the vendor.~~

a profit share structure reducing our future capital commitments to Mannin R&D.

During the years ended November 30, ~~2017~~2022, and ~~2016,~~2021, the Company incurred approximately ~~$1.9 million~~$0.1 and $1.1 million, respectively, in research and development expenses to fund the costs of development of the eye drop treatment for glaucoma pursuant to the Exclusive ~~License, of which an aggregate of $2.0 million and $0.7~~License.

For the year ended November 30, 2022, $3.6 million was ~~already paid as~~converted from Licensing fees and Share awards expensed in Research and Development in recognition of ~~November 30, 2017 and 2016, respectively. Through November 30, 2017,~~shares received in Investment in an Associate - Mannin. We incurred a $500k loss between the ~~Company has funded an aggregate~~value of ~~$2.7 million to Mannin under the Exclusive License.~~

In the event that: (i) the Company does not exercise the option to purchase the Mannin IP; (ii) the Company fails to invest the $4,000,000 within four years from the date of the Exclusive License; or (iii) the Company fails to make a diligent, good faith and commercially reasonable effort to progress the Mannin IP, all Mannin IP shall revert to the vendorshares received and the ~~Company will be granted the right to collect twice the monies invested through that date of reversion by way of a royalty along with other consideration which may be perpetual.~~

~~Bio-Nucleonics~~

amount expended in Research and Development.

Washington University

On ~~September 6, 2016,~~March 9, 2019, the Company entered into an Exclusive License Agreement with Washington University for license of a diagnostic marker for determining the ~~Patent and Technology License and Purchase Option Agreement (the “BNI Exclusive License”). with Bio-Nucleonics Inc. (“BNI”) whereby~~severity of glaucoma using the expression levels of Growth Differentiation Factor 15. The agreement calls for the Company ~~was granted a worldwide, exclusive, perpetual, license on, and option to, acquire certain BNI intellectual property (“BNI IP”) within the three-year term of the BNI Exclusive License.~~

In exchange for the consideration, the Company agreed to, upon reaching various milestones, issue to BNI an aggregate of 110,000 shares of common stock that are subject to restriction from trading until commercialization of the product (approximately 12 months) and subsequent leak-out conditions, and provide funding to BNI for an aggregate of $850,000 in cash, of which the Company had paid $466,000 as of November 30, 2017. Once the Company has funded up to $850,000 in cash, the Company may exercise its option to acquire the BNI IP at no additional charge. In September 2016, the Company issued 50,000 shares of common stock, with a fair value of $160,500, to BNI pursuant to the BNI Exclusive License.

~~During the years ended November 30, 2017 and 2016, the Company incurred approximately $467,000 and $219,000, respectively, in research and development expenses pursuant to the BNI Exclusive License.~~

In the event that: (i) the Company does not exercise the option to purchase the BNI IP; (ii) the Company fails to make the aggregate cash payment within three years from the date of the Exclusive License; or (iii) the Company fails to make a diligent, good faith and commercially reasonable effort to progress the BNI IP, all BNI IP shall revert to BNI and the Company shall be granted the right to collect twice the monies invested through that date of reversion by way of a royalty along with other consideration which may be perpetual.

~~Asdera~~

On April 21, 2017, the Company entered into a License Agreement on Patent & Know-How Technology (“Asdera License”) with Asdera LLC (“Asdera”) whereby the Company was granted a worldwide, exclusive, license on certain Asdera intellectual property (“Asdera IP”). The initial cost to acquire the Asdera License is $50,000 and the issuance of 125,000 shares of the Company’s common stock, with a fair value of $487,500, of which the Company had fully paid and issued as of November 30, 2017, and recorded in research and development expenses in the accompanying Consolidated Statements of Operations. In addition to royalties based upon net sales of the product candidate, if any, the Company is required to make certain additional payments upon the following milestones:

●	~~the filing of an investigational new drug application (the “IND”) with the US Food and Drug Administration (“FDA”);~~

●	~~successful interim results of Phase II/III clinical trial of the product candidate;~~

●	~~FDA acceptance of a new drug application;~~

●	~~FDA approval of the product candidate; and~~

●	~~achieving certain worldwide net sales.~~

~~F-15~~

Subject to the terms of the Agreement, the Company will be in control of the development and commercialization of the product candidate and are responsible for the costs of such development and commercialization. The Company has undertaken a good-faith commitment to (i) initiate a Phase II/III clinical trial at the earlier of the two-year anniversary of the agreement or one year from the FDA’s approval of the IND and (ii) to make the first commercial sale by the fifth-anniversary of the agreement. Failure to show a good-faith effort to meet those goals would mean that the Asdera IP would revert to Asdera. Upon such reversion, Asdera would be obligated to pay ~~the Company royalties on any sales~~an initial fee of ~~products derived~~approximately $88,000, pay annual maintenance fees ranging from ~~the Asdera IP until such time that Asdera has paid the Company twice the sum that the Company had provided Asdera prior~~$15,000 to ~~the reversion.~~

~~OMRF~~

~~OMRF License Agreement~~

On June 15, 2017, the Company entered into a Technology License Agreement (“OMRF License Agreement”) with the Rajiv Gandhi Centre for Biotechnology, an autonomous research institute under the Government of India (“RGCB”), and the Oklahoma Medical Research Foundation (“OMRF” and together with RGCB, the “Licensors”), whereby the Licensors granted the Company a worldwide, exclusive, license on intellectual property related to Uttroside B (the “Uttroside B IP”). Uttroside B is a chemical compound derived from the plant Solanum nigrum Linn, also known as Black Nightshade or Makoi. The Company seeks to use the Uttroside B IP to create a chemotherapeutic agent against liver cancer.

