EDGAR 10-K Filing

Company CIK: 820608
Filing Year: 2021
Filename: 820608_10-K_2021_0001654954-21-004257.json

---

ITEM 1. BUSINESS
ITEM 1. Business
QuantRx Biomedical Corporation was incorporated on December 5, 1986, in the State of Nevada. The Company’s principal business office is located at 10190 SW 90th Avenue, Tualatin, Oregon 97062.
Overview
We have developed and intend to commercialize our patented miniform pads (“PADs”) and PAD based over-the-counter products for the treatment of hemorrhoids, minor vaginal infection, urinary incontinence, general catamenial uses and other medical needs. We are also developing and intend to commercialize genomic diagnostics for the laboratory market, based on our lateral flow patents. Our platforms include: inSync®, UniqueTM, and OEM branded over-the-counter and laboratory testing products based on our core intellectual property related to our PAD technology.
The continuation of our operations remains contingent upon the receipt of additional financing required to execute our business and operating plan, which is currently focused on the commercialization of our PAD technology, either directly or through a joint venture or other relationship intended to increase shareholder value. In the interim, we have nominal operations, focused principally on maintaining our intellectual property portfolio and maintaining compliance with the public company reporting requirements. In order to continue as a going concern, we will need to raise capital, which may include through the issuance of debt and/or equity securities. No assurances can be given that the we will be able to obtain additional financing under terms favorable to us, if at all, or otherwise successfully develop a business and operating plan or enter into an alternative relationship to commercialize our PAD technology.
Our principal business line consists of our OTC Business, which includes commercialization of our InSync feminine hygienic interlabial pad, the Unique® Miniform for hemorrhoid application, and other treated miniforms (the "OTC Business"), as well as maintaining established and continuing licensing relationships related to the OTC Business. We also own certain diagnostic testing technology that is based on our lateral flow patents (the "Diagnostics Business", and collectively with the OTC Business, the "Business"). Management believes this corporate structure permits us to more efficiently explore options to maximize the value of the Businesses, with the objective of maximizing the value of the Businesses for the benefit of the Company and our shareholders.
Our current focus is to obtain additional working capital necessary to continue as a going concern, and to develop a longer term financing and operating plan to: (i) commercialize our over-the-counter products either directly or through joint ventures, mergers or similar transactions intended to capitalize on potential commercial opportunities; (ii) contract manufacturing of our over-the-counter products to third parties while maintaining control over the manufacturing process; (iii) maintain our intellectual property portfolio with respect to patents and licenses pertaining to both the OTC Business and the Diagnostics Business; and (iv) maximize the value of our investments in non-core assets. As a result of our current financial condition, however, our efforts in the short-term will be focused on obtaining financing necessary to maintain the Company as a going concern.
Preprogen Transaction
On December 15, 2017 (“Closing Date”), we executed an agreement with Preprogen LLC (“Preprogen”) (the “Preprogen Agreement”), pursuant to which we agreed to the sale, assignment, and license-back of certain of our assets pertaining to our Diagnostic Business (the “Purchased Assets”). Under this agreement, we retained all rights and assets relating to the OTC Business, which includes all assets necessary to pursue marketing the over-the-counter miniform products for female hygiene and hemorrhoid treatment.
As set forth in the Preprogen Agreement, as consideration for the sale, assignment and transfer of the Purchased Assets (the “Preprogen Transaction”) on the Closing Date, Preprogen (A) paid us $1.0 million (“Cash Amount”) as follows: (i) approximately $38,000 was paid to the City of Portland to payoff certain indebtedness owed by us to the City of Portland, (ii) $65,000 in principal amount of notes held by Preprogen was credited toward the purchase price as a result of the cancellation and termination of those certain promissory notes payable to Preprogen by us, and (iii) the remaining balance was paid to us in cash at closing (the “Closing Balance”); and (B) issued to us that number of membership interests in Preprogen equal to 15% of the issued and outstanding membership interests in Preprogen on a fully diluted basis as of the Closing Date. Under the terms of the Preprogen Agreement, Preprogen is obligated to pay to us such additional amounts calculated based on the aggregate gross revenue generated by Preprogen from the sale of products after the Closing Date that utilize, or royalty payments or licensing fees received by Preprogen with respect to, the Purchased Assets, if any, as more particularly set forth in the Preprogen Agreement.
At closing, and as required by the Preprogen Agreement, we deposited $400,000 of the Cash Balance in escrow, which funds were to be used to fund up to 50% of the costs incurred by Preprogen in connection with the development and manufacturing of materials to be used by us for our over-the-counter miniform products and to be used by Preprogen for diagnostic products related to the Purchased Assets. As additional consideration for the Purchased Assets, we issued a warrant to Preprogen’s designee to purchase up to 15.0 million shares of our common stock, par value $0.01 per share (“Common Stock”), at an exercise price of $0.05 per share (the “Warrant”). The Warrant is immediately exercisable and expires on December 14, 2022.
On October 8, 2018, the Preprogen Agreement was amended to provide for, among other things, the release of funds held in escrow related to the manufacture of the miniform pads (the “Preprogen Amendment”), which resulted in both parties receiving $200,583 in cash. As consideration for the Preprogen Amendment, we agreed to pay Preprogen a royalty of 5% from the sale of all over-the-counter miniform products; provided, however, that such royalty payments shall terminate when Preprogen has received $200,000 in aggregate consideration from the royalties paid by us, and that we shall be entitled to offset such royalty payments due and payable to Preprogen by amounts equal to certain other payments otherwise due and payable to us by Preprogen pursuant to the terms of the Preprogen Agreement. At December 31, 2018, we valued our investment in Preprogen at $222,000 recording an impairment of $278,000 during the year ended December 31, 2018. At December 31, 2019, we revalued our investment in Preprogen to $0, recording an impairment of $222,000 during the year ended December 31, 2019.
Our Business
Management’s objective is to develop our innovative PAD based products through genomic testing, although commercialization efforts are conditioned upon securing adequate financing. Assuming the availability of adequate working capital, our objective is to target significant market opportunities for our products through the following platforms.
PAD/Health and Wellness
PAD products are based on our non-woven disposable absorbent pad technology, with products for aiding the treatment of hemorrhoids, minor vaginal infection, urinary incontinence, the over-the-counter catamenial markets, and other medical needs, including diagnostic sampling products that enable self-collection and worldwide transport for indications such as various cancers, premature delivery, and genomic testing.
Lateral Flow Diagnostics
Our Diagnostic Business is focused on the development RapidSense® point-of-care testing products and related oral fluid collection technologies based on our core intellectual property related to lateral flow methods, devices, and processes for the consumer and healthcare professional markets.
Product and Product Candidates
We have historically operated under a two-fold product development strategy: (i) maximize the value of internally developed products that are market-ready for near-term distribution, and (ii) aggressively develop technology platforms for products we believe will address medical diagnostic and treatment issues into the future.
When introducing our PAD product lines and other products, we sought to align ourselves with experienced marketing partners that have established distribution channels. We teamed with a manufacturing partner in Asia, as well as niche United States manufacturers, in order to bring products to market in an efficient manner while controlling product quality. We currently do not have any manufacturing partnerships, as we are not currently manufacturing or selling any of our products; however, we are currently evaluating new manufacturing relationships in the U.S., consistent with the terms of the Preprogen Agreement.
Our miniform PAD is a patented technology that provides the basis for a line of products that address an array of consumer health issues, including temporary relief of hemorrhoid and minor vaginal infection itch and discomfort, feminine urinary incontinence, catamenial needs, drug delivery, and medical sample collection and transport for diagnostic testing.
Our PAD products for the consumer markets are designated as FDA Class I over-the-counter devices, and are easy to use, non-invasive, fully biodegradable, highly absorbent pads. Additionally, the unique non-woven technology utilized for the PADs allows for a PAD to be used as a sample collection device, providing a sample for diagnostic purposes, or to provide local or systemic therapy.
Unique® Miniforms
Miniform is a safe, convenient, and flushable technology for the underserved over-the-counter hemorrhoid, feminine hygiene and urinary incontinence markets. The disposable miniform pads contain no adhesives, require no insertion, and are small enough to fit in the palm of a hand.
The Unique® miniform is available as a treated pad for the temporary relief of the itch and discomfort associated with hemorrhoids and minor vaginal infection, and as an untreated pad, for the daily protection of light urinary, vaginal or anal leakage.
While we previously initiated a limited web-based domestic roll-out of the Unique® miniform, we are currently in search of a strategic partnership(s) to expand the retail availability of the product across the United States and internationally.
We have significant experience manufacturing our miniform product and a clear understanding of its costs. The miniform technology is protected by numerous patents covering various applications, the manufacturing process, and certain materials. We previously contracted with a firm based in Taiwan to manufacture our PADs, although the manufacturing relationship is currently suspended due to our financial condition and pending the development of a financing and operation plan that allows us to re-commence active operations.
Lateral Flow Diagnostics
