Exhibit 99.1
Quantum Biopharma Ltd. (formerly, FSD Pharma Inc.)
Condensed consolidated interim financial statements
For the three and six months ended June 30, 2026, and 2025
[expressed in United States dollars]
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
[unaudited] [expressed in United States dollars]
| As at | June 30, | December 31, | ||||||||
| 2026 | 2025 | |||||||||
| Notes | $ | $ | ||||||||
| ASSETS | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | ||||||||||
| Other receivables | 4 | |||||||||
| Prepaid expenses and deposits | ||||||||||
| Investments | 5 | |||||||||
| Inventory | ||||||||||
| Digital assets - restricted | 6,10 | |||||||||
| Digital assets | 6,10 | |||||||||
| Non-current assets | ||||||||||
| Equipment, net | ||||||||||
| Right-of-use asset, net | ||||||||||
| Intangible assets, net | 7 | |||||||||
| Total assets | ||||||||||
| LIABILITIES | ||||||||||
| Current liabilities | ||||||||||
| Trade and other payables | 8,19 | |||||||||
| Lease obligations | ||||||||||
| Warrants liability | 9 | |||||||||
| Derivative liabilities | 11 | |||||||||
| Notes payable | 10 | |||||||||
| Convertible debentures | 11 | |||||||||
| Total liabilities | ||||||||||
| SHAREHOLDERS' EQUITY | ||||||||||
| Class A Multiple Voting Share capital | 12 | |||||||||
| Class B Subordinate Voting Share capital | 12 | |||||||||
| Warrants | 12 | |||||||||
| Contributed surplus | ||||||||||
| Foreign exchange translation reserve | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||
| Equity attributable to shareholders of the Company | ||||||||||
| Non-controlling interests | 14 | ( | ) | ( | ) | |||||
| Total liabilities and shareholders’ equity | ||||||||||
| Commitments and contingencies | 18 | |||||||||
| Subsequent events | 22 | |||||||||
On behalf of the Board:
| /s/ Zeeshan Saeed | /s/ Eric Hoskins | |
| Zeeshan Saeed Director |
Eric Hoskins Director |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
2
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
[unaudited] [expressed in United States dollar, except number of shares]
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||
| Notes | $ | $ | $ | $ | ||||||||||||||
| Expenses | ||||||||||||||||||
| General and administrative | 16 | |||||||||||||||||
| External research and development fees | ||||||||||||||||||
| Share-based payments | 13,19 | |||||||||||||||||
| Depreciation and amortization | 7 | |||||||||||||||||
| Total operating expenses | ||||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest expense (income) | ( | ) | ( | ) | ||||||||||||||
| Other income | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Finance expense, net | ||||||||||||||||||
| Accretion expense | 11 | |||||||||||||||||
| Loss (gain) on settlement of debt | 12 | ( | ) | ( | ) | ( | ) | |||||||||||
| Loss (gain) in fair value of derivative liabilities and warrant liability | 9,11 | |||||||||||||||||
| Unrealized loss (gain) on change in fair value of digital assets | 6 | ( | ) | ( | ) | |||||||||||||
| Realized (gain) on sale of digital assets | 6 | ( | ) | ( | ) | ( | ) | |||||||||||
| Realized (gain) on sale of investments | 5 | ( | ) | ( | ) | |||||||||||||
| Unrealized loss (gain) in fair value of investments | 5 | ( | ) | ( | ) | |||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Other comprehensive loss | ||||||||||||||||||
| Items that may be subsequently reclassified to loss: | ||||||||||||||||||
| Exchange gain on translation of foreign operations | ||||||||||||||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Net loss attributable to: | ||||||||||||||||||
| Equity owners of the Company | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Non-controlling interests | 14 | ( | ) | ( | ) | ( | ) | |||||||||||
| ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
| Net (loss) per share | ||||||||||||||||||
| Basic and diluted | 15 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| Weighted average number of shares outstanding – basic and diluted | 15 | |||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
3
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the six months ended June 30, 2026, and 2025
[unaudited][expressed in United States dollars, except number of shares]
| Class A shares | Class A shares to be issued | Class B shares | Warrants | Contributed surplus | Non-controlling interests | Foreign exchange translation reserve | Accumulated deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
| # | $ | # | $ | # | $ | # | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued - convertible debt [note 11,12] | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Shares to be issued [note 12] | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Shares for debt [note 12] | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Warrants issued [note 11] | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Warrants expired [note 12] | — | — | — | — | — | — | ( | ) | ( | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Exercise of warrants [note 11, 12] | — | — | — | — | ( | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Share-based payments [note 13] | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Exercise of RSUs [note 12,13] | — | — | — | — | — | — | ( | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Exercise of options [note 12,13] | — | — | — | — | — | — | ( | ) | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Comprehensive loss for the period | — | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued [note 12] | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Shares issued - convertible debt [note 11,12] | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Shares for debt [note 12] | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Warrants issued [note 11] | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Warrants expired [note 12] | — | — | — | — | — | — | ( | ) | ( | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Exercise of warrants [note 11, 12] | — | — | — | — | ( | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Share-based payments [note 13] | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Exercise of RSUs [note 12,13] | — | — | — | — | — | — | ( | ) | — | — | — | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Comprehensive loss for the period | — | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
4
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN CASH FLOWS
For the six months ended June 30, 2026, and 2025
[unaudited] [expressed in United States dollar]
| 2026 | 2025 | |||||||
| $ | $ | |||||||
| Operating activities | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Add (deduct) items not affecting cash | ||||||||
| Depreciation and amortization | ||||||||
| Interest expense | ||||||||
| Accretion expense | ||||||||
| Share-based payments | ||||||||
| Change in fair value of investments | ( | ) | ||||||
| Change in fair value of derivative liabilities and warrant liability | ||||||||
| Unrealized foreign exchange (gain) | ( | ) | ( | ) | ||||
| Unrealized loss (gain) on change in fair value of digital assets | ( | ) | ||||||
| Realized (gain) on sale of digital assets | ( | ) | ( | ) | ||||
| (Gain) on settlement of debt | ( | ) | ( | ) | ||||
| Realized (gain) on sale of investments | ( | ) | ||||||
| Changes in non-cash working capital balances | ||||||||
| Finance receivables | ||||||||
| Other receivables | ||||||||
| Prepaid expenses and deposits | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ||||||
| Deferred income | ( | ) | ||||||
| Trade and other payables | ( | ) | ||||||
| Cash used in operating activities | ( | ) | ( | ) | ||||
| Investing activities | ||||||||
| Redemption of investments | ||||||||
| Purchase of investments | ( | ) | ||||||
| Proceeds from sale of investments | ||||||||
| Purchases of digital assets | ( | ) | ( | ) | ||||
| Proceeds from sale of digital assets | ||||||||
| Cash (used in) provided by investing activities | ( | ) | ( | ) | ||||
| Financing activities | ||||||||
| Proceeds from issuance of shares, net | ||||||||
| Proceeds from shares to be issued | ||||||||
| Proceeds from convertible debentures | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Payment of lease obligation | ( | ) | ( | ) | ||||
| Exercise of RSUs | ( | ) | ||||||
| Proceeds from share options exercised | ||||||||
| Repayment of loans from tax rebate refund | ( | ) | ||||||
| (Repayment of) proceeds from Bitgo loan | ( | ) | ||||||
| Proceeds from loans | ||||||||
| Cash provided by financing activities | ||||||||
| Net increase (decrease) | ( | ) | ||||||
| Cash and cash equivalents, beginning of the period | ||||||||
| Cash and cash equivalents, end of the period | ||||||||
| Non-cash transactions | ||||||||
| Shares issued for debt | ||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
5
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
| 1. | Nature of business |
Quantum BioPharma Ltd. (formerly, FSD Pharma Inc.) (“Quantum” or the “Company”) is a biopharmaceutical company dedicated to building a portfolio of innovative assets and biotech solutions for the treatment of challenging neurodegenerative, inflammatory and metabolic disorders and alcohol misuse disorders with drug candidates in different stages of development. Through its wholly owned subsidiary, Lucid Psycheceuticals Inc. ("Lucid"), Quantum is focused on the research and development of its lead compound, Lucid-MS (formerly Lucid-21-302) ("Lucid-MS"). Lucid-MS is a patented new chemical entity shown to prevent and reverse myelin degradation, the underlying mechanism of multiple sclerosis, in preclinical models. The Company also maintains selective R&D programs for inflammatory diseases (FSD-PEA) and depression (Lucid-PSYCH), though these initiatives remain secondary priorities. Quantum is also focused on the research and development of a treatment for alcohol misuse for application in hospitals and other medical practices. Quantum maintained, through its wholly owned subsidiary, FSD Strategic Investments Inc. ("FSD Strategic Investments"), a portfolio of strategic investments which historically represented loans secured by residential properties. During the year ended December 31, 2025, the entire portfolio of these loan receivables was sold to a corporation owned by the CFO of the Company. As of June 30, 2026, the Company no longer holds any loans secured by residential properties.