The initial cost to acquire the OMRF License Agreement is $10,000, which will be payable upon reaching certain agreed conditions. In addition to royalties based upon net sales of the product candidate, if any, the Company is required to$75,000, make additional payments upon the following milestones:

●

~~the completion~~●

The first commercial sale of ~~certain preclinical studies (the “Pre-Clinical Trials”);~~a companion diagnostic product;

●

~~the filing~~●

Initiation of ~~an investigational new drug application (the “IND”) with the US Food and Drug Administration (“FDA”)~~a clinical trial for a diagnostic product to support FDA PMA or 510(k) regulatory approval or the ~~filing of the equivalent of an IND with the~~ foreign ~~equivalent of the FDA;~~equivalent;

●	~~successful completion of each of Phase I, Phase II and Phase III clinical trials;~~

●	~~FDA approval of the product candidate;~~

●	PMA or 510(k) regulatory approval by the FDA or the foreign ~~equivalent of the FDA of the product candidate;~~equivalent; and

●

~~achieving certain worldwide net sales; and~~●

The first commercial sale of a diagnostic product.

●	~~a change of control of QBIO.~~

~~Subject~~

In addition to the ~~terms~~above payments, royalty payments based upon sales of ~~the Agreement, the Company will be in control~~a companion diagnostic product or diagnostic product are required.

F-20

Table of ~~the development and commercialization of the product candidate and are responsible for the costs of such development and commercialization. The Company has undertaken a good-faith commitment~~Contents

Q BIOMED INC.

Notes to (i) fund the Pre-Clinical Trials and (ii) to initiate a Phase II clinical trial within six years of the date of the Agreement. Failure to show a good-faith effort to meet those goals would mean that the RGCB License Agreement would revert to the Licensors.Consolidated Financial Statements

~~No milestones have been reached to date on these license agreements.~~

Note ~~8 -~~9 – Related Party Transactions

The Company entered into consulting agreements with certain management personnel and stockholders for consulting and legal services. Consulting and legal expenses resulting from such agreements were ~~approximately $420,000 and $300,000 for the year ended November 30, 2017 and 2016, respectively, and were~~ included within general and administrative expenses in the accompanying Consolidated Statements of ~~Operations.~~

Operations as follows (amounts are rounded to nearest thousand):

On February 1, 2021, the Company issued 35,000 shares to Mr. Rosenstadt, the Company’s Chief Legal Officer and director, for his services performed in connection with December 2020 financing. The fair value was approximately $35,000, which was recorded as part of debt issuance cost to the 2020 Debenture (see note 5).

On April 16, 2021, the Company entered into two unsecured promissory note agreements (the “Notes”) with certain management personnel for an aggregate principal amount of $30,000. The Notes bear interest at 5% per annum and are payable by August 31, 2021. During the quarter ended August 31, 2021, the Company made full repayment of $30,000 to the management personnel, including all outstanding interest.

On May 29, 2022 the company issued 250,000 shares at a nominal value of 10c per share to Mr. Rosenstadt , the company’s Chief Legal Officer and director, in lieu of cash for his monthly services.

On May 29, 2022, the company issued 200,000 shares at a nominal value of 10c per share to Mr Corin, the company’s Chief Executive Officer, as partial payment of his monthly salary in lieu of cash.

Note 910 - Stockholders’ ~~Equity (Deficit)~~

Deficit

As of November 30, ~~2017,~~2022, and ~~2016,~~2021, the Company is authorized to issue up to 250,000,000 shares of its $0.001 par value common stock and up to 100,000,000 shares of its $0.001 par value preferred stock.

Preferred Shares

The original issue price and the liquidation value per share, as of November 30, 2022, of each class of preferred stock is as follows:


	Original Issue Price		Liquidation Value
	Per Share		Per Share
Series A Preferred Share	$	10.00	$	10.20
Series B Preferred Share	$	10.00	$	10.25
Series C Preferred Share	$	0.05	$	—

During the years ended November 30, 2022 and 2021, the Company issued total 5,497,333 shares and 533,610 shares of common stock as dividend payment on Series A and Series B preferred stock for the amount of $0.5 million and $0.5 million, respectively.

During the year ended November 30, 2022, the Company issued 25,655,298 shares of common stock to convert 104,000 shares of Series B preferred stock. The Company recognized deemed dividend for the difference between the carrying amount of the preferred stock and the fair value of the common stock exchanged for such preferred stock of approximately $1 million for the year ended November 30, 2022, in the Consolidated Statements of Operations.

During the year ended November 30, 2022, the Company issued 1,000,000 shares of Series C preferred stock in the amount of $50,000 for settlement of an amount due to officers and directors.

~~F-16~~

F-21

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

~~Private Placement~~

~~2016 activity~~

~~In May 2016,~~

The Company had accumulated dividends payable on the Preferred Shares of approximately $0.5 million and $0.1 million as of November 30, 2022, and 2021, respectively.

Common Shares

2022Activities

Issuance of common shares for services

During the year ended November 30, 2022, the Company issued an aggregate of 1,880,941 shares of the Company’s common stock to various vendors for advisory services, valued at approximately $88,000 based on the estimated fair market value of the stock on the date of grant. The Company also recognized approximately $240,000 related to the vesting of stock options and restricted awards. The $240,000 was recognized within general and administrative expenses in the accompanying Consolidated Statement of Operations for the year ended November 30, 2022.

Issuance of common shares for cash

On February 14, 2022, the Company entered into a ~~subscription agreement with an investor in connection with~~series of securities purchase agreements for the ~~Company’s private placement (“May Private Placement”), generating gross proceeds~~sale of ~~$50,000 by selling 20,000~~400,000 units ~~(each, Unit A”)~~ at a ~~price per Unit A of $2.50, with each Unit A consisting~~$0.25 unit sales price. The Company raised $100,000 in cash. Each unit consisted of one common share ~~of common stock~~ and ~~a two-year~~one warrant to purchase one share of ~~the Company’s~~ common stock at an exercise price of ~~$3.50~~$0.50. The common warrants issued on February 22, 2022, have a fair value of $0.28 per ~~share.~~

~~The subscription agreement requires~~share, see Note 11.

