[10-Q] Qualigen Therapeutics, Inc. Quarterly Earnings Report
Qualigen Therapeutics, Inc. (QLGN) reported a challenging quarter with limited cash and ongoing operating losses. The company had approximately $332,000 in cash and an accumulated deficit of $127.4 million. For the six months ended June 30, 2025 the company used $2.7 million in operating cash and $6.3 million for the year ended December 31, 2024. Loss from continuing operations was $4.33 million for the period versus $3.51 million in the prior comparative period. Short-term borrowings included $3.64 million from nine investors and additional promissory notes totaling $2.3 million. Subsequent to period end, the company closed a private placement in July 2025 raising net proceeds of $4.258 million, which management expects will provide liquidity through year-end. The filing discloses multiple convertible debentures, warrant re-pricings, preferred stock conversions, a 2024 reverse stock split, and a $468,000 loan loss reserve related to Marizyme notes.
Qualigen Therapeutics, Inc. (QLGN) ha riportato un trimestre difficile con disponibilità di cassa limitata e perdite operative in corso. La società disponeva di circa 332.000 dollari in contanti e presenta un deficit accumulato di 127,4 milioni di dollari. Per i sei mesi conclusi il 30 giugno 2025 la società ha utilizzato 2,7 milioni di dollari in attività operative e 6,3 milioni di dollari per l'anno chiuso il 31 dicembre 2024. La perdita dalle operazioni continue è stata di 4,33 milioni di dollari nel periodo rispetto a 3,51 milioni nel periodo comparativo precedente. I finanziamenti a breve termine includevano 3,64 milioni di dollari provenienti da nove investitori e ulteriori cambiali di credito per un totale di 2,3 milioni di dollari. Successivamente alla chiusura del periodo, la società ha completato a luglio 2025 un collocamento privato che ha raccolto proventi netti di 4,258 milioni di dollari, che la direzione ritiene garantiranno liquidità fino alla fine dell'anno. Il documento rivela inoltre molteplici cambiali convertibili, ricalibrazioni di warrant, conversioni di azioni privilegiate, uno frazionamento azionario in senso inverso nel 2024 e una riserva per perdite su prestiti di 468.000 dollari relativa alle cambiali Marizyme.
Qualigen Therapeutics, Inc. (QLGN) informó un trimestre complicado con efectivo limitado y pérdidas operativas continuas. La compañía tenía aproximadamente 332.000 dólares en efectivo y un déficit acumulado de 127,4 millones de dólares. En los seis meses terminados el 30 de junio de 2025, la empresa utilizó 2,7 millones de dólares en actividades operativas y 6,3 millones de dólares en el año cerrado el 31 de diciembre de 2024. La pérdida por operaciones continuas fue de 4,33 millones de dólares durante el período frente a 3,51 millones en el periodo comparativo anterior. Los préstamos a corto plazo incluían 3,64 millones de dólares de nueve inversores y pagarés adicionales por un total de 2,3 millones de dólares. Tras el cierre del periodo, la empresa completó en julio de 2025 una colocación privada que recaudó ingresos netos de 4,258 millones de dólares, que la dirección espera proporcionen liquidez hasta final de año. La presentación también divulga múltiples pagarés convertibles, revalorizaciones de warrants, conversiones de acciones preferentes, una consolidación inversa de acciones en 2024 y una provisión por pérdida de préstamo de 468.000 dólares relacionada con los pagarés de Marizyme.
Qualigen Therapeutics, Inc.(QLGN)는 현금이 제한적이고 지속적인 영업손실이 있는 어려운 분기를 보고했습니다. 회사는 약 332,000달러의 현금과 1억2740만 달러의 누적 결손을 보유하고 있었습니다. 2025년 6월 30일로 끝나는 6개월 동안 회사는 영업활동에서 270만 달러를 사용했으며, 2024년 12월 31일로 종료된 연도에는 630만 달러를 사용했습니다. 계속영업손실은 해당 기간에 433만 달러로, 비교 이전 기간의 351만 달러에서 증가했습니다. 단기 차입에는 9명의 투자자로부터의 364만 달러와 총 230만 달러의 추가 약속어음이 포함되어 있었습니다. 기간 종료 후 회사는 2025년 7월 사모 유상증자를 완료하여 425.8만 달러의 순수익을 조달했으며, 경영진은 이를 통해 연말까지 유동성을 확보할 것으로 기대하고 있습니다. 보고서에는 다수의 전환사채, 워런트 재가격, 우선주 전환, 2024년 액면병합(리버스 스톡 스플릿) 및 Marizyme 어음 관련 46만8천 달러의 대출손실충당금도 공시되어 있습니다.
Qualigen Therapeutics, Inc. (QLGN) a déclaré un trimestre difficile avec des liquidités limitées et des pertes d'exploitation continues. La société détenait environ 332 000 dollars en liquidités et un déficit accumulé de 127,4 millions de dollars. Pour les six mois clos le 30 juin 2025, la société a utilisé 2,7 millions de dollars en flux d'exploitation et 6,3 millions de dollars pour l'exercice clos le 31 décembre 2024. La perte provenant des activités poursuivies s'est élevée à 4,33 millions de dollars sur la période contre 3,51 millions sur la période comparative précédente. Les emprunts à court terme comprenaient 3,64 millions de dollars de neuf investisseurs et des billets à ordre supplémentaires totalisant 2,3 millions de dollars. Après la clôture de la période, la société a réalisé en juillet 2025 un placement privé ayant rapporté 4,258 millions de dollars nets, que la direction estime suffisant pour assurer la liquidité jusqu'à la fin de l'année. Le dossier divulgue également plusieurs billets convertibles, des réajustements de bons de souscription, des conversions d'actions privilégiées, une fusion inverse d'actions en 2024 et une provision pour pertes sur prêts de 468 000 dollars liée aux billets Marizyme.
Qualigen Therapeutics, Inc. (QLGN) meldete ein schwieriges Quartal mit begrenzten Barmitteln und anhaltenden Betriebsverlusten. Das Unternehmen verfügte über etwa 332.000 US-Dollar in bar und einen kumulierten Fehlbetrag von 127,4 Millionen US-Dollar. Für die sechs Monate zum 30. Juni 2025 verwendete das Unternehmen 2,7 Millionen US-Dollar aus der operativen Tätigkeit und 6,3 Millionen US-Dollar für das zum 31. Dezember 2024 abgeschlossene Geschäftsjahr. Der Verlust aus fortgeführten Geschäftsbereichen belief sich im Berichtszeitraum auf 4,33 Millionen US-Dollar gegenüber 3,51 Millionen im Vorjahresvergleichszeitraum. Kurzfristige Darlehen umfassten 3,64 Millionen US-Dollar von neun Investoren sowie zusätzliche Schuldscheine in Höhe von insgesamt 2,3 Millionen US-Dollar. Nach Periodenschluss schloss das Unternehmen im Juli 2025 eine Privatplatzierung ab, die Nettoerlöse von 4,258 Millionen US-Dollar erbrachte, von denen das Management erwartet, dass sie Liquidität bis zum Jahresende sichern. Die Einreichung offenbart außerdem mehrere wandelbare Schuldverschreibungen, Neu-Bepreisungen von Warrants, Umwandlungen von Vorzugsaktien, einen Reverse Stock Split 2024 und eine Kreditausfallrückstellung von 468.000 US-Dollar im Zusammenhang mit Marizyme-Schuldscheinen.
- Private placement raised $4.258 million in July 2025, which management expects will provide liquidity through year-end
- Short-term borrowings of $3.64 million provided additional near-term funding during the period
- Interest income of $251,303 recognized on Marizyme notes for the six months ended June 30, 2025
- Very limited cash balance of $332,000 at June 30, 2025 against ongoing operating cash burn
- Operating loss of $4.33 million for continuing operations and accumulated deficit of $127.4 million
- Multiple short-term promissory notes with a 30% penalty on default, creating refinancing and repayment risk
- $468,000 loan loss reserve on Marizyme notes, indicating credit risk in receivables
- Extensive convertible debt, warrant repricings and preferred conversions that increase dilution and complexity
Insights
TL;DR: Liquidity improved by July private placement but operating cash burn and near-term short-term debt create uncertainty.
Qualigen shows clear operating losses and cash burn: a $4.33 million loss for the period and only $332,000 cash on hand as of June 30, 2025. Management raised $4.258 million in a July 2025 private placement and recorded $3.64 million of short-term borrowings, which should extend runway into year-end per management commentary. Significant convertible debt, promissory notes with steep default penalties, and ongoing warrant and preferred stock conversions continue to create dilution risk. The Marizyme short-term notes generated $251,000 interest income for six months but required a $468,000 loan loss reserve, highlighting credit risk in receivables. Overall, near-term financing events materially affect capital structure and shareholder dilution.
TL;DR: Material liquidity and refinancing risks persist, with high-cost short-term notes and dilutive instruments.
The company faces elevated liquidity risk given $332,000 cash versus short-term obligations including promissory notes that carry a 30% penalty on default and $3.64 million short-term borrowings due within six months. Convertible debentures and preferred conversions have repeatedly triggered down-round repricings and deemed dividends, increasing complexity and potential dilution. The $468,000 allowance on Marizyme notes and the company’s accumulated deficit of $127.4 million raise credit and going-concern considerations. Although the July 2025 private placement provided $4.258 million net proceeds, near-term repayment and refinancing demands, and contingent penalties, present a material downside risk to continuity without further financing.
Qualigen Therapeutics, Inc. (QLGN) ha riportato un trimestre difficile con disponibilità di cassa limitata e perdite operative in corso. La società disponeva di circa 332.000 dollari in contanti e presenta un deficit accumulato di 127,4 milioni di dollari. Per i sei mesi conclusi il 30 giugno 2025 la società ha utilizzato 2,7 milioni di dollari in attività operative e 6,3 milioni di dollari per l'anno chiuso il 31 dicembre 2024. La perdita dalle operazioni continue è stata di 4,33 milioni di dollari nel periodo rispetto a 3,51 milioni nel periodo comparativo precedente. I finanziamenti a breve termine includevano 3,64 milioni di dollari provenienti da nove investitori e ulteriori cambiali di credito per un totale di 2,3 milioni di dollari. Successivamente alla chiusura del periodo, la società ha completato a luglio 2025 un collocamento privato che ha raccolto proventi netti di 4,258 milioni di dollari, che la direzione ritiene garantiranno liquidità fino alla fine dell'anno. Il documento rivela inoltre molteplici cambiali convertibili, ricalibrazioni di warrant, conversioni di azioni privilegiate, uno frazionamento azionario in senso inverso nel 2024 e una riserva per perdite su prestiti di 468.000 dollari relativa alle cambiali Marizyme.
Qualigen Therapeutics, Inc. (QLGN) informó un trimestre complicado con efectivo limitado y pérdidas operativas continuas. La compañía tenía aproximadamente 332.000 dólares en efectivo y un déficit acumulado de 127,4 millones de dólares. En los seis meses terminados el 30 de junio de 2025, la empresa utilizó 2,7 millones de dólares en actividades operativas y 6,3 millones de dólares en el año cerrado el 31 de diciembre de 2024. La pérdida por operaciones continuas fue de 4,33 millones de dólares durante el período frente a 3,51 millones en el periodo comparativo anterior. Los préstamos a corto plazo incluían 3,64 millones de dólares de nueve inversores y pagarés adicionales por un total de 2,3 millones de dólares. Tras el cierre del periodo, la empresa completó en julio de 2025 una colocación privada que recaudó ingresos netos de 4,258 millones de dólares, que la dirección espera proporcionen liquidez hasta final de año. La presentación también divulga múltiples pagarés convertibles, revalorizaciones de warrants, conversiones de acciones preferentes, una consolidación inversa de acciones en 2024 y una provisión por pérdida de préstamo de 468.000 dólares relacionada con los pagarés de Marizyme.
Qualigen Therapeutics, Inc.(QLGN)는 현금이 제한적이고 지속적인 영업손실이 있는 어려운 분기를 보고했습니다. 회사는 약 332,000달러의 현금과 1억2740만 달러의 누적 결손을 보유하고 있었습니다. 2025년 6월 30일로 끝나는 6개월 동안 회사는 영업활동에서 270만 달러를 사용했으며, 2024년 12월 31일로 종료된 연도에는 630만 달러를 사용했습니다. 계속영업손실은 해당 기간에 433만 달러로, 비교 이전 기간의 351만 달러에서 증가했습니다. 단기 차입에는 9명의 투자자로부터의 364만 달러와 총 230만 달러의 추가 약속어음이 포함되어 있었습니다. 기간 종료 후 회사는 2025년 7월 사모 유상증자를 완료하여 425.8만 달러의 순수익을 조달했으며, 경영진은 이를 통해 연말까지 유동성을 확보할 것으로 기대하고 있습니다. 보고서에는 다수의 전환사채, 워런트 재가격, 우선주 전환, 2024년 액면병합(리버스 스톡 스플릿) 및 Marizyme 어음 관련 46만8천 달러의 대출손실충당금도 공시되어 있습니다.
Qualigen Therapeutics, Inc. (QLGN) a déclaré un trimestre difficile avec des liquidités limitées et des pertes d'exploitation continues. La société détenait environ 332 000 dollars en liquidités et un déficit accumulé de 127,4 millions de dollars. Pour les six mois clos le 30 juin 2025, la société a utilisé 2,7 millions de dollars en flux d'exploitation et 6,3 millions de dollars pour l'exercice clos le 31 décembre 2024. La perte provenant des activités poursuivies s'est élevée à 4,33 millions de dollars sur la période contre 3,51 millions sur la période comparative précédente. Les emprunts à court terme comprenaient 3,64 millions de dollars de neuf investisseurs et des billets à ordre supplémentaires totalisant 2,3 millions de dollars. Après la clôture de la période, la société a réalisé en juillet 2025 un placement privé ayant rapporté 4,258 millions de dollars nets, que la direction estime suffisant pour assurer la liquidité jusqu'à la fin de l'année. Le dossier divulgue également plusieurs billets convertibles, des réajustements de bons de souscription, des conversions d'actions privilégiées, une fusion inverse d'actions en 2024 et une provision pour pertes sur prêts de 468 000 dollars liée aux billets Marizyme.