The Company’s registered office is located at 1 Adelaide Street East, Suite 801. On August 15, 2024, the Company consolidated its Class A Multiple Voting Shares and Class B Subordinate Voting Shares (each as defined hereinafter) on a 65:1 basis and changed its name to "Quantum BioPharma Ltd." with a new trading symbol "QNTM" on both NASDAQ and CSE.
On July 31, 2023, the Company entered into an
exclusive intellectual property license agreement (the “License Agreement”) with Celly Nutrition Corp. (“Celly”).
Celly changed its name to “Unbuzzd Wellness Inc.” (“Unbuzzd”), effective May 23, 2025. The License Agreement provides
Unbuzzd access to proprietary information for the purposes of consumer product development and marketing. The License Agreement grants
Unbuzzd the rights to a proprietary formulation of natural ingredients, vitamins, and minerals to help with liver and brain function for
the purposes of potentially quickly relieving from the effects of alcohol consumption, such as inebriation, and restoring normal lifestyle.
The License Agreement also grants Unbuzzd rights to certain trademarks. In exchange, Quantum received
6
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
Subsidiaries
These condensed consolidated interim financial
statements are comprised of the financial results of the Company and its subsidiaries, which are the entities over which the Company has
control. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee
and can affect those returns through its power over the investee.
| Ownership percentage as at | Ownership percentage as at | |||||||||
| June 30, 2026 |
December 31, 2025 |
|||||||||
| Entity Name | Country | % | % | |||||||
| FSD Biosciences Inc. | USA | |||||||||
| Prismic Pharmaceuticals Inc. (“Prismic”) | USA | |||||||||
| FV Pharma Inc. | Canada | |||||||||
| Lucid Psycheceuticals Inc. | Canada | |||||||||
| FSD Strategic Investments Inc. | Canada | |||||||||
| FSD Pharma Australia Pty Ltd (“FSD Australia”) | Australia | |||||||||
| Unbuzzd Wellness Inc. | Canada | |||||||||
| Huge Biopharma Australia Pty Ltd (“Huge Biopharma”) | Australia | |||||||||
Non-controlling interests (“NCI”) represent ownership interests in consolidated subsidiaries by parties that are not shareholders of the Company. They are shown as a component of total equity in the condensed consolidated interim statements of financial position, and the share of income (loss) attributable to non-controlling interests is shown as a component of net income (loss) in the condensed consolidated interim statements of loss and comprehensive loss. Changes in the parent company’s ownership that do not result in a loss of control are accounted for as equity transactions.
| 2. | Basis of presentation |
[a] Statement of compliance
These condensed consolidated interim financial statements (“financial statements’) were prepared using the same accounting policies and methods as those used in the Company’s audited consolidated financial statements for the year ended December 31, 2025. These financial statements have been prepared in compliance with IAS 34 – Interim Financial Reporting. Accordingly, certain disclosures normally included in annual financial statements prepared in accordance with IFRS® Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) have been omitted or condensed. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2025.
These financial statements were approved and authorized for issuance by the Board of Directors (the “Board”) of the Company on August 13, 2026.
[b] Functional currency and presentation currency
The financial statements of each company within the consolidated group are measured using their functional currency, which is the currency of the primary economic environment in which an entity operates. These condensed consolidated interim financial statements are presented in United States dollars ("USD"), which is the Company’s functional and presentation currency for all years presented. The Company’s functional currency is the United States dollar, and the functional currencies of its subsidiaries are as follows:
| FSD Biosciences Inc. | United States Dollar |
| Prismic Pharmaceuticals Inc. | United States Dollar |
| FV Pharma Inc. | Canadian Dollar |
| Lucid Psycheceuticals Inc. | Canadian Dollar |
| FSD Strategic Investments Inc. | Canadian Dollar |
| FSD Pharma Australia Pty Ltd | Australian Dollar |
| Unbuzzd Wellness Inc. | Canadian Dollar |
| Huge Biopharma Australia Pty Ltd | Australian Dollar |
7
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
[c] Use of estimates and judgments
The preparation of these financial statements in conformity with IFRS requires management to make estimates, judgements and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, consistent with those disclosed in the audited consolidated financial statements for the year ended December 31, 2025, and described in these financial statements. Actual results could differ from these estimates.
Estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
[d] Comparative figures
Certain amounts in the prior year have been reclassified to conform with classification in the current year.
| 3. | New standards, amendments and interpretations adopted by the Company |
In May 2024, the IASB issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments – Disclosures. The amendments clarify the derecognition of financial liabilities and introduce an accounting policy option to derecognize financial liabilities that are settled through an electronic payment system. The amendments also clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features and the treatment of non-recourse assets and contractually linked instruments (CLIs). Further, the amendments mandate additional disclosures in IFRS 7 for financial instruments with contingent features and equity instruments classified at FVOCI. The Company has adopted these amendments in the consolidated interim financial statements.
The IASB issued IFRS 18 Presentation and Disclosure in Financial Statements, which replaces IAS 1 Presentation of Financial Statements, effective on January 1, 2027. Earlier application is permitted. The objective of IFRS 18 is to set out requirements for the presentation and disclosure of information in general purpose financial statements to help ensure they provide relevant information that faithfully represents an entity’s assets, liabilities, equity, income and expenses. IFRS 18 applies to all financial statements that are prepared and presented in accordance with IFRSs. Standards for recognizing, measuring, and disclosing specific transactions are addressed in other Standards and Interpretations.
The Company is currently assessing the impact on its consolidated interim financial statements.