Issuance of common shares for debt conversion

During the year ended November 30, 2022, the Company ~~to issue the May Private Placement investor additional common shares if the Company were to issue common stock or issue securities convertible or exercisable into~~issued 21,025,054 shares of common stock ~~at a price below $2.50 per share within 90 days from~~to convert approximately $1,246,000 of outstanding debt and interest and extinguished approximately $365,000 of embedded derivative liabilities Additionally, the ~~closing~~Company reversed approximately $118,000 of unamortized debt discount upon the ~~May Private Placement.~~conversion. The ~~additional shares are calculated as~~Company recognized approximately $384,000 of debt extinguishment loss for the ~~difference between the~~year ended November 30, 2022.

Issuance of common stock ~~that would have been~~for preferred stock conversion

During the year ended November 30, 2022, the Company issued ~~in the May Private Placement using the new price per unit less~~25,655,298 shares of common stock ~~already issued pursuant~~ to convert approximately 104,000 shares of Series B preferred stock.

Issuance of common shares for preferred stock dividends

During the ~~May Private Placement.~~

~~In August 2016,~~year ended November 30, 2022, the Company ~~consummated another private placement, for gross proceeds~~issued a total of ~~approximately $10,000 by selling 6,500 units at a purchase price of $1.55 per unit. As a result, the Company issued the May Private Placement investor an additional 12,258~~5,497,333 shares of common stock ~~according to the agreement.~~

In September 2016, the Company entered into a subscription agreement (the “Subscription Agreement”) with certain investors in connection with the Company’s private placement (“September Private Placement”), generating gross proceeds of $112,500 by selling 37,498 units (each, “Unit B”) at a price per Unitas dividend payment on Series A and Series B ~~of $3.00, with each Unit B consisting of one share~~preferred stock.

2021 Activities

Issuance of common ~~stock and a two-year warrant to purchase one share of~~shares for services

During the ~~Company’s common stock at an exercise price of $5.00 per share.~~

Inyear ended November 2016, the Company entered into additional Subscription Agreements with certain investors, generating gross proceeds of $65,000 by selling 26,000 units (each, “Unit C”) at a price per Unit C of $2.50, with each Unit C consisting of one share of common stock and a two-year warrant to purchase one share of the Company’s common stock at an exercise price of $4.00 per share.

The Subscription Agreement requires the Company to issue the investor additional units if the Company were to issue common stock or issue securities convertible or exercisable into shares of common stock at a price below a specified price per share within 90 days from the closing of the private placement. The additional units are calculated as the difference between the common stock that would have been issued using the new price per unit less shares of common stock already issued pursuant to the private placement.

Pursuant to the Subscription Agreement, the Company issued an additional of 7,502 units to the September Private Placement investors or no additional consideration. In addition, the Company also modified the exercise price of the warrants issued in the Unit B to $4.00 per share, which in effect, made the Unit B equivalent to Unit C (together as “Private Placement Unit”). The Company recorded approximately $41,000 as loss in connection with the issuance of additional units and modification of the warrants in the accompanying consolidated statements of operations, resulted from the value of the additional shares issued of approximately $23,000 and the change in warrant liability of approximately $19,000.

~~2017 activity~~

On August 1, 2017, the Company closed its private placement (“August Private Placement”), selling an aggregate of 953,249 units (“Units”) at a price of $3.20 per Unit, for an aggregate cash proceeds of approximately $2.4 million, net of offering costs, and the retirement of $0.5 million in principal and accrued interest of the Debentures. A Unit consists of one common stock and one warrant exercisable for five years from the date of issuance into a share of the Company’s common stock at an exercise price of $4.50.

~~In connection with the August Private Placement,~~30, 2021, the Company issued an aggregate of ~~39,246 warrants to the placement agent as consideration. These warrants have the same terms with the warrants issued in the August Private Placement.~~

~~In January 2017, the Company issued 20,000~~758,636 shares of the Company’s common stock ~~upon receiving the notice to exercise the warrants at an exercise price of $3.50 included in Unit A sold in the private placement held in May 2017, for an aggregate purchase price of $70,000.~~

~~Issued for services~~

~~2016 activity~~

During the year ended November 30, 2016, the Company issued an aggregate of 341,543 shares of common stock, valued at approximately $1.6 million, and five-year warrants to purchase 175,000 shares of common stock at exercise prices ranging from of $1.45 to $3.00 per share for advisory services. The warrants vest 25% per quarter over the next year and were valued at $377,500 using inputs described in Note 9. The Company recognized the value of the warrants over the vesting period.

In addition, the Company issued fully-vested five-year warrants to a stockholder, a director and general counsel of the Company to purchase an aggregate of 375,000 shares of common stock at strike prices ranging from $1.45 to $4.15 per share. The warrants were valued at $957,500 using inputs described in Note 9. The warrants were issued for services and settlement of a $30,000 in accounts payable.

~~F-17~~

In July 2016, the Company issued five-year warrants to purchase an aggregate of 300,000 shares of the Company’s common stock at $1.45 to two members of the Company’s Board of Director for their compensation for their board services. The warrants vest 25% per quarter starting on grant date and were valued at $390,000 using inputs described in Note 9. The Company recognized the value of the warrants over the vesting period.

~~The Company recognized general and administrative expenses of approximately $4.1 million, as a result of these transactions during the year ended November 30, 2016.~~

~~The estimated unrecognized stock-based compensation associated with these agreements is approximately $399,000 and will be recognized over the next 0.2 year.~~

~~2017 activity~~

The Company entered into customary consulting arrangements with various counterparties to provide consulting services, business development and investor relations services. During the year ended November 30, 2017, the Company issued an aggregate of 153,705 shares of the Company common stock to various vendors for ~~investor relation and introductory~~advisory services, valued at approximately $0.7 million based on the estimated fair market value of the stock on the date of grant and was recognized within general and administrative expenses in the accompanying ~~consolidated statements~~Condensed Consolidated Statements of ~~operations~~Operations.