We developed and patented the RapidSense technology, a one-step lateral flow test with unique features such as a positive indication for a positive test, which allows us to target quantified point-of-care (“POC”) diagnostics previously limited to the diagnostic laboratory. These applications include, but are not limited to, thyroid disease, therapeutic drug monitoring, cancer diagnostics, diagnosis of cardiac disease, and other critical tests. This rapid POC diagnostic technology is ideal for testing all body fluid, including whole blood, serum, oral fluids and urine. We also patented innovative oral fluid collection devices specifically designed for our RapidSense technology. These distinctive collection devices, coupled with RapidSense and the reader platform, are intended to ultimately enable us to target the large and growing markets for diagnostics using oral sample collections, which have previously been limited to blood or urine testing.
Competition
Our industry is highly competitive and characterized by rapid and significant technological changes. Significant competitive factors in our industry include, among others, product efficacy and safety, the timing and scope of regulatory approvals, the government reimbursement rates for and the average selling price of products, the availability of raw materials and qualified manufacturing capacity, manufacturing costs, intellectual property and patent rights and their protection, and sales, marketing and distribution capabilities.
We face, and will continue to face, competition from organizations such as pharmaceutical and biotechnology companies, as well as academic and research institutions.
Any product candidates that we successfully develop, which are cleared for sale by the FDA or similar international regulatory authorities in other countries, may compete with similar products currently available or that may become available in the future. Most of our competitors have substantially greater capital resources than we have, and greater capabilities and resources for research, conducting preclinical studies and clinical trials, regulatory affairs, manufacturing, marketing and sales. As a result, we may face competitive disadvantages relative to these organizations should they develop or commercialize a competitive product. In addition, given our current lack of working capital, our competitors will have the opportunity to capture market opportunities missed by us as we attempt to secure additional financing necessary to commercialize our products.
Raw Materials and Manufacturing
We currently do not have manufacturing capacity for any of our products, and therefore have historically contracted for the manufacturing of our products to third-party manufacturers, both in and outside the United States. All of our manufactured products have been, and at such time that we recommence active operations will be, produced under FDA mandated Good Manufacturing Practices standard operating procedures developed and controlled by our quality system, which specifies approved raw materials, vendors, and manufacturing methodology.
Intellectual Property Rights and Patents
As of December 31, 2020, we had nine (9) patents issued and five (5) licensed patents. Our issued patents expire between 2019 and 2030; however, we may obtain continuations, which would extend the rights granted under our issued patents, and additional patents to cover technology in development. We also have four (4) registered U.S. and foreign trademarks.
Patents and other proprietary rights are an integral part of our business. It is our policy to seek patent protection for our inventions and also to rely upon trade secrets and continuing technological innovations and licensing opportunities to develop and maintain our competitive position. However, our patent positions involve complex legal and factual questions and, therefore, enforceability of our patents cannot be predicted with any certainty. Our issued patents, those licensed to us, and those that may be issued to us in the future may be challenged, invalidated or circumvented, and the rights granted thereunder may not provide us with proprietary protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies or duplicate any technology developed by us. Because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any of our product candidates can be approved for sale and commercialized, our relevant patent rights may expire or remain in force for only a short period following commercialization. Expiration of patents we own or license could adversely affect our ability to protect future product development and, consequently, our operating results and financial position.
Licensing, Distribution and Development Agreements
As noted above, on December 15, 2017, we entered into an agreement with Preprogen, which was subsequently amended on October 8, 2018, pursuant to which we agreed to the sale, assignment, and license-back of certain of our assets, including rights to use the intellectual property transferred to Preprogen necessary to the development, manufacture, marketing and sale of our OTC miniform products for the feminine hygiene and hemorrhoid treatment markets.
Regulatory Requirements
Some of our products and manufacturing activities are, or will be subject to regulation by the FDA, and by other federal, state, local and foreign regulatory authorities. Pursuant to the Food, Drug and Cosmetic Act of 1938, commonly known as the "FD&C Act", and the regulations promulgated thereunder, the FDA regulates the research, development, clinical testing, manufacture, packaging, labeling, storage, distribution, promotion, advertising and sampling of medical devices and medical imaging products. Before a new device or pharmaceutical product can be introduced to the market, the manufacturer must generally obtain marketing clearance through a section 510(k) notification, a Premarket Approval (“PMA”) or a New Drug Approval (“NDA”).
In the United States, medical devices intended for human use are classified into three categories, Class I, II or III, on the basis of the controls deemed reasonably necessary by the FDA to assure their safety and effectiveness, with Class I requiring the fewest controls and Class III the most controls. Class I, unless exempted, and Class II devices are marketed following FDA clearance of a Section 510(k) premarket notification. Because Class III devices (e.g., a device whose failure could cause significant human harm or death) tend to carry the greatest risks, the manufacturer must demonstrate that such a device is safe and effective for its intended use by submitting a PMA application. PMA approval by the FDA is required before a Class III device can be lawfully marketed in the United States. Usually, the PMA process is significantly more time consuming and costly than the 510(k) process.
The U.S. regulatory scheme for the development and commercialization of new pharmaceutical products, which includes the targeted molecular imaging agents, can be divided into three distinct phases: an investigational phase including both preclinical and clinical investigations leading up to the submission of an NDA; a period of FDA review culminating in the approval or refusal to approve the NDA; and the post-marketing period.
All of our over-the-counter products derived from the miniform technology, including Unique®, are currently classified as Class I - exempt devices, requiring written notification to the FDA before marketing.
In addition, the FD&C Act requires device manufacturers to obtain a new FDA 510(k) clearance when there is a substantial change or modification in the intended use of a legally marketed device, or a change or modification, including product enhancements, changes to packaging or advertising text and, in some cases, manufacturing changes, to a legally marketed device that could significantly affect its safety or effectiveness. Supplements for approved PMA devices are required for device changes, including some manufacturing changes that affect safety or effectiveness, or disclosure to the consumer, such as labeling. For devices marketed pursuant to 510(k) determinations of substantial equivalence, the manufacturer must obtain FDA clearance of a new 510(k) notification prior to marketing the modified device. For devices marketed with PMA, the manufacturer must obtain FDA approval of a supplement to the PMA prior to marketing the modified device. Such regulatory requirements may require us to retain records for up to seven years, and to be subject to periodic regulatory review and inspection of all facilities and documents by the FDA.
The FD&C Act requires device manufacturers to comply with Good Manufacturing Practices regulations. The regulations require that medical device manufacturers comply with various quality control requirements pertaining to design controls, purchasing contracts, organization and personnel, including device and manufacturing process design, buildings, environmental control, cleaning and sanitation; equipment and calibration of equipment; medical device components; manufacturing specifications and processes; reprocessing of devices; labeling and packaging; in-process and finished device inspection and acceptance; device failure investigations; and record keeping requirements including complaint files and device tracking. At such time that we re-commence operations, if ever, Company personnel and non-affiliated contract auditors will periodically inspect the contract manufacturers to assure they remain in compliance.
Additionally, the Centers for Medicare & Medicaid Services (“CMS”) regulates all laboratory testing (except research) performed on humans in the U.S. pursuant to the Clinical Laboratory Improvement Amendments (“CLIA”). In total, CLIA covers approximately 225,000 laboratory entities. The Division of Laboratory Services, within the Survey and Certification Group, under the Office of Clinical Standards and Quality (“OCSQ”) has the responsibility for implementing the CLIA Program.
The objective of the CLIA program is to ensure quality laboratory testing. Although all clinical laboratories must be properly certified to receive Medicare or Medicaid payments, CLIA has no direct Medicare or Medicaid program responsibilities. In the event our current operating plan includes such a facility, we will fall under CLIA regulatory requirements.
Certain of our product candidates will require significant clinical validation prior to obtaining marketing clearance from the FDA. We intend to contract with appropriate and experienced CROs (contract research organizations) to prepare for and review the results from clinical field trials. We engage certain scientific advisors, consisting of scientific Ph.D.s and M.D.’s, who contribute to the scientific and medical validity of our clinical trials when appropriate.
Research and Development Activities
We did not engage in any research and development efforts during the years ended December 31, 2020 and 2019, nor do we expect to engage in any research and development activity until funding is secured and we develop a plan to commercialize our products.
Employees
As of December 31, 2020, we had no employees, and two part-time consultants providing services to the Company in order to maintain the Company as a going concern and to protect our intellectual property portfolio and other assets.