Qualigen Therapeutics, Inc. (QLGN) meldete ein schwieriges Quartal mit begrenzten Barmitteln und anhaltenden Betriebsverlusten. Das Unternehmen verfügte über etwa 332.000 US-Dollar in bar und einen kumulierten Fehlbetrag von 127,4 Millionen US-Dollar. Für die sechs Monate zum 30. Juni 2025 verwendete das Unternehmen 2,7 Millionen US-Dollar aus der operativen Tätigkeit und 6,3 Millionen US-Dollar für das zum 31. Dezember 2024 abgeschlossene Geschäftsjahr. Der Verlust aus fortgeführten Geschäftsbereichen belief sich im Berichtszeitraum auf 4,33 Millionen US-Dollar gegenüber 3,51 Millionen im Vorjahresvergleichszeitraum. Kurzfristige Darlehen umfassten 3,64 Millionen US-Dollar von neun Investoren sowie zusätzliche Schuldscheine in Höhe von insgesamt 2,3 Millionen US-Dollar. Nach Periodenschluss schloss das Unternehmen im Juli 2025 eine Privatplatzierung ab, die Nettoerlöse von 4,258 Millionen US-Dollar erbrachte, von denen das Management erwartet, dass sie Liquidität bis zum Jahresende sichern. Die Einreichung offenbart außerdem mehrere wandelbare Schuldverschreibungen, Neu-Bepreisungen von Warrants, Umwandlungen von Vorzugsaktien, einen Reverse Stock Split 2024 und eine Kreditausfallrückstellung von 468.000 US-Dollar im Zusammenhang mit Marizyme-Schuldscheinen.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
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Securities registered pursuant to Section 12(b) of the Act:
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TABLE OF CONTENTS
| Page | |||
| PART I. | Financial Information | ||
| Item 1. | Condensed Consolidated Financial Statements (Unaudited) | 3 | |
| Condensed Consolidated Balance Sheets | 3 | ||
| Condensed Consolidated Statement of Operations | 4 | ||
| Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit) | 5 | ||
| Condensed Consolidated Statements of Cash Flow | 6 | ||
| Notes to Condensed Consolidated Financial Statements | 7 | ||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 30 | |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 40 | |
| Item 4. | Controls and Procedures | 40 | |
| PART II. | Other Information | 41 | |
| Item 1. | Legal Proceedings | 41 | |
| Item 1A. | Risk Factors | 41 | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 41 | |
| Item 3. | Defaults Upon Senior Securities | 41 | |
| Item 4. | Mine Safety Disclosures | 41 | |
| Item 5. | Other Information | 41 | |
| Item 6. | Exhibits | 42 |
| 2 |
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
QUALIGEN THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (Unaudited) | ||||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Short-term notes receivable, net of allowance for credit losses of $ | ||||||||
| Total current assets | ||||||||
| Other assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Warrant liabilities | ||||||||
| Convertible debt | — | |||||||
| Promissory notes | — | |||||||
| Total current liabilities | ||||||||
| Commitments and Contingencies (Note 10) | - | - | ||||||
| Stockholders’ Equity (Deficit) | ||||||||
| Preferred stock, $ | $ | $ | ||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity (Deficit) | ( | ) | ||||||
| Total Liabilities & Stockholders’ Equity (Deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
QUALIGEN THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
For the Three Months Ended | For
the Six Months Ended | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| EXPENSES | ||||||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||
| Research and development | ||||||||||||||||
| Credit loss expense - short-term note receivable | — | — | ||||||||||||||
| Total expenses | ||||||||||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER EXPENSE (INCOME), NET | ||||||||||||||||
| Gain on change in fair value of warrant liabilities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain on change in fair value of derivative liabilities | — | ( | ) | — | ( | ) | ||||||||||
| Gain on change in fair value of convertible debt | ( | ) | — | ( | ) | — | ||||||||||
| Interest expense | ||||||||||||||||
| Interest income | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss on issuance of convertible debt | — | |||||||||||||||
| Gain on voluntary conversion of convertible debt into common stock | — | ( | ) | — | ( | ) | ||||||||||
| Loss on monthly redemptions of convertible debt into common stock | — | — | ||||||||||||||
| Total other expense (income), net | ( | ) | ( | ) | ||||||||||||
| LOSS BEFORE (BENEFIT FROM) PROVISION FOR INCOME TAXES | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| (BENEFIT FROM) PROVISION FOR INCOME TAXES | — | ( | ) | ( | ) | |||||||||||
| NET LOSS FROM CONTINUING OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| DISCONTINUED OPERATIONS | ||||||||||||||||
| Loss on disposal of discontinued operations, net of tax | — | ( | ) | — | ( | ) | ||||||||||
| GAIN (LOSS) FROM DISCONTINUED OPERATIONS | — | ( | ) | — | ( | ) | ||||||||||
| NET LOSS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Deemed dividend arising from warrant down-round provision | $ | ( | ) | $ | — | $ | ( | ) | $ | ( | ) | |||||
| Net loss attributable to Qualigen Therapeutics, Inc | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Total net loss per common share, basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted-average number of shares outstanding, basic and diluted (after stock split) | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
QUALIGEN THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
| Shares | Amount | Shares | Amount |
Capital |
Deficit |
Equity (Deficit) | ||||||||||||||||||||||
| Series A-2 | ||||||||||||||||||||||||||||
| Convertible | Additional | Total | ||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-In | Accumulated |
Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount |
Capital |
Deficit |
Equity (Deficit) | ||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | | ||||||||||||||||||||
| Issuance of common stock for the conversion of Series A-2 preferred shares | ( | ) | ( | ) | — | — | ||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||
| Net loss | — | — | - | — | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2025 | ( | ) | ||||||||||||||||||||||||||
| Issuance of common stock for the conversion of Series A-2 preferred shares | ( | ) | ( | ) | — | — | ||||||||||||||||||||||
| Net loss | — | — | - | — | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Series A-2 | ||||||||||||||||||||||||||||
| Convertible | Additional | Total | ||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital |
Deficit |
Equity (Deficit) | ||||||||||||||||||||||
| Balance at December 31, 2023 | - | $ | — | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Monthly redemptions of convertible debt into common stock | — | — | — | |||||||||||||||||||||||||
| Fair value of warrant modification for professional services | — | — | — | — | — | |||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2024 | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance | — | $ | - | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Voluntary conversion of convertible debt into common stock | $ | $ | ||||||||||||||||||||||||||
| Monthly redemptions of convertible debt into common stock | — | — | — | |||||||||||||||||||||||||
| Stock issued upon partial exercise of warrants | — | — | — | |||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance at June 30, 2024 | — | $ | - | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Balance | — | $ | - | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
QUALIGEN THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| 2025 | 2024 | |||||||
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Loss from discontinued operations, net of tax | — | ( | ) | |||||
| Loss from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile loss from continuing operations to net cash used in operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Change in fair value of warrant liabilities | ( | ) | ( | ) | ||||
| Gain on voluntary conversion of convertible debt | — | ( | ) | |||||
| Legal expenses deducted from issuance of convertible debt | ||||||||
| Provision for credit losses of short-term note receivable | — | |||||||
| Accrued interest on short-term note receivable | ( | ) | — | |||||
| Amortization of penalty on promissory note | — | |||||||
| Loss on monthly redemptions of convertible debt into common stock | — | |||||||
| Accretion of discount on convertible debt | — | |||||||
| Loss on issuance of convertible debt | ||||||||
| Gain on change in fair value of derivative liabilities | — | ( | ) | |||||
| Gain on change in fair value of convertible debt | ( | ) | — | |||||
| Fair value of warrant modification for professional services | — | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other assets | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued expenses and other current liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Issuance of short-term note receivable | ( | ) | — | |||||
| Net cash provided by (used in) investing activities - discontinued operations | — | |||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from the issuance of convertible debt | ||||||||
| Repayment of convertible debt | ( | ) | — | |||||
| Proceeds from warrant exercises | — | |||||||
| Proceeds from issuance of promissory notes | — | |||||||
| Net cash provided by financing activities - continuing operations | ||||||||
| Net cash provided by financing activities - discontinued operations | — | — | ||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents - beginning of period | ||||||||
| Cash and cash equivalents - end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | — | $ | |||||
| Taxes | $ | — | $ | |||||
| NONCASH FINANCING AND INVESTING ACTIVITIES: | ||||||||
| Voluntary conversion of convertible debt into common stock | $ | — | $ | |||||
| Monthly redemption of convertible debt into common stock | $ | — | $ | |||||
| Deemed dividend arising from warrant down-round provision | $ | $ | ||||||
| Exchange of derivative liability for warrant and convertible debt | $ | — | $ | |||||
| Issuance of common stock for the conversion of Series A-2 preferred shares | $ | $ | — | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
QUALIGEN THERAPEUTICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES
Organization
Ritter Pharmaceuticals, Inc. (the Company’s predecessor) was formed as a Nevada limited liability company on March 29, 2004 under the name Ritter Natural Sciences, LLC. In September 2008, this company converted into a Delaware corporation under the name Ritter Pharmaceuticals, Inc. On May 22, 2020, upon completing a “reverse recapitalization” transaction with Qualigen, Inc., Ritter Pharmaceuticals, Inc. was renamed Qualigen Therapeutics, Inc. (the “Company”). Qualisys Diagnostics, Inc. was formed as a Minnesota corporation in 1996, reincorporated to become a Delaware corporation in 1999, and then changed its name to Qualigen, Inc. in 2000. Qualigen, Inc. was a wholly-owned subsidiary of the Company. On July 20, 2023, the Company sold all of the issued and outstanding shares of common stock of Qualigen, Inc. to Chembio Diagnostics, Inc. (“Chembio”), a wholly-owned subsidiary of Biosynex, S.A. (“Biosynex”). Following the consummation of this transaction, Qualigen, Inc. became a wholly-owned subsidiary of Chembio (see Note 5 – Discontinued Operations).
In
2022, the Company acquired a
Basis of Presentation
Certain information or footnote disclosures normally included in financial statements prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results, and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2024 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The interim results for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any future periods.
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company and its former wholly-owned and majority owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to GAAP. The Company views its operations and manages its business in one operating segment. In general, the functional currency of the Company and its subsidiaries is the U.S. dollar. For NanoSynex, the functional currency was the local currency, New Israeli Shekels (NIS). As there were no transactions between the Company and Nanosynex during 2025 or 2024, there was no activity required to reflect the assets and liabilities for NanoSynex translated into U.S. dollars, with the effects of foreign currency translation adjustments reflected as a component of accumulated other comprehensive loss within the Company’s condensed consolidated statements of changes in stockholders’ equity (deficit).
As of July 20, 2023, NanoSynex was deconsolidated from these financial statements as the transactions contemplated by the NanoSynex Amendment resulted in a loss of control of a subsidiary that constitutes a business under ASC 810. The retained investment in NanoSynex is accounted for prospectively as an equity method investment.
| 7 |
Discontinued Operations
On July 20, 2023, the Company completed the sale of Qualigen, Inc. to Chembio Diagnostics, Inc. The sale of Qualigen Inc. constituted a significant disposition and as such, the Company concluded that the disposition of ownership in Qualigen, Inc. represented a strategic shift that had a major effect on its operations and financial results. Therefore, Qualigen, Inc. is classified as discontinued operations for all periods presented herein.
On
July 20, 2023, the Company entered into the NanoSynex Amendment, which amended the Master Funding Agreement for the Operational and Technology
Funding of NanoSynex Ltd., dated May 26, 2022, by and between the Company and NanoSynex (the “NanoSynex Funding Agreement”),
a former majority owned subsidiary of the Company, to, among other things, forfeit
Accounting Estimates
Management uses estimates and assumptions in preparing its condensed consolidated financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The most significant estimates relate to the estimated fair value of convertible debt, warrant liabilities, and determination of the allowance for credit losses. Actual results could vary from the estimates that were used.
Reverse Stock Splits
On
November 20, 2024, the Company effected a
All share and per share data for all periods presented in the accompanying financial statements and the related disclosures have been adjusted retrospectively to reflect both reverse stock splits. The number of authorized shares of common stock and the par value per share remains unchanged.
Cash
The Company considers all highly liquid investments purchased with an initial maturity of 90 days or less and money market funds to be cash equivalents.
The Company maintains the majority of its cash in government money market mutual funds and in accounts at banking institutions in the U.S. that are of high quality. Cash held in these accounts often exceed the Federal Deposit Insurance Corporation (FDIC) insurance limits. If such banking institutions were to fail, the Company could lose all or a portion of amounts held in excess of such insurance limitations. As of June 30, 2025, the Company had not experienced losses on these accounts, and management believes the Company is not exposed to significant risk on such accounts.
