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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2023

 

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number 001-37428

 

 

Qualigen Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   26-3474527

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

5857 Owens Avenue, Suite 300, Carlsbad, California 92008

(Address of principal executive offices) (Zip Code)

 

(760) 452-8111

Registrant’s telephone number, including area code

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class   Trading Symbol   Name of Exchange on Which Registered
Common Stock, par value $0.001 per share   QLGN   The Nasdaq Capital Market

 

Securities registered pursuant to Section 12(g) of the Act:

None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of “large accelerated filer, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   Accelerated filer
Non-accelerated filer   Smaller reporting company
      Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

 

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No

 

As of June 30, 2023, the aggregate market value of the registrant’s common stock held by non-affiliates was approximately $4,570,535 based on the closing price for the common stock of $0.91 on that date. Shares of common stock held by the registrant’s executive officers and directors have been excluded from this calculation, as such persons may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

 

As of March 25, 2024, there were 6,307,371 shares of the registrant’s common stock outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

 

 

 
 

 

TABLE OF CONTENTS

 

        Page Number
Part I        
Item 1   Business   4
Item 1A   Risk Factors   10
Item 1B   Unresolved Staff Comments   22
Item 1C   Cybersecurity   22
Item 2   Properties   22
Item 3   Legal Proceedings   22
Item 4   Mine Safety Disclosures   23
Part II        
Item 5   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities   23
Item 6   [Reserved]   23
Item 7   Management’s Discussion and Analysis of Financial Condition and Results of Operations   23
Item 7A   Quantitative and Qualitative Disclosure About Market Risk   31
Item 8   Financial Statements and Supplementary Data   32
Item 9   Changes in and Disagreements With Accountants on Accounting and Financial Disclosure   62
Item 9A   Controls and Procedures   62
Item 9B   Other Information   63
Item 9C   Disclosure Regarding Foreign Jurisdictions that Prevent Inspections   63
Part III        
Item 10   Directors, Executive Officers and Corporate Governance   64
Item 11   Executive Compensation   66
Item 12   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters   72
Item 13   Certain Relationships and Related Transactions, and Director Independence   74
Item 14   Principal Accounting Fees and Services   76
Part IV        
Item 15   Exhibits and Financial Statement Schedules   77
Item 16   Form 10-K Summary   81
    Signatures   82

 

2
 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Annual Report on Form 10-K (“Annual Report”) contains forward-looking statements by Qualigen Therapeutics, Inc. that involve risks and uncertainties and reflect our judgment as of the date of this Report. These statements generally relate to future events or our 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 our 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.

 

These forward-looking statements include, but are not limited to, statements about:

 

  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 Annual 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 Annual 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 Annual Report, they may not be predictive of results or developments in other future periods. Any forward-looking statement that we make in this Annual Report speaks only as of the date of this Annual Report, and we disclaim any intent or obligation to update these forward-looking statements beyond the date of this Annual 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.

 

3
 

 

PART I

 

As used in this Annual Report, unless the context suggests otherwise, “we,” “us,” “our,”or “the Company” refer to Qualigen Therapeutics, Inc.

 

Item 1. Business

 

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).

 

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. QN-302 is currently undergoing a Phase 1a clinical trial at START Midwest in Grand Rapids, Michigan, and HonorHealth in Scottsdale, Arizona.

 

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.

 

On May 22, 2020, we completed a “reverse recapitalization” transaction with Qualigen, Inc. (not to be confused with the Company); pursuant to which our merger subsidiary merged with and into Qualigen, Inc. with Qualigen, Inc. surviving as a wholly owned subsidiary of the Company. The Company, which had previously been known as Ritter Pharmaceuticals, Inc., was renamed Qualigen Therapeutics, Inc., and the former stockholders of Qualigen, Inc. acquired, via the recapitalization, a substantial majority of the shares of the Company. Ritter/Qualigen Therapeutics common stock, which was previously traded on the Nasdaq Capital Market under the ticker symbol “RTTR,” commenced trading on Nasdaq, on a post-reverse-stock-split adjusted basis, under the ticker symbol “QLGN” on May 26, 2020. We are no longer pursuing the gastrointestinal disease treatment business on which Ritter Pharmaceuticals, Inc. had focused before the reverse recapitalization transaction. On July 20, 2023, we sold our Qualigen, Inc. subsidiary, which contained our former FastPack® diagnostics business to Chembio Diagnostics, Inc., an American subsidiary of French diagnostics provider Biosynex, S.A. Accordingly, our former FastPack® diagnostics business is reported as Discontinued Operations in this Annual Report.

 

The aggregate net purchase price for Qualigen, Inc. was $5.4 million in cash, of which $450,000 is being held in escrow to satisfy certain Company indemnification obligations. Any amounts remaining in the escrow that have not been offset or reserved for claims will be released to us within five business days following January 20, 2025.

 

We own a minority interest in NanoSynex, Ltd. (“NanoSynex”), a privately-held microbiologics diagnostic company domiciled in Israel. NanoSynex’s technology is for Antimicrobial Susceptibility Testing that aims to enable better targeting of antibiotics for their most suitable uses to ultimately result in faster and more efficacious treatment, hence reducing hospitals’ mortality and morbidity rates. On May 26, 2022, we acquired a 52.8% interest in NanoSynex from our related party Alpha Capital Anstalt (“Alpha”) and NanoSynex, and entered into a Master Agreement for the Operational and Technological Funding of NanoSynex with NanoSynex (the “NanoSynex Funding Agreement”). On July 20, 2023, we entered into an Amendment and Settlement Agreement with NanoSynex (the “NanoSynex Amendment”), pursuant to which we agreed to, in exchange for eliminating all future Funding Agreement obligations for us to invest further cash in NanoSynex (except for obligations to lend NanoSynex $560,000 on or before November 30, 2023, and $670,000 on or before March 31, 2024), surrender 281,000 Series B Preferred Shares of NanoSynex held by us, resulting in our ownership in NanoSynex being reduced from approximately 52.8% to approximately 49.97% of the voting equity of NanoSynex; in addition, we agreed to surrender approximately $3.0 million of promissory notes which NanoSynex had issued to us under the Funding Agreement. On November 22, 2023 we further agreed to eliminate our obligations to lend NanoSynex $560,000 on or before November 30, 2023, and $670,000 on or before March 31, 2024, by instead surrendering shares of Series A-1 Preferred Stock of NanoSynex in an amount that reduced our ownership in NanoSynex voting equity from approximately 49.97% to 39.90%. NanoSynex was deconsolidated from our financial statements as of July 20, 2023, and is reported as Discontinued Operations in this Annual Report. Our investment in NanoSynex will be accounted for in the future as an equity method investment.

 

4
 

 

Product Pipeline

 

QN-302

 

We exclusively in-licensed the global rights to the G-Quadruplex (“G4”) selective transcription inhibitor platform from University College London (“UCL”) in January 2022. The licensed technology comprises lead compound QN-302 (formerly known as SOP1812) and back-up compounds that target regulatory regions of cancer genes that down-regulate gene expression in multiple cancer pathways. Developed by Dr. Stephen Neidle and his group at UCL, the G4 binding concept is derived from nucleic acid research conducted over more than over 30 years, including research on G4s, which are higher order DNA and RNA structures formed by sequences containing guanine-rich repeats. G4s are overrepresented in telomeres (a region of repetitive DNA sequences at the end of a chromosome) as well as promoter sequences and untranslated regions of many oncogenes. Their prevalence is therefore significantly greater in cancer cells compared to normal human cells.

