Q Biomed Inc. (QBIO), a biomedical acceleration and development company, updated its financial records to include the modification of an aggregate of 3,608,641 warrants originally granted to certain officers during 2017 and 2021. The exercise price of the warrants was reduced to $0.10 per share, resulting in an immediate recognition of approximately $22,000 incremental stock-based compensation during the quarter ended August 31, 2022. This decision also caused a reclassification of modified warrants to purchase an aggregate of 5,461,432 common shares from equity to liability as a result of applying reassessment under ASC 815.
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Financial Performance
During the three months ended February 28, 2023, QBIO did not generate any sales revenue, a decrease of $75,059 compared to the same period in 2022. This drop in sales is attributed to less vials being sold during this recent period. Cost of sales also decreased, from $74,000 in the 2022 period to $3,000 in the 2023 period. Additionally, net losses for the company during these respective periods were $2.3 million and $0.7 million. Management expects to continue incurring net losses for the foreseeable future, due to the need for further asset diversification and R&D investments, as well as the implementation of other aspects of their business plan.
Funding Challenges
The company has not yet established a significant ongoing source of revenues and must rely on debt and equity financing to remain a going concern. As of February 28, 2023, QBIO had approximately $23,000 in cash. The continued operation of the company depends on its ability to obtain adequate capital to fund operating losses until it can generate enough cash flow from operations to cover operating costs and obligations. If the necessary funding is not secured, QBIO may be forced to cease operations.
Future Growth Strategy
Looking ahead, QBIO seeks to monetize its current pipeline and create a platform for future growth. Emphasis will be placed on areas such as commercial product revenue growth, partnerships, joint venture equity value, and future development platforms. The company remains determined to find a solution that benefits all stakeholders, despite the financial challenges faced by many microcap biotech firms that require substantial capital resources.
Income Statement
Financials in millions USD. Fiscal year is December – November. source
| Year | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 0 | Revenue | 0.28 | 0.2 | 0.03 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 1 | Revenue Growth (YoY) | 45.38% | 551.99% | – | – | – | – | – | – | – | – |
| 2 | Cost of Revenue | 0.29 | 0.25 | 0.33 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3 | Gross Profit | -0.01 | -0.05 | -0.3 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4 | General & Administrative | 3.31 | 6.26 | 10.97 | 4.48 | 5.78 | 9.27 | 5.03 | 0.35 | 0.04 | 0 |
| 5 | Research & Development | 0.13 | 1.07 | 1.88 | 3.54 | 3.24 | 3.1 | 1.31 | 0.6 | 0 | 0 |
| 6 | Operating Expenses | 3.44 | 7.34 | 12.85 | 8.02 | 9.02 | 12.37 | 6.35 | 0.95 | 0.04 | 0 |
| 7 | Operating Income | -3.45 | -7.39 | -13.15 | -8.02 | -9.02 | -12.37 | -6.35 | -0.95 | -0.04 | -0 |
| 8 | Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 9 | Interest Expense | 1.38 | 0.51 | 0.3 | 1.46 | 0.16 | 0.76 | 0.48 | 0.01 | 0 | 0 |
| 10 | Other Expense / Income | -2.78 | 0.35 | 0.05 | 0.8 | 0.09 | 1.41 | 0.34 | 0.12 | – | – |
| 11 | Pretax Income | -2.05 | -8.24 | -13.49 | -10.28 | -9.27 | -14.54 | -7.17 | -1.09 | -0.04 | -0 |
| 12 | Income Tax | -1.34 | 0.35 | 0.05 | 0.8 | 0 | 0 | 0 | 0 | 0 | 0 |
| 13 | Net Income | -0.72 | -8.59 | -13.54 | -11.08 | -9.27 | -14.54 | -7.17 | -1.09 | -0.04 | -0 |
| 14 | Shares Outstanding (Basic) | 45 | 27 | 22 | 15 | 14 | 10 | 9 | 9 | 6 | 3 |
| 15 | Shares Outstanding (Diluted) | 45 | 27 | 22 | 15 | 14 | 10 | 9 | 9 | 6 | 3 |
| 16 | Shares Change | 67.13% | 20.84% | 47.34% | 9.50% | 31.23% | 18.12% | -2.28% | 41.22% | 131.16% | – |
| 17 | EPS (Basic) | -0.02 | -0.32 | -0.61 | -0.74 | -0.67 | -1.39 | -0.81 | -0.12 | -0.00 | -0.00 |
| 18 | EPS (Diluted) | -0.02 | -0.32 | -0.61 | -0.74 | -0.67 | -1.39 | -0.81 | -0.12 | -0.00 | -0.00 |
| 19 | Free Cash Flow Per Share | 0.04 | -0.16 | -0.28 | -0.27 | -0.51 | -0.53 | -0.17 | -0.01 | -0.01 | – |
| 20 | Gross Margin | -3.16% | -26.20% | -986.70% | – | – | – | – | – | – | – |
| 21 | Operating Margin | -1211.74% | -3777.44% | -43818.05% | – | – | – | – | – | – | – |
| 22 | Profit Margin | -251.83% | -4389.44% | -45142.51% | – | – | – | – | – | – | – |
| 23 | Free Cash Flow Margin | 682.75% | -2199.44% | -20778.14% | – | – | – | – | – | – | – |
| 24 | EBITDA | -0.25 | -7.34 | -13.1 | -7.97 | -9.11 | -13.78 | -6.69 | -1.07 | -0.04 | -0 |
| 25 | EBITDA Margin | -88.77% | -3751.88% | -43651.38% | – | – | – | – | – | – | – |
| 26 | Depreciation & Amortization | 0.05 | 0.05 | 0.05 | 0.05 | 0 | 0 | 0 | 0 | 0 | 0 |
| 27 | EBIT | -0.3 | -7.39 | -13.15 | -8.02 | – | – | – | – | – | – |
| 28 | EBIT Margin | -106.35% | -3777.44% | -43818.05% | – | – | – | – | – | – | – |
Note that we may hold securities mentioned in this article. All data is based on recent SEC filings. Even though we have implemented various manual and automatic fact-checking and data acquisition processes, some incorrect information may have slipped through (false positive). Let us know if you find any inconsistencies!