Segment Reporting
The Company adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, as of January 1, 2024. Operating segments are identified as components of an enterprise about which separate discrete financial information is regularly reviewed for evaluation by the chief operating decision-maker (“CODM”) in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and managed its business as one segment operating primarily within the United States (and in Israel prior to the NanoSynex deconsolidation). The Company is an early stage clinical therapeutics company focused on developing treatments for adult and pediatric cancer. The Company’s operations are organized and reported as a single reportable segment, which includes all activities related to the discovery, development, and commercialization of its products. The Company’s CODM, its chief executive officer, reviews operating results on an aggregate basis and manages the operations as a single operating segment. The accounting policies of the Company’s single operating and reportable segment are the same as those described in the summary of significant accounting policies. The measure of segment assets is reported on the consolidated balance sheets as total assets. The CODM evaluates performance and allocates resources based on consolidated net loss that also is reported on the consolidated statements of operations as net loss, and consolidated cash used in operations. The significant expenses regularly reviewed by the CODM are consistent with those reported on the Company’s consolidated statement of operations, and expenses are not regularly provided to or reviewed on a more disaggregated basis for purposes of assessing segment performance and deciding how to allocate resources.
| 8 |
General and Administrative Expenses
Beginning
in December 2024, the Company engaged IR Agency LLC to provide marketing and advertising services to communicate information about the
Company to the investment community. During the three and six months ended June 30, 2025, expenses related to the work performed by IR
Agency LLC totaled to $
Research and Development
Except for acquired in process research and development (IPR&D), the Company expenses research and development costs as incurred including therapeutics license costs.
Patent Costs
The Company expenses all costs as incurred in connection with patent applications (including direct application fees, and the legal and consulting expenses related to making such applications) and such costs are included in general and administrative expenses in the condensed consolidated statement of operations.
Derivative Financial Instruments and Warrant Liabilities
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements of operations and comprehensive loss. Depending on the features of the derivative financial instrument, the Company uses either the Black-Scholes option-pricing model or a Monte-Carlo simulation to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period (See Note 8-Warrant Liabilities and Note 9- Convertible Debt).
Fair Value Measurements
The Company determines the fair value measurements of applicable assets and liabilities based on a three-tier fair value hierarchy established by accounting guidance and prioritizes the inputs used in measuring fair value. The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows:
| ● | Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; |
| ● | Level 2 - Inputs other than quoted prices that are observable for the assets or liability either directly or indirectly, including inputs in markets that are not considered to be active; and |
| ● | Level 3 - Inputs that are unobservable. |
Fair Value of Financial Instruments
Cash, prepaid expenses, and accrued liabilities are carried at cost, which management believes approximates fair value due to the short-term nature of these instruments. Short-term notes receivable are valued subject to a current expected credit loss (“CECL”) model (see Note 5 - Short-Term Notes Receivable).
Stock-Based Compensation
Stock-based compensation cost for equity awards granted to employees and non-employees is measured at the grant date based on the calculated fair value of the award using the Black-Scholes option-pricing model, and is recognized as an expense, under the straight-line method, over the requisite service period (generally the vesting period of the equity grant). If the Company determines that other methods are more reasonable, or other methods for calculating these assumptions are prescribed by regulators, the fair value calculated for the Company’s stock options could change significantly. Higher volatility, lower risk-free interest rates, and longer expected lives would result in an increase to stock-based compensation expense to employees and non-employees determined at the date of grant.
| 9 |
Income Taxes
Deferred income taxes are recognized for temporary differences in the basis of assets and liabilities for financial statement and income tax reporting that arise due to net operating loss carry forwards, research and development credit carry forwards and from using different methods and periods to calculate depreciation and amortization, allowance for doubtful accounts, accrued vacation, research and development expenses, and state taxes. A provision has been made for income taxes due on taxable income and for the deferred taxes on the temporary differences. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Realization of the deferred income tax asset is dependent on generating sufficient taxable income in future years.
Accounting Standards
In December 2023, the FASB issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures, which requires more detailed income tax disclosures. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the disclosure requirements related to the new standard.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Expense Disaggregation Disclosures. This update requires entities to disaggregate operating expenses into specific categories, such as salaries and wages, depreciation, and amortization, to provide enhanced transparency into the nature and function of expenses. Accounting Standards Update 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. Accounting Standards Update 2024-03 may be applied retrospectively or prospectively. The Company is evaluating the disclosure requirements related to the new standard.
The Company does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on our consolidated financial statements or disclosures.
Global Economic Conditions
Ongoing Wars in Ukraine and Israel
In February 2022, Russia invaded Ukraine. While the Company has no direct exposure in Russia and Ukraine, the Company continues to monitor
any broader impact to the global economy, including with respect to inflation, supply chains and fuel prices. The full impact of the
conflict on the Company’s business and financial results remains uncertain and will depend on the severity and duration of the
conflict and its impact on regional and global economic conditions.
In October 2023, Hamas conducted terrorist attacks in Israel resulting in ongoing war. There continue to be hostilities between Israel and Hezbollah in Lebanon and Hamas in the Gaza Strip, both of which have resulted in rockets being fired into Israel, causing casualties and disruption of economic activities. In early 2023, there were a number of changes proposed to the political system in Israel by the current government which, if implemented as planned, could lead to large-scale protests and additional uncertainty, negatively impacting the operating environment in Israel. Popular uprisings in various countries in the Middle East over the last few years have also affected the political stability of those countries and have led to a decline in the regional security situation. Such instability may also lead to deterioration in the political and trade relationships that exist between Israel and these countries. Any armed conflicts, terrorist activities or political instability involving Israel or other countries in the region could adversely affect the Company’s minority interest in NanoSynex, its results of operations, financial condition, cash flows and prospects (see Note 5 – Discontinued Operations).
Inflation and Global Economic Conditions
Beginning in 2022 and continuing into the current fiscal year, global commodity and labor markets experienced significant inflationary pressures attributable to government stimulus and recovery programs, government deficit spending and supply chain issues. The Company cannot provide assurance that it will be successful in fully offsetting increased costs resulting from inflationary pressure. In addition, the global economy suffers from slowing growth and rising interest rates, and some economists believe that there may be a global recession in the near future. If the global economy slows, the Company’s business may be adversely affected.
| 10 |
NOTE 2 — LIQUIDITY AND GOING CONCERN
As
of June 30, 2025, the Company had approximately $
From
January to July 2025, the Company borrowed a total of $
The Company expects to continue to have net losses and negative cash flow from operations, which will challenge its liquidity. These factors raise substantial doubt about the Company’s ability to continue as a going concern for the one-year period following the date that these financial statements were issued.
There is no assurance that profitable operations will ever be achieved, or, if achieved, could be sustained on a continuing basis.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The financial statements do not include any adjustments that would be necessary should the Company be unable to continue as a going concern, and therefore, be required to liquidate its assets and discharge its liabilities in other than the normal course of business and at amounts that may differ from those reflected in the accompanying financial statements.
NOTE 3 — FAIR VALUE MEASUREMENTS
Below is the summary of our assets and liabilities measured at fair value on a recurring basis and categorized using the fair value hierarchy as of June 30, 2025:
SCHEDULE OF FAIR VALUE MEASUREMENTS
| (Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
| Assets | ||||||||||||||||
| Money Market funds | $ | $ | - | $ | - | $ | ||||||||||
| Total Assets | $ | $ | - | $ | - | $ | ||||||||||
| Liabilities | ||||||||||||||||
| Convertible Debt | $ | - | $ | - | $ | $ | ||||||||||
| Warrant Liabilities | — | — | ||||||||||||||
| Total Liabilities | $ | — | $ | — | $ | $ | ||||||||||
Below is the summary of our assets and liabilities measured at fair value on a recurring basis and categorized using the fair value hierarchy as of December 31, 2024:
| (Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
| Assets | ||||||||||||||||
| Money Market funds | $ | $ | - | $ | - | $ | ||||||||||
| Total Assets | $ | $ | - | $ | - | $ | ||||||||||
| Liabilities | ||||||||||||||||
| Warrant Liabilities | $ | - | $ | - | $ | $ | ||||||||||
| Total Liabilities | $ | — | $ | — | $ | $ | ||||||||||
NOTE 4 — PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following at June 30, 2025 and December 31, 2024:
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Prepaid consulting | $ | $ | ||||||
| Prepaid insurance | ||||||||
| Prepaid legal | — | |||||||
| Other current assets | ||||||||
| Prepaid expenses and other current assets | $ | $ | ||||||
NOTE 5 — SHORT-TERM NOTE RECEIVABLE
Short-term note receivable consisted of the following at June 30, 2025 and December 31, 2024:
SCHEDULE OF SHORT-TERM NOTE RECEIVABLE
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Short-term note receivable - Marizyme | $ | $ | ||||||
| Less allowance for credit losses | ( | ) | ( | ) | ||||
| Short-term notes receivable | $ | $ | ||||||
Allowance for credit losses consisted of the following at June 30, 2025 and December 31, 2024:
SCHEDULE OF ALLOWANCE FOR CREDIT LOSSES
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Beginning Balance | $ | ( | ) | $ | — | |||
| Current period provision for expected credit losses | ( | ) | ( | ) | ||||
| Ending Balance | $ | ( | ) | $ | ( | ) | ||
| 11 |
During
the six months ended June 30, 2025, the Company advanced to Marizyme, Inc., $
The
Marizyme Notes bears interest the rate of eighteen percent (
Under
ASC 326-20, known as the CECL model, the Company was required to estimate credit losses expected over the life of an exposure (or pool
of exposures) based on historical information, current information, and reasonable and supportable forecasts. The Company is unable to
use its historical data to estimate losses as it has no relevant loss history to date. To determine the estimate of expected credit losses,
the Company used a probability-weighted approach that incorporates multiple settlement scenarios, including recovery of amounts due upon
an acquisition of the debtor, and recovery in different liquidation scenarios, and determines the expected recoverable amount of the
loan in each scenario. This model requires management to make certain assumptions including the likelihood of each outcome, the estimated
value of the debtor’s assets, and the Company’s expected claim and recovery rate on the debtor’s assets in the event
of an insolvency or a liquidation proceeding. As of June 30, 2025, the estimate for expected credit losses on the Marizyme Notes is $
The Company is also party to a Co-Development Agreement with Marizyme (see Note 13 - Research and License Agreements).
NOTE 6 — DISCONTINUED OPERATIONS
On
July 20, 2023, the Company completed the sale of Qualigen, Inc., its formerly wholly-owned subsidiary, to Chembio Diagnostics, Inc. for
net cash consideration of $
There were no assets and liabilities remaining related to Qualigen, Inc. as of June 30, 2025 or December 31, 2024.
NOTE 7 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consisted of the following at June 30, 2025 and December 31, 2024:
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
| June 30 | December 31, | |||||||
| 2025 | 2024 | |||||||
| Board compensation | $ | $ | - | |||||
| License fees | ||||||||
| Professional fees | ||||||||
| Vacation | ||||||||
| Accrued expenses and other current liabilities | $ | $ | ||||||
| 12 |
NOTE 8 — WARRANT LIABILITIES
On
November 20, 2024, the Company closed its private placement transaction resulting in the issuance of newly designated Series A-2
Preferred Stock (see Note 14 – Stockholders Equity (Deficit)). As a result of the issuance of a new class of voting securities, the
Company evaluated its equity classified warrants’ respective terms, and concluded that warrants for
In
2004, the Company issued warrants to various investors and brokers for the purchase of Series C preferred stock in connection with a
private placement (the “Series C Warrants”). The Series C Warrants were subsequently extended and, upon closing of the reverse
recapitalization transaction with Ritter, exchanged for warrants to purchase common stock of the Company. On February 27, 2024, these
Series C Warrants were repriced as a result of a down-round provision triggered by a Securities Purchase Agreement with Alpha for the
purchase of the February 2024 Debentures described below, from an exercise price of $
The following table summarizes the activity in liability classified warrants for the six months ended June 30, 2025:
SCHEDULE OF WARRANTS ACTIVITY
| Common Stock Warrants | ||||||||||||||||
| Shares | Weighted– Average Exercise Price | Range of Exercise Price | Weighted– Average Remaining Life (Years) | |||||||||||||
| Total outstanding –December 31, 2024 | $ | $ | * | |||||||||||||
| Granted | — | — | — | — | ||||||||||||
| Exercised | — | — | — | — | ||||||||||||
| Reclassified from equity | — | — | — | — | ||||||||||||
| Reclassified to equity | — | — | — | — | ||||||||||||
| Expired | ( | ) | $ | $ | — | |||||||||||
| Total outstanding – June 30, 2025 | $ | $ | * | |||||||||||||
| Exercisable | $ | $ | * | |||||||||||||
| * |
| 13 |
The following table summarizes the activity in liability classified warrants for the six months ended June 30, 2024:
| Common Stock Warrants | ||||||||||||||||
| Shares | Weighted– Average Exercise Price | Range of Exercise Price | Weighted– Average Remaining Life (Years) | |||||||||||||
| Total outstanding –December 31, 2023 | $ | $ | ||||||||||||||
| Granted | $ | $ | ||||||||||||||
| Exercised | — | — | — | — | ||||||||||||
| Reclassified from equity | — | — | — | — | ||||||||||||
| Reclassified to equity | — | — | — | — | ||||||||||||
| Expired | ( | ) | $ | $ | — | |||||||||||
| Total outstanding – June 30, 2024 | $ | $ | ||||||||||||||
| Exercisable | $ | $ | ||||||||||||||
The following table presents the Company’s fair value hierarchy for its warrant liabilities measured at fair value on a recurring basis as of June 30, 2025:
SCHEDULE OF FAIR VALUE OF HIERARCHY FOR WARRANT LIABILITIES
| Quoted | ||||||||||||||||
| Market | Significant | |||||||||||||||
| Prices for | Other | Significant | ||||||||||||||
| Identical | Observable | Unobservable | ||||||||||||||
| Assets | Inputs | Inputs | ||||||||||||||
| Common Stock Warrant Liabilities | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
| Balance as of December 31, 2024 | $ | — | $ | — | $ | $ | ||||||||||
| Granted | — | — | — | — | ||||||||||||
| Exercised | — | — | — | — | ||||||||||||
| Gain on change in fair value of warrant liabilities | — | — | ( | ) | ( | ) | ||||||||||
| Balance as of June 30, 2025 | $ | — | $ | — | $ | $ | ||||||||||
The following table presents the Company’s fair value hierarchy for its warrant liabilities measured at fair value on a recurring basis as of December 31, 2024:
| Quoted | ||||||||||||||||
| Market | Significant | |||||||||||||||
| Prices for | Other | Significant | ||||||||||||||
| Identical | Observable | Unobservable | ||||||||||||||
| Assets | Inputs | Inputs | ||||||||||||||
| Common Stock Warrant liabilities | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
| Balance as of December 31, 2023 | $ | — | $ | — | $ | $ | ||||||||||
| Granted | — | — | ||||||||||||||
| Exercised | — | — | — | — | ||||||||||||
| Fair value of warrants reclassified from equity | — | — | ||||||||||||||
| Fair value of warrants reclassified to equity | — | — | ( | ) | ( | ) | ||||||||||
| Gain on change in fair value of warrant liabilities | — | — | ( | ) | ( | ) | ||||||||||
| Balance as of December 31, 2024 | $ | — | $ | — | $ | $ | ||||||||||
| 14 |
During the six months ended June 30, 2025, there were no warrants reclassified from equity to liabilities. There were no transfers of financial assets or liabilities between category levels for the six months ended June 30, 2025 and 2024.