 

G4-selective small molecules such as QN-302 and backup compounds target the regulatory regions of cancer genes, which have a high prevalence of enriched G4s. Stable G4-QN-302 complexes can be impediments to replication, transcription or translation of those cancer genes containing G4s, and the drugs’ binding to G4s are believed to stabilize the G4s against possible “unwinding.” G4 binders like QN-302 could be efficacious in a variety of cancer types with a high prevalence of G4s.

 

We believe that QN-302 has the potential to demonstrate superior efficacy and activity against pancreatic ductal adenocarcinoma (“PDAC”), which represents 98% of pancreatic cancers. Pancreatic cancer is the tenth most common cancer in men and the seventh most common in women, but it is the fourth leading cause of cancer deaths in men and the third leading cause in women; it accounts for about 3% of all cancers in the United States but is responsible for about 8% of all cancer-related deaths. It has one of the lowest rates of survival of all cancer types.

 

In-vitro and in-vivo studies have shown that G4 stabilization by QN-302 resulted in inhibition of target gene expression and cessation of cell growth in various cancers, including PDAC. In in-vitro studies, QN-302 was potent in inhibiting the growth of several PDAC cell lines at low nanomolar concentrations. Similarly, in in-vivo studies, QN-302 showed a longer survival duration in a KPC genetic mouse model for pancreatic cancer than gemcitabine (the current standard of care for PDAC) has historically shown. Additional preclinical in-vivo studies suggest activity in gemcitabine-resistant PDAC. Data further demonstrated that QN-302 had significant anti-tumor activity in three patient-derived PDAC xenograft models. Early safety indicators in pancreatic cancer mouse in-vivo models suggest no significant adverse toxic effects at proposed therapeutic doses.

 

On January 9, 2023, the U.S. Food and Drug Administration (“FDA”) granted Orphan Drug Designation (“ODD”) to QN-302 for the indication of pancreatic cancer. ODD provides advantages to pharmaceutical companies that are developing investigational drugs or biological products that show promise in treating rare diseases or conditions that affect fewer than 200,000 people in the United States, including seven-year marketing exclusivity and eligibility to receive regulatory support and guidance from the FDA in the design of an overall drug development plan.

 

There are also economic advantages to receiving ODD, including a 25% federal tax credit for expenses incurred in conducting clinical research on the orphan designated product within the United States. Tax credits may be applied to the prior year or applied to up to 20 years of future taxes. ODD recipients may also have their Prescription Drug User Fee Act (PDUFA) application fees waived, a potential savings of around $3.2 million (as of fiscal year 2023) for applications requiring covered clinical data, and may qualify to compete for research grants from the Office of Orphan Products Development that support clinical studies.

 

On August 1, 2023 we announced that the FDA had cleared our investigational new drug (“IND”) application for QN-302, and on November 1, 2023 the first patient in our Phase 1a clinical trial for QN-302 was dosed at START Midwest in Grand Rapids, Michigan.

 

We will require additional cash resources to be able to continue and complete this Phase 1a clinical trial.

 

5
 

 

Pan-RAS (formerly referred to as RAS or RAS-F)

 

In July 2020 we entered into an exclusive worldwide in-license agreement with the University of Louisville’s Research Foundation (“UofL” or “ULRF”) for the intellectual property covering the “RAS” family of pan-RAS inhibitor small molecule drug candidates, which are believed to work by blocking RAS mutations directly, thereby inhibiting tumor formation (especially in pancreatic, colorectal and lung cancers). Pursuant to the license agreement, we will seek to identify and develop a lead drug candidate from the compound family and, upon commercialization, will pay UofL royalties in the low-to-mid-single-digit percentages on net sales of Pan-RAS inhibitor licensed products. The license agreement with UofL for Pan-RAS was amended in March 2021 and June 2023.

 

RAS is the most common oncogene in human cancer. Activating mutations in one of the three human RAS gene isoforms (KRAS, HRAS or NRAS) are present in about one-fourth to one-third of all cancers. For example, mutant KRAS is found in 98% of pancreatic ductal adenocarcinomas, 52% of colon cancers, and 32% of lung adenocarcinomas. For these three cancer types, cancers with mutant KRAS are diagnosed in more than 170,000 people each year in the United States and cause more than 120,000 deaths. Drugs that target signaling downstream of RAS are available; however, such drugs have shown disappointing clinical durability because RAS is a “hub” that activates multiple effectors, so drugs that block a single pathway downstream may not account for the many other activated pathways.

 

We also had a sponsored research agreement with UofL for Pan-RAS research; that agreement expired in December 2023.

 

We currently do not have the resources to advance our Pan-RAS program, and so we are seeking to out-license it.

 

On February 15, 2024, we entered into a License and Sublicense Agreement with Pan-RAS Holdings, Inc., a New York corporation (“Pan-RAS Holdings”), which contemplated an exclusive out-license of our Pan-RAS drug development program, including our rights under the ULRF license agreement, Pan-RAS Holdings.

 

Although the License and Sublicense Agreement called for a closing by March 16, 2024, the License and Sublicense Agreement was in essence structured as a 30-day option in favor of Pan-RAS Holdings.

 

At the contemplated closing, Pan-RAS Holdings would have paid us an upfront fee of $1,000,000 in cash. In addition, Pan-RAS Holdings would have become responsible to pay on our behalf our in-license royalty obligations to ULRF, as and when required.

 

Finally, if the contemplated closing had occurred, Pan-RAS Holdings would have required to pay to us for our own account, on a semiannual basis, royalties equal to 1.0% of net sales of any RAS products.

 

We would have owed certain amounts to ULRF under our in-license agreement from them, if, as and when we received any Non-Royalty Sublicensing Income from Pan-RAS Holdings.

 

Pan-RAS Holdings did not effectuate the closing by March 16, 2024, and we and they voluntarily terminated the License and Sublicense Agreement effective as of March 16, 2024.

 

Previous Programs

 

We have discontinued all of our efforts the following programs, and we do not plan to resume them:

 

  1. QN-247(formerly referred to as ALAN or AS1411-GNP) – an oligonucleotide aptamer-based, nucleolin-inhibiting anticancer drug candidate, consisting of QN-165 conjugated with gold nanoparticles.
     
  2. QN-165 (formerly referred to as AS1411) – an oligonucleotide aptamer-based drug candidate for the potential broad-spectrum treatment of infectious diseases such as COVID-19.
     
  3. Selective Target Antigen Removal System (STARS) – a therapeutic blood-filtering device product concept, which would be designed to remove circulating tumor cells, viruses, inflammation factors and immune checkpoints.

 

Research and Development

 

For research and development of our drug candidates, we have historically leveraged the scientific and technical resources and laboratory facilities of UofL and UCL, through technology licensing, sponsored research, and other consulting agreements. We have engaged contract research organizations (“CROs”) and clinical sites for the Phase 1a clinical trial of QN-302. We intend to focus our internal research and development on oversight of these CROs. We currently have no internal research and development facilities.

 

Regulatory Matters

 

We have obtained FDA clearance/approval for our QN-302 Phase 1a clinical trial. We have not obtained FDA or other regulatory approval for any other drug candidate.

 

6
 

 

United States—FDA Drug Approval Process

 

The research, development, testing, and manufacture of product candidates are extensively regulated by governmental authorities in the United States and other countries. In the United States, the FDA regulates drugs under the Food, Drug and Cosmetics Act and its implementing regulations.