F-22

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

Issuance of common shares for cash

On February 26, 2021, the Company issued 100,000 shares of common stock for cash proceeds of $0.1 million.

On May 20, 2021, the Company entered into a series of securities purchase agreements for the sale of 1,213,333 units at a $0.75 per unit sales price. The Company raised approximately $0.9 million in cash. Each unit consisted of one common share and one warrant to purchase one share of common stock at an exercise price of $1.25. The common warrants issued on May 20, 2021 have a fair value of $0.80 per share.

Issuance of common shares for debt conversion

During the year ended November 30, ~~2017.~~

~~In September 2017,~~2021, the Company issued ~~warrants to purchase up to 50,000~~945,631 shares of ~~the Company’s~~ common stock to ~~two vendors~~convert $0.7 million of outstanding debt and interest.

Issuance of common shares for ~~services. The warrants are exercisable for three years at a per share price of $4.00.~~

~~On October 3, 2017,~~preferred stock conversion

Between January and February 2021, the Company ~~amended the Debentures to extend the maturity date from November 30, 2017 to November 30, 2018, and~~ issued ~~25,641 restricted~~1,245,089 shares of ~~its~~ common stock to convert approximately 103,000 shares of Series B preferred stock.

Financing Agreements

On September 15, 2022, the ~~holder~~Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company sold a convertible debenture (the “September Debenture”) in the principal amount of $102,637.

On October 18, 2022, the ~~Debentures as consideration.~~

Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company sold a convertible debenture (the “October Debenture”) in the principal amount of $62,250.

Note 1011 - Warrants and Options

~~Warrant Liability~~

As of November 30, 2016, the Company had outstanding warrants issued as part of the private placement units initially classified as liabilities because the exercise price may be adjusted downward, in certain circumstances, for a ninety-day period following their initial issuance. Warrant liabilities were measured at fair value, with changes in fair value recognized each reporting period in the Statement of Operations. The warrants ceased being liability classified at the conclusion of the ninetieth day from issuance. As a result, an aggregate of approximately $228,000 in warrant liability was reclassified to equity during the year ended November 30, 2017. All other warrants are equity classified.

In September 2017, the Company issued equity-classified warrants to purchase up to 50,000 shares of the Company’s common stock to two vendors for services. The warrants are exercisable for three years at a per share price of $4.00.

The warrant liability is a Level 3 fair value measurement, recognized on a recurring basis. Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level 3 category. As a result, the unrealized gains and losses for liabilities within the Level 3 category may include changes in fair value that were attributable to both observable inputs (e.g., changes in market interest rates) and unobservable inputs (e.g., probabilities of the occurrence of an early termination event).

~~Fair value of warrant liability at November 30, 2016~~	$~~168,070~~
~~Issuance of new warrant liability~~	-
~~Change in fair value of warrant liability~~	~~59,870~~
~~Reclassification of warrant liability to equity~~	~~(227,940~~)
~~Fair value of warrant liability at November 30, 2017~~	$-

Summary of warrants

The following represents a summary of all outstanding warrants to purchase the Company’s common stock, including warrants issued to vendors for services and warrants issued as part of the units sold in the private placements, at November 30, ~~2017~~2022 and ~~2016~~2021 and the changes during the period then ~~ended:~~

Warrants

Weighted Average Exercise Price

Intrinsic Value

Weighted Average Remaining Contractual Life (years)

Outstanding at November 30, 2015
  100,000
$2.18
$1,370,000
  4.80
Issued
  984,998
$2.67
$1,033,000
  3.97
Expired
  (37,498)
$5.00
$-
  -
Outstanding at November 30, 2016
  1,047,500
$2.54
$1,158,000
  4.10
Issued
  2,056,495
$4.25
$512,960
  4.46
Exercised
  (20,000)
$3.50
$19,800
  -
Outstanding at November 30, 2017
  3,083,995
$3.67
$2,539,185
  4.02
Exercisable at November 30, 2017
  2,323,245
$3.56
$2,170,618
  3.90

~~F-18~~

~~Fair~~ended (warrants amount and intrinsic value are rounded to nearest thousand):


				Weighted Average
		Weighted Average		Remaining Contractual
	Warrants	Exercise Price		Life (years)	Intrinsic Value
Outstanding at November 30, 2021	11,752,000	$	1.97	2.60	$	—
Issued	400,000		0.50	2.23		—
Forfeited/expired	(932,000)		—	—		—
Outstanding and exercisable at November 30, 2022	11,220,000	$	1.01	3.8	$	—

Grant date fair value of all outstanding warrants was ~~calculated with~~based on the following key inputs:

F-23

For the year ended November 30, 2017

For the year ended November 30, 2016

Stock price
$3.40 - $5.60
$1.60 - $4.15
Term (years)
  1.75 - 5.0
  2.0 - 5.0
Volatility
  129.64% - 143.47%
  101.13% - 138.69%
Risk-free rate
  1.42% - 2.14%
  0.76% - 1.83%
Dividend yield
  0.00%
  0.00%

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements


	For the year ended November 30,
	2022			2021
Strike price	$	1.25		$	1.25
Term (years)		5.0			5.0
Volatility		114	%		114	%
Risk-free rate		0.4	%		0.8	%
Dividend yield		0.0	%		0.0	%

Modification date fair value of all outstanding warrants was based on the following key inputs:


	After Modification			Before Modification
Strike price	$	1.77		$	2.51
Term (years)		3.5			0.8
Volatility		123	%		77	%
Risk-free rate		0.5	%		0.4	%
Dividend yield		0.0	%		0.0	%

Warrants issued on February 22, 2022, were classified as liabilities. The fair value of the warrants on grant date was based on the following key inputs:


	February 22, 2022
Strike price	$	0.50
Terms (years)		3.0
Volatility		126	%
Risk-free rate		1.7	%
Dividend yield		0.0	%

Modification of Warrants

On February 1, 2022, the Company modified an aggregate of 245,625 warrants (the “Warrants”) that were originally granted to certain investors and consultants. The exercise price of the Warrants was reduced to $0.65 per share and the maturity dates of the Warrants were extended until August 1, 2024.