The value of the warrant liabilities was based on a valuation received from an independent valuation firm determined using the Black-Scholes Model at June 30, 2025, and a Monte-Carlo simulation at June 30, 2024. For volatility, the Company considers comparable public companies as a basis for its expected volatility to calculate the fair value of common stock warrants and transitions to its own volatility as the Company develops sufficient appropriate history as a public company. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected term of the common stock warrant. The Company uses an expected dividend yield of zero based on the fact that the Company has never paid cash dividends and does not expect to pay cash dividends in the foreseeable future. Any significant changes in the inputs may result in significantly higher or lower fair value measurements.
The following are the weighted average and the range of assumptions used in estimating the fair value of warrant liabilities (weighted average calculated based on the number of outstanding warrants on each issuance) as of June 30, 2025 and December 31, 2024:
SCHEDULE OF ASSUMPTIONS OF WARRANT LIABILITIES
| June 30, 2025 | December 31, 2024 | |||||||
| Risk-free interest rate | % | % | ||||||
| Expected volatility (peer group) | % | % | ||||||
| Term of warrants (years) | ||||||||
| Expected dividend yield | % | % | ||||||
NOTE 9 — CONVERTIBLE DEBT
2022 Convertible Debenture (Related party)
On
December 22, 2022, the Company issued to Alpha an
Commencing
June 1, 2023 the Company was required to redeem $
| 15 |
In December 2022, pursuant to the terms of the 2022 Securities Purchase Agreement, the Company entered into a registration rights agreement with Alpha (the “Registration Rights Agreement”), pursuant to which the Company agreed to file one or more registration statements, as necessary, and to the extent permissible, to register under the Securities Act the resale of the remaining shares (underlying the 2022 Debenture and the 2022 Warrant) not otherwise registered under the Company’s registration statement on Form S-3 (File No. 333-266430). The Company filed a resale registration statement on Form S-3 pursuant to the requirements of the Registration Rights Agreement on December 2022 (File Number 333-269088), which registration statement was declared effective by the SEC on January 5, 2023. On September 1, 2023, the Company filed a Post-Effective Amendment No. 1 to Form S-3 on Form S-1 (File No. 333-269088), which Post-Effective Amendment was declared effective by the SEC on September 7, 2023. On May 1, 2024, the Company filed a Post-Effective Amendment No. 2 to Form S-1 on Form S-3 (File No. 333-269088), which Post-Effective Amendment was declared effective by the SEC on May 2, 2024.
The Company evaluated the 2022 Debenture and the 2022 Warrant and determined that the 2022 Warrant is a freestanding financial instrument. Initially, the 2022 Warrant is not considered indexed to the Company’s own stock, because the settlement amount would not equal the difference between the fair value of a fixed number of the Company’s equity shares and a fixed strike price and all of the adjustment features in Section 3(b) of the Alpha Warrant are not down round provisions, as defined in ASU 2017-11. Accordingly, the 2022 Warrant was classified as a liability and recognized at fair value, with subsequent changes in fair value recognized in earnings.
In
accordance with ASC 470-50, the Company determined that the modified terms of the 2022 Debenture were substantially different when compared
to the original terms that existed prior to the SPA Amendment, and thus the event was required to be accounted for as a debt extinguishment.
Accordingly, the Company derecognized the net carrying value of the original Debenture, and recorded the new debt instrument at its fair
value of $
On
February 27, 2024, in connection with the issuance of an additional warrant to Alpha with an exercise price of $
2024 Alpha Debenture (Related party)
On
February 27, 2024, pursuant to a Securities Purchase Agreement executed with Alpha on February 27, 2024 the “2024 Securities Purchase
Agreement”, the Company issued to Alpha an
Pursuant
to the 2024 Securities Purchase Agreement, the Company also granted to Alpha an option, exercisable until July 1, 2024, to purchase from
us an additional
The Company evaluated the terms of the 2024 Securities Purchase Agreement and determined that the 2024 Alpha Warrant and the Option issued to Alpha are each considered freestanding financial instruments. The 2024 Alpha Warrant was further determined to initially (i) be indexed to the Company’s own stock, and (ii) meet all of the additional criteria for permanent equity classification. As the Option required the Company to issue convertible debt with multiple cash settlement alternatives, the Option was classified as a liability and recognized at fair value, with subsequent changes in fair value recognized in earnings.
The
net proceeds from the issuance of the 2024 Alpha Debenture were allocated first to the liability-classified Option and the bifurcated
embedded features in the 2024 Alpha Debenture (conversion option, contingent acceleration upon an Event of Default, and contingent interest
upon an Event of Default), with the resulting difference, if any, allocated to the loan host instrument and the equity-classified warrant
on a relative fair value basis. The fair value of the Option was estimated to be $
| 16 |
During
the three and six months ending June 30, 2024 in connection with the 2024 Alpha Debenture, the Company recorded initial derivative liabilities
with a fair value of $
As
of June 30, 2024, the fair value of derivative liabilities related to the 2024 Alpha Debenture was $
On November 20, 2024, in connection with the closing of the Company’s private placement transaction and issuance of Series A-2 Preferred Stock, the Company repaid the outstanding principal and accrued interest on the Alpha Debenture, in full settlement of the obligation. As of December 31, 2024, there were no amounts outstanding under the 2024 Alpha Debenture.
2024 Convertible Debenture
In
April 2024, Alpha assigned the Option to Yi Hua Chen (“Chen”) and Chen exercised the option in full, in exchange for $
In
November 2024, in connection with the closing of the Company’s private placement transaction and issuance of Series A-2 Preferred
Stock, the Company and Chen executed an Exchange Agreement (the “Exchange Agreement”), agreeing to convert all outstanding
principal and accrued interest on the 2024 Chen Debenture totaling approximately $
2025 Convertible Note
On
April 28, 2025, the Company entered into a Secured Convertible Note (the “2025 Convertible Note”) with Alpha Capital Anstalt
(“Alpha”, or “Holder”), pursuant to which the Company issued to Alpha a non-interest-bearing note with a principal
of $
The
Company determined the 2025 Convertible Note does not contain a substantial premium and therefore the Company elected to account for
the Convertible Note under the fair value option in accordance with ASC 825-10-15-4. The Company determined the fair value of the Convertible
Note was $
On
June 4, 2025 the Company paid down $
NOTE 10 — PROMISSORY NOTES
During
the six months ended June 30, 2025 the Company issued short term notes payable totaling $
The
Penalty would only be triggered upon nonpayment by the Company upon the Maturity Date. Therefore, the Company views the Penalty to
be a contingent fee which would only be triggered upon the occurrence of non-payment. Under ASC 450-20, the Penalty
should be viewed as a potential loss contingency which would require payment if the Company does not have the ability to repay the
Note at the Maturity Date. Though the Company’s financial position at June 30, 2025 is insufficient to pay the principal owed,
in June 2025 the Company engaged outside consultants to raise additional funding through the sale of equity, and therefore
anticipates to be able to repay $
| 17 |
In
May 2025, the Company borrowed a total of $
There were no promissory notes outstanding at December 31, 2024.
NOTE 11 — EARNINGS (LOSS) PER SHARE
Basic loss per share (“EPS”) is computed by dividing net loss by the weighted-average number of common shares outstanding plus unexercised pre-funded warrants. Diluted EPS is computed based on the sum of the weighted-average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of shares issuable from preferred stock, convertible debt, stock options and warrants.
SCHEDULE OF DILUTIVE SECURITIES EXCLUDED FROM DILUTED NET LOSS PER SHARE
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net loss used for basic earnings per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic weighted-average common shares outstanding | ||||||||||||||||
| Dilutive potential shares issuable from preferred stock, convertible debt, stock options and warrants | — | — | — | — | ||||||||||||
| Diluted weighted-average common shares outstanding | ||||||||||||||||
The following potentially dilutive securities have been excluded from diluted net loss per share as of June 30, 2025 and 2024 because their effect would be anti-dilutive:
SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES
| As of June 30, | ||||||||
| 2025 | 2024 | |||||||
| Shares of common stock subject to outstanding options | ||||||||
| Shares of common stock subject to outstanding warrants (excluding pre-funded warrants) | ||||||||
| Shares of common stock subject to outstanding preferred stock | — | |||||||
| Shares of common stock subject to outstanding convertible debt | ||||||||
| Total common stock equivalents | ||||||||
| 18 |
NOTE 12 — COMMITMENTS AND CONTINGENCIES
Litigation and Other Legal Proceedings
On
January 29, 2025, the Company was named as a defendant in an action brought by LifeSci Capital LLC (“LifeSci”) in the U.S.
District Court for the Southern District of New York. The complaint alleges that the Company failed to pay $
The Company filed its answer on March 17, 2025, denying the material allegations in the complaint and asserting various affirmative defenses. As of May 29, 2025, the matter is in the discovery phase.
The Company disputes that any amount is owed and is vigorously defending the lawsuit. Based on the current stage of the proceedings and the information available at this time, the Company does not believe a loss is probable or reasonably estimable.
NOTE 13 — RESEARCH AND LICENSE AGREEMENTS
UCL Business Limited
In
January 2022, the Company entered into a License Agreement with UCL Business Limited to obtain an exclusive worldwide in-license of a
genomic quadruplex (G4)-selective transcription inhibitor drug development program which had been developed at University College London,
including lead and back-up compounds, preclinical data and a patent estate. (UCL Business Limited is the commercialization company for
University College London.) The program’s lead compound is now being developed at the Company under the name QN-302 as a candidate
for treatment for pancreatic ductal adenocarcinoma, which represents the vast majority of pancreatic cancers. The License Agreement required
a $
For
both the three months ended June 20, 2025 and 2024, there were license costs of $
QN-302 Phase 1 Study
In June 2023, the Company entered into a Master Clinical Research Services Agreement with Translational Drug Development, LLC (“TD2”) whereby TD2 agreed to perform certain clinical research and development services for the Company including but not limited to trial management, side identification and selection, site monitoring/management, medical monitoring, project management, data collection, statistical programming or analysis, quality assurance auditing, scientific and medical communications, regulatory affairs consulting and submissions, strategic consulting, and/or other related services. From time to time, the Company shall enter into statements of work with TD2 for the performance of specific services under this Master Clinical Research Services Agreement.
In June 2023, the Company entered into a Master Laboratory Services Agreement with MLM Medical Labs, LLC (“MLM”) whereby MLM agreed to perform certain clinical research and development services for the Company including but not limited to laboratory, supply, testing, validation, data management, and storage services. From time to time, the Company shall enter into work orders with MLM for the performance of specific services under this Master Laboratory Services Agreement.
In June 2023, the Company entered into a Master Services Agreement with Clinigen Clinical Supplies Management, Inc. (“Clinigen”) whereby Clinigen agreed to provide certain pharmaceutical products and/or services. From time to time, the Company shall enter into statements of work with Clinigen for the performance of specific services under this Master Services Agreement.
In July 2023, pursuant to the above agreements, the Company entered into work orders and statements of work for clinical trial services for the conduct of the QN-302 Phase 1 study. Given our financial situation, the company slowed the development of the QN-302 Phase 1 Study beginning in the second quarter of 2024.
| 19 |
The University of Louisville Research Foundation
In
March 2019, the Company entered into a sponsored research agreement and an option for a license agreement with University of Louisville
Research Foundation, Inc. (“ULRF”) for development of several small-molecule RAS interaction inhibitor drug candidates. Under
the terms of this agreement, the Company agreed to reimburse ULRF for sponsored research expenses of initially up to $
There
were
Between
June 2018 and April 2022, the Company entered into license and sponsored research agreements with ULRF for QN-247, a novel aptamer-based
compound that has shown promise as an anticancer drug.
The
sponsored research agreement for QN-247 expired in August 2022 and there were
| 20 |
Marizyme
On
April 11, 2024, the Company entered into a Co-Development Agreement with Marizyme. Under the Co-Development Agreement (as amended),
NOTE 14 — STOCKHOLDERS’ EQUITY (DEFICIT)
As of June 30, 2025 and December 31, 2024, the Company had two classes of authorized capital stock: common stock and preferred stock.
Common Stock
Holders of common stock generally vote as a class with the holders of the preferred stock and are entitled to one vote for each share held. Subject to the rights of the holders of the preferred stock to receive preferential dividends, the holders of common stock are entitled to receive dividends when and if declared by the Board of Directors. Following payment of the liquidation preference of the preferred stock, any remaining assets will be distributed ratably among the holders of the common stock and, on an as-if-converted basis, the holders of any preferred stock upon liquidation, dissolution or winding up of the affairs of the Company. The holders of common stock have no preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions.