---

ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
You should consider carefully the following risks, along with other information contained in this Annual Report on Form 10-K. The risks and uncertainties described below are not the only ones that may affect us. Additional risks and uncertainties may also adversely affect our business and operations, including those discussed in Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operation, below. If any of the following risks actually occur, our business, result of operations, and financial condition could be adversely affected.
We have a history of incurring net losses and, currently, we are not generating any revenue. There can be no assurances that we will generate any revenue in the future, achieve profitable operations or continue as a going concern.
As of the year ended December 31, 2020, we had an accumulated deficit of $52,114,986. Our losses resulted principally from general and administrative costs relating to our operations. Currently, we are not generating any revenue from operations, and we expect to incur sizeable and increasing losses in 2020. Historically, we have financed our operations with the proceeds from issuances of equity and debt securities, including, most recently, issuances of promissory notes. In the past, we also provided for our cash needs by issuing shares of our Common Stock, options and warrants as payment for certain operating costs, including consulting and professional fees, as well as divesting our minority equity interests and equity-linked investments.
Our history of operating losses, limited cash resources and the absence of an operating plan necessary to capitalize on our assets raise substantial doubt about our ability to continue as a going concern, absent a strengthening of our cash position. Management is currently pursuing various funding options, including seeking debt or equity financing, licensing opportunities and the sale of certain investment holdings, as well as a strategic, merger or other transaction to obtain additional funding to recommence operation and to continue the development of, and to successfully commercialize, our products. There can be no assurance that we will be successful in our efforts. Should we be unable to obtain adequate financing or generate sufficient revenue in the future, our business, result of operations, liquidity and financial condition would be materially and adversely harmed, and we will be unable to continue as a going concern.
There can be no assurance that, assuming we are able to strengthen our cash position, we will achieve adequate revenue or profitable operations sufficient to continue as a going concern.
Our ability to re-commence and support operations and continue as a going concern is dependent upon raising adequate financing. We may not be able to obtain such capital on a timely basis or under commercially reasonable terms, if at all.
We expect that the capital required to re-commence our operations will be substantial, and the extent of this need will depend on many factors, some of which are beyond our control, including the continued development of our product candidates; the costs associated with maintaining, protecting and expanding our patent and other intellectual property rights; future payments, if any, received or made under existing or possible future collaborative arrangements, including pursuant to the Preprogen Agreement; the timing of regulatory approvals needed to market our product candidates; and market acceptance of our products. Although we are pursuing various funding and related options to re-commence operations and, ultimately, commercialize our innovative PAD-based products, management has been unsuccessful to date in securing sufficient financing. There can be no assurance that we will be successful in our efforts to obtain adequate financing. Should we be unable to raise adequate financing or generate revenue in the future, our business prospects would be materially and adversely harmed. As a result, management believes that given the current economic environment and the continuing need to strengthen our cash position, there is substantial doubt about our ability to continue as a going concern.
We have promissory notes in the aggregate principal amount of approximately $2.4 million outstanding that are all currently due and payable on demand. In the event that demand for repayment is made, and we are not able to raise sufficient capital to pay such notes or otherwise restructure the same, we will be in default and will not be able to continue as a going concern.
Currently, we have promissory notes with a principal amount aggregating approximately $2.4 million outstanding, all of which are now due and payable on demand. In the event the holders demand repayment and we are unable to pay such notes or restructure the notes, the notes will be in default, and the Company may not be able to continue as a going concern.
Assuming we are able to successfully develop a financing and operating plan, and therefore re-commence operations, there is no assurance that our products will gain market acceptance.
Efforts to commercialize our products are conditioned upon the development of a financing and operating plan that allows us to re-commence operations. Assuming the successful development of such a plan, our success will depend in substantial part on the extent to which our products achieve market acceptance. We cannot predict or guarantee that physicians, patients, healthcare insurers or maintenance organizations, or the medical community in general, will accept or utilize any of our products.
We face intense competition, including competition from entities that are more established and may have greater financial resources than we do, which may make it difficult for us to establish and maintain a viable market presence.
If successfully brought into the marketplace, any of our products will likely compete with several existing products. We anticipate that we will face intense and increasing competition in the future as new products enter the market and advanced technologies become available. We cannot assure that existing products or new products developed by competitors will not be more effective, or more effectively marketed and sold than those by us. Competitive products may render our products obsolete or noncompetitive prior to our recovery of development and commercialization expenses.
Many of our competitors also have significantly greater financial, technical and human resources and will likely be better equipped to develop, manufacture and market products. Smaller companies may also prove to be significant competitors, particularly through collaborative arrangements with large biotechnology companies. Furthermore, academic institutions, government agencies and other public and private research organizations are becoming increasingly aware of the commercial value of their inventions and are actively seeking to commercialize the technology they have developed. Accordingly, competitors may succeed in commercializing products more rapidly or effectively than us, which would have a material adverse effect on the Company.
If we fail to establish marketing and sales capabilities or fail to enter into effective sales, marketing and distribution arrangements with third parties, we may not be able to successfully commercialize our products.
Upon re-commencement of active operations, we will be primarily dependent on third parties for the sales, marketing and distribution of our products. We may enter into various agreements providing for the commercialization of our product candidates. We intend to sell our product candidates primarily through third parties and establish relationships with other companies to commercialize them in other countries around the world. We currently have no internal sales and marketing capabilities, and only a limited infrastructure to support such activities. Therefore, our future profitability will depend in part on our ability to enter into effective marketing agreements. To the extent that we enter into sales, marketing and distribution arrangements with other companies to sell our products in the United States or abroad, our product revenue will depend on their efforts, which may not be successful.
Further testing of certain of our product candidates is required and regulatory approval may be delayed or denied, which would limit or prevent us from marketing our product candidates and significantly impair our ability to generate revenues.
Human pharmaceutical products are subject to rigorous preclinical testing and clinical trials and other approval procedures mandated by the FDA and foreign regulatory authorities. Various federal and foreign statutes and regulations also govern or influence the manufacturing, safety, labeling, storage, record keeping and marketing of pharmaceutical products. The process of obtaining these approvals and the subsequent compliance with appropriate U.S. and foreign statutes and regulations is time-consuming and requires the expenditure of substantial resources. In addition, these requirements and processes vary widely from country to country.
To varying degrees based on the regulatory plan for each product candidate, the effect of government regulation and the need for FDA and other regulatory agency approval will delay commercialization of our product candidates, impose costly procedures upon our activities, and put us at a disadvantage relative to larger companies with which we compete. There can be no assurance that FDA or other regulatory approval for any products developed by us will be granted on a timely basis, or at all. If we discontinue the development of one of our product candidates, our business and stock price may suffer.
Our success will be dependent upon licenses and proprietary rights we receive from other parties, and on any patents we may obtain.
Our success will depend in large part on our ability and that of our licensors to (i) maintain license and patent protection with respect to our products, (ii) defend patents and licenses once obtained, (iii) maintain trade secrets, (iv) operate without infringing upon the patents and proprietary rights of others, and (v) maintain and obtain appropriate licenses to patents or proprietary rights held by third parties if infringement would otherwise occur, both in the United States and in foreign countries.