| 4. | Other receivables |
The Company’s other receivables are comprised of the following as at:
| June 30, 2026 | December 31, 2025 | |||||||
| $ | $ | |||||||
| Sales tax recoverable | ||||||||
| Interest receivable | ||||||||
| Other receivables | ||||||||
| Subscription receivables | ||||||||
8
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
| 5. | Investments |
The following tables outline changes in investments during the period ended June 30, 2026:
| Balance at December 31, 2025 |
Additions | Disposals | Change in fair value through profit or loss | Effects of foreign exchange | Balance at June 30, 2026 |
|||||||||||||||||||||||
| Entity | Instrument | Note | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| A2ZCryptoCap Inc. | Shares | (i) | ||||||||||||||||||||||||||
| Royal Bank of Canada | GIC | (ii) | ( |
) | ||||||||||||||||||||||||
| Gamestop | Shares | (iii) | ||||||||||||||||||||||||||
| Genius Group Ltd | Shares | (iv) | ( |
) | ( |
) | ||||||||||||||||||||||
| JZR Gold | Warrants | (v) | ( |
) | ||||||||||||||||||||||||
| SLV | Shares | (vi) | ( |
) | ||||||||||||||||||||||||
| ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||
| Current | ||||||||||||||||||||||||||||
| Non-current | ||||||||||||||||||||||||||||
| (i) | On June 23, 2022, the Company acquired |
| ii) | During the year ended December 31, 2024, the Company purchased
four GICs for a total amount of C$ |
| iii) | On July 18, 2025, the Company purchased |
| iv) | On July 25, 2025, the Company purchased |
| v) | On July 22, 2025, the Company acquired |
| ● | The Company sold |
| ● | The |
9
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
The fair value of the warrants was determined using the Black-Scholes option pricing model and the following assumptions as at the following dates:
| July 22, 2025 | December 31, 2025 | June 30, 2026 | ||||||||||
| Share price (CDN) | $ | $ | $ | |||||||||
| Exercise price | $ | $ | $ | |||||||||
| Expected dividend yield | ||||||||||||
| Risk free interest rate | % | % | % | |||||||||
| Expected life | ||||||||||||
| Expected volatility | % | % | % | |||||||||
(vi) On April 16, 2026, the Company purchased
| 6. | Digital assets |
| (a) |
| January 1, 2026 Balance | Additions | Dispositions | Unrealized (loss) gain | June 30, 2026 Balance | ||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||
| Bitcoin | ( | ) | ( | ) | ||||||||||||||||
| Solana | ( | ) | ||||||||||||||||||
| ETH | ( | ) | ||||||||||||||||||
| XRP | ( | ) | ||||||||||||||||||
| SUI | ( | ) | ||||||||||||||||||
| LINK | ( | ) | ||||||||||||||||||
| ( | ) | ( | ) | |||||||||||||||||
| January 1, 2025 Balance | Additions | Dispositions | Unrealized (loss) gain | December 31, 2025 Balance | ||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||
| Bitcoin | ( | ) | ( | ) | ||||||||||||||||
| Dogecoin | ( | ) | ||||||||||||||||||
| Solana | ( | ) | ( | ) | ||||||||||||||||
| ETH | ( | ) | ( | ) | ||||||||||||||||
| XRP | ( | ) | ||||||||||||||||||
| SUI | ( | ) | ||||||||||||||||||
| LINK | ( | ) | ||||||||||||||||||
| ( | ) | ( | ) | |||||||||||||||||
10
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
Digital currency prices are
affected by various forces including global supply and demand, interest rates, exchange rates, inflation or deflation and the global political
and economic conditions. Digital assets have a limited history, and the fair value historically has been very volatile. The Company may
not be able to liquidate its inventory of digital assets currency at its desired price if required. The Company has recognized an unrealized
loss in change in fair value of $
During the six months ended
June 30, 2026, the Company invested an additional $
The following table presents the Company’s digital assets, measured at fair value less and categorized into levels of the fair value hierarchy on the condensed consolidated interim statements of financial position as at the following:
As at June 30, 2026
| Level 2 | Level 3 | |||||||||||
Digital assets, at fair value | Level 1 Quoted market price | Valuation technique - observable market inputs | Valuation technique - unobservable market inputs | |||||||||
| $ | $ | $ | ||||||||||
| Digital coins | ||||||||||||
As at December 31, 2025
| Level 2 | Level 3 | |||||||||||
| Digital assets, at fair value | Level 1 Quoted market price | Valuation technique - observable market inputs | Valuation technique - unobservable market inputs | |||||||||
| $ | $ | $ | ||||||||||
| Digital coins | ||||||||||||
| 7. | Intangible assets |
Intangible assets as at June 30, 2026, are as follows:
| Cost | Lucid | |||
| $ | ||||
| As at December 31, 2025, and June 30, 2026 | ||||
| Accumulated amortization | $ | |||
| As at December 31, 2025 | ||||
| Amortization | ||||
| As at June 30, 2026 | ||||
| Net book value | ||||
| As at June 30, 2026 | ||||
| As at December 31, 2025 | ||||
The Company’s intangible asset for Lucid represents the license agreement with the University Health Network giving the Company world-wide exclusive rights to the Lucid-MS compound and related patents.
11
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
| 8. | Trade and other payables |
Trade and other payables consist of the following as at:
| June 30, 2026 | December 31, 2025 | |||||||
| $ | $ | |||||||
| Trade payables | ||||||||
| Accrued liabilities (i) | ||||||||
(i) Accrued liabilities consist of the following as at:
| June 30, 2026 | December 31, 2025 | |||||||
| $ | $ | |||||||
| External research and development fees | ||||||||
| Operational expenses | ||||||||
| Professional and other fees | ||||||||
| Accrued interest | ||||||||
| 9. | Warrants Liability |
[a] December 2024 Warrants
During the year ended December 31, 2024, the Company issued warrants attached to its convertible debenture (Note 11).
The Company determined that these warrants were
exchangeable into a variable number of shares due to foreign exchange, and as such, the warrants were classified as financial liabilities
measured at fair value through profit or loss (“FVTPL”). The Company used the Black-Scholes pricing model to estimate fair
value. Expected volatility was based on an evaluation of the historical volatility of the Company’s share price. The risk-free interest
rate for the life of the warrants was based on the yields available on government benchmark bonds with a term approximating the remaining
term of the warrants. The life of the warrants was based on the contractual terms. The fair value of the warrant liability as at December
13, 2024, the date of issuance was $
The fair values were determined using the Black-Scholes option pricing model and the following assumptions as at:
| December 13, 2024 | December 31, 2024 | June 25, 2025 | ||||||||||
| Share price (CAD) | $ | $ | $ | |||||||||
| Exercise price (CAD) | $ | $ | $ | |||||||||
| Expected dividend yield | ||||||||||||
| Risk free interest rate | % | % | % | |||||||||
| Expected life | ||||||||||||
| Expected volatility | % | % | % | |||||||||
| Foreign exchange rate | ||||||||||||
12
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
[b] January 2025 Warrants
On January 20, 2025, the Company issued
warrants attached to its convertible debenture (Note 11). The fair value of the warrant liability at the date of issuance on January 20,
2025, was $
The fair values were determined using the Black-Scholes option pricing model and the following assumptions as at:
| January 20, 2025 | June 25, 2025 | |||||||
| Share price (CAD) | $ | $ | ||||||
| Exercise price (CAD) | $ | $ | ||||||
| Expected dividend yield | ||||||||
| Risk free interest rate | % | % | ||||||
| Expected life | ||||||||
| Expected volatility | % | % | ||||||
| Foreign exchange rate | ||||||||
[c] March 6, 2025 Warrants
On March 6, 2025, the Company issued warrants
attached to its convertible debenture (Note 11). The fair value of the warrant liability as at date of issuance on March 6, 2025, was
$
The fair values were determined using the Black-Scholes option pricing model and the following assumptions as at:
| March 6, 2025 | June 25, 2025 | |||||||
| Share price (CAD) | $ | $ | ||||||
| Exercise price (CAD) | $ | $ | ||||||
| Expected dividend yield | ||||||||
| Risk free interest rate | % | % | ||||||
| Expected life | ||||||||
| Expected volatility | % | % | ||||||
| Foreign exchange rate | ||||||||
[d] March 28, 2025 Warrants
On March 28, 2025, the Company issued warrants
attached to its convertible debenture (Note 11). The fair value of the warrant liability as at date of issuance was $
13
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
The fair values were determined using the Black-Scholes option pricing model and the following assumptions as at:
| March 28, 2025 | June 25, 2025 – July 31, 2025 | |||||||
| Share price (CAD) | $ | $ | | |||||
| Exercise price (CAD) | $ | $ | ||||||
| Expected dividend yield | - | |||||||
| Risk free interest rate | % | % | ||||||
| Expected life | ||||||||
| Expected volatility | % | % | ||||||
| Foreign exchange rate | ||||||||
[e] March 20, 2026 Warrants
On March 20, 2026, the Company issued
The fair values were determined using the Black-Scholes option pricing model and the following assumptions as at:
| March 20, 2026 | May 28, 2026 – June 1, 2026 | June 30, 2026 | ||||||||||
| Share price (CAD) | $ | $ | $ | |||||||||
| Exercise price (CAD) | $ | $ | $ | |||||||||
| Expected dividend yield | - | - | ||||||||||
| Risk free interest rate | % | % | % | |||||||||
| Expected life | ||||||||||||
| Expected volatility | % | % | ||||||||||
| Foreign exchange rate | ||||||||||||
| 10. | Notes payable |
On June 4, 2025, the Company obtained a $
During the six months
ended June 30, 2026, the Company repaid the outstanding principal balance of $
As at June 30, 2026, the Company
has an outstanding notes payable balance of $
14
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
| 11. | Convertible debentures |
December 2024 Debentures
In December 2024, the Company issued a total of
The Company could have redeemed the December 2024
Debentures at any time prior to maturity, in whole or in part, upon fifteen days’ notice and payment of certain penalties as applicable.