At
June 30, 2025, the Company has reserved
SCHEDULE OF RESERVED SHARES
| Exercise of issued and future grants of stock options | ||||
| Conversion of Series A-2 preferred stock | ||||
| Exercise of stock warrants | ||||
| Conversion of convertible debt | ||||
| Total |
Common Stock Purchase Agreement
On
November 19, 2024, the Company entered into a Common Stock Purchase Agreement (the “Common Stock Purchase Agreement”) with
Horberg Enterprises LP (the “Investor”), pursuant to which the Company in its sole discretion has the right, but not the
obligation, to issue and sell to the Investor up to $
No upfront fees were paid to the Investor at the execution of the arrangement. As of June 30, 2025, no registration statement had been filed and thus the Commencement Date permitting the sale of shares under the Common Stock Purchase Agreement had not yet occurred.
The Company evaluated the Common Stock Purchase Agreement under ASC 815-40 Derivatives and Hedging-Contracts on an Entity’s Own Equity as it represents the right to require the Investor to purchase shares of Common Stock in the future, similar to a put option. The Company concluded the Common Stock Purchase Agreement represents a freestanding derivative instrument that does not qualify for equity classification and therefore requires fair value accounting. The Company analyzed the terms of the contract and concluded the derivative instrument had no value at inception, as of December 31, 2024, or as of June 30, 2025.
| 21 |
Preferred Stock
There
are a total of
On
November 20, 2024 in a private placement transaction, the Company sold and issued to certain institutional and accredited investors
The shares of Series A-2 Preferred Stock have the rights, preferences, powers, restrictions and limitations as set forth below.
Conversion
Rights – Each share of Series A-2 Preferred Stock is convertible at any time, at the option of the holder, into a number of shares
of common stock equal to $
Liquidation Preference – Upon any voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, the holders shall be entitled to an amount equal to the Stated Value for each share of Series A-2 Preferred Stock before any distribution or payment shall be made to the holders of common stock.
Voting Rights – The holders of Series A-2 Preferred Stock are entitled to vote, together as a single class with the common stock, on all matters presented to the common stockholders for a vote. Each share of Series A-2 Preferred Stock is entitled to a number of votes equal to the number of shares into which such share of Series A-2 Preferred Stock would be convertible, as of the record date for determination of stockholders entitled to vote as to such matter, if the conversion price was equal to the “Minimum Price” (as defined in Nasdaq Listing Rule 5635(d)) as of November 20, 2024, taking into account for such purposes the beneficial ownership limitation as then in effect.
Dividends – The holders of Series A-2 Preferred Stock are entitled to receive dividends, if and when such dividends are paid to holders of common stock, in the same form and at the same time on an as-converted to common stock basis.
Protective Provisions – At all times while the Series A-2 Preferred Stock are outstanding, without the consent of the holders of at least 67% of the Stated Value of the then-outstanding Series A-2 Preferred Stock, the Company is prohibited from amending its charter documents in any manner that adversely affects the rights of the Series A-2 Preferred Stock, repurchase junior securities of the Company, pay cash dividends or distributions on junior securities of the Company, or enter into a material transactions with an affiliate of the Company (unless it is at arm’s length and expressly approved by a majority of the disinterested directors).
Stock Options and Warrants
Stock Options
The Company recognizes all compensatory share-based payments as compensation expense over the service period, which is generally the vesting period.
In
April 2020, the Company adopted the 2020 Stock Incentive Plan (the “2020 Plan”), which provides for the granting of incentive
or non-statutory common stock options and other types of awards to qualified employees, officers, directors, consultants and other service
providers. At June 30, 2025 and December 31, 2024, there were
| 22 |
The following represents a summary of the options granted to employees and non-employee service providers that were outstanding at June 30, 2025, and changes during the six-month period then ended:
SCHEDULE OF STOCK OPTION ACTIVITY
| Shares | Weighted– Average Exercise Price | Range of Exercise Price | Weighted– Average Remaining Life (Years) | |||||||||||||
| Total outstanding – December 31, 2024 | $ | $ | ||||||||||||||
| Granted | — | — | — | — | ||||||||||||
| Expired | — | — | — | — | ||||||||||||
| Forfeited | ( | ) | $ | $ | — | |||||||||||
| Total outstanding – June 30, 2025 | $ | $ | ||||||||||||||
| Exercisable (vested) | $ | $ | ||||||||||||||
| Non-Exercisable (non-vested) | $ | $ | ||||||||||||||
The following represents a summary of the options granted to employees and non-employee service providers that were outstanding at June 30, 2024, and changes during the six-month period then ended:
| Weighted– | Weighted– | |||||||||||||||
| Average | Range of | Average | ||||||||||||||
| Exercise | Exercise | Remaining | ||||||||||||||
| Shares | Price | Price | Life (Years) | |||||||||||||
| Total outstanding – December 31, 2023 | $ | $ | | |||||||||||||
| Granted | — | — | — | — | ||||||||||||
| Expired | — | — | — | — | ||||||||||||
| Forfeited | ( | ) | $ | $ | | — | ||||||||||
| Total outstanding – June 30, 2024 | $ | $ | ||||||||||||||
| Exercisable (vested) | $ | $ | | |||||||||||||
| Non-Exercisable (non-vested) | $ | $ | | |||||||||||||
There
were approximately $
| 23 |
The exercise price for an option issued under the 2020 Plan is determined by the Board of Directors, but will be (i) in the case of an incentive stock option (A) granted to an employee who, at the time of grant of such option, is a 10% stockholder, no less than 110% of the fair market value per share on the date of grant; or (B) granted to any other employee, no less than 100% of the fair market value per share on the date of grant; and (ii) in the case of a non-statutory stock option, no less than 100% of the fair market value per share on the date of grant. The options awarded under the 2020 Plan will vest as determined by the Board of Directors but will not exceed a ten-year period. A forfeiture is recognized as incurred if the option holder does not exercise after 90 days following termination of service.
No stock options were granted or exercised during the six months ended June 30, 2025 and June 30, 2024.
Fair Value of Equity Awards
The Company utilizes the Black-Scholes option pricing model to value awards under its equity plans. Key valuation assumptions include:
| ● | Expected dividend yield. The expected dividend is assumed to be zero, as the Company has never paid dividends and has no current plans to pay any dividends on the Company’s common stock. |
| ● | Expected stock-price volatility. The Company’s expected volatility is derived from the average historical volatilities of publicly traded companies within the Company’s industry that the Company considers to be comparable to the Company’s business over a period approximately equal to the expected term, because the Company does not have sufficient stock price history over the expected term. |
| ● | Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term. |
| ● | Expected term. The expected term represents the period that the stock-based awards are expected to be outstanding. The Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate an expected term because of a lack of sufficient data. Therefore, the Company estimates the expected term by using the simplified method provided by the SEC. The simplified method calculates the expected term as the average of the time-to-vesting and the contractual life of the options. |
The Company recorded share-based compensation expense and classified it in the unaudited condensed consolidated statements of operations as follows:
SCHEDULE OF SHARE-BASED COMPENSATION EXPENSE
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
For
the Three Months Ended | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| General and administrative | $ | — | $ | $ | $ | |||||||||||
| Research and development | — | — | ||||||||||||||
| Total | $ | — | $ | $ | $ | |||||||||||
| Share-based compensation expense | $ | — | $ | $ | $ | |||||||||||
Equity Classified Compensatory Warrants
As
part of the May 2020 reverse recapitalization transaction, the Company issued equity classified compensatory common stock warrants to
an advisor and its designees. In addition, various service providers hold equity classified compensatory common stock warrants issued
in 2017 and earlier (originally exercisable to purchase Series C convertible preferred stock, and now instead exercisable to purchase
common stock). These are to be differentiated from the Series C Warrants described in Note 8- Warrant Liabilities. As of June 30, 2025,
warrants to purchase
On
February 27, 2024, as a result of a down-round provision triggered by a Securities Purchase Agreement with Alpha for the purchase of
the February 2024 Debenture,
| 24 |
The following table summarizes the equity classified compensatory warrant activity for the six months ended June 30, 2025:
SCHEDULE OF COMPENSATORY WARRANT ACTIVITY
| Common Stock | ||||||||||||||||
| Shares | Weighted–Average Exercise Price | Range of Price | Weighted– Average Remaining Life (Years) | |||||||||||||
| Total outstanding – December 31, 2024 | $ | $ | ||||||||||||||
| Exercised | — | — | — | — | ||||||||||||
| Expired | ( | ) | $ | $ | — | |||||||||||
| Forfeited | — | — | — | — | ||||||||||||
| Total outstanding – June 30, 2025 | $ | $ | ||||||||||||||
| Exercisable | $ | $ | ||||||||||||||
| Non-Exercisable | — | — | — | — | ||||||||||||
The following table summarizes the equity classified compensatory warrant activity for the six months ended June 30, 2024:
| Common Stock | ||||||||||||||||
| Shares | Weighted–Average Exercise Price | Range of Exercise Price | Weighted– Average Remaining Life (Years) | |||||||||||||
| Total outstanding – December 31, 2023 | $ | $ | ||||||||||||||
| Exercised | — | — | — | — | ||||||||||||
| Expired | ( | ) | $ | $ | — | |||||||||||
| Forfeited | — | — | — | — | ||||||||||||
| Total outstanding – June 30, 2024 | $ | $ | ||||||||||||||
| Exercisable | $ | $ | ||||||||||||||
| Non-Exercisable | — | — | — | — | ||||||||||||
There
were
| 25 |
Noncompensatory Equity Classified Warrants
On
December 22, 2022, in conjunction with the issuance of a debenture to Alpha (see Note 8 – Convertible Debt), the Company issued
to Alpha a warrant to purchase
On
February 27, 2024 the Company entered into a new Securities Purchase Agreement with Alpha for the purchase of the February 2024 Debenture
(see Note 8 – Convertible Debt). This Securities Purchase Agreement resulted in the reduction of the exercise price of the December
22, 2022 warrant and the May 2020 warrant from $
On
April 12, 2024, in connection with the issuance of a convertible debenture to Chen (see Note 8 – Convertible Debt), the Company
issued a liability classified warrant to Chen to purchase
On
September 6, 2024 as a result of the down-round provision triggered by shares sold in a public offering, the above warrants were repriced
from $
As
a result of a partial voluntary conversion of the 2024 Alpha Debenture on September 9, 2024, the Company no longer had sufficient shares
to settle the 2024 Alpha Warrant in full until shareholder approval was obtained, and a portion (
On
September 6, 2024, upon the closing of a public offering, the Company issued pre-funded warrants to purchase
On
September 6, 2024, upon the closing of a public offering,
On
April 28, 2025 as a result of the down-round provision triggered by the issuance of the 2025 Convertible Note (see Note 9 - Convertible
Debt), warrants for
No new noncompensatory warrants were issued during the three and six months ended June 30, 2025.
| 26 |
The following table summarizes the noncompensatory equity classified warrant activity for the six months ended June 30, 2025:
SCHEDULE OF NON COMPENSATORY WARRANT ACTIVITY
| Common Stock | ||||||||||||||||
| Shares | Weighted– Average Exercise Price | Range of Exercise Price | Weighted– Average Remaining Life (Years) | |||||||||||||
| Total outstanding – December 31, 2024 | $ | $ | ||||||||||||||
| Granted | — | — | — | — | ||||||||||||
| Exercised | — | — | — | — | ||||||||||||
| Expired | — | — | — | — | ||||||||||||
| Forfeited | — | — | — | — | ||||||||||||
| Total outstanding – June 30, 2025 | $ | $ | ||||||||||||||
| Exercisable | $ | $ | ||||||||||||||
| Non-Exercisable | — | — | — | — | ||||||||||||
The following table summarizes the noncompensatory equity classified warrant activity for the six months ended June 30, 2024:
| Common Stock | ||||||||||||||||
| Shares | Weighted– Average Exercise Price | Range of Exercise Price | Weighted– Average Remaining Life (Years) | |||||||||||||
| Total outstanding – December 31, 2023 | $ | $ | ||||||||||||||
| Granted | $ | $ | ||||||||||||||
| Exercised | ( | ) | $ | $ | — | |||||||||||
| Expired | — | — | — | — | ||||||||||||
| Forfeited | — | — | — | — | ||||||||||||
| Total outstanding – June 30, 2024 | $ | $ | ||||||||||||||
| Exercisable | $ | $ | ||||||||||||||
| Non-Exercisable | — | — | — | — | ||||||||||||
NOTE 15 — RELATED PARTY TRANSACTIONS
Convertible Debt
On
December 22, 2022, the Company issued to Alpha, an
| 27 |
On
February 27, 2024, the Company issued to Alpha, an
On
April 12, 2024, the Company issued to Chen an
See Note 9 – Convertible Debt for additional information concerning convertible debt – related party transactions.
Warrants
On
May 22, 2020, as a commitment fee, the Company issued warrants to Alpha for the purchase of common stock. The remaining warrants expired
on May 22, 2025, and as of June 30, 2025, none of these warrants remain outstanding and exercisable. During the six months ended June
30, 2025 and 2024 there were
On
December 22, 2022, in conjunction with the issuance of a debenture to Alpha, the Company issued to Alpha a warrant to purchase
On
February 27, 2024, in conjunction with the issuance of a debenture to Alpha, the Company issued to Alpha, a warrant to purchase
On
September 6, 2024 as a result of the down-round provision triggered by shares sold in a public offering, the above warrants were repriced
from $
As
a result of a partial voluntary conversion of the 2024 Alpha Debenture on September 9, 2024, the Company no longer had sufficient shares
to settle the 2024 Alpha Warrant in full until shareholder approval was obtained, and a portion (
During the six months ended June 30, 2025, there were no exercises of this warrant. This warrant is included in equity on the Company’s consolidated balance sheets (see Note 14 – Stockholders’ Equity(Deficit)).