 

The steps required to be completed before a drug may be marketed in the United States include, among others:

 

  preclinical laboratory tests, animal studies, and formulation studies, all performed in accordance with the FDA’s Good Laboratory Practice (“GLP”) regulations;
     
  submission to the FDA of an IND application for human clinical testing, which must become effective before human clinical trials may begin and for which progress reports must be submitted annually to the FDA;
     
  approval by an independent institutional review board (“IRB”) or Ethics Committee (“EC”) at each clinical trial site before each trial may be initiated;
     
  adequate and well-controlled human clinical trials, conducted in accordance with applicable IND regulations, Good Clinical Practices (“GCP”), and other clinical trial related regulations, to establish the safety and efficacy of the drug for each proposed indication to the FDA’s satisfaction;
     
  submission to the FDA of a New Drug Application (“NDA”) and payment of user fees for FDA review of the NDA (unless a fee waiver applies);
     
  satisfactory completion of an FDA pre-approval inspection of one or more clinical trial site(s) at which the drug was studied in a clinical trial(s) and/or of us as a clinical trial sponsor to assess compliance with GCP regulations;
     
  satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current GMPs regulations;
     
  agreement with the FDA on the final labeling for the product and the design and implementation of any required Risk Evaluation and Mitigation Strategy; and
     
  FDA review and approval of the NDA, including satisfactory completion of an FDA advisory committee review, if applicable, based on a determination that the drug is safe and effective for the proposed indication(s).

 

Preclinical tests include laboratory evaluation of product chemistry, toxicity, and formulation, as well as animal studies. The conduct of the preclinical tests and formulation of the compounds for testing must comply with federal regulations and requirements, including GLP regulations. The results of the preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND application, which must become effective before human clinical trials may begin. An IND application will automatically become effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions about issues such as the conduct of the trials as outlined in the IND application, and places the clinical trial(s) on a clinical hold. In such a case, the IND application sponsor and the FDA must resolve any outstanding FDA concerns or questions before clinical trials can proceed. We cannot be certain that submission of an IND application will result in the FDA allowing clinical trials to begin.

 

7
 

 

Clinical trials necessary for product approval are typically conducted in three sequential phases, but the phases may overlap or be combined. The study protocol and informed consent information for study subjects in clinical trials must also be approved by an IRB for each institution where the trials will be conducted, and each IRB must monitor the study until completion. Study subjects must provide informed consent and sign an informed consent form before participating in a clinical trial. Clinical testing also must satisfy the extensive GCP regulations for, among other things, informed consent and privacy of individually identifiable information.

 

  Phase 1—Phase 1 clinical trials involve initial introduction of the study drug in a limited population of healthy human volunteers or patients with the target disease or condition. These studies are typically designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the study drug in humans, evaluate the side effects associated with increasing doses, and, if possible, to gain early evidence of effectiveness.
     
  Phase 2—Phase 2 clinical trials typically involve administration of the study drug to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.
     
  Phase 3—Phase 3 clinical trials typically involve administration of the study drug to an expanded patient population to further evaluate dosage, to provide substantial evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the study drug and to provide an adequate basis for product approval. Generally, adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of an NDA.

 

Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after receiving initial marketing approval. These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication and are commonly intended to generate additional safety data regarding use of the product in a clinical setting. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA or, in certain circumstances, post-approval.

 

The FDA has various programs, including fast track designation, breakthrough therapy designation, priority review and accelerated approval, which are intended to expedite or simplify the process for the development, and the FDA’s review of drugs (e.g., approving an NDA on the basis of surrogate endpoints subject to post-approval trials). Generally, drugs that may be eligible for one or more of these programs are those intended to treat serious or life-threatening diseases or conditions, those with the potential to address unmet medical needs for those disease or conditions, and/or those that provide a meaningful benefit over existing treatments. For example, a sponsor may be granted FDA designation of a drug candidate as a “breakthrough therapy” if the drug candidate is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. If a drug is designated as breakthrough therapy, the FDA will take actions to help expedite the development and review of such drug. Moreover, if a sponsor submits an NDA for a product intended to treat certain rare pediatric or tropical diseases or for use as a medical countermeasure for a material threat, and that meets other eligibility criteria, upon approval such sponsor may be granted a priority review voucher that can be used for a subsequent NDA. From time to time, we anticipate applying for such programs where we believe we meet the applicable FDA criteria. A company cannot be sure that any of its drugs will qualify for any of these programs, or even if a drug does qualify, that the review time will be reduced.

 

The results of the preclinical studies and of the clinical studies, together with other detailed information, including information on the manufacture and composition of the drug, are submitted to the FDA in the form of an NDA requesting approval to market the product for one or more proposed indications. The testing and approval process requires substantial time, effort and financial resources. Unless the applicant qualifies for an exemption, the filing of an NDA typically must be accompanied by a substantial “user fee” payment to the FDA. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the product in the proposed patient population to the satisfaction of the FDA. After an NDA is accepted for filing, the FDA substantively reviews the application and may deem it to be inadequate, and companies cannot be sure that any approval will be granted on a timely basis, if at all. The FDA may also refer the application to an appropriate advisory committee, typically a panel of clinicians, for review, evaluation and a recommendation as to whether the application should be approved, but is not bound by the recommendations of the advisory committee.

 

8
 

 

Before approving an NDA, the FDA usually will inspect the facility or the facilities at which the drug is manufactured and determine whether the manufacturing and production and testing facilities are in compliance with cGMP regulations. The FDA also may audit the clinical trial sponsor and one or more sites at which clinical trials have been conducted to determine compliance with GCPs and data integrity. If the NDA and the manufacturing facilities are deemed acceptable by the FDA, it may issue an approval letter, and, if not, the Agency may issue a Complete Response Letter (“CRL”). An approval letter authorizes commercial marketing of the drug with specific prescribing information for a specific indication(s). A CRL indicates that the review cycle of the application is complete and the application is not ready for approval. A CRL may require additional clinical data and/or an additional pivotal Phase 3 clinical trial(s), and/or other significant, expensive and time-consuming requirements related to clinical trials, preclinical studies or manufacturing. Even if such additional information is submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. The FDA could also require, as a condition of NDA approval, post-marketing testing and surveillance to monitor the drug’s safety or efficacy or impose other conditions, or a Risk Evaluation and Mitigation Strategy that may include both special labeling and controls, known as Elements to Assure Safe Use, on the distribution, prescribing, dispensing and use of a drug product. Once issued, the FDA may withdraw product approval if, among other things, ongoing regulatory requirements are not met, certain defects exist in the NDA, or safety or efficacy problems occur after the product reaches the market.

 

Intellectual Property

 

Information regarding our (in-licensed) issued patents and pending patent applications, as of December 31, 2023, is as follows (excluding patents and pending patent applications which pertain to programs which we have discontinued). As of that date we did not have any directly-owned issued patents and pending patent applications.

 

Subject Matter   Issued   Pending   Geographic Scope   Patent Term
In-Licensed Patents                
University College London (UCL)                
QN-302   3   10   U.S., Europe, Australia, Canada, China, Hong Kong, India, Japan, Korea, Russia   2030-2040
University of Louisville (ULRF)                
Pan-RAS   0   12   U.S., Europe, Australia, Canada, China, Hong Kong, India, Israel, Japan, Korea, Mexico, Russia, South Africa   2039*
TOTAL   3   22        

 

*Anticipated patent term

 

Human Capital Management

 

As of March 25, 2024, we had 4 employees, all of whom were full-time. None of our employees is represented by a labor union or covered by a collective bargaining agreement.