The patent positions of biomedical companies, including ours, are uncertain and involve complex legal and factual questions. There is no guarantee that we, or our licensors, have or will develop or obtain the rights to products or processes that are patentable, that patents will issue from any of the pending applications, or that claims allowed will be sufficient to protect the technology developed by, or licensed to, us. In addition, we cannot be certain that any patents issued to or licensed by us will not be challenged, invalidated, infringed or circumvented, or that the rights granted thereunder will provide us with competitive advantages.
Litigation, which could result in substantial cost, may also be necessary to enforce any patents to which we have rights, or to determine the scope, validity and unenforceability of other parties’ proprietary rights, which may affect our rights. United States patents carry a presumption of validity and generally can be invalidated only through clear and convincing evidence. There can be no assurance that our patents would be held valid by a court or administrative body or that an alleged infringer would be found to be infringing. The mere uncertainty resulting from the institution and continuation of any technology-related litigation or interference proceeding could have a material adverse effect on us pending resolution of the disputed matters.
We may also rely on unpatented trade secrets and know-how to maintain our competitive position, which we seek to protect, in part, by confidentiality agreements with employees, consultants and others. There can be no assurance that these agreements will not be breached or terminated, that we will have adequate remedies for any breach, or that trade secrets will not otherwise become known or be independently discovered by our competitors.
Protecting our proprietary rights is difficult and costly.
The patent positions of biotechnology companies can be highly uncertain and involve complex legal and factual questions. Accordingly, we cannot predict the breadth of claims allowed in these companies’ patents or whether we may infringe or be infringing these claims. Patent disputes are common and could preclude the commercialization of our products. Patent litigation is costly in its own right and could subject us to significant liabilities to third parties. In addition, an adverse decision could force us to either obtain third-party licenses at a material cost or cease using the technology or product in dispute.
We currently do not have any employees, resulting from our objective of substantially reducing our expenses. At such time as we re-commence operations, if ever, we may be unable to attract skilled personnel and maintain key relationships.
The success of our business will depend, in large part, on our ability to attract and retain highly qualified management, scientific and other personnel, and on our ability to develop and maintain important relationships with leading research institutions and consultants and advisors. Competition for these types of personnel and relationships is intense among numerous pharmaceutical and biotechnology companies, universities and other research institutions. As a result of the suspension of the development of our PAD based products, and in connection with our objective to substantially reduce our expenses, we do not have any employees, and currently rely on consultants and/or contract managers to manage the business and operations of the Company. There can be no assurance that we will be able to attract and retain skilled personnel at such time as we re-commence operations, and the failure to do so would have a material adverse effect on the Company.
We may not be able to efficiently develop manufacturing capabilities or contract for such services from third parties on commercially acceptable terms, if at all.
We have established relationships with third-party manufacturers for the commercial production of our products, which relationships have been suspended due to the suspension of our direct, active operations. There can be no assurance that we will be able to reestablish or maintain relationships with third-party manufacturers on commercially acceptable terms, if at all, or that third-party manufacturers will be able to manufacture our products on a cost-effective basis in commercial quantities under Good Manufacturing Practices mandated by the FDA.
Our dependence upon third parties for the manufacture of our products may adversely affect future costs and the ability to develop and commercialize our products on a timely and competitive basis. Further, there can be no assurance that manufacturing or quality control problems will not arise in connection with the manufacture of our products or that third-party manufacturers will be able to maintain the necessary governmental licenses and approvals to continue manufacturing such products. Any failure to establish relationships with third parties for our manufacturing requirements on commercially acceptable terms would have a material adverse effect on the Company. Additionally, we may rely upon foreign manufacturers. Any event which negatively impacts these manufacturing facilities, manufacturing systems or equipment, or suppliers, including, among others, wars, terrorist activities, natural disasters and outbreaks of infectious disease, could delay or suspend shipments of products or the release of new products.
In the future, we anticipate that we will need to obtain additional or increased product liability insurance coverage and it is uncertain that such increased or additional insurance coverage can be obtained on commercially reasonable terms.
Our business will expose us to potential product liability risks that are inherent in the testing, manufacturing and marketing of pharmaceutical products. There can be no assurance that product liability claims will not be asserted against us. The Company does not have product liability coverage, and there can be no assurance that we will be able to obtain product liability insurance on commercially acceptable terms or that we will be able to maintain such insurance at a reasonable cost or in sufficient amounts to protect against potential losses. A successful product liability claim or a series of claims brought against us could have a material adverse effect on the Company.
Insurance coverage is increasingly more difficult to obtain or maintain.
Obtaining insurance for our business, property and products is increasingly more costly and narrower in scope, and we may be required to assume more risk in the future. If we are subject to third-party claims or suffer a loss or damage in excess of our insurance coverage, we may be required to share that cost in excess of our insurance limits. Furthermore, any first- or third-party claims made on any of our insurance policies may impact our ability to obtain or maintain insurance coverage at reasonable costs or at all in the future.
The market price of shares of our Common Stock, like that of many biotechnology companies, is highly volatile.
Market prices for our Common Stock and the securities of other medical and biomedical technology companies have been highly volatile and may continue to be highly volatile in the future. Factors such as announcements of technological innovations or new products by us or our competitors, government regulatory action, litigation, patent or proprietary rights developments, and market conditions for medical and high technology stocks in general can have a significant impact on any future market for our Common Stock.
Trading of our Common Stock is limited, which may make it difficult for you to sell your shares at times and prices that you feel are appropriate.
Trading of our Common Stock, which is conducted on the OTC: PINK marketplace, has been limited. This adversely affects the liquidity of our Common Stock, not only in terms of the number of shares that can be bought and sold at a given price, but also through delays in the timing of transactions and reduction in security analysts and the media’s coverage of us. This may result in lower prices for our Common Stock than might otherwise be obtained and could also result in a larger spread between the bid and ask prices for our Common Stock.
The issuance of shares of our preferred stock may adversely affect the holders of our Common Stock.
Our Board of Directors is authorized to designate one or more series of preferred stock and to fix the rights, preferences, privileges and restrictions thereof, without any action by the stockholders. The designation and issuance of such shares of our preferred stock may adversely affect the holders of our Common Stock if the rights, preferences and privileges of such preferred stock (i) restrict the declaration or payment of dividends on our Common Stock, (ii) dilute the voting power of our Common Stock, (iii) impair the liquidation rights of our Common Stock, or (iv) delay or prevent a change in control of the Company from occurring, among other possibilities.
Our Common Stock is subject to “penny stock” rules.
Our Common Stock is currently defined as a “penny stock” under Rule 3a51-1 promulgated under the Exchange Act. “Penny stocks” are subject to Rules 15g-2 through 15g-7 and Rule 15g-9, which impose additional sales practice requirements on broker-dealers that sell penny stocks to persons other than established customers and institutional accredited investors. Among other things, for transactions covered by these rules, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. Consequently, these rules may affect the ability of broker-dealers to sell our Common Stock and affect the ability of holders to sell their shares of our Common Stock in the secondary market. To the extent our Common Stock is subject to the penny stock regulations, the market liquidity for our shares will be adversely affected.
Because we do not expect to pay dividends, you will not realize any income from an investment in our Common Stock unless and until you sell your shares at a profit.
We have never paid dividends on our Common Stock and do not anticipate paying any dividends for the foreseeable future. You should not rely on an investment in our stock if you require dividend income. Further, you will only realize income on an investment in our shares of Common Stock in the event you sell or otherwise dispose of your shares at a price higher than the price you paid for your shares. Such a gain would result only from an increase in the market price of our Common Stock, which is uncertain and unpredictable.

