TORONTO – Quantum (NASDAQ:QMCO) BioPharma Ltd. (NASDAQ:QNTM)(CSE:QNTM)(FRA:0K91), a biopharmaceutical company currently valued at $7.77 million, disclosed its plans today to launch a non-brokered private placement of convertible debenture units, aiming to raise capital for business development and general working capital purposes. According to InvestingPro data, the company maintains a healthy balance sheet with more cash than debt and a strong current ratio of 3.76x.
The offering involves up to 5,000 debenture units priced at $1,000 each, with each unit comprising a secured convertible debenture and 80 class B common share purchase warrants. The debentures will mature 36 months from issuance, carrying an interest rate of 1.25% per month, payable quarterly in cash. This financing comes as the company's stock trades at $4.28, having declined over 92% year-to-date. InvestingPro analysis suggests the stock is currently undervalued, with 12 additional exclusive insights available to subscribers.
Holders of the debentures have the option to convert into class B shares at a conversion price of $6.25 per share. Additionally, each warrant entitles the holder to purchase a class B share at $7.00 per share for a period of five years from the date of issuance.
The company may choose to redeem the debentures prior to maturity, subject to a fifteen-day notice period and applicable penalties. The obligations under the debentures are secured by general security from the company.
Quantum BioPharma anticipates completing the offering in tranches, with the initial closing expected the week of December 9, 2024. It's important to note that the securities offered have not been registered under the U.S. Securities Act of 1933 and, hence, may not be offered or sold in the United States absent registration or an exemption from registration requirements.
In another development, Quantum BioPharma has settled an outstanding debt of $43,825.17 with an arm's length creditor through the issuance of 7,500 shares at a deemed price of $5.84 per share. Despite recent challenges, InvestingPro analysts project the company will achieve profitability this year, marking a potential turning point for investors.
Quantum BioPharma is recognized for its focus on neurodegenerative and metabolic disorders and alcohol misuse disorders, with its lead compound, Lucid-MS, in development to address multiple sclerosis. The company also maintains a strategic investment portfolio through its subsidiary, FSD Strategic Investments Inc.
This news is based on a press release statement from Quantum BioPharma and contains forward-looking statements regarding the offering and the company's business strategy. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
In other recent news, Quantum BioPharma has initiated a Phase 1 clinical trial for its drug candidate Lucid-21-302, marking a significant step in the potential treatment of multiple sclerosis. The company has also engaged in various services to enhance market awareness and shareholder communication, part of its capital allocation strategy. Quantum BioPharma maintains a portfolio of strategic investments, including a 25.71% ownership stake in Celly Nutrition Corp.
Simultaneously, Quantum BioPharma has initiated legal action against CIBC (TSX:CM) World Markets and RBC Dominion Securities for alleged market manipulation. The company claims that these actions have manipulated Quantum BioPharma's share price through "spoofing" tactics. In collaboration with its subsidiary Lucid (NASDAQ:LCID) Psycheceuticals Inc., Quantum BioPharma continues to develop Lucid-MS, a compound designed to prevent and reverse myelin degradation in multiple sclerosis.
In other developments, Celly Nutrition Corp., licensed by Quantum BioPharma, has secured a master distribution agreement with FUSION Consulting Group to distribute its alcohol metabolism supplement, unbuzzd™, across Puerto Rico, the Caribbean, and parts of Central and South America. Quantum BioPharma, which holds a 25.71% ownership of Celly Nutrition, is also preparing for a future phase 2 clinical trial of Lucid-21-302.
FSD Pharma Inc. has settled debts by issuing 650,000 Class B Subordinate Voting shares and has won a court judgment against its former CEO, Dr. Raza Bokhari. FSD Pharma has also received approval to commence a Phase 1 clinical trial for Lucid-21-302, a drug candidate for treating multiple sclerosis, and to begin its METAL-2 trial in the United States for acute alcohol intoxication treatments. These are recent developments in the biopharmaceutical sector.
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