The Company received $20,000 cash from one of the investors as consideration for this modification. The Company immediately recognized approximately $17,000 incremental stock-based compensation on February 1, 2022 based on the following weighted average assumptions:


	After Modification			Before Modification
Strike price	$	0.65		$	2.33
Term (years)		2.5			2.1
Volatility		135	%		127	%
Risk-free rate		1.0	%		1.0	%
Dividend yield		0.0	%		0.0	%

Between April and May 2022, the Company modified an aggregate of 4,765,807 warrants (the “Warrants”) that were originally granted to certain investors and officers during 2017 and 2021. The exercise price of the Warrants was reduced to between $0.50 and $0.65 per share and the maturity date of the Warrants were extended for an additional 5 years.

F-24

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

The Company immediately recognized approximately $261,000 incremental stock-based compensation during the quarter ended May 31, 2022, based on the following weighted average assumptions:


	After Modification			Before Modification
Strike price	$	0.51		$	1.76
Term (years)		6.9			2.1
Volatility		118	%		128	%
Risk-free rate		2.7	%		2.2	%
Dividend yield		0.0	%		0.0	%

On August 31, 2022, the Company modified an aggregate of 3,608,641 warrants (the “Warrants”) that were originally granted to certain officers during 2017 and 2021. The exercise price of the Warrants was reduced to $0.10 per share.

The Company immediately recognized approximately $22,000 incremental stock-based compensation during the quarter ended August 31, 2022, based on the following weighted average assumptions:


	After Modification			Before Modification
Strike price	$	0.10		$	0.50
Term (years)		2.7			2.7
Volatility		151	%		151	%
Risk-free rate		3.5	%		3.5	%
Dividend yield		0.0	%		0.0	%

The new warrants issued in February 2022 and warrant modifications, described above, resulted in reclassifying such modified warrants to purchase an aggregate of 5,461,432 common shares from equity to liability as a result of applying the reassessment under ASC 815. The warrants are subsequently recognized at fair value with changes in fair value recognized in the Company’s Consolidated Statements of Operations.

Options issued for services

The following represents a summary of all outstanding options to purchase the Company’s common stock at November 30, ~~2017~~2022 and 2021 and the changes during the period then ~~ended:~~ended (options amount and intrinsic value are rounded to nearest thousand):


				Weighted Average
		Weighted Average		Remaining Contractual
	Options	Exercise Price		Life (years)	Intrinsic Value
Outstanding at November 30, 2021	4,450,000	$	1.13	4.0	$	1,000
Issued	3,000,000		0.10	5.0		—
Forfeited/expired	—		—	—		—
Outstanding at November 30, 2022	7,450,000	$	0.10	6.5	$	—
Exercisable at November 30, 2022	5,200,000	$	0.10	7.5	$	—

Fair value of all options issued as of November 30, 2021was calculated with the following key inputs:


	For the year ended November 30,
	2021
Strike price	$	0.45
Term (years)		5.0
Volatility		111	%
Risk-free rate		1.2	%
Dividend yield		0.0	%

F-25

Options

Weighted Average Exercise Price

Intrinsic Value

Weighted Averegae Remaining Contractual Life (years)

Outstanding at November 30, 2016
  -
$-
$-
  -
Issued
  450,000
$4.00
$220,500
  4.51
Exercised
  -
$-
$-
  -
Outstanding at November 30, 2017
  450,000
$4.00
$220,500
  4.51
Exercisable at November 30, 2017
  112,500
$4.00
$55,125
  4.51

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

Stock-based Compensation

The Company recognized general and administrative expenses of approximately ~~$6.4~~$ million and ~~$4.1~~$2.3 million as a result of the shares, outstanding warrants and options issued to consultants and employees during the ~~year~~years ended November 30, ~~2017~~2022 and ~~2016,~~2021, respectively.

As of November 30, ~~2017,~~2021, the estimated unrecognized stock-based compensation associated with these agreements is approximately ~~$437,000~~$210,000 and ~~will be~~was fully recognized ~~over the next 0.15 year.~~

by November 30, 2022.

Note ~~11 -~~12 – Income Taxes

~~On December 22, 2017, the United States enacted new tax legislation, the Tax Cuts and Jobs Act. The Company is currently in the process of evaluating the impact this law will have on the~~ ~~consolidated~~ financial statements and calculating the related impact to the Company’s tax expense. The Company expects the largest impact to the company from this legislation to be from the provisions that lower the corporate tax rate to 21% beginning on January 1, 2018, and impose tax on earnings outside the United States that have previously not been subject to United States tax, which must be paid beginning in fiscal 2019 through fiscal 2026. The adjustments to the Company’s tax expense for this legislation will be recorded beginning in the period of enactment and are not expected to materially affect the ~~consolidated~~ ~~financial statements, given the Company’s net deferred tax asset position has a full valuation allowance.~~

At November 30, ~~2017,~~2022, the Company has a net operating loss (“NOL”) carryforward for Federal and state income tax purposes totaling approximately ~~$10.0~~$33 million available to reduce future taxable ~~income which, if not utilized,~~income. Of this amount, approximately $10 million will begin to expire in 2034. Under the Tax Cuts and Jobs Act, all NOLs incurred after December 31, 2017, are carried forward indefinitely for federal tax purposes. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) signed in to law on March 27, 2020, provided that NOLs generated in a taxable year ~~2037.~~ beginning in 2018, 2019, or 2020, may now be carried back five years and forward indefinitely. In addition, the limitation of NOL utilization up to 80% of taxable income limitation is temporarily removed, allowing NOLs to fully offset taxable income. Some of the state net operating losses follow the Federal Tax Cuts and Jobs Act and are carried over indefinitely, and others have various expiration dates.