---

ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

---

ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
We did not maintain a corporate headquarters during the years ended December 31, 2020 or 2019, nor do we have any further obligation under any prior lease agreements. We currently plan to transfer operations to a new facility pending obtaining financing to re-commence operations.

---

ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
As of the date hereof, there are no material pending legal proceedings to which we are a party to or of which any of our property is the subject.

---

ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II

---

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our Common Stock
Our Common Stock trades on the OTC: PINK marketplace under the symbol “QTXB”. The prices below are based on high and low reported sales prices as reported by the OTC Markets during the calendar quarters indicated. The prices represent quotations between dealers without adjustment for retail mark-up, mark-down or commission and do not necessarily represent actual transactions.
High
Low
Year ended December 31, 2020
Fourth Quarter
$0.010
$0.004
Third Quarter
$0.009
$0.004
Second Quarter
$0.013
$0.003
First Quarter
$0.004
$0.002
Year ended December 31, 2019
Fourth Quarter
$0.010
$0.000
Third Quarter
$0.010
$0.000
Second Quarter
$0.010
$0.000
First Quarter
$0.010
$0.000
Stockholders
As of April 15, 2021, there were approximately 259 shareholders of record of our Common Stock, one of which was Cede & Co., a nominee for the Depository Trust Company (“DTC”). Shares of Common Stock that are held by financial institutions, as nominees for beneficial owners, are deposited into principal accounts at the DTC and are considered to be held of record by Cede & Co. as one stockholder.
Recent Sales of Unregistered Securities
No unregistered securities were issued during the fiscal year ended December 31, 2020 that were not previously reported in a Quarterly Report on Form 10-Q or Current Report on Form 8-K.

---

ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. SELECTED FINANCIAL DATA
Not required under Regulation S-K for “smaller reporting companies”.

---

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We have developed and intend to commercialize our patented miniform pads and PAD based over-the-counter products for the treatment of hemorrhoids, minor vaginal infection, urinary incontinence, general catamenial uses and other medical needs. We are also developing genomic diagnostics for the laboratory market, based on our lateral flow patents. Our platforms include: inSync®, UniqueTM, and OEM branded over-the-counter and laboratory testing products based on our core intellectual property related to our PAD technology.
The continuation of our operations remains contingent upon the receipt of additional financing required to execute our business and operating plan, which is currently focused on the commercialization of our PAD technology either directly or through a joint venture or other relationship intended to increase shareholder value. In the interim, we have nominal operations, focused principally on maintaining our intellectual property portfolio and maintaining compliance with the public company reporting requirements. In order to continue as a going concern, we will need to raise capital, which may include through the issuance of debt and/or equity securities. No assurances can be given that we will be able to obtain financing on terms favorable to us, if at all, or otherwise successfully develop a business and operating plan or enter into an alternative relationship to commercialize our PAD technology.
Our principal business line consists of our OTC Business, which includes commercialization of our InSync feminine hygienic interlabial pad, the Unique® Miniform for hemorrhoid application, and other treated miniforms, as well as maintaining established and continuing licensing relationships related to the OTC Business. We also own certain diagnostic testing technology that is based on our lateral flow patents. Management believes this corporate structure permits us to more efficiently explore options to maximize the value of the Businesses, with the objective of maximizing the value of the Businesses for the benefit of the Company and our shareholders.
Our current focus is to obtain additional working capital necessary to continue as a going concern, and develop a longer term financing and operating plan to: (i) commercialize our over-the-counter products either directly or through joint ventures, mergers or similar transactions intended to capitalize on potential commercial opportunities; (ii) contract manufacturing of our over-the-counter products to third parties while maintaining control over the manufacturing process; (iii) maintain our intellectual property portfolio with respect to patents and licenses pertaining to both the OTC Business and the Diagnostics Business; and (iv) maximize the value of our investments in non-core assets. As a result of our current financial condition, however, our efforts in the short-term will be focused on obtaining financing necessary to maintain the Company as a going concern.
Our Results of Operations
We did not generate any revenue during the years ended December 31, 2020 or 2019. The absence of revenue is due to no royalty revenue attributable to our PAD technology received during the 2020 and 2019 periods. Management does not anticipate that we will generate any revenue until such time as we develop a plan to commercialize our over-the-counter products, which is contingent on the receipt of financing.
Total costs and operating expense for the years ended December 31, 2020 and 2019 were $60,624 and $201,739, respectively. Highlights of the major components of our results of operations are detailed and discussed below:
Year Ended
December 31,
Year Ended
December 31,
Sales, general and administrative
$12,726
$59,904
Professional fees
$37,398
$57,835
Professional fees, related party
$10,500
$84,000
Sales, general and administrative expense includes, but is not limited to, consulting expense, office and insurance expense, accounting and other costs to maintain compliance with our reporting requirements to the Securities and Exchange Commission (the “SEC”). The decrease in sales, general and administrative expense in the year ended December 31, 2020 compared to the year ended December 31, 2019 is principally attributable to lower costs incurred during the 2020 period for intellectual property and Directors and Officers Liability Insurance.
Professional fees include the costs of legal, consulting and auditing services provided to us, each of which were lower in the 2020 period, as compared to the 2019 period. The period over period decrease is due to lower costs of legal fees during the 2020 period due to the lower legal and audit fees compared to the 2019 period.
Professional fees, related party include the costs of consulting fees paid to Dr. Hirschman and Mr. Abrams for their services provided to the Company. During the year ended December 31, 2020, professional fees, related party were lower compared to the 2019 period due to a Dr. Hirschman and Mr. Abrams waiving certain of the service fees during the 2020 period.
We did not incur any research and development costs during the years ended December 31, 2020 or 2019 and did not engage in any research and development efforts in the 2020 or 2019 periods. The Company does not expect to engage in any research and development activity until funding is secured and we develop a plan to commercialize our products.
Other income and expense for the years ended December 31, 2020 and 2019 includes expense of $192,110 and expense of $420,181, respectively. Highlights of the major components of other income and expense related to our results of operations are detailed and discussed below:
Year Ended
December 31,
Year Ended
December 31,
Interest expense
$(216,720)
$(198,181)
Loss on impairment
$-
$(222,000)
Gain on settlement of accounts payable
$24,610
$-
During the year ended December 31, 2020, interest expense increased to $216,720 from $198,181 for the 2019 period. The increase in interest expense in the 2020 period compared to the 2019 period is primarily due to higher interest rate calculations on certain notes payable during the 2020 periods.
During the year ended December 31, 2019, we recorded non-cash expense of $222,000 due to impairment of certain assets during the period.
During the year ended December 31, 2020, we recorded a net gain on the settlement of accounts payable of $24,610.
Net loss for the 2020 period was $252,734, compared to a net loss of $621,920 reported for the 2019 period. The decrease in net loss in the 2020 period is directly attributable to lower expenses, described above.
Although we anticipate that we will likely incur net loss in future periods, we expect such net loss to decrease in future periods due to the current suspension of our active operations and our lack of revenue. We do not expect to re-commence active operations until we are able to secure financing necessary to execute our business and operating plan, including the development and launch of our products, or to otherwise capitalize on our PAD technology.
Liquidity and Capital Resources
At December 31, 2020, we had cash and cash equivalents of $55,428, as compared to $130,351 at December 31, 2019. At December 31, 2020, we had negative working capital of $2,381,055 and an accumulated deficit of $52,114,986.
During the years ended December 31, 2020 and 2019, we made aggregate cash payments of $3,500 and $78,000, respectively, to certain officers of the Company and to a consultant for services provided to the Company. During the year ended December 31, 2019, we had prepaid $7,000 of compensation to an officer which was applied to 2020 consulting fees.
During the year ended December 31, 2020, cash used for operating activities was $74,923, compared to $191,673 during the year ended December 31, 2019. The net overall decrease in cash used for operating activities during the year ended December 31, 2020, is attributable to losses incurred in the period.
Cash provided by investing activities during the year ended December 31, 2020 and 2019 was $0 and $0, respectively.
Cash used by financing activities during the year ended December 31, 2020 was $0 and $0, respectively.
We have not generated sufficient revenue from operations to meet our operating expenses. We require additional funding to complete the development and launch of our products, or to otherwise capitalize on our PAD technology. We have historically financed our operations primarily through issuances of equity securities and the proceeds of debt instruments. In the past, we have also provided for our cash needs by issuing Common Stock, options and warrants for certain operating costs, including consulting and professional fees. In addition, in the fiscal year ended December 31, 2017, we received a large cash payment from Preprogen as consideration for the sale and transfer of the Purchased Assets.
Management believes that given the current economic environment and the continuing need to strengthen our cash position, there is substantial doubt about our ability to continue as a going concern. We are pursuing various funding options, including licensing opportunities and the sale of investment holdings, as well other financing transactions, to obtain additional funding to continue the development of our products and bring them to commercial markets. There can be no assurance that we will be successful in our efforts. Should we be unable to raise adequate financing or generate sufficient revenue in the future, our business, results of operations, liquidity and financial condition would be materially and adversely harmed.
We believe that our ability to re-commence operations, and therefore continue as a going concern, is dependent upon our ability to do any or all of the following:
●
obtain adequate sources of funding to pay operating expenses and fund long-term business operations;
●
enter into a licensing or other relationship that allows us to commercialize our products;
●
manage or control working capital requirements by reducing operating expenses; and
●
develop new and enhance existing relationships with product distributors and other points of distribution for our products.
There can be no assurance that we will be successful in achieving our short- or long-term plans as set forth above, or that such plans, if consummated, will enable us to obtain profitable operations or continue in the long-term as a going concern.
Off-Balance Sheet Arrangements
We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.
Critical Accounting Estimates and Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Note 3 to the Financial Statements describes the significant accounting policies and methods used in the preparation of the Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Financial Statements.
Impairment of Assets
We assess the impairment of long-lived assets, including our other intangible assets, at least annually, or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The determination of related estimated useful lives and whether or not these assets are impaired involves significant judgments, related primarily to the future profitability and/or future value of the assets. Changes in our strategic plan and/or market conditions could significantly impact these judgments and could require adjustments to recorded asset balances. We hold investments in companies having operations or technologies in areas which are within or adjacent to our strategic focus when acquired, all of which are privately held and whose values are difficult to determine. We record an investment impairment charge if we believe an investment has experienced a decline in value that is other than temporary. Future changes in our strategic direction, adverse changes in market conditions or poor operating results of underlying investments could result in losses or an inability to recover the carrying value of the investments that may not be reflected in an investment’s current carrying value, thereby possibly requiring an impairment charge in the future.
In determining fair value of assets, the Company bases estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets that are not readily apparent from other sources. Actual fair value may differ from management estimates resulting in potential impairments causing material changes to certain assets and results of operations.
Transactions with Related Parties
During the year ended December 31, 2020, we paid Dr. Hirschman $3,500 of consulting fees for services as Chief Executive Officer. Dr. Hirschman waived ongoing fees during the 2020 calendar year. During the year ended December 31, 2019, the Company paid Dr. Hirschman $43,000 of consulting fees for services as Chief Executive Officer and a prepaid advance of $7,000 that was applied to services performed in 2020.
As of December 31, 2020 and 2019, we owed Mr. Abrams, a director of the Company, an aggregate total of $166,251 and $150,968, respectively, for outstanding principal and accrued and unpaid interest due pursuant to certain Bridge Notes. As of December 31, 2019, we owed Mr. Abrams $14,085 of accrued consulting fees that were paid in 2020.