 

Diversity & Inclusion. With respect to our employees overall, fifty percent (50%) are women and 0% are people of color.

 

Additional Information

 

Ritter Pharmaceuticals, Inc. (our 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 the “reverse recapitalization” transaction with Qualigen, Inc., Ritter Pharmaceuticals, Inc. was renamed Qualigen Therapeutics, Inc. and Qualigen, Inc. became a wholly-owned subsidiary of the Company. On July 20, 2023 we sold Qualigen Inc. to ChemBio Diagnostics, Inc., an American subsidiary of French diagnostics provider Biosynex S.A.

 

Our website address is www.qlgntx.com. We post links to our website to the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the SEC: annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, information statements, beneficial ownership reports and any amendments to those reports or statements filed or furnished pursuant to Sections 13(a), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All such filings are available through our website free of charge. However, the information contained on or accessed through our website does not constitute part of this Annual Report, and references to our website address in this Annual Report are inactive textual references only. All such reports are also available free of charge via EDGAR through the SEC website at www.sec.gov.

 

9
 

 

Item 1A. Risk Factors

 

An investment in our common stock involves risks. You should carefully consider the risks described below, together with all of the other information included in this Annual Report, as well as in our other filings with the SEC, in evaluating our business. If any of the following risks actually occur, our business, financial condition, operating results and future prospects could be materially and adversely affected. In that case, the trading price of our common stock may decline and you might lose all or part of your investment. The risks described below, which are the risks we judge (rightly or wrongly) to be the most significant to investors, are not the only ones we face. Additional risks that we currently do not judge to be among the “most significant” may also impair our business, financial condition, operating results and prospects.

 

Certain statements below are forward-looking statements. For additional information, see the section of this Annual Report under the caption “Cautionary Note Regarding Forward-Looking Statements.”

 

Risks Related to Our Business Generally

 

Our business strategy is high-risk

 

We are focusing our resources and efforts on development of drug product candidates, which requires extensive cash needs for research and development activities. This is a high-risk strategy because there is no assurance that that our cash resources will be adequate to develop our product candidates, that our product candidates will ever be proven to be safe and effective or that any products will ever become commercially viable. This makes our stock an unsuitable investment for many investors.

 

We do not currently have enough working capital to execute our strategic plan.

 

We have suffered recurring losses from operations, and we are now essentially a non-revenue company. We will need capital to maintain our operations and to support our intended development of our therapeutics business. Future financings will be necessary in order for us to survive as a going concern and to properly execute our strategic plan. However, there can be no assurance that such future financings will be available to us (or, if they are, that they can be consummated on desirable terms).

 

We may, in the short and long-term, seek to raise capital through the issuance of equity securities or through other financing sources. To the extent that we seek to raise additional funds by issuing equity or equity-linked securities, our stockholders may (as has already occurred several times) experience significant dilution. Any debt financing, if available, may include financial and other covenants that could restrict our use of the proceeds from such financing or impose other business and financial restrictions on us. In addition, we may consider alternative approaches such as licensing, joint venture, or partnership arrangements to provide short term or long term capital. Additional funding may not be available to us on acceptable terms, or at all. In addition, any future financing (depending on the terms and conditions) may be subject to the approval of Alpha, a related party and the holder of our 8% Senior Convertible Debenture and of our 8% Convertible Debenture (together, the “Debentures”), and/or trigger certain adjustments to the conversion prices of the Debentures or to the exercise prices of warrants held by Alpha and/or by other persons. See Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional details regarding the Debentures.

 

Servicing our debt will require a significant amount of cash, and we do not expect to have sufficient cash flow from our business to pay this debt.

 

Our ability to make payments to Alpha of principal or interest on the Debentures or to make any potential prepayments for the Debentures, to the extent applicable, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our cash resources currently on hand, plus any anticipated near-term cash flow from operations or dispositions, would not be sufficient to service our indebtedness and/or to make necessary expenditures.

 

In December 2022, we entered into a Securities Purchase Agreement with Alpha and in exchange for $3,000,000 in cash (less $50,000 for expense reimbursement) issued to Alpha our 8% Senior Convertible Debenture with an original face amount of $3,300,000 due on December 22, 2025 (the “2022 Debenture”), plus 2,500,000 common stock warrants exercisable (from June 22, 2023 through June 22, 2028) at $1.65 per share. Commencing June 1, 2023 and continuing on the first day of each month thereafter until the earlier of (i) December 22, 2025 and (ii) the full redemption of the 2022 Debenture (each such date, a “Monthly Redemption Date”), we must redeem $110,000 plus accrued but unpaid interest, liquidated damages and any amounts then owing under the 2022 Debenture (the “Monthly Redemption Amount”). The Monthly Redemption Amount must be paid in cash; provided that after the first two monthly redemptions, we may (if the Equity Conditions, as defined in the 2022 Debenture, are then satisfied or have been waived) elect to pay all or a portion of a Monthly Redemption Amount in shares of our common stock, based on a conversion price equal to the lesser of (i) the then applicable conversion price of the 2022 Debenture and (ii) 85% of the average of the VWAPs (as defined in the 2022 Debenture) for the five consecutive trading days ending on the trading day that is immediately prior to the applicable Monthly Redemption Date.

 

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The 2022 Debenture accrues interest at the rate of 8% per annum, which began accruing on December 1, 2023, and will be payable on a quarterly basis. Interest may be paid in cash or shares of common stock or a combination thereof at our option; provided that the Equity Conditions have been satisfied.

 

Alpha has waived the Equity Conditions for certain Monthly Redemption Amounts, but Alpha is not required to continue such waivers beyond May 2024. For the foreseeable future, we do not expect to be able to satisfy the Equity Conditions; as a result, where there is no waiver of the Equity Conditions we would not have the opportunity to make 2022 Debenture payments in the form of stock rather than in the form of cash, even for types of payments for which payment in the form of stock would have been allowed.

 

The 2022 Debenture is convertible into our common stock at any time at the holder’s option; the conversion price was originally $1.32 but pursuant to a Securities Purchase Agreement amendment in December 2023 it was reduced to $0.73 and then in February 2024 it was adjusted downward to $0.26 per share by virtue of the operation of a “ratchet” antidilution provision. (The exercise price of the warrants issued with the 2022 Debenture was originally $1.65 but pursuant to a Securities Purchase Agreement amendment in December 2023 it was reduced to $0.73 and then in February 2024 it was adjusted downward to $0.26 per share by virtue of the operation of a “ratchet” antidilution provision.)

 

Other than the Monthly Redemption Amounts, the 2022 Debenture does not call for scheduled payments of principal before the scheduled maturity date.

 

Both the 2022 Debenture and the accompanying warrants provide for “ratchet” antidilution adjustments to their conversion price and exercise price.

 

Both the 2022 Debenture and the accompanying warrants include a beneficial ownership blocker of 9.99%, which may only be waived by Alpha upon 61 days’ notice to the Company.

 

We granted Alpha resale registration rights for the common shares underlying the 2022 Debenture and the accompanying warrants.