The NOL carry forward is subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Under the Internal Revenue Code (“IRC”) Sections 382 and 383, annual use of the Company’s net operating loss carryforwards to offset taxable income may be limited based on cumulative changes in ownership. The Company has not completed an analysis to determine whether any such limitations have been triggered as of November 30, ~~2017.~~2021. The amount of the annual limitation, if any, will be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years.

The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on the Company’s history of operating losses since inception, the Company has concluded that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of November 30, ~~2017~~2022, and ~~2016.~~2021. The valuation allowance increased by approximately ~~$5.9~~$0.3 million and ~~$2.5~~$2.6 million for the fiscal years ended November 30, ~~2017~~2022 and ~~2016.~~2021.

F-26

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

The tax effects of the temporary differences and carry forwards that give rise to deferred tax assets consist of the ~~following:~~

As of November 30,

2017

2016

Deferred tax assets:

Net-operating loss carryforward
$3,810,498
$885,120
Stock-based compensation
  4,466,254
  1,685,262
License agreement
  595,780
  293,433
Tax amortization for license agreement
  (102,747)
  -
Charitable contributions
  387
  -
Total Deferred Tax Assets
  8,770,172
  2,863,815
Valuation allowance
  (8,770,172)
  (2,863,815)
Deferred Tax Asset, Net of Allowance
$-
$-

~~F-19~~

following (amounts are rounded to nearest thousand):


	As of November 30,
	2022		2021
Deferred tax assets:
Net operating loss carryforward	$	11,579,000	$	11,438,000
Stocked based compensation		7,171,000		6,889,000
License agreement		70,000		183,000
Charitable contributions		4,000		4,000
Other accrued tax expenses		386,000		329,000
Total deferred income tax assets		19,210,000		18,853,000

Deferred tax liability:
Convertible debt	$	(204,000)	$	(102,000)
Total deferred income tax liability		(204,000)		(102,000)

Net deferred income tax assets		19,006,000		18,751,000
Valuation allowance		(19,006,000)		(18,751,000)
Deferred tax asset, net of allowance	$	—	$	—

A reconciliation of the statutory income tax rates and the Company’s effective tax rate is as follows:

For the year ended November 30,

2017

2016

Statutory Federal Income Tax Rate
  (34.0)%
  (34.0)%
State and Local Taxes, Net of Federal Tax Benefit
  (10.3)%
  (4.7)%
Loss on conversion of debt
  1.4%
  0.5%
Gain/ loss on extinguishment of convertible note
  0.2%
  (0.7)%
Change in fair value of embedded conversion option and related accretion of interest expense
  4.4%
  1.6%
Change in fair value of warrant liability
  0.2%
  0.0%
Loss on modification of Private Placement Units
  0.0%
  0.2%
Loss on issuance of convertible debt
  0.0%
  2.6%
Non-U.S. operations
  0.3%
  0.0%
Change in Valuation Allowance
  37.8%
  34.5%



Income Taxes Provision (Benefit)
  0.0%
  0.0%


	For the year ended November 30,
	2022		2021
Expected federal income tax benefit	21.0	%	21.0	%
State taxes net of federal benefit	7.6	%	10.6	%
Deferred tax true-up	0.0	%	0.0	%
Gain/loss on conversion and extinguishment of debt	0.0	%	0.0	%
Loss on settlement	0.0	%	0.0	%
Change in fair value of embedded conversion option and related accretion of interest expense	(3.9)	%	(1.0)	%
Meals and entertainment	0.0	%	0.0	%
Non-U.S. operations	(3.6)	%	(1.1)	%
Deferred tax rate change	0.2	%	0.2	%
Change in valuation allowance	(21.9)	%	(29.7)	%
Income taxes provision (benefit)	—		—

The ~~Company's~~Company’s major tax jurisdictions are the United States and New York. All of the ~~Company's~~Company’s tax years will remain open starting ~~2013~~2014 for examination by the Federal and state tax authorities from the date of utilization of the net operating loss. The Company does not have any tax audits pending.

F-27

Table of Contents

Q BIOMED INC.

Notes to Consolidated Financial Statements

Note 1213 - Subsequent Events

On January 12 2023 the company entered into a promissory note with an accredited investor and current debt holder for $49,000. The note must be paid off in 10 installments.

On February ~~1, 2018,~~13, 2023 the ~~Company sold an~~company entered into a 12 month convertible note for $62,387.00.

On March 20^th 2023 the company received a default notice due to late current report filings,with respect to four (4) Promissory Notes dated September 15, 2022, November 22, 2022, January 12, 2023 and February 13, 2023, respectively (collectively, the “Notes”), in aggregate of ~~1,711,875 shares~~Two Hundred Seventy Six Thousand Four Hundred Eleven Dollars ($276,411.00).

On March 31^st 2023 the company entered into a 12 month convertible note with an accredited investor in aggregate principal face amount of common stock, and 1,711,875 warrants to purchase shares of common stock, in a registered public offering for gross proceeds of approximately $5,478,000. The warrants are exercisable for five years at $3.20 per share. The Company paid placement agent commissions of approximately $418,000 and issued the placement agent five-year warrants to purchase 81,688 shares of common stock at $3.84 per share. After the placement agents’ commissions and other offering expenses, the Company netted approximately $4,915,000 of proceeds. The Company intends to useOne Hundred Fifty Thousand Dollars (U.S. $150,000.00) including $15,000.00 original issue discount such that the net proceeds from the offering to: i) launch our non-opioid FDA approved Strontium Chloride 89 USP Injection (SR89), a therapeutic drug for the treatment of skeletal pain associated with metastatic cancers; ii) focus on the clinical planning and IND filing for a Phase 4 post-marketing study to expand the indication of the approved SR89; iii) complete pre-IND studies and the filing of an IND for a phase II/III clinical program to test the efficacy of QBM-001, our product candidate for the treatment of young children with a rare autistic spectrum disorder that severely inhibits their ability to communicate; iv) continue development work on our novel chemotherapeutic drug for liver cancer; and v) further the optimization and pre-clinical testing of our glaucoma drug Man-01 for the treatment of open angle glaucoma.receipt was $135,000.00.