The December 2024 Debenture was determined to be a financial instrument comprising a host debt component, a conversion feature and a warrant
component which are both considered to be embedded derivatives due to variable consideration payable upon conversion caused by foreign
exchange. On initial recognition, the fair value of the embedded derivatives was calculated first, with the residual value being assigned
to the host financial liability. The initial fair value of the warrants was $
The fair value of the conversion feature was determined
by using with-and-without method (“with-and-without method’) that considered changes in expected cash flows due to the conversion.
The model included all terms of the December 2024 Debenture described above as well as the probability of conversion, the impact of default
barrier and the implied credit spread of the Company. The fair value of the conversion feature as at December 13, 2024, the date of issuance,
was $
The fair values were determined using the assumptions below:
| December 13, 2024 | December 31, 2024 | May 5, 2025 | May 23, 2025 | |||||||||||||
| Share price (CAD) | $ | $ | $ | $ | ||||||||||||
| Conversion price (CAD) | $ | $ | $ | $ | ||||||||||||
| Expected Volatility | % | % | % | % | ||||||||||||
| Risk free interest rate | % | % | % | % | ||||||||||||
| Expected life | ||||||||||||||||
| Credit Spread | % | % | % | % | ||||||||||||
| Foreign exchange rate | ||||||||||||||||
As of June 30, 2026, the Company had the following December 2024 Debenture balance outstanding:
| Proceeds | $ | |||
| Value of conversion option | ( | ) | ||
| Value of warrants (Note 9 [b]) | ( | ) | ||
| Initial recognition of debt | $ | |||
| Accretion expense | ||||
| Balance, December 31, 2024 | $ | |||
| Accretion expense | ||||
| Balance, date of conversion, May 5, 2025 | $ | |||
| Amount converted | ( | ) | ||
| Balance, May 5, 2025 | $ | |||
| Accretion expense | ||||
| Balance, date of conversion, May 23, 2025 | $ | |||
| Amount converted | ( | ) | ||
| Balance, December 31, 2025 and June 30, 2026 | $ |
15
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
January 2025 Debentures
On January 20, 2025, the Company closed
the third tranche of the December 2024 Offering (“Tranche 3”) and issued
On initial recognition, the fair value of the
embedded derivatives was calculated first, with the residual value being assigned to the host financial liability. The initial fair value
of the warrants was $
On February 7, 2025, the debt holder converted
a partial amount of the December 2024 Debenture into an aggregate of
The fair value of the conversion feature as at
dates of conversion on February 7 and February 26, 2025, was $
The fair values were determined using the assumptions below:
| January 20, 2025 | February 7, 2025 | February 26, 2025 | ||||||||||
| Share price (CAD) | $ | $ | $ | |||||||||
| Conversion price (CAD) | $ | $ | $ | |||||||||
| Expected Volatility | % | % | % | |||||||||
| Risk free interest rate | % | % | % | |||||||||
| Expected life | ||||||||||||
| Credit Spread | % | % | % | |||||||||
| Foreign exchange rate | ||||||||||||
The Company also incurred a total of $
As of June 30, 2026, the Company had the following January 2025 Debenture balance outstanding:
| Proceeds | $ | |||
| Value of conversion option | ( | ) | ||
| Value of warrants (Note 9 [c]) | ( | ) | ||
| Initial recognition of debt – January 20, 2025 | $ | |||
| Accretion expense | ||||
| Balance, date of conversion – February 7, 2025 | $ | |||
| Amount converted | ( | ) | ||
| Balance, February 7, 2025 | $ | |||
| Accretion expense | ||||
| Balance, date of conversion, February 26, 2025 | $ | |||
| Amount converted | ( | ) | ||
| Balance, December 31, 2025, and June 30, 2026 | $ |
16
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
March 6, 2025 Debentures
On March 6, 2025, the Company closed the fourth
tranche of the December 2024 Offering (“Tranche 4”) and issued
On initial recognition, the fair value of the
embedded derivatives was calculated first, with the residual value being assigned to the host financial liability. The initial fair value
of the warrants was $
On March 25, 2025, the debt holder converted the
December 2024 Debenture into an aggregate of
The fair value was determined using the assumptions below:
| March 6, 2025 | ||||
| Share price (CAD) | $ | |||
| Conversion price (CAD) | $ | |||
| Expected Volatility | % | |||
| Risk free interest rate | % | |||
| Expected life | ||||
| Credit Spread | % | |||
| Foreign exchange rate | ||||
There was no change in accretion amount from date of issuance to date of conversion.
As of June 30, 2026, the Company had the following March 6, 2025, Debenture balance outstanding:
| Proceeds | $ | |||
| Value of conversion option | ( | ) | ||
| Value of warrants (Note 9 [d]) | ( | ) | ||
| Initial recognition of debt - March 6, 2025 and date of conversion, March 25, 2025 | $ | |||
| Amount converted | ( | ) | ||
| Balance, December 31, 2025 and June 30, 2026 | $ |
March 28, 2025 Debentures
On March 28, 2025, the Company closed the final
tranche of the December 4, 2024 Offering (“Tranche 5”) and issued
On initial recognition, the fair value of the
embedded derivatives was calculated first, with the residual value being assigned to the host financial liability. The initial fair value
of the warrants is $
Of the
The December 2024 Debentures were converted into
Class B Subordinate Voting Shares on various dates, and a total of
17
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
The fair values of the conversion feature and assumptions, on the date of issuance and conversions were as follows:
| March 28, 2025 | April 10, 2025 | April 23, 2025 | May 12, 2025 | May 21, 2025 | June 5, 2025 | |||||||||||||||||||
| Share price (CAD) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Conversion price (CAD) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Expected Volatility | % | % | % | % | % | % | ||||||||||||||||||
| Risk free interest rate | % | % | % | % | % | % | ||||||||||||||||||
| Expected life | ||||||||||||||||||||||||
| Credit Spread | % | % | % | % | % | % | ||||||||||||||||||
| Foreign exchange rate | ||||||||||||||||||||||||
| Conversion value | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
As of June 30, 2026, Company had the following March 28, 2025 Debenture balance outstanding
| Proceeds | $ | |||
| Value of conversion option | ( | ) | ||
| Value of warrants (Note 9 [e]) | ( | ) | ||
| Loss on issuance of convertible | ||||
| Initial recognition of debt - March 28, 2025 | $ |
March 20, 2026 Debentures
On March 20, 2026, the Company issued
Each March 2026 Debenture Unit will mature
On initial recognition, the fair value of the
embedded derivatives is calculated first, with the residual value being assigned to the host financial liability. The fair value of the
conversion feature is determined by using with-and-without method. As the fair value of warrants and conversion feature are higher than
the principal debt amount on the date of issuance, the value of warrants and conversion features were calculated using relative fair value
method. The initial value allocated to the warrants is $
Of the
During the six months ended June 30, 2026, debt
holders converted partial amounts of the March 2026 Debenture Units, consisting of C$
18
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
The fair value inputs and assumptions for the calculation of the conversion feature, on the date of issuance and on the dates of conversion, are as follows:
| March 20, 2026 | March 31, 2026 | April 16, 2026 – June 25, 2026 | June 30, 2026 | |||||||||||||
| Share price (CAD) | $ | $ | $ | $ | ||||||||||||
| Conversion price (CAD) | $ | $ | $ | $ | ||||||||||||
| Expected Volatility | % | % | % | % | ||||||||||||
| Risk free interest rate | % | % | % | % | ||||||||||||
| Expected life | ||||||||||||||||
| Credit Spread | % | % | % | % | ||||||||||||
| Foreign exchange rate | ||||||||||||||||
| Conversion value | $ | $ | $ | | $ | |||||||||||
As of June 30, 2026, the Company had the following March 2026 Debenture balance outstanding.
| Proceeds | $ | |||
| Value of conversion option using relative fair value | ( | ) | ||
| Value of warrants (Note 9 [e]) using relative fair value | ( | ) | ||
| Initial recognition of debt – March 20, 2026 | $ | |||
| Accretion expense | ||||
| Balance, June 30, 2026 | $ |
As at June 30, 2026, the Company recognized interest
expense of $
Convertible Debentures issued by Unbuzzd
Tranche 1
In April 2025, Unbuzzd issued a total of 172 unsecured
convertible debenture units of Unbuzzd (each an ‘Unbuzzd Debenture’) at a price of US$
The Unbuzzd Debenture holder has the right, from time to time and at any time while any portion of the principal amount or any accrued and unpaid interest on the Unbuzzd Debenture is outstanding, to convert all or any portion of the outstanding principal amount and interest into units of Unbuzzd (each, a “Unbuzzd Unit”) at the Unbuzzd Conversion Price (defined below).