As
of June 30, 2025, the exercise price of all of the above warrants issued to Alpha was $
On
April 12, 2024, in connection with the issuance of a debenture to Chen (see Note 9 – Convertible Debt), the Company issued a liability
classified warrant to Chen to purchase
| 28 |
NOTE 16 — SUBSEQUENT EVENTS
In
July 2025, a total of
In
July 2025, the Company received $
On
July 25, 2025 a Certificate of Designation for
As
a result of this transaction, the conversion price of the 2025 Convertible Note was reduced from $
On July 4, 2025, the United States Congress passed budget reconciliation bill H.R. 1, referred to as the One Big Beautiful Bill (OBBB). The OBBB contains several changes to corporate taxation, including modifications to the capitalization of research and development expenses, limitations on deductions for interest expense, and accelerated fixed asset depreciation. The Company is currently evaluating the impact of the new legislation but does not expect it to have a material impact on the results of operations.
In
August 2025, the Company finalized the terms of the agreements with five investors for the $
In July 2025, the Company repaid three lenders $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and the audited financial statements and notes thereto as of and for the twelve months ended December 31, 2024, which are contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on June 30, 2025. As used in this Quarterly Report, unless the context suggests otherwise, “we,” “us,” “our,” or “Qualigen” refer to Qualigen Therapeutics, Inc. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.
Cautionary Note Regarding Forward Looking Statements
This Quarterly Report contains forward-looking statements by the Company that involve risks and uncertainties and reflect the Company’s judgment as of the date of this Report. These statements generally relate to future events or the Company’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” or “continue” or the negative of these words or other similar terms or expressions that concern the Company’s expectations, strategy, plans or intentions. Such forward-looking statements may relate to, among other things, potential future development, testing and launch of products and product candidates. Actual events or results may differ from our expectations due to a number of factors.
Some of the factors that we believe could cause actual results to differ from those anticipated or predicted include:
| ● | our ability to procure sufficient working capital to continue and complete the development, testing and launch of our prospective drug products; | |
| ● | our ability to successfully develop any drugs; | |
| ● | our ability to progress our drug candidates through preclinical and clinical development; | |
| ● | our ability to obtain the requisite regulatory approvals for our clinical trials and to begin and complete such trials according to any projected timeline; | |
| ● | our ability to complete enrollment in our clinical trials as contemplated by any projected timeline; | |
| ● | the likelihood that future clinical trial data will be favorable or that such trials will confirm any improvements over other products or lack negative impacts; | |
| ● | our ability to successfully commercialize any drugs; | |
| ● | the likelihood that patents will issue on our in-licensed patent applications; | |
| ● | our ability to protect our intellectual property; and | |
| ● | our ability to compete. |
By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics, and healthcare, regulatory and scientific developments and depend on the economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent in some future periods with the forward-looking statements contained in this Quarterly Report, they may not be predictive of results or developments in other future periods. Any forward-looking statement that we make in this Quarterly Report speaks only as of the date of this Quarterly Report, and we disclaim any intent or obligation to update these forward-looking statements beyond the date of this Quarterly Report, except as required by law. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Future filings with the Securities and Exchange Commission (the “SEC”), future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may also contain forward-looking statements. Because such statements include risks and uncertainties, many of which are beyond our control, actual results may differ materially from those expressed or implied by such forward-looking statements. The forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.
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Overview
We are an early-clinical-stage therapeutics company focused on developing treatments for adult and pediatric cancer. Our business now consists of one early-clinical-stage therapeutic program (QN-302) and one preclinical therapeutic program (Pan-RAS), and a co-development agreement with Marizyme, Inc. (“Marizyme”).
Our lead program, QN-302, is an investigational small molecule G-quadruplexes (G4)-selective transcription inhibitor with strong binding affinity to G4s prevalent in cancer cells (such as pancreatic cancer). Such binding could, by stabilizing the G4s against DNA “unwinding,” help inhibit cancer cell proliferation.
Our Pan-RAS program, which is currently at the preclinical stage, consists of a family of RAS oncogene protein-protein interaction inhibitor small molecules believed to inhibit or block mutated RAS genes’ proteins from binding to their effector proteins thereby leaving the proteins from the mutated RAS unable to cause further harm. In theory, such mechanism of action may be effective in the treatment of about one quarter of all cancers, including certain forms of pancreatic, colorectal, and lung cancers. The investigational compounds within our Pan-RAS portfolio are designed to suppress the interaction of endogenous RAS with c-RAF, upstream of the KRAS, HRAS and NRAS effector pathways.
In addition, under a Co-Development Agreement dated April 11, 2024 with Marizyme, Inc. (“Marizyme”), we are entitled to receive quarterly a 33% payment in the nature of royalties (capped at double the amount of Funding Payment cash we provide to Marizyme) on any Net Sales (as defined with a meaning tantamount to gross profit on net sales) of Marizyme’s DuraGraft™ vascular conduit solution, which is indicated for adult patients undergoing coronary artery bypass grafting surgeries and is intended for the flushing and storage of the saphenous vein grafts used in coronary artery bypass grafting surgery. No such payments-in-the-nature-of-royalties would accrue until after DuraGraft has been launched in the United States and a cumulative total of $500,000 of DuraGraft Net Sales have been made in the United States. To date we have provided $700,000 of Funding Payments to Marizyme.
We do not expect to be profitable before products from our therapeutics pipeline are commercialized. To experience losses while therapeutic products are still under development is, of course, typical for biotechnology companies. Given our financial situation, the company slowed the development of the aforementioned therapeutic products beginning in the second quarter of 2024. We have also implemented dramatic expense controls in an effort to stem the rate of losses. Management and the board are strategically reviewing plans on how to best advance our therapeutics pipeline, and will ramp up development when properly funded through either capital markets or strategic partnerships.
Recent Developments
Marizyme
On April 11, 2024, we entered into a Co-Development Agreement with Marizyme. Under the Co-Development Agreement (as amended on August 6, 2024), we agreed to pay Marizyme a Funding Payment of up to $1,750,000 and an Exclusivity Fee of $200,000. The Exclusivity Fee of $200,000 and a Funding Payment of $500,000 was paid to Marizyme on April 12, 2024. The Exclusivity Fee entitled us to an exclusivity period until May 31, 2024 for purposes of proposing and outlining a broader strategic relationship with Marizyme with regard to Marizyme’s DuraGraft business. The Funding Payment is designed to provide financial support for commercialization of Marizyme’s DuraGraft™ vascular conduit solution, which is indicated for adult patients undergoing coronary artery bypass grafting surgeries and is intended for the flushing and storage of the saphenous vein grafts used in coronary artery bypass grafting surgery. In return for the Funding Payment we will receive quarterly a 33% payment in the nature of royalties on any Net Sales (as defined with a meaning tantamount to gross profit on net sales) of DuraGraft, capped at double the amount of the Funding Payment cash provided. No such payments-in-the-nature-of-royalties would accrue until after DuraGraft has been launched in the United States and a cumulative total of $500,000 of DuraGraft Net Sales have been made in the United States.
In addition, as of June 30, 2025, the Company has advanced $3,775,900 to Marizyme against which Marizyme had previously delivered its demand promissory notes to the Company of like principal amounts (the “Marizyme Note”). The Marizyme Note bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Note at any time and from time to time, in whole or in part, without premium or penalty.
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Critical Accounting Policies and Estimates
Our condensed consolidated financial statements historically have not separated our diagnostics-related activities from our therapeutics-related activities. All of our historically reported revenue was diagnostics-related
This discussion and analysis is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to determination of allowance for credit losses, fair value of derivative financial instruments and warrant liabilities, and stock-based compensation. We base our estimates on historical experience, known trends and events and various other factors we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are more fully described in Note 1 to our condensed consolidated financial statements, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our financial condition and results of operations:
| ● | Derivative financial instruments and warrant liabilities | |
| ● | Short-term notes receivable | |
| ● | Convertible notes |
Derivative Financial Instruments and Warrant Liabilities
On April 12, 2024, in connection with an 8% Convertible Debenture in the principal amount of $1,100,000 issued to Yi Hua Chen (“Chen”) (see Note 7 - Warrant Liabilities), we issued a liability classified warrant to Chen purchase 36,001 shares of our common stock, exercisable until February 27, 2029, which remains outstanding and exercisable as of September 30, 2024.
As a result of a partial voluntary conversion of the 2024 Alpha Debenture on September 9, 2024, as of September 30, 2024 the Company no longer had sufficient shares to settle the 2024 Alpha Warrant in full until shareholder approval was obtained, and a portion (2,314 warrant shares) was reclassified to liabilities (see Note 7 - Warrant Liabilities and Note 12 - Stockholders’ Equity).
The fair value of liability classified warrants will be determined each quarter on a “mark-to-market” basis, it could result in significant variability in our future quarterly and annual consolidated statement of operations and consolidated balance sheets based on changes in our public market common stock price. Pursuant to U.S. GAAP, a quarter-to-quarter increase in our stock price would result in an increase in the fair value of the warrant liabilities and a quarter-to-quarter decrease in our stock price would result in a decrease in the fair value of the warrant liabilities.
Short-Term Notes Receivable
As of June 30, 2025, we had advanced to Marizyme $3,775,900, against which Marizyme delivered demand promissory notes to us of like principal amounts (the “Marizyme Notes”). As of June 30, 2025, accrued interest related to the Marizyme Notes was $364,596. Interest income of $140,433 and $251,303 for the three and six months ended June 30, 2025, respectively was recognized in other income in the condensed consolidated statement of operations. As of June 30, 2024 there were no amounts due to us under the Marizyme Notes.
The Marizyme Notes bear at interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest at any time and from time to time, in whole or in part, without premium or penalty.
Under ASC 326-20, known as the current expected credit loss (“CECL”) model, we were required to estimate credit losses expected over the life of an exposure (or pool of exposures) based on historical information, current information, and reasonable and supportable forecasts. We are unable to use our historical data to estimate losses as it has no relevant loss history to date. To determine the estimate of expected credit losses, we used a probability-weighted approach that incorporates multiple settlement scenarios, including recovery of amounts due upon an acquisition of the debtor, and recovery in different liquidation scenarios, and determines the expected recoverable amount of the loan in each scenario. This model requires management to make certain assumptions including the likelihood of each outcome, the estimated value of the debtor’s assets, and our expected claim and recovery rate on the debtor’s assets in the event of an insolvency or a liquidation proceeding. As of June 30, 2025, the estimate for expected credit losses on the Marizyme Notes is $828,000. Given the inherently uncertain nature of the debtor’s financial condition and future outcomes, actual credit losses may differ materially from this estimate. We will continue to monitor relevant events and conditions and update its assumptions and allowance as necessary.
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2025 Convertible Note
On April 28, 2025, we entered into a Secured Convertible Note (the “2025 Convertible Note”) with Alpha Capital Anstalt (“Alpha”, or “Holder”), pursuant to which we issued to Alpha a non-interest-bearing note with a principal of $264,000, and an original issue discount (“OID”) of 20%, or $44,000, in exchange for $220,000 cash, less $20,000 in expenses. The Note is convertible at any time at Alpha’s option, into shares of our common stock at a price equal to $3.80 per share (the “Conversion Price”), subject to certain adjustments. The Convertible Note bears no interest, and the principal will be due on January 28, 2026 (the “Maturity Date”).
We determined the 2025 Convertible Note does not contain a substantial premium and therefore we elected to account for the Convertible Note under the fair value option in accordance with ASC 825-10-15-4. We determined the fair value of the Convertible Note was $311,943 at issuance. The difference between the $220,000 proceeds received and fair value was recorded as a loss upon issuance in the amount of $91,943. Issuance costs incurred in connection with the transaction were expensed immediately.
On June 4, 2025 we paid down $132,000 in principal at the request of Alpha. As of June 30, 2025 we reassessed the fair value of the 2025 Convertible Note at $142,069, with a gain on the change in fair value of $37,874 recorded in the three months ended June 30, 2025.
Results of Operations
Comparison of the Three Months Ended June 30, 2025 and 2024
The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024:
| For the Three Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| EXPENSES | ||||||||
| General and administrative | $ | 1,394,932 | $ | 986,484 | ||||
| Research and development | 17,815 | 754,287 | ||||||
| Credit loss expense - short-term note receivable | 271,000 | - | ||||||
| Total expenses | 1,683,747 | 1,740,771 | ||||||
| LOSS FROM OPERATIONS | (1,683,747 | ) | (1,740,771 | ) | ||||
| OTHER EXPENSE (INCOME), NET | ||||||||
| Gain on change in fair value of warrant liabilities | (15,974 | ) | (493,206 | ) | ||||
| Gain on change in fair value of derivative liabilities | — | (10,116 | ) | |||||
| Gain on change in fair value of convertible note | (37,874 | ) | — | |||||
| Interest expense | 106,052 | 263,560 | ||||||
| Interest income | (142,477 | ) | (1,094 | ) | ||||
| Loss on issuance of convertible debt | 91,943 | — | ||||||
| Gain on voluntary conversion of convertible debt into common stock | — | (83,800 | ) | |||||
| Loss on monthly redemptions of convertible debt into common stock | — | 61,655 | ||||||
| Total other expense (income), net | 1,670 | (263,001 | ) | |||||
| - | - | |||||||
| LOSS BEFORE (BENEFIT FROM) PROVISION FOR INCOME TAXES | (1,685,417 | ) | (1,477,770 | ) | ||||
| (BENEFIT FROM) PROVISION FOR INCOME TAXES | — | (1,212 | ) | |||||
| - | - | |||||||
| NET LOSS FROM CONTINUING OPERATIONS | (1,685,417 | ) | (1,476,558 | ) | ||||
| DISCONTINUED OPERATIONS | ||||||||
| Loss on disposal of discontinued operations, net of tax | — | (100,000 | ) | |||||
| GAIN (LOSS) FROM DISCONTINUED OPERATIONS | — | (100,000 | ) | |||||
| NET LOSS | (1,685,417 | ) | (1,576,558 | ) | ||||
| Deemed dividend arising from warrant down-round provision | $ | (1,586 | ) | $ | — | |||
| — | — | |||||||
| Weighted-average number of shares outstanding, basic and diluted (after stock split) | $ | (1,687,003 | ) | $ | (1,576,558 | ) | ||
| Total net loss per common share, basic and diluted | $ | (1.00 | ) | $ | (10.37 | ) | ||
| Weighted-average number of shares outstanding, basic and diluted (after stock split) | 1,683,881 | 152,065 | ||||||
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Expenses
General and Administrative Expenses
General and administrative expenses increased from $1.0 million for the three months ended June 30, 2024, to $1.4 million for the three months ended June 30, 2025, an increase of $0.4 million or 38%. This is primarily due to an increase in professional fees and license fees of $0.7 million as we needed more legal and accounting consultants to assist with our audit, offset by a decrease in payroll expenses of $0.3 million.