~~F-20~~

F-28

Nevada				~~46-4013793~~ 30-0967746
(State or Other Jurisdiction of Incorporation or Organization)				(I.R.S. Employer Identification No.)

Title of Each Class		Trading Symbol(s)		Name of Exchange on which Registered
None		N/A		None

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☐ ☒	~~(Do not check if smaller reporting company)~~	Smaller reporting company	☒
			Emerging growth company	☐

	High Bid	Low Bid

Fiscal Year 2018
December 1, 2017 through February 26, 2018	$5.55	$2.73

Fiscal Year 2017	��
November 30, 2017	$5.90	$3.35
August 31, 2017	$5.10	$3.19
May 31, 2017	$7.90	$3.35
February 29, 2017	$12.61	$3.20

Fiscal Year 2016
November 30, 2016	$6.00	$2.39
August 31, 2016	$4.14	$1.26
May 31, 2016	$4.10	$2.00
February 29, 2016	$4.69	$2.35


	High Bid		Low Bid
Fiscal Year 2022
February 28, 2023	$	0.015	$	0.012

Fiscal Year 2022
November 30, 2022	$	0.019	$	0.014
August 31, 2022	$	0.032	$	0.026
May 31, 2022	$	0.109	$	0.09
February 28, 2022	$	0.324	$	0.27

Fiscal Year 2021
November 30, 2021	$	0.90	$	0.45
August 31, 2021	$	0.99	$	0.66
May 31, 2021	$	1.25	$	0.89
February 29, 2021	$	1.59	$	0.90


PART I				4
ITEM 1. ~~DESCRIPTION OF~~ BUSINESS			4
ITEM 1A. RISK FACTORS			10	12
ITEM 1B. UNRESOLVED STAFF COMMENTS			20	12
ITEM 2. ~~DESCRIPTION OF PROPERTY~~PROPERTIES			20	12
ITEM 3. LEGAL PROCEEDINGS			20	12
ITEM 4. MINE SAFETY DISCLOSURES			20	14
PART II				15
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES			21	15
ITEM 6. ~~SELECTED FINANCIAL DATA~~[RESERVED]			21	18
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			21	18
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK			28	26
ITEM 8. ~~CONSOLIDATED~~ FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			29	26
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES			29	26
ITEM 9A. CONTROLS AND PROCEDURES			29	27
ITEM 9B. OTHER INFORMATION			30	28
PART III				28
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE			31	28
ITEM 11. EXECUTIVE COMPENSATION			31	29
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS			32	30
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE			33	31
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES			33	31
PART IV				32
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES			33	32
~~SIGNATURES~~ITEM 16. FORM 10-K SUMMARY	33
SIGNATURES		34

	For the year ended November 30,
	2017	2016
Operating expenses:
General and administrative expenses	$9,271,804	$5,032,257
Research and development expenses	3,099,971	1,314,250
Total operating expenses	12,371,775	6,346,507

Other income (expenses):
Interest expense	(760,314)	(480,285)
Interest income	138	-
Loss on conversion of debt	(463,578)	(85,123)
Gain (loss) on extinguishment of debt	(76,251)	134,085
Loss on issuance of convertible notes	-	(481,000)
Change in fair value of embedded conversion option	(810,017)	121,000
Change in fair value of warrant liability	(59,870)	7,587
Loss on modification of Private Placement Units	-	(41,268)
Total other expenses	(2,169,892)	(825,004)

Net loss	$(14,541,667)	$(7,171,511)

Net loss per share - basic and diluted	$(1.39)	$(0.81)

Weighted average shares outstanding, basic and diluted	10,466,648	8,861,212

	For the years ended November 30,
	2017			2016
Net cash provided by (used in):
Operating activities	$	(5,584,451	)	$	(1,545,259	)
Financing activities		4,940,510			2,882,575
Net increase (decrease) in cash	$	(643,941)		$	1,337,316

			Held
			Position
Name	Age	Positions	Since

Denis Corin	44	Chief Executive Officer and Director (Chairman)	2015

William Rosenstadt	49	General Counsel and Director	2015

Rick Panicucci	57	Director	2018

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($) (4)	Non-Equity Incentive Plan Compensation ($)	Non-qualified Deferred Compensation Earnings ($)	All Other Compensations ($) (1)	Total ($)
Denis Corin (2)	2017	$45,000.00	$-	$-	$1,545,000	$-	$-	$175,000	$1,765,000
Chief Executive Officer	2016	$-	$-	$-	$195,000	$-	$-	$63,655	$258,655
William Rosenstadt (3)	2017	$-	$-	$-	$1,545,000	$-	$-	$280,248	$1,825,248
General Counsel and Director	2016	$-	$-	$-	$1,055,000	$-	$-	$112,147	$1,167,147

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Owner (1)	Percent of Class (2)
Directors and Officers:
Denis Corin (3)	3,112,500	21.4%
William Rosenstadt (4)	1,502,500	10.1%
Rick Panicucci	50,000	0.4%

Directors and Officers as a Group (3)(4)	4,665,000	33.5%

Major Stockholders:
Ari Jatwes	860,000	6.1%
Alan Lindsay	1,136,000	8.2%

SERVICES	2017	2016
Audit fees	$85,000	$80,000
Audit-related fees	10,000	-
Tax fees	-	-
All other fees	-	-
Total fees	$95,000	$80,000

	As of November 30,
	2017	2016
ASSETS
Current assets:
Cash	$824,783	$1,468,724
Prepaid expenses	2,500	-
Total current assets	827,283	1,468,724
Total Assets	$827,283	$1,468,724

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$463,539	$497,936
Accrued expenses - related party	7,500	70,502
Accrued interest payable	-	48,813
Convertible notes payable (See Note 5)	-	2,394,849
Note payable	-	100,152
Warrant liability	-	168,070
Total current liabilities	471,039	3,280,322