19
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
The conversion price (“Unbuzzd Conversion Price”) is equal to:
| i) | US$0.15 per Unbuzzd Unit; |
| ii) | In the event of an Unbuzzd Qualified Financing, then 0.80 multiplied by the Unbuzzd Qualified Financing Price; or |
| iii) | In the event of an Unbuzzd Liquidity Event, then 0.80 multiplied by the Unbuzzd Liquidity Event Price: |
Following the completion of an Unbuzzd Qualified
Financing or immediately prior to an Unbuzzd Liquidity Event, Unbuzzd shall have the option to force a conversion of the principal amount
of each Unbuzzd Debenture, and if Unbuzzd elects, the accrued but unpaid Interest, into Unbuzzd Units at the Unbuzzd Conversion Price.
Unbuzzd Qualified Financing means the completion of an equity financing by Unbuzzd, including but not limited to a Series A financing,
after the date hereof for aggregate gross proceeds of not less than US$
Tranche 2
On July 7, 2025, Unbuzzd issued a total of 50
unsecured convertible debenture units at a price of US$
Tranche 3
In August and September 2025, Unbuzzd issued a
total of 92.50 unsecured convertible debenture units (each, an ‘Unbuzzd Debenture’) at a price of US$
Tranche 4
In October and November 2025, Unbuzzd issued a
total of 35 unsecured convertible debenture units of Unbuzzd (each an ‘Unbuzzd Debenture’) at a price of US$
The Unbuzzd Debenture holder has the right, from time to time and at any time while any portion of the principal amount or any accrued and unpaid interest on the Unbuzzd Debenture is outstanding, to convert all or any portion of the outstanding principal amount and interest into units of Unbuzzd (each, a “Unbuzzd Unit”) at the Unbuzzd Conversion Price (defined below).
Each Unbuzzd Unit consists of one (1) common share in the capital of Unbuzzd (each, a “Unbuzzd Common Share”) and (ii) one half of a one (1/2) Unbuzzd Common Share purchase warrant (each whole warrant, a “Unbuzzd Warrant”). Each Unbuzzd Warrant entitles the holder to acquire one additional Unbuzzd Common Share on or before December 31, 2027 for 115% of the Unbuzzd Liquidity Event Price.
The conversion price (“Unbuzzd Conversion Price”) is equal to:
| i) | US$0.15 per Unbuzzd Unit; |
| ii) | In the event of an Unbuzzd Qualified Financing, then 0.80 multiplied by the Unbuzzd Qualified Financing Price; or |
| iii) | In the event of an Unbuzzd Liquidity Event, then 0.80 multiplied by the Unbuzzd Liquidity Event Price: |
Following the completion of an Unbuzzd Qualified
Financing or immediately prior to an Unbuzzd Liquidity Event, Unbuzzd shall have the option to force a conversion of the principal amount
of each Unbuzzd Debenture, and if Unbuzzd elects, the accrued but unpaid Interest, into Unbuzzd Units at the Unbuzzd Conversion Price.
Unbuzzd Qualified Financing means the completion of an equity financing by Unbuzzd, including but not limited to a Series A financing,
after the date hereof for aggregate gross proceeds of not less than US$
20
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
The convertible debenture was determined to be financial instruments comprising a host debt component, a conversion feature and a warrant component which are both considered to be embedded derivatives due to variable consideration payable upon conversion caused by foreign exchange as well as failing the fixed-to-fixed clause for classifying as equity. On initial recognition, the fair value of the embedded derivatives is calculated first, with the residual value being assigned to the host financial liability.
Conversion feature
The fair value of the conversion feature is determined
by using with-and-without method that considers the change in expected cash flows due to the conversion. The model includes all terms
of the convertible debenture described above as well as the probability of conversion and the implied credit spread of Unbuzzd. Expected
volatility was estimated by using historical volatility of Quantum as Unbuzzd considers it comparable for its own volatility history.
The share price of $
| April 15, 2025 | July 7, 2025 | August/September 2025 | October/ November | December 31, 2025 | June 30, 2026 | |||||||||||||||||||
| Share price (USD) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Conversion price (USD) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Expected Volatility | % | % | % | % | % | |||||||||||||||||||
| Risk free interest rate | % | % | % | % | % | |||||||||||||||||||
| Expected life (years) | ||||||||||||||||||||||||
| Credit Spread | % | % | % | % | % | % | ||||||||||||||||||
| Foreign exchange rate | ||||||||||||||||||||||||
Secured debentures
On July 25, 2025, Unbuzzd issued a total of 110
secured convertible debenture units (each an “Unbuzzd Secured Debenture”) at a subscription price of US$
Each unit consists of one (1) Unbuzzd Common Share and (ii) one Unbuzzd Warrant. Each Unbuzzd Warrant entitles the holder to acquire one additional Unbuzzd Common Share on or before July 25, 2027, for 115% of the Liquidity Event Price.
The conversion price (“Unbuzzd Secured Debenture Conversion Price”) is equal to:
| i) | US$0.05 per Unbuzzd Unit; |
| ii) | In the event of a Qualified Financing, then 0.80 multiplied by the Qualified Financing Price; or |
| iii) | In the event of a Liquidity Event, then 0.80 multiplied by the Liquidity Event Price: |
Following the completion of a Qualified Financing or immediately prior to a Liquidity Event, Unbuzzd shall have the option to force a conversion of the principal amount of each Unbuzzd Secure Debenture, and if Unbuzzd elects, the accrued but unpaid Interest, into Units at the Conversion Price.
Qualified Financing means the completion of an
equity financing by Unbuzzd, including but not limited to a Series A financing, after the date hereof for aggregate gross proceeds of
not less than US$
The Unbuzzd Secured Debenture is collateralized by a priority security interest in substantially all assets of Unbuzzd pursuant to the terms of a general security agreement.
21
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
Conversion feature
The fair value of the conversion feature is determined
by using with-and-without method that considers the change in expected cash flows due to the conversion. The model includes all terms
of the convertible debenture described above as well as the probability of conversion and the implied credit spread of Unbuzzd. Expected
volatility was estimated by using historical volatility of Quantum as Unbuzzd considers it comparable for its own trading and volatility
history. The share price of $
| July 25, 2025 | December 31, 2025 | June 30, 2026 | ||||||||||
| Share price (USD) | $ | $ | $ | |||||||||
| Conversion price (USD) | $ | $ | $ | |||||||||
| Expected Volatility | % | % | % | |||||||||
| Risk free interest rate | % | % | % | |||||||||
| Expected life (years) | ||||||||||||
| Credit Spread | % | % | % | |||||||||
| Foreign exchange rate | ||||||||||||
As of June 30, 2026, the Company had the following total debentures balance outstanding for the secured and unsecured tranches:
| Unsecured | Secured | Total | ||||||||||
| Proceeds | $ | $ | $ | |||||||||
| Initial recognition of debt | $ | $ | $ | |||||||||
| Accretion expense | ||||||||||||
| Balance, June 30, 2026, and December 31, 2025 | $ | $ | $ | |||||||||
Warrant liability
During the year ended December 31, 2025, Unbuzzd issued warrants attached to its convertible debentures.