---

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required under Regulation S-K for “smaller reporting companies”.

---

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Audited balance sheets for the years ended December 31, 2020 and 2019 and audited statements of operations, stockholders’ equity and cash flows for the years ended December 31, 2020 and 2019 are included immediately following the signature page to this Annual Report, beginning on page.

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

---

ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer/principal financial officer, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15I and 15d-15I under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, 2020. Based on this evaluation, and in light of the material weaknesses in internal controls over financial reporting described below, our Chief Executive Officer/Principal Financial Officer concluded that our disclosure controls and procedures were not effective.
Management’s Annual Report on Internal Control over Financial Reporting
Our Chief Executive Officer/Principal Accounting Officer is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-(f) under the Exchange Act. Our internal control over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). Our internal control over financial reporting include those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Our Chief Executive Officer/Principal Accounting Officer assessed the effectiveness of our internal control over financial reporting presented in conformity with U.S. GAAP. as of December 31, 2020. In conducting its assessment, our Chief Executive Officer/Principal Accounting Officer used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-2013 Integrated Framework. Based on this assessment, our Chief Executive Officer/Principal Accounting Officer concluded that, as of December 31, 2020, our internal control over financial reporting was not effective based on those criteria due to the material weakness in our entity level control environment described in the 2020 Annual Report on Form 10-K.
In an effort to remediate the identified material weaknesses in our entity level control environment, we have initiated and/or undertaken the following actions:
Management has retained, and will continue to retain, additional personnel with technical knowledge, experience, and training in the application of generally accepted accounting principles commensurate with our financial reporting and U.S. GAAP requirements. Where necessary, we will supplement personnel with qualified external advisors.
While we have retained competent accounting and finance professionals necessary to ensure timely and accurate reporting with the SEC, the weaknesses in our entity level control environment arguably persist, and will continue to persist pending financing necessary to allow us to recruit additional accounting and/or finance professionals to address the material weakness in our entity level control environment.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting that occurred during our most recent fiscal year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There has been no additional progress towards remediating our previously disclosed material weakness due to the lack of funding.

---

ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
None.
PART III

---

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following table sets forth our executive officers and directors:
Directors and Executive Officers
Age
Position
Shalom Hirschman
Chief Executive Officer, Principal Accounting Officer and Chair of the Board
Michael Abrams
Director
Shalom Hirschman, M.D. was appointed as our Chief Executive Officer and Principal Accounting Officer on December 31, 2010, and has served as a Director of the Company since September 2005. Dr. Hirschman was a Professor of Medicine, Director of the Division of Infectious Diseases and Vice-Chairman of the Department of Medicine at Mt. Sinai School of Medicine and the Mount Sinai Hospital. He spent nearly three decades at Mt. Sinai until his retirement in 1997. He then became the CEO, President and Chief Scientific Officer of Advanced Viral Research Corp., from which he retired in 2004. Dr. Hirschman received his medical degree from Albert Einstein College of Medicine Yeshiva University.
Our Board of Directors believes that Dr. Hirschman’s extensive experience in healthcare, in both academia and as an executive working in advanced clinical research, contribute to the efforts of the Board of Directors in shaping the direction of the Company as it seeks to execute its business plan.
Michael S. Abrams was appointed to our Board of Directors in March 2012. Mr. Abrams served the Chief Financial Officer and as a director of FitLife Brands, Inc., a publicly traded company, from 2010 until early 2019, and is currently a Managing Director of Burnham Hill Partners LLC, a New York-based investment and merchant banking firm he joined in August of 2003. Mr. Abrams holds a Master of Business Administration with Honors from the Booth School of Business at the University of Chicago.
Our Board of Directors believes that Mr. Abrams’ broad experience in corporate finance, including restructurings, as well as his experience as a finance executive working with public companies, provides necessary and relevant experience to the Board of Directors given the Company’s financing challenges and efforts to restructure its business and operations.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company’s Directors and Officers, and persons who own more than 10% of a registered class of the Company’s equity securities (“Section 16 Persons”), to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Section 16 Persons are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file. Based on the Company’s review of the forms it has received, on other reports filed by Section 16 Persons with the SEC and on the Company’s records, the Company believes that all persons subject to the reporting requirements pursuant to Section (16)(a) filed the required reports on a timely basis with the Securities and Exchange Commission.
Code of Ethics
We have adopted a code of ethics, which applies to all of our directors, officers and employees. Our code of ethics is intended to comply with the requirements of Item 406 of Regulation S-K. Any person may also obtain a copy of our code of ethics without charge by sending a written request addressed to: QuantRx Biomedical Corporation, 10190 SW 90th Avenue, No. 4690, Tualatin, Oregon, 97062.
Audit Committee
We do not currently have an audit committee. Considering the current suspension of active development of our PAD based products, together with the costs associated with procuring and providing the infrastructure to support an independent audit committee and our limited number of transactions, our Board of Directors has concluded that the risks associated with the lack of an independent audit committee are justified and manageable. Our Board of Directors will, however, periodically reevaluate its position with a view to establishing an audit committee in the event it is deemed to be in the best interests of the Company’s stockholders.
Compensation Committee
We do not currently have a compensation committee due to the lack of sufficient independent directors. At such time that we actively recruit additional management in connection with the recommencement of active operations, our Board of Directors will establish a compensation committee to administer our stock option plans and to re-establish general policies relating to compensation.
Nominating Committee
Our entire Board of Directors participates in consideration of director nominees. The Board will consider candidates who have experience as a board member or senior officer of a company or who are generally recognized in a relevant field as a well-regarded practitioner, faculty member or senior government officer. The Board will also evaluate whether the candidate’s skills and experience are complementary to the existing Board’s skills and experience as well as the Board’s need for operational, management, financial, international, technological or other expertise. The Board will interview candidates that meet the criteria, and then select nominees that the Board believes best suit the Company’s needs.