 

The December 2023 amendment of the 2022 Debenture conversion price (and the accompanying warrants’ exercise price) to be $0.73 per share resulted in the 2022 Debenture’s then current $1,528,922 principal amount thereof becoming convertible into 2,094,414 shares of Company common stock (as opposed to the 1,158,274 shares into which such outstanding principal amount was convertible pre-adjustment). Also, the December 2023 amendment triggered a “ratchet” antidilution adjustment in the Company’s outstanding “exploding” “Series C Warrants,” resulting in such Series C Warrants becoming exercisable for 455,623 common shares (at an exercise price of $0.73 per share), as opposed to the 251,971 common shares into which such outstanding Series C Warrants would have been exercisable (at $1.32 per share) pre-adjustment. Finally, the $0.73 price triggered a “ratchet” antidilution adjustment in the exercise price of other outstanding Company common stock warrants, including 7,048 warrants held by Alpha and 67,620 warrants held by other persons, which were previously exercisable at $1.32 per share.

 

In February 2024, we entered into a Securities Purchase Agreement with Alpha and in exchange for $500,000 in cash (less $25,000 for expense reimbursement) issued to Alpha an 8% Convertible Debenture with a face amount of $550,000 due on December 31, 2024 (the “2024 Debenture”), plus 900,016 5-year common stock warrants exercisable at $0.26 per share. In addition, per this Securities Purchase Agreement Alpha obtained an option to purchase 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 1,800,032 additional warrants), which would (if and when Alpha exercises such option) provide us up to an additional $1.0 million in cash proceeds (less expense reimbursement, and not including any possible cash proceeds from any future exercise of the additional warrants). This option is valid through July 1, 2024.

 

The 2024 Debenture has a maturity date of December 31, 2024 and is convertible, at any time, and from time to time, at Alpha’s option, into shares of our common stock, at $0.6111 per share. The 2024 Debenture does not call for scheduled payments of principal or interest before the scheduled maturity date. Interest on the 2024 Debenture accrues on its outstanding principal balance at the rate of 8% per annum.

 

Both the 2024 Debenture and the accompanying warrants provide for “ratchet” antidilution adjustments to the Conversion Price and Exercise Price.

 

Both the 2024 Debenture and the accompanying warrants include a beneficial ownership blocker of 9.99%, which may only be waived by Alpha upon 61 days’ notice to the Company.

 

We granted Alpha “piggyback” registration rights for the common shares underlying the 2024 Debenture and the accompanying warrants.

 

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The $0.26 exercise price of the warrants issued with the 2024 Debenture triggered a “ratchet” antidilution adjustment in the 2022 Debenture, resulting in the then current $1,198,922 principal amount thereof becoming convertible into 4,611,238 shares of Company common stock (as opposed to the 1,642,359 shares into which such outstanding principal amount were convertible pre-adjustment). Also, the $0.26 exercise price of the warrants issued with the 2024 Debenture triggered a “ratchet” antidilution adjustment in the Company’s outstanding “exploding” “Series C Warrants,” resulting in such Series C Warrants becoming exercisable for 1,279,261 common shares (at an exercise price of $0.26 per share), as opposed to the 455,623 common shares into which such outstanding Series C Warrants would have been exercisable (at $0.73 per share) pre-adjustment. Finally, the $0.26 exercise price of the Warrant would trigger a “ratchet” antidilution adjustment in the exercise price of other outstanding Company common stock warrants, including 2,507,048 warrants held by Alpha and 67,620 warrants held by other persons, all of which were previously exercisable at $0.73 per share.

 

If we continue to lack cash resources sufficient to service our indebtedness, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or issuing additional equity, equity-linked or debt instruments on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. If we are unable to engage in any of these activities or engage in these activities on desirable terms, we may be unable to meet our debt obligations, which would materially and adversely impact our business, financial condition and operating results or even put us out of business.

 

Risks Related to Our Product Pipeline

 

Our product candidates are still in the early stages of development. Although we have begun Phase 1a clinical trials for QN-302, we might be unable to obtain further regulatory approval for QN-302 or any other drug candidate. We may never obtain marketing approval for any of our drug candidates.

 

We are still early in our Pan-RAS development efforts and have not yet sought approval for, or begun enrollment, in any clinical trials evaluating Pan-RAS. There can be no assurance that any of our drug product candidates will achieve success in their clinical trials or obtain regulatory approval.

 

Our ability to generate revenues from our drug product candidates will depend on the successful development and eventual commercialization of such drug candidates. The success of these products will depend on several factors, including the following:

 

  successful completion of preclinical studies and clinical trials;
     
  acceptance of an IND application by the FDA or other clinical trial or similar applications from foreign regulatory authorities for our future clinical trials for our pipeline;
     
  timely and successful enrollment of patients in, and completion of, clinical trials with favorable results;
     
  demonstration of safety, efficacy and acceptable risk-benefit profiles of our products to the satisfaction of the FDA and foreign regulatory agencies;
     
  receipt and related terms of marketing approvals from applicable regulatory authorities, including the completion of any required post-marketing studies or trials;
     
  obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity for our products;
     
  developing and implementing marketing and reimbursement strategies;
     
  establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in collaboration with others;
     
  acceptance of our drugs, if and when approved, by patients, the medical community and third-party payors;
     
  effectively competing with other therapies;
     
  obtaining and maintaining third-party payor coverage and adequate reimbursement; and
     
  maintaining a continued acceptable safety profile of the products following approval.

 

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Many of these factors are beyond our control, and it is possible that none of our drug candidates will ever obtain regulatory approval even if we expend substantial time and resources seeking such approval. If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our drug candidates. For example, our business could be harmed if results of the clinical trials of QN-302, Pan-RAS or any other drug candidates vary adversely from our expectations.

 

Drug development involves a lengthy and expensive process. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug product candidates.

 

Most drug candidates fail, and taking a drug candidate from concept through clinical trials and regulatory approval is not easy or guaranteed. We are unable to predict when or if our drug candidates, will prove effective or safe in humans or will obtain marketing approval. Before obtaining marketing approval from regulatory authorities for the sale of these products, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of these products for humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to the outcome. A failure of one or more clinical trials can occur at any stage of testing. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim or preliminary results of a clinical trial do not necessarily predict final results.

 

We may experience numerous unforeseen events that could delay or prevent our ability to obtain marketing approval or commercialize our drug candidates, including:

 

  we may not be able to obtain enough capital to begin clinical trials ort to complete any already-begun clinical trials, or to complete any necessary preclinical studies;
     
  regulators or IRBs or ECs may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;
     
  we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;
     
  clinical trials for our drug candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials, delay clinical trials or abandon product development programs;
     
  the number of patients required for clinical trials for our drug candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or the duration of these clinical trials may be longer than we anticipate;
     
  competition for clinical trial participants from investigational and approved therapies may make it more difficult to enroll patients in our clinical trials;
     
  our third-party contractors may fail to meet their contractual obligations to us in a timely manner, or at all, or may fail to comply with regulatory requirements;
     
  we may have to suspend or terminate clinical trials for our drug candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks;
     
  our drug candidates may have undesirable or unexpected side effects or other unexpected characteristics, causing us or our investigators, regulators or IRBs/ECs to suspend or terminate the trials;
     
  the cost of clinical trials for our drug candidates may be greater than we anticipate; and
     
  the supply or quality of our drug candidates, or other materials necessary to conduct clinical trials may be insufficient or inadequate and result in delays or suspension of our clinical trials.

 

Our product development costs will increase if we experience delays in preclinical studies or clinical trials or in obtaining marketing approvals. We do not know whether any of our planned preclinical studies or clinical trials will begin on a timely basis or at all, will need to be restructured or will be completed on schedule, or at all. For example, the FDA may place a partial or full clinical hold on any of our clinical trials for a variety of reasons.