Unbuzzd determined that these warrants were exchangeable into a variable number of shares due to foreign exchange, and as such, the warrants were classified as financial liabilities measured at fair value through profit or loss (“FVTPL”). Unbuzzd uses the Black-Scholes pricing model to estimate fair value. Expected volatility was estimated by using historical volatility of other companies that the Unbuzzd considers comparable that have trading and volatility history. The risk-free interest rate for the life of the warrants was based on the yields available on government benchmark bonds with a term approximating the remaining term of the warrants. The life of the warrants is based on the contractual term. The fair value of the warrant liability on dates of issuance for both secured and unsecured convertible debentures issued was $Nil. The fair value of these warrants as of June 30, 2026, was also $ (December 31, 2025 - $).
The fair value of the unsecured debenture warrants was determined using the Black-Scholes option pricing model and the following assumptions as at:
| April 15, 2025 | July 7, 2025 | August/September 2025 | October/November 2025 | December 31, 2025 | June 30, 2026 | |||||||||||||||||||
| Share price (USD) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Exercise price (USD) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Expected dividend yield | - | - | - | - | - | |||||||||||||||||||
| Risk free interest rate | % | % | % | % | % | % | ||||||||||||||||||
| Expected life (years) | | | ||||||||||||||||||||||
| Expected volatility | % | % | % | % | % | % | ||||||||||||||||||
| Foreign exchange rate | ||||||||||||||||||||||||
22
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
The fair value of the secured debenture warrants was determined using the Black-Scholes option pricing model and the following assumptions as at:
| July 25, 2025 | December 31, 2025 | June 30, 2026 | ||||||||||
| Share price (USD) | $ | $ | $ | |||||||||
| Exercise price (USD) | $ | $ | $ | |||||||||
| Expected dividend yield | — | — | — | |||||||||
| Risk free interest rate | % | % | % | |||||||||
| Expected life (years) | ||||||||||||
| Expected volatility | % | % | % | |||||||||
| Foreign exchange rate | ||||||||||||
| 12. | Share capital |
| [a] | Authorized |
The Company is authorized to issue an unlimited number of class A multiple voting shares ("Class A Multiple Voting Shares") and an unlimited number of Class B Subordinate Voting Shares, all without par value. All shares are ranked equally regarding the Company's residual assets.
The Class B Subordinate Voting Shares are “restricted securities” within the meaning of such term under applicable Canadian securities laws, as these securities do not carry equal voting rights as compared with the Class A Multiple Voting Shares.
The holders of Class A Multiple Voting Shares
are entitled to
| [b] | Issued and outstanding |
Reconciliation of the Company’s share capital is as follows:
| Class A shares | ||||||||||||||||||||||||||||||||
| Class A shares | To be issued | Class B shares | Warrants | |||||||||||||||||||||||||||||
| # | $ | # | $ | # | $ | # | $ | |||||||||||||||||||||||||
| Balance, December 31, 2024 | ||||||||||||||||||||||||||||||||
| Shares issued - convertible debentures [a] | ||||||||||||||||||||||||||||||||
| Exercise of options [b] | ||||||||||||||||||||||||||||||||
| Warrants issued [c] | ||||||||||||||||||||||||||||||||
| Warrants expired [d] | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Exercise of warrants [e] | ( | ) | ||||||||||||||||||||||||||||||
| Exercise of RSUs [f] | ||||||||||||||||||||||||||||||||
| Shares issued for debt [g] | ||||||||||||||||||||||||||||||||
| Shares to be issued [h] | ||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | ||||||||||||||||||||||||||||||||
23
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
| Class A shares | Class B shares | Warrants | ||||||||||||||||||||||
| # | $ | # | $ | # | $ | |||||||||||||||||||
| Balance, December 31, 2025 | ||||||||||||||||||||||||
| Shares issued - convertible Debentures [i] | ||||||||||||||||||||||||
| Warrants issued [j] | ||||||||||||||||||||||||
| Exercise of RSUs [k] | ||||||||||||||||||||||||
| Shares issued for debt [l] | ||||||||||||||||||||||||
| Shares issued [m] | ||||||||||||||||||||||||
| Warrants expired [n] | ( | ) | ( | ) | ||||||||||||||||||||
| Warrants exercised [o] | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2026 | — | |||||||||||||||||||||||
Activity during the six months ended June 30, 2025:
| [a] |
On March 25, 2025, the full amount of
the March 6, 2025 Debenture of $
On May 5, 2025, a partial amount of
the December 2024 Debentures was converted into an aggregate of
During the six months ended June 30,
2025, the full amount of the March 28, 2025 Debenture was converted into an aggregate of
| [b] |
| [c] |
During the six months ended June 30,
2025,
During the six months ended June 30,
2025,
| [d] |
| [e] |
24
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
| [f] |
During the six months ended June 30,
2025,
| [g] |
| [h] |
Activity during the six months ended June 30, 2026
| [i] | ||
| [j] | ||
| [k] | ||
| [m] | ||
| [n] | ||
| [o] |
25
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
The changes in the number of warrants outstanding during the six months ended June 30, 2026, and 2025:
| Number of warrants | Weighted average exercise price | |||||||
| # | C$ | |||||||
| Outstanding as at December 31, 2025 | ||||||||
| Issued | ||||||||
| Expired | ( | ) | ||||||
| Exercised | ( | ) | ( | ) | ||||
| Outstanding as at June 30, 2026 | ||||||||
| Number of warrants | Weighted average exercise price | |||||||
| # | C$ | |||||||
| Outstanding as at December 31, 2024 | ||||||||
| Issued | ||||||||
| Expired | ( | ) | ||||||
| Exercised | ( | ) | ||||||
| Outstanding as at June 30, 2025 | ||||||||
Measurement of fair values
During the six months ended June 30, 2026, a total
of
During the six months ended June 30, 2025, a total
of
There were no warrants issued during the six months ended June 30, 2026, and 2025 under equity.
The following table is a summary of the Company’s warrants outstanding as at June 30, 2026:
| Exercise price | Number outstanding | |||||||
| Expiry Date | C$ | # | ||||||
| March 20, 2031 | ||||||||
| 13. | Share-based compensation |
The Company has established a share option plan (the “Option Plan”) for directors, officers, employees and consultants of the Company. The Company’s Board determines, among other things, the eligibility of individuals to participate in the Option Plan, the term and vesting periods, and the exercise price of options granted to individuals under the Option Plan.
Each share option is converted into one Class B Subordinate Voting Share on exercise. No amounts are paid or payable by the individual on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
26
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
[i] Share-based payment arrangements
During the six months ended June 30, 2026, the
Company granted a total of
During the six months ended June 30, 2025, an
aggregate of
The changes in the number of share options outstanding during the periods ended June 30, 2026, and 2025 are as follows:
| Number of options | Weighted average exercise price | |||||||
| # | C$ | |||||||
| Outstanding as at December 31, 2025 | ||||||||
| Granted | ||||||||
| Cancelled | ( | ) | ||||||
| Expired | ( | ) | ||||||
| Outstanding as at June 30, 2026 | ||||||||
| Exercisable as at June 30, 2026 | ||||||||
| Number of options | Weighted average exercise price | |||||||
| # | C$ | |||||||
| Outstanding as at December 31, 2024 | ||||||||
| Granted | ||||||||
| Exercised | ( | ) | ||||||
| Outstanding as at June 30, 2025 | ||||||||
| Exercisable as at June 30, 2025 | ||||||||
Measurement of fair values
The fair value of share options granted during the six months ended June 30, 2026, and 2025, were estimated at the date of grant using the Black-Scholes option pricing model with the following inputs:
| 2026 | 2025 | |||||||
| Grant date share price | C$ | C$ | ||||||
| Exercise price | C$ | C$ | ||||||
| Expected dividend yield | — | |||||||
| Risk free interest rate | % | % | ||||||
| Expected life | | | ||||||
| Expected volatility | % | % | ||||||
Expected volatility was estimated by using the annualized historical volatility of the Company. The expected option life represents the period that options granted are expected to be outstanding. The risk-free interest rate is based on Canadian government bonds with a remaining term equal to the expected life of the options.