---

ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
During the years ended December 31, 2020 and 2019, our Chief Executive Officer and Principal Accounting Officer, Dr. Hirschman, was our only executive officer and was the only individual considered to be a Named Executive Officer.
The following table sets forth information concerning the compensation paid to Dr. Hirschman during the years ended December 31, 2020 and 2019.
Name and Principal Position
Year
Salary and Bonus ($)
Stock
Awards ($)
Warrants/ Option Awards ($)
All Other
Compensation ($)
Total ($)
Shalom Hirschman
$3,500
$
$
$
$3,500
Chief Executive Officer, Principal Accounting Officer and Chair of the Board
$42,000
$-
$-
$-
$42,000
During the years ended December 31, 2020 and 2019, Dr. Hirschman received aggregate compensation of $3,500, and $42,000, respectively, for his services as Chief Executive Officer of the Company. In November 2018, the Company authorized payment of $3,500 per month to Dr. Hirschman for services as Chief Executive Officer, including a prepaid advance of $7,000 to that was applied to services performed during 2020. In April 2020, Dr. Hirschman waived his service fees for the 2020 calendar year.
Outstanding Equity Awards at Fiscal Year-End
Option Awards
Name
Number of
Securities Underlying Unexercised
Options (#) Exercisable
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
Equity Incentive Plan Awards:
Number of
Securities
Underlying Unexercised
Unearned
Options (#)
Option
Exercise
Price
($)
Option
Expiration
Date
None
-
-
-
$-
-
Director Compensation
Name and Principal Position
Year
Salary and Bonus ($)
Stock
Awards ($)
Warrants/ Option Awards ($)
All Other
Compensation ($)
Total ($)
Michael Abrams
$-
$-
$-
$-
$-
Director
$42,000-
$-
$-
$-
$42,000
During the year ended December 31, 2020, Mr. Abrams waived his consulting fees.
During the year ended December 31, 2019, Mr. Abrams earned consulting fees of $42,000. As of December 31, 2019, the Company owed Mr. Abrams $14,085 of accrued compensation.

---

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following tables sets forth certain information as of April 15, 2021, concerning the ownership of shares of our Series B Preferred and Common Stock by (i) each stockholder of the Company known by us to be the beneficial owner of more than 5% of the outstanding shares of Series B Preferred and Common Stock, (ii) each current member of our Board of Directors, and (iii) each Executive Officer of the Company named in the Summary Compensation Table appearing under “Executive Compensation” above.
The number and percentage of shares beneficially owned is determined in accordance with Rule 13(d)(3) of the Exchange Act and the information is not necessarily indicative of beneficial ownership for any other purpose. Under that rule, beneficial ownership includes any shares as to which the individual or entity has voting power or investment power and any shares that the individual has the right to acquire within 60 days of April 15, 2021 through the exercise of any stock option or other right. Unless otherwise indicated in the footnotes or table, each person or entity has sole voting and investment power, or shares such powers with his or her spouse, with respect to the shares shown as beneficially owned.
Beneficial Ownership of our Series B Preferred
Name and Address of Beneficial Owner (1)
Amount and
Nature of
Beneficial
Ownership as of April 15, 2021
Percentage of
Class (2)
5% Beneficial Owners
Jason Adelman
3,085,336
50.0%
Barlett Family Trust utd 05/05/99
612,850
10.0%
Kate Weiner Revocable Trust
412,856
6.7%
Robert F. Hussey
350,572
5.7%
Robert J. and Sandra S. Nebrosky Living Trust
346,684
5.6%
(1)
Our officers and directors do not own any shares of our Series B Preferred, and have therefore been excluded from this table.
(2)
As of April 15, 2021, there are 6,196,893 shares of Series B Preferred Stock issued and outstanding, and 860,000 shares reserved for issuance.
Beneficial Ownership of our Common Stock
Amount and
Nature of
Beneficial
Name and Address of Beneficial Owner (1)
Ownership as of April 15,
Percentage of Class (2)
Officers and Directors
Shalom Hirschman
2,050,000
2.60%
Chief Executive Officer
Michael Abrams (3)
1,026,945
1.30%
Director
Total Officers and Directors as a Group
3,076,945
3.91%
(2 persons)
5% Beneficial Owners
Jason T. Adelman (4)
5,979,222
7.6%
c/o Cipher Capital Partners LLC
Avenue of Americas, Suite 936
New York, NY 10020
Matthew Balk (5)
5,696,780
7.24%
50 North 5th Street, Apt. 5GE
Brooklyn, NY 11249
*
Less than 1%.
(1)
Unless indicated otherwise, the address of each person listed in the table is: c/o QuantRx Biomedical Corporation, 10190 SW 90th Avenue, Tualatin, Oregon 97062.
(2)
The percentage of beneficial ownership of Common Stock is based on 78,696,461 shares of Common Stock outstanding as of April 15, 2021 and excludes all shares of Common Stock issuable upon the exercise of outstanding options or warrants to purchase Common Stock or conversion of any Common Stock equivalents, other than the shares of Common Stock issuable upon the exercise of options or warrants to purchase Common Stock held by the named person to the extent such options or warrants are exercisable within 60 days of April 15, 2021.
(3)
Excludes Common Stock issuable upon conversion of certain convertible promissory notes in the principal amount of $102,000 beneficially owned by Mr. Abrams. The terms of the promissory notes contain provisions preventing their conversion if as a result of such conversion the holder thereof owns in excess of 4.99% and 9.99%, respectively, of the issued and outstanding shares of the Company’s Common Stock.
(4)
Shares are owned by Mr. Adelman in JTWROS with Cass G. Adelman, Mr. Adelman’s spouse. The shares exclude 3,085,336 shares of Common Stock issuable upon conversion of shares of Series B Preferred, and Common Stock issuable upon conversion of certain convertible promissory notes in the principal amount of $636,149 beneficially owned by Mr. Adelman. The terms of the promissory notes and the Series B Preferred contain provisions preventing their conversion if as a result of such conversion the holder thereof owns in excess of 4.99% and 9.99%, respectively, of the issued and outstanding shares of the Company’s Common Stock.
(5)
Shares exclude 300,000 shares of Common Stock issuable upon conversion of shares of Series B Preferred, and Common Stock issuable upon conversion of certain convertible promissory notes in the principal amount of $60,544 beneficially owned by Mr. Balk. The terms of the promissory notes and the Series B Preferred contain provisions preventing their conversion if as a result of such conversion or exercise the holder thereof owns in excess of 4.99% and 9.99%, respectively, of the issued and outstanding shares of the Company’s Common Stock.