 

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Significant preclinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our drug candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our drug candidates.

 

Any delays in the commencement or completion, or termination or suspension, of our current clinical trial or our future clinical trials, if any, could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.

 

Before we can initiate clinical trials of a drug candidate, we must submit the results of preclinical studies to the FDA along with other information as part of an IND application or similar regulatory filing, and the FDA (or corresponding foreign regulatory body) must approve the application.

 

Before obtaining marketing approval from the FDA for the sale of QN-302, Pan-RAS or any other future drug candidate, we must conduct extensive clinical studies to demonstrate safety and efficacy. Clinical testing is expensive, time consuming and uncertain as to outcome. The FDA may require us to conduct additional preclinical studies for any drug candidate before it allows us to initiate clinical trials under any IND application, which may lead to additional delays and increase the costs of our preclinical development programs.

 

Any delays in the commencement or completion of our ongoing, planned or future clinical trials could significantly increase our costs, slow down our development and approval process and jeopardize our ability to commence product sales and generate revenues. We do not know whether our planned trials will begin on time or at all, or be completed on schedule, if at all. The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to:

 

  our ability to pay for the costs and expenses for the clinical trials;
     
  the FDA disagreeing as to the design or implementation of our clinical trials or with our recommended dose for any of our pipeline programs;
     
  obtaining FDA authorization to commence a trial or reaching a consensus with the FDA on trial design;
     
  obtaining approval from one or more IRBs/ECs;
     
  IRBs/ECs refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial;
     
  changes to clinical trial protocol;
     
  clinical sites deviating from trial protocol or dropping out of a trial;
     
  failing to manufacture or obtain sufficient quantities of drug candidate, or, if applicable, combination therapies for use in clinical trials;
     
  patients failing to enroll or remain in our trial at the rate we expect, or failing to return for post-treatment follow-up;
     
  patients choosing an alternative treatment, or participating in competing clinical trials;
     
  lack of adequate funding to continue the clinical trial;
     
  patients experiencing severe or unexpected drug-related adverse effects;
     
  occurrence of serious adverse events in trials of the same class of agents conducted by other companies;
     
  selecting or being required to use clinical end points that require prolonged periods of clinical observation or analysis of the resulting data;
     
  a facility manufacturing our drug candidates, or any of their components, including without limitation, our own facilities being ordered by the FDA to temporarily or permanently shut down due to violations of cGMP, regulations or other applicable requirements, or infections or cross-contaminations in the manufacturing process;
     
  lack of stability of our clinical trial material or any quality issues that arise with the clinical trial material;

 

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  any changes to our manufacturing process that may be necessary or desired;
     
  Our, or our third-party contractors, not performing data collection or analysis in a timely or accurate manner or improperly disclosing data prematurely or otherwise in violation of a clinical trial protocol; or
     
  any third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications.

 

We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs/ECs of the institutions in which such trials are being conducted, by a Data Safety Monitoring Board for such trial or by the FDA. Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using the product under investigation, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. In addition, changes in regulatory requirements and policies may occur, and we may need to amend clinical trial protocols to comply with these changes. Amendments may require us to resubmit our clinical trial protocols to IRBs/ECs for reexamination, which may impact the costs, timing or successful completion of a clinical trial.

 

If we experience delays or difficulties enrolling patients in our ongoing or planned clinical trials, our receipt of necessary regulatory approval could be delayed or prevented.

 

We may not be able to initiate or continue our ongoing or planned clinical trials for our products if we are unable to identify and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA. In addition, some of our competitors may have ongoing clinical trials for products that would treat the same patients as QN-302 or Pan-RAS, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ products. In addition, introduction of new drugs or devices to the marketplace may have an effect on the number of patients available or timing of the availability of the patients.

 

Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.

 

Adverse side effects or other safety risks associated with our drug product candidates could delay or preclude approval, cause us to suspend or discontinue any clinical trials or abandon further development, limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval, if any.

 

Results of our current and planned clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Undesirable side effects caused by our products could result in the delay, suspension or termination of clinical trials by us or the FDA for a number of reasons.

 

Moreover, if our products are associated with undesirable side effects in clinical trials or have characteristics that are unexpected, we may elect to abandon or limit their development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective, which may limit the commercial expectations for our products, if approved. We may also be required to modify our study plans based on findings in our clinical trials. Many drug candidates that initially showed promise in early stage testing have later been found to cause side effects that prevented further development. In addition, regulatory authorities may draw different conclusions or require additional testing to confirm these determinations.

 

It is possible that as we test our drug candidates in larger, longer and more extensive clinical trials, including with different dosing regimens, or as the use of our drug candidates becomes more widespread following any regulatory approval, illnesses, injuries, discomforts and other adverse events that were observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, will be reported by patients.

 

The development and commercialization of pharmaceutical and device products are subject to extensive regulation, and we may not obtain regulatory approvals for any product candidates, on a timely basis or at all.

 

The clinical development, manufacturing, labeling, packaging, storage, recordkeeping, advertising, promotion, export, import, marketing, distribution, adverse event reporting, including the submission of safety and other post-marketing information and reports, and other possible activities relating to drug product candidates such as ours are subject to extensive regulation.

 

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We rely, and intend to continue to rely, on third parties to conduct our preclinical studies and clinical trials and perform some of our research and preclinical studies. If these third parties do not satisfactorily carry out their contractual duties, fail to comply with applicable regulatory requirements or do not meet expected deadlines, our development programs may be delayed or subject to increased costs or we may be unable to obtain regulatory approval.

 

We are dependent on third parties to conduct our planned preclinical studies and clinical trials of our drug product candidates. The timing of the initiation and completion of these trials will therefore be partially controlled by such third parties and may result in delays to our development programs. We have relied heavily on UofL for preclinical studies related to Pan-RAS, and we expect to rely heavily on CROs and sponsored academic researchers for any further preclinical studies. As to any clinical trials, we expect to rely on CROs, sponsored academic researchers, clinical investigators and/or consultants to play a significant role in the conduct of these trials and the subsequent collection and analysis of data. However, we will not be able to control all aspects of their activities. Nevertheless, we are responsible for ensuring that each clinical trial is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards, including GCP, requirements, and our reliance on the CROs and other third parties does not relieve us of our regulatory responsibilities.

 

There is no guarantee that any such CROs, clinical trial investigators and/or other third parties on which we rely will devote adequate time and resources to our development activities or perform as contractually required. If any of these third parties fail to meet expected deadlines, adhere to our clinical protocols or meet regulatory requirements, otherwise perform in a substandard manner, or terminate their engagements with us, the timelines for our development programs may be extended or delayed or our development activities may be suspended or terminated. If one of our clinical trial site terminates for any reason, we may experience the loss of follow-up information on subjects enrolled in such clinical trial unless we are able to transfer those subjects to another qualified clinical trial site, which may be difficult or impossible.

 

If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, regulatory approvals for our drug product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our products.

 

Manufacturing pharmaceutical products is complex and subject to product loss for a variety of reasons. We contract with third parties for the manufacture of our product candidates for preclinical testing and clinical trials and expect to continue to do so for commercialization. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

 

We rely, and expect to continue to rely, on third parties for the manufacture of our products for preclinical and any clinical testing, as well as for future commercial manufacture if any of our product candidates obtain regulatory approval. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

 

We may be unable to establish any agreements with third-party manufacturers or to do so on favorable terms. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

 

  reliance on the third-party for regulatory, compliance and quality assurance;
     
  operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier or the issuance of an FDA Form 483 notice or warning letter;
     
  the possible breach of the manufacturing agreement by the third-party; and
     
  the possible termination or nonrenewal of the agreement by the third-party at a time that is costly or inconvenient for us.