Long-term liabilities:
Convertible notes payable (See Note 5)	-	231,517
Total long term liabilities	-	231,517
Total Liabilities	471,039	3,511,839

Commitments and Contingencies (Note 6)

Stockholders' Equity (Deficit):
Preferred stock, $0.001 par value; 100,000,000 shares authorized; no shares issued and outstanding as of November 30, 2017 and 2016	-	-
Common stock, $0.001 par value; 250,000,000 shares authorized; 12,206,409 and 9,231,560 shares issued and outstanding as of November 30, 2017 and 2016, respectively	12,206	9,231
Additional paid-in capital	23,187,408	6,249,357
Accumulated deficit	(22,843,370)	(8,301,703)
Total Stockholders' Equity (Deficit)	356,244	(2,043,115)
Total Liabilities and Stockholders' Equity (Deficit)	$827,283	$1,468,724

	Common Stock			Accumulated	Total Stockholders'
	Shares	Amount	Additional Paid in Capital	Deficit	Equity (Deficit)
Balance as of November 30, 2015	8,597,131	$8,597	$865,690	$(1,130,192)	$(255,905)
Issuance of common stock and warrants for services	341,543	342	3,300,772	-	3,301,114
Issuance of common stock for acquired in-process research and development	50,000	50	160,450	-	160,500
Issuance of common stock and warrants in connection with Private Placement, net of warrant liabilities	102,256	102	80,578	-	80,680
Modification of Private Placement Units	7,502	7	22,499		22,506
Issuance of warrants for services to related party	-	-	830,000	-	830,000
Issuance of warrants to settle accounts payable to related party	-	-	30,000	-	30,000
Issuance of common stock upon conversion of convertible notes payable	118,128	118	380,768	-	380,886
Beneficial conversion feature in connection with issuance of convertible notes	-	-	526,400	-	526,400
Issuance of common stock in connection with OID Note	15,000	15	52,200	-	52,215
Net loss	-	-	-	(7,171,511)	(7,171,511)
Balance as of November 30, 2016	9,231,560	$9,231	$6,249,357	$(8,301,703)	$(2,043,115)
Issuance of additional common stock to convertible notes holders	25,641	26	98,179	-	98,205
Issuance of common stock, warrants and options for services	153,705	154	6,399,431	-	6,399,585
Issuance of common stock for acquired in-process research and development	125,000	125	487,375	-	487,500
Beneficial conversion feature in connection with issuance of convertible notes	-	-	645,000	-	645,000
Issuance of common stock upon conversion of convertible notes payable	1,650,379	1,650	5,972,236	-	5,973,886
Issuance of common stock and warrants in exchange for extinguishment of convertible notes payable	162,000	162	518,238	-	518,400
Issuance of common stock in exchange for extinguishment of OID Note	46,875	47	149,953	-	150,000
Issuance of common stock and warrants for cash, net of offering costs	791,249	791	2,369,719	-	2,370,510
Reclassification of warrant liability to equity	-	-	227,940	-	227,940
Exercise of warrants	20,000	20	69,980	-	70,000
Net loss	-	-	-	(14,541,667)	(14,541,667)
Balance as of November 30, 2017	12,206,409	$12,206	$23,187,408	$(22,843,370)	$356,244

Embedded derivatives in Convertible Notes at inception
	For the years ended November 30,
	2017			2016
Stock price		$	-		$	2.60 - $3.26
Terms (years)			-			1.5
Volatility			-			116.77	%
Risk-free rate			-			0.51% - 0.76	%
Dividend yield			-			0.00	%

Rollforward of Level 3 Fair Value Measurement for the Year Ended November 30, 2017

Balance at November 30, 2016	Issuance	Net unrealized gain/(loss)	Conversion	Balance at November 30, 2017
$977,000	86,000	810,017	(1,873,017)	$-

Rollforward of Level 3 Fair Value Measurement for the Year Ended November 30, 2016

Balance at November 30, 2015	Issuance	Net unrealized gain/(loss)	Settlements	Balance at November 30, 2016
$229,000	1,303,000	(121,000)	(434,000)	$977,000

	Principal	Shares
Series A conversions	$12,500	5,936
Series B conversions	55,000	27,995
Series C conversions	576,383	407,484
Series D conversions	160,000	91,782
Series E conversions	180,000	76,455
Secured Debenture conversions	4,000,000	1,040,727
Total	$4,983,883	1,650,379

	Warrants	Weighted Average Exercise Price	Intrinsic Value	Weighted Average Remaining Contractual Life (years)
Outstanding at November 30, 2015	100,000	$2.18	$1,370,000	4.80
Issued	984,998	$2.67	$1,033,000	3.97
Expired	(37,498)	$5.00	$-	-
Outstanding at November 30, 2016	1,047,500	$2.54	$1,158,000	4.10
Issued	2,056,495	$4.25	$512,960	4.46
Exercised	(20,000)	$3.50	$19,800	-
Outstanding at November 30, 2017	3,083,995	$3.67	$2,539,185	4.02
Exercisable at November 30, 2017	2,323,245	$3.56	$2,170,618	3.90

	For the year ended November 30, 2017	For the year ended November 30, 2016
Stock price	$3.40 - $5.60	$1.60 - $4.15
Term (years)	1.75 - 5.0	2.0 - 5.0
Volatility	129.64% - 143.47%	101.13% - 138.69%
Risk-free rate	1.42% - 2.14%	0.76% - 1.83%
Dividend yield	0.00%	0.00%

	Options	Weighted Average Exercise Price	Intrinsic Value	Weighted Averegae Remaining Contractual Life (years)
Outstanding at November 30, 2016	-	$-	$-	-
Issued	450,000	$4.00	$220,500	4.51
Exercised	-	$-	$-	-
Outstanding at November 30, 2017	450,000	$4.00	$220,500	4.51
Exercisable at November 30, 2017	112,500	$4.00	$55,125	4.51

For the year ended November 30,

Rent expense