27
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
The following table is a summary of the Company’s share options outstanding as at June 30, 2026:
| Options outstanding | Options exercisable | |||||||||||||||||
| Exercise price | Number outstanding | Weighted average remaining contractual life [years] | Exercise price | Number exercisable | ||||||||||||||
| C$ | # | # | C$ | # | ||||||||||||||
[ii] Performance Share Units (“PSUs”) and Restrictive Share Units (“RSUs”)
In May 2022, the Company established a performance share unit plan (“PSU Plan”) and a restrictive unit plan (“RSU Plan”), for directors, offers, employees and consultants of the Company. The Company’s Board determines the eligibility of individuals to participate in the PSU Plan and RSU Plan to align their interests with those of the Company’s shareholders.
No amounts are paid or payable by the individual
on receipt of
PSUs
There were no PSUs issued during the six months
ended June 30, 2026, and 2025. As at June 30, 2026, there were
RSUs
On August 23, 2024, the Company granted an aggregate
of
On April 15, 2025, the Company granted
On August 15, 2025, the Company granted a total
of
First Vesting Tranche of
Second Vesting Tranche of
28
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
During the six months ended June 30, 2026, the
Company recognized $
On September 26, 2025, the Company granted
The change in the number of RSUs during the periods ended June 30, 2026, and 2025, is as follows:
| Number of RSUs | ||||
| # | ||||
| Outstanding as at December 31, 2025 | ||||
| Converted to common shares | ( | ) | ||
| Outstanding as at June 30, 2026 | ||||
| Number of RSUs | ||||
| # | ||||
| Outstanding as at December 31, 2024 | ||||
| Granted | ||||
| Converted to common shares | ( | ) | ||
| Outstanding as at June 30, 2025 | ||||
The Company recognized share-based compensation for the three and six months ended June 30, 2026, and 2025 as follows:
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Share options (i) | ||||||||||||||||
| RSUs (ii) | ||||||||||||||||
| (i) |
| (ii) |
| 14. | Non-controlling interests |
Through the License Agreement, Quantum acquired
Reconciliation of non-controlling interest is as follows:
| $ | ||||
| Balance, December 31, 2025 | ( | ) | ||
| Net loss for the period | ( | ) | ||
| Balance, June 30, 2026 | ( | ) | ||
The condensed consolidated interim financial statements incorporate the assets and liabilities of Unbuzzd as of June 30, 2026.
29
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
| 15. | Loss per share |
Net loss per common share represents net loss attributable to common shareholders divided by the weighted average number of common shares outstanding during the period.
For all the periods presented, diluted loss per share equals basic loss per share due to the anti-dilutive effect of warrants, share options, PSUs, RSUs and convertible debentures. The outstanding number and type of securities that could potentially dilute basic net loss per share in the future but would have decreased the loss per share (anti-dilutive) for the six months ended June 30, 2026, and 2025 are as follows:
| June 30, 2026 | June 30, 2025 | |||||||
| # | # | |||||||
| Warrants | ||||||||
| Share Options | ||||||||
| RSUs | ||||||||
| Convertible debentures | ||||||||
| 16. | General and administrative |
Components of general and administrative expenses for the three and six months ended June 30, 2026, and 2026 were as follows:
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Professional fees | ||||||||||||||||
| Investor relations | ||||||||||||||||
| Salaries, wages and benefits | ||||||||||||||||
| Consulting fees | ||||||||||||||||
| Office and general administrative | ||||||||||||||||
| Foreign exchange loss (gain) | ( | ) | ( | ) | ||||||||||||
| 17. | Segment information |
Reportable segments are reported in a manner consistent
with the internal reporting provided to the chief operating decision maker, with appropriate aggregation. The chief operating decision
maker is the CEO who is responsible for allocating resources, assessing the performance of the reportable segment and making key strategic
decisions. The Company operates in
The Company’s Strategic Investments segment is no longer active as of June 30, 2026, and December 31, 2025.
The following tables summarize the Company's total current and non-current assets and current and non-current liabilities as of June 30, 2026, and December 31, 2025, on a segmented basis:
As of June 30, 2026
| Biopharmaceutical | Total | |||||||
| $ | $ | |||||||
| Current assets | ||||||||
| Non-current assets | ||||||||
| Current liabilities | ||||||||
30
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
As of December 31, 2025
| Biopharmaceutical | Total | |||||||
| $ | $ | |||||||
| Current assets | ||||||||
| Non-current assets | ||||||||
| Current liabilities | ||||||||
The following tables summarize the Company's interest income, total operating expenses, and net loss for the three and six months ended June 30, 2026, and 2025 on a segmented basis:
| For the six months ended June 30, 2026 | ||||||||||||
| Biopharmaceutical | Strategic Investments | Total | ||||||||||
| $ | $ | $ | ||||||||||
| Interest expense (income) | ( | ) | ||||||||||
| Total operating expenses | ||||||||||||
| Net (loss) income | ( | ) | ( | ) | ||||||||
| For the three months ended June 30, 2026 | ||||||||||||
| Biopharmaceutical | Strategic Investments | Total | ||||||||||
| $ | $ | $ | ||||||||||
| Interest expense | ||||||||||||
| Total operating expenses | ||||||||||||
| Net (loss) | ( | ) | ( | ) | ( | ) | ||||||
| For the six months ended June 30, 2025 | ||||||||||||
| Biopharmaceutical | Strategic Investments | Total | ||||||||||
| $ | $ | $ | ||||||||||
| Interest (income) | ( | ) | ( | ) | ( | ) | ||||||
| Total operating expenses | ||||||||||||
| Net (loss) income | ( | ) | ( | ) | ||||||||
For the three months ended June 30, 2025 | ||||||||||||
| Biopharmaceutical | Strategic Investments | Total | ||||||||||
| $ | $ | $ | ||||||||||
| Interest (income) | ( | ) | ( | ) | ( | ) | ||||||
| Total operating expenses | ||||||||||||
| Net (loss) income | ( | ) | ( | ) | ||||||||
| 18. | Commitments and contingencies |
| Commitments |
Lucid-MS Agreement
The Company has entered into a license agreement
that governs the Lucid-MS compound. Under the terms of the agreement, the Company shall pay a yearly license maintenance fee of C$
Under the agreement, the Company is committed
to minimum milestone payments of $
31
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
| Contingencies |
Legal Matters
From time to time, the Company is named as a party to claims or involved in proceedings, including legal, regulatory and tax related, in the ordinary course of its business. While the outcome of these matters may not be estimated at the reporting date, the Company makes provisions, where possible, for the estimated outcome of such claims or proceedings. Should a loss result from the resolution of any claims or proceedings that differs from these estimates, the difference will be accounted for as a charge to the consolidated statements of loss and comprehensive loss in that year.
GBB Drink Lab, Inc. (“GBB”)
On June 23, 2023, the Company filed a motion to dismiss the complaint. On July 3, 2023, GBB responded in opposition to the Company’s motion to dismiss the complaint. On August 24, 2023, the parties filed a proposed joint scheduling report with the S.D. Fla., which set forth various deadlines that would govern this action. Under the proposed joint schedule, the case was supposed to be trial-ready by November 30, 2024. On January 8, 2024, the S.D. Fla. denied the Company’s request to dismiss the lawsuit.
On January 22, 2024, the Company filed a third-party complaint against Joseph Romano (a former director of the Company) and a counterclaim against GBB. The Company alleged that Mr. Romano breached his fiduciary duty by providing or fabricating confidential information to GBB, and that GBB aided and abetted this breach. On October 9, 2024, the Court denied Mr. Romano’s motion to dismiss, finding that the Company plausibly had alleged that Romano breached fiduciary duties, including his duties of loyalty, confidentiality, and to act in the company’s best interests. GBB and Romano then denied the allegations in their respective answers.
