Thoughts on the recent 10-Q
It's clear the company is in a bit of a pickle. It has debt it is not able to service and convertible debt that at current levels would heavily dilute current shareholders.
Besides this, by the company's own assessment is own assessment continuing in its present course is not sustainable. On page 24 the company says as much:
"As of March 31, 2020, approximately $1,068,152 of the original issuance principal amount of the Bridge Notes matured. The Company has received extensions of the maturity date from all of these holders until June 15, 2020 for no additional consideration. Management is working on a plan to repay or convert into equity these and the other Bridge Notes by their respective maturity dates, as discussed above. Any equity conversion would be highly dilutive to our current shareholders. If we cannot repay these obligations or otherwise come to agreement with the holders, our ability to operate will be materially adversely affected, if not completely shut down and the Company may be forced to seek bankruptcy protection."
THE PROPOSED WAY FORWARD... Includes the medical technology subsidiary QSAM, and the novel bone cancer drug. On Page 23 it is stated:
"We believe there is a path forward that includes transferring the ABS licensed technology we control related to our compost and soil business to EPH in return for a forgiveness of approximately $1 million in loans as of the end of the second quarter of 2020, as well as redemption and retirement in full of approximately $4 million of Bridge Notes principal and interest. It is expected that EPH would receive in consideration for the funds required to complete this Bridge Note repayment a preferred stock equity that is structured to limit dilution to our common stockholders."
SO WHERE ARE THINGS AT??? (Page 24 of 10-Q)
"While the details of this strategic plan have not been finalized, we are in discussions with all of the stakeholders required to accomplish it. The results of the successful completion of this plan, for which there is no guaranty, could mean a stronger balance sheet and the infusion of new capital to pursue this novel pharmaceutical opportunity. While a transition into this new business line is a departure from our current compost and soil operations, which are not financially sustainable for the Company in its current condition and would be continued by EPH if the plan is completed, management believes that the path to creating shareholder value is more visible and probable if we can complete these corporate actions in 2020."
So... from what I can gather, there are no guarantee that things will work out, but there's the possibility that there will be a positive outcome for all involved.
At this point, we will have to see if all parties can work together to ensure the survival and eventual success of the company. It sounds like we should know what the way forward will look like by the middle to end of June.
Watch for opportunities with those you trust.
