QSAM Biosciences Issues Letter from CEO on Successful First Quarter 2021
https://finance.yahoo.com/news/qsam-biosciences-issues-letter-ceo-130000884.html
Austin, TX, May 25, 2021 (GLOBE NEWSWIRE) -- The Chief Executive Officer of QSAM Biosciences Inc. (OTCQB: QSAM), Douglas Baum, provided the following letter to shareholders today:
Dear Shareholders:
QSAM Biosciences had a transformative first quarter of 2021. We want to take this opportunity to summarize the progress we’ve made since the end of 2020, much of which can be found on our Form 10-Q filed with the SEC on May 20, 2021, as well as the latest on the development of our core radiopharmaceutical technology, CycloSam®.
Key Take-Aways from our March 31, 2021 Financial Statements and 10-Q
On May 20, we filed our Form 10-Q for the first quarter of 2021. The financial statements presented in that filing show a significantly improved balance sheet from December 31, 2020, and in fact, present the strongest position the Company has been in since inception. Most notably, we reported at the end of March:
$1.94 million in available cash, up from $8,300 at the end of 2020;
$389,000 of total current liabilities, down from $4.19 million at the end of 2020; and
$821,000 of Shareholder Equity, up from a Shareholder Deficit of $5.1 million at the end of 2020.
The dramatic change in our cash and equity position resulted from the completion of our $2.5 million Series B Preferred Stock offering in January 2021, as well as the conversion to common stock of all Bridge Notes, which were previously in default, and additional common stock conversions of debentures and payables in the quarter. As of March 31, 2021, we only had $35,000 of debentures outstanding in addition to a Payroll Protection Program loan received in 2020 which we expect to be forgiven in future periods.
On our Statement of Operations, we showed no revenue for the quarter, which is to be expected for a company advancing the development of a drug technology. Our operating expenses of $3.3 million increased significantly in the first quarter of 2021 over 2020; however, all but $288,000 of these operating expenses were comprised of non-cash charges primarily from stock-based compensation, mostly in the form of restricted, vesting and forfeitable Series E-1 Preferred Stock to the officers, directors and key employees, and short-term common stock warrants issued to a service provider. We expect the accrual of preferred stock-based compensation expenses to be similar in the second quarter, with these expenses tapering off in the second half of 2021.
Our total losses of $4.4 million in the first quarter of 2021 also included approximately $1.2 million in non-cash charges from the conversion of almost all remaining debt to equity in the period (as discussed above), offset by a $100,000 gain from the sale of our remaining equity interests in our legacy business.
Our current overhead run-rate is low with all executives of the Company choosing to receive only a portion of their salaries during our initial development stage. At the current rate, we would expect cash on hand to last into early 2022. However, we believe operations are about to accelerate for QSAM as we enter clinical trials for our lead drug candidate CycloSam, and as such, expenses will increase as we start to dose patients afflicted with metastatic bone cancer and primary bone cancer, which is the focus of our upcoming Phase 1 study.
Updates on Operations and Clinical Development
From an operational perspective, we have already achieved several important milestones projected last month, namely:
In late April we filed our IND with the FDA, the clearance of which will allow us to start dosing patients in our Phase 1 trials for CycloSam. This is a dose escalating open study, so we would expect to start seeing actual efficacy results that may be reportable in early 2022.
We executed an agreement with an experienced Contract Research Organization (CRO) to provide full clinical trial management, monitoring, data management, statistical analysis and medical writing services in association with conducting our upcoming Phase I clinical trial. Work commenced under this agreement in the first quarter of 2021.
We added to our team Richard K. Burt, M.D, as a member of the Company’s Scientific Advisory Board. Dr. Burt is a world-renowned pioneer in stem cell transplants, which is an area our bone cancer therapy technology touches in many different aspects, and his experience should help advance our clinical trials and possibility open new potential indications for our drug candidate.
With respect to the start of our clinical trials, last week QSAM engaged with the FDA regarding our IND filing for CycloSam. The call was very cooperative in tone and content, and the QSAM team was able to convey a better understanding of the clinical direction and the potential utility of CycloSam. The FDA will be requesting additional information and clarification over the near term and we will work promptly to resolve all FDA clinical hold questions and comments before proceeding with our Phase I study.
Important Milestones for the Coming Year.
In the near term we are working to achieve the following additional milestones:
Clearance of our IND with the FDA to start clinical trials with CycloSam;
Dosing of the first patient in the Phase 1 trials with CycloSam;
Announcement of initial Phase 1 results of CycloSam (possibly in 2022);
Expansion of our intellectual property portfolio with newly issued patents; and
Possible acquisition of a second radiopharmaceutical asset to expand our product pipeline.
Should we be able to achieve these milestones and other regulatory qualifications can be met, it is our intention to seek a NASDAQ up-listing on our common shares in 2022.
This is truly an exciting time for QSAM and its shareholders, as we believe the Company is now positioned for meaningful value appreciation over the following months and year.
Sincerely,
Douglas R. Baum
Chief Executive Officer
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