Research and Development Costs
Research and development expenses decreased from $0.8 million for the three months ended June 30, 2024, to $18,000 for the three months ended June 30, 2025, a decrease of $0.7 million or 98%. This was primarily due to all research and development being slowed down in 2025, resulting in decreases in QN-302 program expenses of $40,000, a decrease in RAS program expenses of $30,000, a decrease in payroll of $36,000 and a decrease in Marizyme research expense of $700,000.
Credit Loss Expense – Short-Term Note Receivable
Credit loss expense – short-term note receivable increased from $0 for the three months ended June 30, 2024, to $0.3 million for the three months ended June 30, 2025, an increase of $0.3 million or 100%. This is due to Marizyme notes first being recorded in July 2024, therefore no reserve was required for the three months ended June 30, 2024.
Other Expense (Income), Net
Gain on Change in Fair Value of Warrant Liabilities
During the three months ended June 30, 2025 and 2024, we experienced a gain of approximately $16,000 and a gain of approximately $0.5 million, respectively, on change in fair value of warrant liabilities, primarily due to changes in our stock price and expiration of warrants during the prior period, and changes in our stock price in the prior period. Typically, a decline in our stock price would result in a decline in the fair value of our warrant liabilities, generating a gain, while an increase in our stock price would result in an increase in the fair value of our warrant liabilities, generating a loss.
Gain on Change in Fair Value of Derivative Liabilities
During the three months ended June 31, 2025 we experienced no change in fair value of derivative liabilities, compared to a gain of $10,000 for the three months ended June 30, 2024. We did not hold any derivative liabilities in 2025.
Gain on Change in Fair Value of Convertible Debt
During the three months ended June 31, 2025 we experienced a $38,000 gain on change in fair value of convertible debt, compared to no change for the three months ended June 30, 2024. We did not hold any convertible debt in 2024.
Interest Expense
Interest expense decreased from $0.3 million for the three months ended June 30, 2024 to $0.1 million for the three months ended June 30, 2025 due to a $0.3 million decrease for to the settlement of convertible debt in 2024, offset by interest on the amortized penalty on the 2025 Convertible Note 2025 for $106,000.
Interest Income
Interest income increased from $1,000 for the three months ended June 30, 2024 to $0.1 million for the three months ended June 30, 2025 due to a $0.1 million increase from the recording of interest on Marizyme notes receivable issued in 2024 and 2025.
Loss on Issuance of Convertible Debt
During the three months ended June 30, 2025 we experienced $0.1 million of loss on issuance of convertible debt, compared to a loss of $0 for the three months ended June 30, 2024. The 2025 Convertible Note was issued in the three months ended June 30, 2025, no notes were issued in the three months ended June 30, 2024.
Loss on Monthly Redemptions of Convertible Debt into Common Stock
During the three months ended June 30, 2025 we experienced $0 on monthly redemptions of convertible debt into common stock, compared to a loss of $62,000 for the three months ended June 30, 2024. No debt was converted into stock in 2025.
Gain on Voluntary Conversions of Convertible Debt into Common Stock
During the three months ended June 30, 2025 we experienced $0 on voluntary conversions of convertible debt into common stock, compared to a gain of $84,000 for the three months ended June 30, 2024. No debt was converted into stock in 2025.
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Discontinued Operations
There was a $100,000 loss from discontinued operations during the three months ended June 30, 2024, which was generated from the early settlement of an escrow account from the sale of Qualigen, Inc. There was no loss from discontinued operations in the three months ended June 30, 2025 (See Note 5 - Discontinued Operations).
Comparison of the Six Months Ended June 30, 2025 and 2024
The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| EXPENSES | ||||||||
| General and administrative | $ | 3,889,464 | $ | 2,047,419 | ||||
| Research and development | 50,982 | 1,118,672 | ||||||
| Credit loss expense - short-term note receivable | 468,000 | - | ||||||
| Total expenses | 4,408,446 | 3,166,091 | ||||||
| LOSS FROM OPERATIONS | (4,408,446 | ) | (3,166,091 | ) | ||||
| OTHER EXPENSE (INCOME), NET | ||||||||
| Gain on change in fair value of warrant liabilities | (55,199 | ) | (359,906 | ) | ||||
| Gain on change in fair value of derivative liabilities | — | (174,613 | ) | |||||
| Gain on change in fair value of convertible note | (37,874 | ) | — | |||||
| Interest expense | 179,667 | 400,117 | ||||||
| Interest income | (255,430 | ) | (2,713 | ) | ||||
| Loss on issuance of convertible debt | 91,943 | 358,279 | ||||||
| Gain on voluntary conversion of convertible debt into common stock | — | (83,800 | ) | |||||
| Loss on monthly redemptions of convertible debt into common stock | — | 208,852 | ||||||
| Total other expense (income), net | (76,894 | ) | 346,216 | |||||
| LOSS BEFORE (BENEFIT FROM) PROVISION FOR INCOME TAXES | (4,331,553 | ) | (3,512,307 | ) | ||||
| - | - | |||||||
| (BENEFIT FROM) PROVISION FOR INCOME TAXES | 35 | (2,998 | ) | |||||
| NET LOSS FROM CONTINUING OPERATIONS | (4,331,588 | ) | (3,509,309 | ) | ||||
| DISCONTINUED OPERATIONS | ||||||||
| Loss on disposal of discontinued operations, net of tax | — | (100,000 | ) | |||||
| GAIN (LOSS) FROM DISCONTINUED OPERATIONS | — | (100,000 | ) | |||||
| NET LOSS | (4,331,588 | ) | (3,609,309 | ) | ||||
| Deemed dividend arising from warrant down-round provision | $ | (1,586 | ) | $ | (60,017 | ) | ||
| — | — | |||||||
| Weighted-average number of shares outstanding, basic and diluted (after stock split) | $ | (4,333,174 | ) | $ | (3,669,326 | ) | ||
| Total net loss per common share, basic and diluted | $ | (2.76 | ) | $ | (27.09 | ) | ||
| Weighted-average number of shares outstanding, basic and diluted (after stock split) | 1,570,925 | 135,471 | ||||||
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Expenses
General and Administrative Expenses
General and administrative expenses increased from $2.0 million for the six months ended June 30, 2024, to $3.9 million for the six months ended June 30, 2025, an increase of $1.8 million or 88%. This is primarily due to an increase in investor relation fees of $1.5 million as we paid consultants to help raise capital, plus $0.8 million increase in consultant fees offset by a decrease in payroll expenses of $0.7 million.
Research and Development Costs
Research and development expenses decreased from $1.1 million for the six months ended June 30, 2024, to $51,000 for the six months ended June 30, 2025, a decrease of $1.1 million or 95%. This was primarily due all research and development being slowed down in 2025, resulting in decreases in QN-302 program expenses of $275,000, a decrease in RAS program expenses of $58,000, a decrease in payroll of $26,000 and a decrease in Marizyme research expense of $700,000.
Credit Loss Expense – Short-Term Note Receivable
Credit loss expense – short-term note receivable increased from $0 for the six months ended June 30, 2024, to $0.5 million for the six months ended June 30, 2025, an increase of $0.5 million or 100%. This is due to Marizyme notes first being recorded in July 2024, therefore no reserve was required for the six months ended June 30, 2024.
Other Expense (Income), Net
Gain on Change in Fair Value of Warrant Liabilities
During the six months ended June 30, 2025 and 2024, we experienced a gain of approximately $55,000 and a gain of approximately $0.4 million, respectively, on change in fair value of warrant liabilities, primarily due to changes in our stock price and expiration of warrants during the prior period, and changes in our stock price in the prior period. Typically, a decline in our stock price would result in a decline in the fair value of our warrant liabilities, generating a gain, while an increase in our stock price would result in an increase in the fair value of our warrant liabilities, generating a loss.
Gain on Change in Fair Value of Derivative Liabilities
During the six months ended June 31, 2025 we experienced no change in fair value of derivative liabilities, compared to a gain of $175,000 for the six months ended June 30, 2024. We did not hold any derivative liabilities in 2025.
Gain on Change in Fair Value of Convertible Debt
During the six months ended June 31, 2025 we experienced a $38,000 gain on change in fair value of convertible debt, compared to no change for the six months ended June 30, 2024. We did not hold any convertible debt in 2024.
Interest Expense
Interest expense decreased from $0.4 million for the six months ended June 30, 2024 to $0.2 million for the six months ended June 30, 2025 due to a $0.4 million decrease for to the settlement of convertible debt in 2024, offset by interest on the amortized penalty on the 2025 Convertible Note 2025 for $106,000.
Interest Income
Interest income increased from $3,000 for the six months ended June 30, 2024 to $0.3 million for the six months ended June 30, 2025 due to a $0.3 million increase from the recording of interest on Marizyme notes receivable issued in 2024 and 2025.
Loss on Issuance of Convertible Debt
During the six months ended June 30, 2024 we incurred a loss on issuance of convertible debt of approximately $358,000 due to the fair value of the 2024 Alpha Debenture and derivative liabilities exceeding the cash proceeds. During the six months ended June 30, 2025 we incurred a loss on issuance of convertible debt of approximately $92,000 due to the fair value of the 2025 Convertible Note and derivative liabilities exceeding the cash proceeds.
Loss on Monthly Redemptions of Convertible Debt into Common Stock
During the six months ended June 30, 2025 we experienced $0 on monthly redemptions of convertible debt into common stock, compared to a loss of $209,000 for the six months ended June 30, 2024. No debt was converted into stock in 2025.
Gain on Voluntary Conversions of Convertible Debt into Common Stock
During the six months ended June 30, 2025 we experienced $0 on voluntary conversions of convertible debt into common stock, compared to a gain of $84,000 for the six months ended June 30, 2024. No debt was converted into stock in 2025.
Discontinued Operations
There was a $100,000 loss from discontinued operations during the six months ended June 30, 2024, which was generated from the early settlement of an escrow account from the sale of Qualigen, Inc. There was no loss from discontinued operations in the six months ended June 30, 2025 (See Note 5 - Discontinued Operations).
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Liquidity and Capital Resources
Our financial position is weak. As of June 30, 2025 we had approximately $332,000 in cash and net accounts payable of approximately $1.4 million. We are in arrears on accounts payable to important partners. We have incurred recurring losses from operations, and have an accumulated deficit of $127.2 million at June 30, 2025. We expect to continue to incur losses subsequent to the balance sheet date of June 30, 2025. For the six months ended June 30, 2025 and year ended December 31, 2024, we used cash of $2.7 million and $6.4 million, respectively, in operations.
Our current liabilities at June 30, 2025 include approximately $1.4 million of accounts payable, $3.4 million of short-term debt, $0.4 million of accrued expenses and other current liabilities, and $0.2 million of warrant liabilities.
From January to July 2025, the Company borrowed a total of $3,640,000 from nine investors as short-term borrowings, with some due six months from the date of issuance, some due nine months from the date of borrowing, and some with an indefinite term length. Additionally, in July 2025, the Company closed a private placement transaction to raise additional funding through the sale of equity, in the total of $4,258,000. We expect these proceeds to provide liquidity for the company through calendar year end.
We expect to continue to have net losses and negative cash flow from operations, which will challenge our liquidity. These factors raise substantial doubt regarding our ability to continue as a going concern for the one-year period following the date that the financial statements in this Quarterly Report were issued.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our common stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through third-party funding, commercialization, marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.
Contractual Obligations and Commitments
We have no material contractual obligations that are not fully recorded on our condensed consolidated balance sheets or fully disclosed in the notes to the financial statements.
License and Sponsored Research Agreements
We have obligations under various license and sponsored research agreements to make future payments to third parties that become due and payable on the achievement of certain development, regulatory and commercial milestones (such as the start of a clinical trial, filing for product approval with the FDA or other regulatory agencies, product approval by the FDA or other regulatory agencies, product launch or product sales) or on the sublicense of our rights to another party. We have not included these commitments on our balance sheet because the achievement and timing of these events is not determinable. Certain milestones are in advance of receipt of revenue from the sale of products and, therefore, we may require additional debt or equity capital to make such payments.
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We have multiple license agreements with ULRF. Under these agreements, we have taken over development, regulatory approval and commercialization of various drug compounds from ULRF and are responsible for maintenance of the related intellectual property portfolio. Under the terms of these agreements, we are required to make patent maintenance payments and payments based upon development, regulatory and commercial milestones for any products covered by the in-licensed intellectual property. The maximum aggregate milestone payments we may be obligated to make per product are $5 million. We will also be required to pay a royalty on net sales of products covered by the in-licensed intellectual property in the low single digits. The royalty is subject to reduction for any third-party payments required to be made, with a minimum floor in the low single digits. We have the right to sublicense our rights under these agreements, but we will be required to pay ULRF a percentage of any sublicense income.