 

We do not have manufacturing agreements in place for any of our current drug candidates. We acquire many key materials on a purchase order basis. As a result, we do not have long-term committed arrangements with respect to our product candidates and other materials. If we obtain regulatory approval for any of our product candidates, we will need to establish an agreement for commercial manufacture with a third-party.

 

Any performance failure on the part of our existing or future manufacturers could delay clinical development or regulatory approval. We do not currently have arrangements in place for redundant supply or a second source for bulk drug substance for QN-302 or Pan-RAS.

 

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We will need to seek and enter into out-licenses or collaborations with third parties for the development and commercialization of our products, resulting in a limitation of our upside potential.

 

We expect that we will need third-party out-licensees or collaborators for the development and commercialization of our products.

 

Our likely collaborators for any collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies. We face significant competition in seeking appropriate collaborators. Our ability to reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors.

 

If we do enter into any such arrangements with any third parties, we will likely have limited control over the amount and timing of resources that such collaborators dedicate to the development or commercialization of our products. Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities and efforts to successfully perform the functions assigned to them in these arrangements.

 

Any out-license or collaboration will necessarily result in a sharing of economics with the out licensee or collaborator, which might otherwise have been captured by us directly.

 

Risks Related to our Intellectual Property

 

If we are unable to obtain and maintain sufficient patent protection for our therapeutic product candidates, or if the scope of the patent protection is not sufficiently broad, third parties, including our competitors, could develop and commercialize products similar or identical to ours, and our ability to commercialize our product candidates successfully may be adversely affected.

 

Our commercial success depends significantly on our ability to protect our proprietary (and exclusively in-licensed) product candidates or technologies that we believe are important to our business, including pursuing, obtaining and maintaining patent protection in the United States and other countries intended to cover the composition of matter of our product candidates, the methods of use, related technologies, and other inventions that are important to our business. In addition to patent protection, we also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection. If we do not adequately pursue, obtain, maintain, protect or enforce our intellectual property, third parties, including our competitors and/or collaborators, may be able to erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.

 

Moreover, depending on the terms of any license agreements to which we may become a party, we may not have the right to control the preparation, filing, and prosecution of patent applications, or to maintain or defend the patents, covering technology licensed from third parties. Therefore, these patents and patent applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.

 

We cannot offer any assurances about which, if any, patents will issue, the breadth of any such patents, whether any issued patents will be found invalid and unenforceable or will be threatened by third parties or whether any issued patents will effectively prevent others from commercializing competing technologies and product candidates. Our licensors have not filed patent applications in every jurisdiction, and some filings are only pending in the United States.

 

Moreover, because the issuance of a patent, although presumptive, is not conclusive as to its inventorship, scope, validity or enforceability, our licensors’ patents or pending patent applications may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or in the patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical products and technologies or limit the duration of the patent protection of our products and technologies. Such challenges also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us.

 

Our licensors’ pending and future patent applications may not result in patents being issued that protect our product candidates and technologies, in whole or in part, or that effectively prevent others from commercializing competitive products and technologies. Even if the patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us or otherwise provide us with any competitive advantage. Our competitors and other third parties may be able to circumvent our licensors’ patents by developing similar or alternative products or technologies in a non-infringing manner. Our competitors and other third parties may also seek approval to market their own products and technologies similar to or otherwise competitive with our products and technologies. Alternatively, our competitors or other third parties may seek to market generic versions of any approved products by submitting abbreviated NDAs to the FDA during which process they may claim that patents owned by us are invalid, unenforceable or not infringed. In these circumstances, we may need to defend or assert our licensors’ patents, or both, including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court or other agency with jurisdiction may find our licensors’ patents invalid or unenforceable, or that our competitors are competing in a non-infringing manner. Thus, even if we have in-licensed valid and enforceable patents, these patents still may not provide protection against competing products or processes sufficient to achieve our business objectives.

 

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The term of our in-licensed patents may be inadequate to protect our competitive position on our products.

 

Given the amount of time required for the development, testing and regulatory review of drug candidates, our in-licensed patents protecting such candidates might expire before or shortly after such candidates are commercialized. In such an event (and if we are unable to obtain patent term extension or the term of any such extension is less than we request), our competitors and other third parties may be able to obtain approval of competing products following patent expiration and take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case. Generic competition usually results in serious price erosion for the original drug brand.

 

Risks Related to Employee Matters, Potential Dilution, Stock Price Variability and Other Risks Related to Our Business

 

Our future success depends on our ability to retain key employees and to attract, retain and motivate qualified personnel.

 

We are highly dependent on Michael Poirier, our Chief Executive Officer and Chairman, and Christopher Lotz, our Vice President and Chief Financial Officer. In addition, the rest of our team has been sharply reduced due to rightsizing, voluntary departures and the disposition of our Qualigen, Inc. diagnostics-products subsidiary – we currently have only two other employees.

 

Our ability to compete depends upon our ability to attract, retain and motivate highly skilled and experienced personnel with scientific, clinical, regulatory, manufacturing and management skills and experience. We may not be able to attract or retain qualified personnel in the future. Many of the companies against which we compete have greater financial and other resources, different risk profiles and a longer history in the industry than we do. Our competitors may provide higher compensation, more diverse opportunities and/or better opportunities for career advancement. Any or all of these competing factors (as well as our own limited resources) may limit our ability to attract and retain high quality personnel, which could negatively affect our ability to successfully develop and commercialize our product candidates and to grow our business and operations as currently contemplated.

 

We will need to rebuild our development and regulatory teams.

 

Due to rightsizing, voluntary departures and the disposition of Qualigen, Inc. and our former FastPack®products business, we currently have only four employees. Although we outsource many drug development functions and may choose to continue to do so in the future, we expect that (resources allowing) to recruit and retain more employees in all areas, and particularly in the areas of clinical development, clinical operations, and regulatory affairs (and maybe, longer-term, in areas such as manufacturing, sales, marketing and distribution). We will also need to implement and improve our managerial, operational and financial systems, and obtain stage-appropriate facilities. We do not currently have the cash resources needed for any of the above.

 

We currently rely, and for the foreseeable future will continue to rely, in substantial part, on certain third-party contract research organizations and consultants to provide certain services, including assuming substantial responsibilities for the conduct of our clinical trials. We cannot assure that the services of such third-party contract research organizations and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements. In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by our vendors or consultants is compromised for any reason, our clinical trials may be extended, delayed or terminated. We cannot assure that we will be able to properly manage our existing vendors or consultants or find other competent outside vendors and consultants on economically reasonable terms, or at all.

 

We may engage in strategic transactions that could impact liquidity, increase expenses and present significant distractions to management.