---

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Transactions with Related Parties
During the year ended December 31, 2020, we paid Dr. Hirschman $3,500 of consulting fees for services as Chief Executive Officer. Dr. Hirschman waived ongoing fees during the 2020 calendar year. During the year ended December 31, 2019, the Company paid Dr. Hirschman $43,000 of consulting fees for services as Chief Executive Officer and a prepaid advance of $7,000 that was applied to services performed in 2020.
During the years ended December 31, 2020 and 2019, Mr. Abrams received aggregate cash payments of $0 and $35,000 for services as a director of the Company. As of December 31, 2019, we owed Mr. Abrams $14,085 in accrued and unpaid consulting.
As of December 31, 2020 and 2019, we owed Mr. Abrams, a director of the Company, an aggregate total of $166,251 and $150,968, respectively, for outstanding principal and accrued and unpaid interest due pursuant to certain Bridge Notes.
Director Independence
We have determined that none of our directors were independent as of December 31, 2020, as determined under Rule 10A-3(b)(1) of the Exchange Act adopted pursuant to the Sarbanes-Oxley Act.

---

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees
The aggregate fees billed for professional services rendered by Fruci & Associates II, PLLC (“Fruci II”), our independent registered public accounting firm for the years ended December 31, 2020 and 2019, for the audit of our annual financial statements and the reviews of financial statements for years 2020 and 2019 were $22,750 and $24,460, respectively.
Audit-Related Fees
During the years ended December 31, 2020 and 2019, no assurance or related services were performed by Fruci II that were reasonably related to the performance of the audit or review of our financial statements.
Tax Fees
During the year ended December 31, 2020 and 2019, no fees were billed by Fruci II for tax compliance, tax advice or tax planning services.
All Other Fees
During the years ended December 31, 2020 and 2019, no fees were billed by Fruci II other than the fees set forth under the captions “Audit Fees” above.

---

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(F) The following documents are filed as part of this report:
F.
Financial Statements
Report of Fruci & Associates II, PLLC
Balance Sheets
Statements of Operations
Statements of Cash Flows
Statements of Stockholders’ Equity
Notes to Financial Statements
2. Financial Statement Schedules.
3. Exhibits. The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed with the Commission:
Exhibit No.
Description
3.1
Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 filed with Form 10-KSB filed on April 16, 2001).
3.2
Certificate of Amendment to the Articles of Incorporation of the Company, dated November 30, 2005 (incorporated by reference to Exhibit 3.2 filed with Form 10-KSB on March 31, 2006).
3.3
Bylaws of the Company (incorporated by reference to Exhibit 3.2 filed with Form 10KSB40/A filed on September 23, 1999).
3.4
Certificate of Amendment to the Bylaws of the Company dated December 2, 2005 (incorporated by reference to Exhibit 3.4 filed with Form 10-KSB on March 31, 2006).
3.5
Certificate of Amendment to the Articles of Incorporation dated January 25, 2010 (incorporated by reference to Exhibit 3.5 filed with Form 10-K on April 14, 2014).
3.6
Certificate of Withdrawal of the Series A Convertible Preferred Stock and Series A-1 Convertible Preferred Stock, dated November 19, 2010 (incorporated by reference to Exhibit 3.6 filed with Form 10-K on April 14, 2014).
3.7
Certificate of Designation for Series B Convertible Preferred Stock (incorporated by reference to Exhibit 3.6 filed with Form 10-K on April 14, 2011).
4.1
Form of Warrant to Purchase Shares of Common Stock of QuantRx Biomedical Corporation, dated October 2007 (incorporated by reference to Exhibit 10.2 filed with Form 8-K on October 24, 2007).
4.2
Form of Warrant to Purchase Shares of Common Stock of QuantRx issued by QuantRx in favor of Investors (incorporated by reference to Exhibit 4.2 filed with Form 8-K on January 29, 2008).
4.3
Form of Warrant to Purchase Shares of Common Stock of QuantRx, dated June 2008, issued by QuantRx in favor of lender (incorporated by reference to Exhibit 4.2 filed with Form 8-K on July 28, 2008).
4.4
Form of Warrant to Purchase Shares of Common Stock of QuantRx, dated August 2008, issued by QuantRx in favor of lender. (incorporated by reference to Exhibit 4.2 filed with Form 8-K on August 27, 2008).
4.5
Warrant to Purchase 2,000,000 Shares of Common Stock of QuantRx, dated July 30, 2009, issued by QuantRx in favor of NuRx (incorporated by reference to Exhibit 10.4 filed with Form 8-K on August 5, 2009).
4.6
Warrant to Purchase 2,000,000 Shares of Common Stock of QuantRx, dated July 30, 2009, issued by QuantRx in favor of NuRx (incorporated by reference to Exhibit 10.5 filed with Form 8-K on August 5, 2009).
10.1
2007 Incentive and Non-Qualified Stock Option Plan (incorporated by reference to Exhibit C filed with Schedule 14A on June 5, 2007).
10.2
Employment Agreement, dated July 30, 2009, by and between QuantRx and William Fleming (incorporated by reference to Exhibit 10.8 filed with Form 8-K on August 5, 2009).
10.3
Settlement Agreement and Release, dated as of July 7, 2011, by and between the Company and NuRx Pharmaceuticals, Inc. (incorporated by reference to Exhibit 99.1 filed with Form 8-K on July 8, 2011).
10.4
Form of Convertible Demand Purchase Note, dated July 1, 2017 (incorporated by reference to Exhibit 10.1 filed with Form 10-Q on August 20, 2017).
10.5
Asset Purchase Agreement, dated December 14, 2017, by and between QuantRx Biomedical Corporation and Preprogen LLC (incorporated by reference to Exhibit 10.1 filed with Form 8-K on December 21, 2017).
10.6
Patent Assignment Agreement, dated December 14, 2017, by and between QuantRx Biomedical Corporation and Preprogen LLC (incorporated by reference to Exhibit 10.2 filed with Form 8-K on December 21, 2017).
10.7
Trademark Assignment Agreement, dated December 14, 2017, by and between QuantRx Biomedical Corporation and Preprogen LLC (incorporated by reference to Exhibit 10.3 filed with Form 8-K on December 21, 2017).
10.8
Intellectual Property License Agreement, dated December 14, 2017, by and between QuantRx Biomedical Corporation and Preprogen LLC (incorporated by reference to Exhibit 10.4 filed with Form 8-K on December 21, 2017).
10.9
Escrow Agreement, dated December 14, 2017 (incorporated by reference to Exhibit 10.5 filed with Form 8-K on December 21, 2017).
10.10
Warrant to Purchase 15,000,000 Shares of Common Stock of QuantRx, dated December 14, 2017 (incorporated by reference to Exhibit 10.6 filed with Form 8-K on December 21, 2017).
10.11
Amendment No. 1 to the Asset Purchase Agreement, by and between QuantRx Biomedical Corporation and Preprogen LLC, dated October 8, 2018 (incorporated by reference to Exhibit 10.1 filed with Form 10-Q on November 19, 2018).
14.1
Ethical Guidelines adopted by the Board of Directors of the Company on May 31, 2005 (incorporated by reference to Exhibit 14.1 filed with Form 10-KSB on March 31, 2006).
31**
Certification of Principal Executive and Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32**
Certification of Principal Executive and Financial Officer pursuant to 18 USC Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**
XBRL Instance Document
101.SCH**
XBRL Taxonomy Extension Schema
101.CAL**
XBRL Taxonomy Extension Calculation Linkbase
101..DEF**
XBRL Taxonomy Extension Definition Linkbase
101.LAB**
XBRL Taxonomy Extension Label Linkbase
101.PRE**
XBRL Taxonomy Extension Presentation Linkbase
** Document is filed herewith.