In January 2022, we entered into a License Agreement with UCL Business Limited to obtain an exclusive worldwide in-license of a genomic quadruplex (G4)-selective transcription inhibitor drug development program which had been developed at University College London, including lead and back-up compounds, preclinical data and a patent estate. (UCL Business Limited is the commercialization company for University College London.) We are further developing the program’s lead compound under the name QN-302. The License Agreement requires (if and when applicable) tiered royalty payments in the low to mid-single digits, clinical/regulatory/sales milestone payments, and sharing of a percentage of any non-royalty sublicensing consideration paid to the Company. In November 2023, we became obligated to pay $100,000 to UCL Business Limited upon the first patient dosing of QN-302, which was paid in January 2024.
2022 Convertible Debenture
On December 22, 2022, we issued to Alpha an 8% Senior Convertible Debenture in the aggregate principal amount of $3,300,000 for a purchase price of $3,000,000 pursuant to the terms of a Securities Purchase Agreement, dated December 21, 2022 (the “2022 Securities Purchase Agreement”). The 2022 Debenture has a maturity date of December 22, 2025 and is convertible, at any time, and from time to time, until the 2022 Debenture is no longer outstanding, at Alpha’s option, into shares of our common stock (the “Conversion Shares”), at a price initially equal to $1.32 per share, subject to adjustment as described in the 2022 Debenture and other terms and conditions described in the 2022 Debenture. On July 13, 2023, we obtained stockholder approval, for purposes of complying with Nasdaq Listing Rule 5635(d), for the issuance to Alpha of more than 20% of our issued and outstanding shares of common stock pursuant to the terms and conditions of (a) the 2022 Debenture, and (b) the common stock purchase warrant dated December 22, 2022 issued by us to Alpha. Between January 9 - 12, 2023, we issued 16,834 shares of common stock upon Alpha’s partial conversion of the 2022 Debenture at $66.00 per share for a total of $1,111,078 in principal. In October and December 2023, we issued 6,193 shares of common stock to Alpha in lieu of cash for monthly redemption payments on the 2022 Debenture at a weighted average price of $35.52 per share. During the three and nine months ending September 30, 2024, we issued 30,378 and 103,865 shares of common stock, respectively to Alpha in lieu of cash for monthly redemption payments on and voluntary conversions of the 2022 Debenture at a weighted average conversion price of $13.00 and $13.66 per share, respectively, and a weighted average fair value of $12.97 and $15.19 per share, respectively.
2024 Convertible Debentures
On February 27, 2024, upon our receipt of a cash purchase price payment of $500,000 (less expenses), we issued to Alpha an 8% Convertible Debenture (the “2024 Alpha Debenture”) in the principal amount of $550,000. The 2024 Alpha Debenture matures no later than December 31, 2024 and is convertible, at any time, and from time to time, at Alpha’s option, into shares of common stock of the Company, at $30.56 per share, subject to adjustment as described in the 2024 Alpha Debenture. Except in respect of an Exempt Issuance, the 2024 Alpha Debenture contains a “ratchet” antidilution provision, with a $5.82 per share floor. The 2024 Alpha Debenture accrues interest on its outstanding principal balance at the rate of 8% per annum, payable at maturity. In connection with this issuance, we also issued to Alpha a 5-year common stock purchase warrant to purchase 18,001 shares of our common stock with an exercise price of $6.50 per share as of September 30, 2024.
We also granted to Alpha an option, exercisable until July 1, 2024, to purchase from us additional 8% Convertible Debentures, of like tenor, with face amounts of up to an aggregate of $1,100,000 (and with a proportional number of accompanying common stock warrants of like tenor, up to a total of 36,002 additional warrants). On April 11, 2024, Alpha assigned this option to Yi Hua Chen, who exercised it in full on April 12, 2024 (see Note 8 - Convertible Debt to the Company’s condensed consolidated financial statements).
2025 Convertible Note
On April 28, 2025, we entered into a Secured Convertible Note (the “2025 Convertible Note”) with Alpha Capital Anstalt (“Alpha”, or “Holder”), pursuant to which we issued to Alpha a non-interest-bearing note with a principal of $264,000, and an original issue discount (“OID”) of 20%, or $44,000, in exchange for $220,000 cash, less $20,000 in expenses. The Note is convertible at any time at Alpha’s option, into shares of our common stock at a price equal to $3.80 per share (the “Conversion Price”), subject to certain adjustments. The Convertible Note bears no interest, and the principal will be due on January 28, 2026 (the “Maturity Date”).
We determined the 2025 Convertible Note does not contain a substantial premium and therefore we elected to account for the Convertible Note under the fair value option in accordance with ASC 825-10-15-4. We determined the fair value of the Convertible Note was $311,943 at issuance. The difference between the $220,000 proceeds received and fair value was recorded as a loss upon issuance in the amount of $91,943. Issuance costs incurred in connection with the transaction were expensed immediately.
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On June 4, 2025 we paid down $132,000 in principal at the request of Alpha. As of June 30, 2025 we reassessed the fair value of the 2025 Convertible Note at $142,069, with a gain on the change in fair value of $37,874 recorded in the three months ended June 30, 2025.
Short-Term Promissory Notes
During the six months ended June 30, 2025 we issued short term notes payable totaling $1.0 million for total net proceeds of $1.0 million. The notes are unsecured with a maturity date six months from the original issuance, and include a provision for a penalty in case of default totaling $1.1 million.
The penalty would only be triggered upon nonpayment by the Company upon the Maturity Date. Therefore, we view the Penalty to be a contingent fee which would only be triggered upon the occurrence of non-payment. Under ASC 450-20, the Penalty should be viewed as a potential loss contingency which would require payment if we do not have the ability to repay the Note at the Maturity Date. Though the Company’s financial position at June 30, 2025 is insufficient to pay the principal owed, in June 2025 the Company engaged outside consultants to raise additional funding through the sale of equity, and therefore anticipates to be able to repay $0.3 million of the notes without incurring the penalty. Therefore, as of June 30, 2025, these promissory notes will be recorded in the original agreed principal amount. However, there remains a possibility due to the timing of the due date of one note, that it will not be able to be paid on time, and therefore may incur the penalty. Therefore, the penalty for this note has been accrued in the amount of $0.2 million and will be amortized over the duration of the note, with approximately $30,000 remaining to be amortized at June 30, 2025. In the three and six months ended June 30, 2025, we recorded $0.1 million and $0.2 million, respectively, in interest related to the amortization of the penalty. No interest for promissory notes was recorded in the three and six months ended June 30, 2024.
In May 2025, we borrowed a total of $2.3 million from five investors as short term borrowings. The terms of the agreements are currently in the process of being finalized. These funds will be recorded as short term promissory notes valued at the amount of funds received.
Marizyme
On April 11, 2024, we entered into a Co-Development Agreement with Marizyme, Inc. (“Marizyme”). Under the Co-Development Agreement (as amended on August 6, 2024), we agreed to pay Marizyme a Funding Payment of up to $1,750,000 and an Exclusivity Fee of $200,000. The Exclusivity Fee of $200,000 and a Funding Payment of $500,000 was paid to Marizyme on April 12, 2024. The Exclusivity Fee entitled us to an exclusivity period until May 31, 2024 for purposes of proposing and outlining a broader strategic relationship with Marizyme with regard to Marizyme’s DuraGraft business. The Funding Payment is designed to provide financial support for commercialization of Marizyme’s DuraGraft™ vascular conduit solution, which is indicated for adult patients undergoing coronary artery bypass grafting surgeries and is intended for the flushing and storage of the saphenous vein grafts used in coronary artery bypass grafting surgery. In return for the Funding Payment we will receive quarterly a 33% payment in the nature of royalties on any Net Sales (as defined with a meaning tantamount to gross profit on net sales) of DuraGraft, capped at double the amount of the Funding Payment cash provided. No such payments-in-the-nature-of-royalties would accrue until after DuraGraft has been launched in the United States and a cumulative total of $500,000 of DuraGraft Net Sales have been made in the United States.
On July 15, 2024, the Company advanced to Marizyme $1,250,000 against which Marizyme had previously delivered its demand promissory note to the Company of like principal amount dated July 12, 2024 (the “Marizyme Note”). During the six month periods ending June 30, 2025 and the year ended December 31, 2024, the Company advanced additional funds of $1.5 million and $2.3 million, respectively. The Marizyme Note bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Note at any time and from time to time, in whole or in part, without premium or penalty.
Other Service Agreements
We enter into contracts in the normal course of business, including with clinical sites, contract research organizations, and other professional service providers for the conduct of clinical trials, contract manufacturers for the production of our product candidates, contract research service providers for preclinical research studies, professional consultants for expert advice and vendors for the sourcing of clinical and laboratory supplies and materials. These contracts generally provide for termination on notice, and therefore are cancelable contracts.
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Cash Flows
The following table sets forth the significant sources and uses of cash for the periods set forth below:
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash (used in) provided by: | ||||||||
| Operating activities | $ | (2,687,507 | ) | $ | (2,258,118 | ) | ||
| Investing activities | (1,518,500 | ) | 350,000 | |||||
| Financing activities | 3,363,000 | 1,625,000 | ||||||
| Net decrease in cash | $ | (843,007 | ) | $ | (283,118 | ) | ||
Net Cash Used in Operating Activities
During the six months ended June 30, 2025, operating activities used $2.7 million of cash, primarily resulting from a loss from continuing operations of $4.2 million. Cash flows from operating activities for the six months ended June 30, 2025 were positively impacted by adjustments for $0.5 million change in provision for credit losses of short-term notes receivable, $0.1 million in loss on issuance of convertible debt, a decrease in prepaid expenses of $1.2 million, and an increase in accrued expenses of $0.2 million. Cash flows from operating activities for the six months ended June 30, 2025 were negatively impacted by adjustments for a $55,000 gain on change in fair value of warrant liabilities, a $0.3 million increase in accrued interest on short-term notes receivable, a $38,000 gain on change in fair value of derivative liabilities, and a $0.2 million decrease in accounts payable.
During the six months ended June 30, 2024, operating activities used $2.3 million of cash, primarily resulting from a loss from continuing operations of $3.5 million. Cash flows from operating activities for the six months ended June 30, 2024 were positively impacted by adjustments for $0.1 million in stock based compensation, a $0.2 loss on monthly redemptions of convertible debt into common stock, accretion of discount of $0.3 million on convertible debt, a loss on issuance of convertible debt of $0.4 million, a $0.8 million decrease in prepaid expenses, and a $0.5 million increase in accrued expenses and other current liabilities. Cash flows from operating activities for the six months ended June 30, 2024 were negatively impacted by adjustments for a $0.4 million decrease in fair value of warrant liabilities, a $0.1 million gain on voluntary conversion of convertible debt, a $0.2 million gain on change in fair value of derivative liabilities, and a $0.4 million decrease in accounts payable.
Net Cash Provided by (Used in) Investing Activities
During the six months ended June 30, 2025, net cash used in investing activities resulted from advances to Marizyme of $1.5 million.
During the six months ended June 30, 2024, net cash provided from investing activities resulted from $0.4 million received from settlement of an escrow account for discontinued operations.
Net Cash Provided by Financing Activities
Net cash provided by financing activities for the six months ended June 30, 2025 was $3.4 million, which resulted from the issuance of short-term debt in the amount of $3.3 million and the issuance of convertible debt in the amount of $0.2 million, offset by repayment of convertible debt of $0.1 million.
Net cash provided by financing activities for the six months ended June 30, 2024 was approximately $1.6 million, resulting from the issuance of convertible debt in the amount of $1.5 million and proceeds from warrant exercises of $0.2 million.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Disclosure controls and procedures are controls and other procedures designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
With the participation of our principal executive officer and principal financial officer, management evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of June 30, 2025. Based on this evaluation, management concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of that date.
Management identified the following material weaknesses:
| ● | An insufficient number of accounting personnel to adequately segregate duties. | |
| ● | Lack of designed and implemented effective Information Technology General Controls (“ITGC”) related to access controls for our financial accounting system. | |
| ● | Absence of formalized documentation of processes and controls that could be evaluated for proper design and implementation. |
Due to resource constraints, we are currently unable to employ additional personnel to remediate these material weaknesses. We do not expect remediation until we obtain additional funding to strengthen our accounting department.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As previously disclosed in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, the Company is a party to certain legal proceedings. There have been no material developments with respect to these matters during the quarter ended June 30, 2025. The description of these proceedings set forth in such report is incorporated herein by reference.
From time to time, we could become involved in disputes and various litigation matters that arise in the normal course of business. These may include disputes and lawsuits related to intellectual property, licensing, contract law and employee relations matters. The Company is not aware of any pending legal claims, actions, or investigations against it or its properties, other than those described above, that the Company believes would have a material adverse effect on its business, financial condition, or results of operations.
ITEM 1A. RISK FACTORS
The Company’s business, reputation, results of operations and financial condition, as well as the price of its stock, can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 under the heading “Risk Factors.” When any one or more of these risks materialize, the Company’s business, reputation, results of operations and financial condition, as well as the price of its stock, can be materially and adversely affected.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable
ITEM 5. OTHER INFORMATION
Rule 10b5-1 Trading Arrangement
During the three months ended June 30, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
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ITEM 6. EXHIBITS
| Exhibit No. | Description | |
| 31.1 | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended. | |
| 31.2 | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended. | |
| 32.1 | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| August 14, 2025 | QUALIGEN THERAPEUTICS, INC. | |
| By: | /s/ Kevin Richardson II | |
| Name: | Kevin Richardson II | |
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) | |
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FAQ
How much cash did QLGN have at June 30, 2025?
What was Qualigen's operating cash use in 2025?
Did Qualigen raise additional funding after the quarter?
What short-term borrowings and promissory notes does the company have?
What was the loss from continuing operations?
Are there material credit exposures disclosed?