Discovery concluded in July 2025, and the parties filed various pre-trial motions, including summary judgment motions. On October 9, 2025, the Court granted the motion for the Company’s current counsel, Given Pursley LLP, to appear, officially appointing them and relieving prior counsel, Blank Rome LLP. A status conference was held on December 16, 2025, where the Court ruled on several pending motions. The Court granted Mr. Romano’s motion for summary judgment, dismissing all claims against him. The Court reserved ruling on the Company’s motion for summary judgment, ordering supplemental briefing on the issue of whether GBB had standing to pursue its claims after selling its assets to a third party. The trial, previously set for January 2026, was continued. The parties filed supplemental briefs addressing standing in accord with the Court’s order. On March 24, 2026, the Court held that GBB “regained standing” and that its claims were not moot. The Court denied the Company’s motion for summary judgment.
Between April 20, 2026, and July 21, 2026, there have been a few changes to the ongoing district court litigation. Judge Damian granted a brief delay of the trial in the GBB matter, and Judge Damian entered an order on July 8, 2026, requiring the parties to attend a settlement conference on August 7, 2026. Subsequent to the August 7, 2026 settlement conference, the case did not settle. The case is set to go to trial during a two-week period, starting August 24, 2026.
Additionally, on June 15, 2026, the Company asked an appellate court, the United States Court of Appeals for the Eleventh Circuit, to issue an order requiring the district court to dismiss GBB’s lawsuit. Petitioners argued that GBB lost standing and that the district court erred in allowing GBB to restore standing after it was lost. On June 26, 2026, the appellate court issued an order requiring GBB and the District Court to respond. On July 13, 2026, GBB Drink Lab and the District Court filed responses to the petition. The Company then filed a reply brief in support of the petition on July 20, 2026. The appellate case is still pending.
Lawsuit against CIBC World Markets, RBC Dominion Securities, and John Does 1-10
On October 20, 2024, the Company filed a complaint
in the U.S. District Court for the Southern District of New York against CIBC World Markets, Inc., RBC Dominion Securities Inc., and John
Does 1-10. The complaint alleges market manipulation through spoofing activities between January 1, 2020, and August 15, 2024. The Company
is seeking damages of more than US$
32
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
The complaint alleges that between January 1,
2020, and August 15, 2024, the defendants engaged in "spoofing," an unlawful trading practice, to manipulate the market price
of Quantum's shares. The complaint details that the defendants placed thousands of spoofing orders to sell, creating the illusion that
Quantum's share price was declining. This practice allegedly "tricked" other investors into selling their shares at lower prices,
driving the company's share price downward. The defendants then purchased shares at artificially depressed prices, positioning themselves
to profit when the market price rebounded. The Company claims to have suffered significant damage and seeks to recover more than USD $
The defendants filed a motion to dismiss on June 16, 2025. On March 30, 2026, the United States District Court for the Southern District of New York largely ruled against defendants. Subsequent to March 30, 2026, no further events occurred as of the date of this report.
| 19. | Related party transactions |
Related parties and related party transactions impacting the condensed consolidated interim financial statements are summarized below and include transactions with the following individuals or entities:
Key management personnel
Related parties include directors, officers, close family members, certain consultants and enterprises that are controlled by these individuals as well as certain individuals performing similar functions.
Key management personnel are those individuals who have authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company.
Transactions with key management and directors comprise the following:
| a) | Director’s compensation for the three and six months ended June 30, 2026, is $ |
| b) | During the six months ended June 30, 2026, the Company granted |
| c) | During the six months ended June 30, 2026, the Company issued a total of |
| d) | Of the |
| e) | During the year ended December 31, 2025, the Company entered into a lease agreement with Peak Corp, an
entity, which is owned by a family member of the CFO of the Company. The lease arrangement had resulted in the right-of-use asset recognized
as at December 31, 2025, of $ |
| f) | During the six months ended June 30, 2026, pursuant to the exercise of warrants from the March 2026 Debentures,
|
33
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
Key management personnel compensation during the three and six months ended June 30, 2026, and 2025, is comprised of:
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Salaries, benefits, bonuses and consulting fees | ||||||||||||||||
| Share-based payments | ||||||||||||||||
As at June 30, 2026, the Company has $
| 20. | Capital Management |
The Company defines capital as the aggregate of its capital stock and borrowings and convertible debentures.
As at June 30, 2026, the Company’s
share capital was $
The Company manages its capital structure in accordance with changes in economic conditions. To maintain or adjust its capital structure, the Company may elect to issue or repay financial liabilities, issue shares, repurchase shares or undertake any other activities as deemed appropriate under specific circumstances. The Company is not subject to any externally imposed capital requirements. There were no changes in capital management during the periods ended June 30, 2026, and 2025.
| 21. | Financial Instruments and Risk Management |
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from deposits with banks and outstanding other receivables and finance receivables. The Company trades only with recognized, creditworthy third parties.
The Company does not hold any collateral as security for its outstanding finance receivables but mitigates this risk by dealing only with what management believes to be financially sound counterparties and, accordingly, does not anticipate significant loss for non-performance. The loans are secured by real estate properties, and the Company is granted a first or second collateral charge mortgage on the properties for a sum equal to the interest payments plus the principal amount. The Company performs assessments on factors such as timing of payments, loan to value, communications with the borrower and external macro factors such as interest rates and economic conditions to mitigate risks.
Liquidity risk
Liquidity risk is the risk the Company will not be able to meet its financial obligations as they come due. The Company’s exposure to liquidity risk is dependent on the Company’s ability to raise additional financing to meet its commitments and sustain operations. The Company mitigates liquidity risk by management of working capital, cash flows, the issuance of share capital and if desired, the issuance of debt. The Company’s trade and other payables and notes payables are all due within twelve months from the date of these financial statements.
If unanticipated events occur that impact the Company’s ability to carry out the planned clinical trials, the Company may need to take additional measures to increase its liquidity and capital resources, including issuing debt or additional equity financing or strategically altering the business forecast and plan. In this case, there is no guarantee that the Company will obtain satisfactory financing terms or adequate financing. Failure to obtain adequate financing on satisfactory terms could have a material adverse effect on the Company’s results of operations or financial condition.
34
QUANTUM BIOPHARMA LTD. (FORMERLY, FSD PHARMA INC.)
Notes to the condensed consolidated interim financial statements
[unaudited] [expressed in United States dollars]
For the three and six months ended June 30, 2026, and 2025
Market risk
Market risk is the risk the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: foreign currency risk, interest rate risk and other price risk.
| ● | Foreign currency risk |
Foreign currency risk arises with financial instruments that are denominated in a currency other than the functional currency in which they are measured. The Company’s primary exposure with respect to foreign currencies is from Canadian dollar denominated cash, investments and trade and other payables. A 1% change in the foreign exchange rates would not have any significant impact on the condensed consolidated interim financial statements.
| ● | Interest rate risk |
Interest rate risk is the risk the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company does not have any material long-term borrowings outstanding subject to variable interest rates. Therefore, the Company is not exposed to interest rate risk as at June 30, 2026.
| ● | Other price risk |
Other price risk is the risk the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The Company is not exposed to other price risks as at June 30, 2026.
Fair values
The carrying values of cash, other receivables (excluding sales tax recoverable), trade and other payables, and notes payable approximate fair values due to the short-term nature of these items, or they are being carried at fair value or, for, notes payable, interest payables and convertible debentures are close to the current market rates. The risk of material change in fair value is not considered to be significant. The Company does not use derivative financial instruments to manage this risk.
Financial instruments recorded at fair value on the condensed consolidated interim statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest-level input significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:
| ● | Level 1 – Unadjusted quoted prices as at the measurement date for identical assets or liabilities in active markets. |
| ● | Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. |
| ● | Level 3 – Significant unobservable inputs that are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. |
The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value. Investments are measured using level 1 and level 2 inputs. Digital assets, warrant liabilities and derivative liabilities are measured using level 2 inputs. During the six months ended June 30, 2026, there were no transfers of amounts between levels.
| 22. | Subsequent events |
| ● | On July 22, 2026, the Company issued | |
| ● | On July 30, 2026, the Company issued |
| ● | On July 30, 2026, the Company completed a debt settlement transaction, issuing an aggregate of | |
| ● | On July 31, 2026, the Company issued | |
| ● | On August 10, 2026, the Company issued |
| ● | Subsequent to June 30, 2026, the Company successfully sold an aggregate of |
35