 

From time to time, we may consider strategic transactions, such as acquisitions of companies, businesses or assets and out-licensing or in-licensing of products, drug candidates or technologies. Potential transactions that we may consider include a variety of different business arrangements, including spin-offs, in-licensing, strategic partnerships, joint ventures, restructurings, divestitures, business combinations and investments. Any such transaction may require us to incur non-recurring or other charges, may increase near term or long-term expenditures and may pose significant integration challenges or disrupt management or business, which could adversely affect our operations and financial results. These transactions may entail numerous operational and financial risks, including:

 

  exposure to unknown liabilities;
     
  disruption of business and diversion of management’s time and attention in order to develop acquired products, drug candidates or technologies;

 

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  incurrence of substantial debt or dilutive issuances of equity securities to pay for acquisitions;
     
  higher than expected acquisition and integration costs;
     
  write-downs of assets or impairment charges;
     
  increased amortization expenses;
     
  difficulty and cost in combining the operations, systems and personnel of any acquired businesses with our operations, systems and personnel;
     
  impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership; and
     
  inability to retain key employees of any acquired businesses.

 

Our minority-interest investment in NanoSynex is illiquid and has many risks associated with it.

 

Our investment in NanoSynex has been reduced to a 39% equity interest and has a number of risks associated with it, including, among others, the following:

 

  a history of operating losses, with no assurance of future revenues or operating profits;
     
  uncertainty as to the availability to NanoSynex of the cash resources it needs to execute its plans;
     
  technological risk;
     
  our inability, now that we are no longer a majority shareholder of NanoSynex, to control or veto NanoSynex’s decisions;
     
  risks associated with the development of medical devices and NanoSynex’s ability to obtain the necessary regulatory approvals for the development and commercialization of its antimicrobial susceptibility test platform;
     
  very limited manufacturing, marketing, distribution and sales capabilities;
     
  competition from both public and private companies and academic collaborators, many of which have significantly greater experience and financial resources;
     
  acceptance by life sciences research and diagnostic communities is not assured;
     
  commercial development of its antimicrobial susceptibility test platform is not assured;
     
  an inability to manufacture, market or sell its proposed products if it is unsuccessful in entering into strategic alliances or joint ventures with third parties; and
     
  risks related to the political, economic and military conditions in Israel.

 

In addition, NanoSynex is a privately-held company and its shares are illiquid, which means that we could not readily obtain cash in exchange for some or all of our equity interest. We no longer hold any NanoSynex debt instruments.

 

Our reported financial condition may fluctuate significantly from quarter to quarter and year to year, which makes them difficult to predict or understand.

 

We expect our financial condition and results of operations to fluctuate from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. Accordingly, you should not blindly rely upon the results of any quarterly or annual periods as indications of future financial status or operating performance. Other investors may, however, attach undue significance to reported results which are heavily influenced by such distortions and variability, which in turn could cause our stock price to rise or fall despite there being no corresponding change in our prospects or position as a practical matter.

 

We have a substantial amount of derivative securities outstanding.

 

As of December 31, 2023 there were 398,924 stock options outstanding under our equity incentive plans, 3,081,717 outstanding warrants, and 1,943,729 shares issuable upon voluntary conversion of principal amount of the 2022 Debenture issued to Alpha. (At December 31, 2023, such principal amount was $1,418,922) Due to antidilution adjustments occurring as a result of the 2024 Debenture transaction in February 2024, the outstanding principal balance of the 2022 Debenture (which at March 25, 2024 was $1,088,922) is now convertible upon voluntary conversions into 4,188,162 shares; and in addition the 2024 Debenture’s principal amount is convertible upon voluntary conversions into 900,016 shares, and the warrants issued with the 2024 Debenture are exercisable for 900,016 shares.

 

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The 2022 and 2024 Debentures issued to Alpha are convertible, at any time, and from time to time, at Alpha’s option, into shares of our common stock, subject to the terms and conditions described in the Debentures. Currently the conversion price for such optional conversions is $0.26 per share for the 2022 Debenture and $0.6111 per share for the 2024 Debenture. Furthermore, subject to certain terms and conditions described in the 2022 Debenture, we may elect to pay all or a portion of the Monthly Redemption Amount and/or interest required by the 2022 Debenture in shares of our common stock.

 

The issuance of shares upon the exercise or conversion of outstanding stock options, warrants and the Debentures (or our election to pay amounts owed under the Debentures in shares of our common stock) could result in significant dilution to the holders of our existing outstanding common stock.

 

We rely significantly upon information technology, and any failure, inadequacy, interruption or security lapse of that technology, including any cyber security incidents, could harm our ability to operate our business effectively and result in a material disruption of our product development programs.

 

We utilize information technology systems to transmit and store information, including sensitive personal information and proprietary or confidential information, and otherwise to support our business and process. In the future, our systems may prove inadequate to our business needs and necessary upgrades may not operate as designed, which could result in excessive costs or disruptions in portions of our business. In particular, any disruptions, delays or deficiencies from our enterprise resource planning systems could adversely affect our ability to, among other matters, process orders, procure supplies, manufacture and ship products, send invoices and track payments, fulfill contractual obligations or otherwise operate our business.

 

We could also be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or accidental release or loss of information maintained in the information systems and networks of our company. Outside parties may attempt to penetrate our systems or those of our partners or fraudulently induce our employees or employees of our partners to disclose sensitive information to gain access to our data. Like other companies, we may experience threats to our data and systems, including malicious codes and computer viruses, cyber-attacks or other system failures. Furthermore, a security breach could be facilitated by ineffective protection measures, employee errors or omissions, and malfeasance. Despite our efforts to protect against cyber-attacks and security breaches, hackers and other cyber criminals are using increasingly sophisticated and constantly evolving techniques, and we may need to expend substantial additional resources to continue to protect against potential security breaches or to remediate problems caused by such attacks or any breach of our safeguards. Any system failure, accident or security breach that causes interruptions in our operations, for us or our partners, could result in a material disruption of our product development programs and business operations, in addition to possibly requiring substantial expenditures of resources to remedy. For example, the loss of clinical trial data from completed clinical trials could result in delays in our regulatory approval efforts and we could incur significant increases in costs to recover or reproduce the data. The risk of cyber incidents could also be increased by cyberwarfare in connection with the ongoing war in Ukraine, including potential proliferation of malware from the conflict into systems unrelated to the conflict. To the extent that any disruption or security breach results in a loss of, or damage to, our data or applications, or inappropriate public disclosure of confidential or proprietary information, we may incur liabilities and the further development of our product candidates may be delayed.

 

We or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

 

We are located in southern California and are subject to risks posed by natural disasters, including wildfires, earthquakes and severe weather that may interfere with our operations. Extreme weather events and other natural disasters could severely disrupt our operations, and have a material adverse effect on our business, results of operations, financial condition and prospects. If a natural disaster, power outage or other event occurred that damaged critical infrastructure, such as the facilities of our third-party clinical sites or contract manufacturers, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. Any disaster recovery and business continuity plans we have in place may prove inadequate in the event of a serious disaster or similar event.

 

Any failure to develop or maintain effective internal controls over financial reporting or difficulties encountered in implementing or improving our internal controls over financial reporting could harm our operating results and prevent us from meeting our reporting obligations.

 

Effective internal controls, particularly those related to financial reporting, are necessary for us to produce reliable financial reports. If we cannot provide reliable financial reports, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock could drop significantly. In addition, investors relying upon this misinformation could make an uninformed investment decision, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities or to stockholder class action securities litigation.

 

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As previously described in our annual report on Form 10-K for the year ended December 31, 2021, in connection with the audit of our financial statements as of and for the year ended December 31, 2021 (the “2021 audit”), our management identified a material weakness in our internal control over financial reporting related to the lack of accounting department resources and/or policies and procedures to ensure recording and disclosure of items in compliance with U.S. GAAP. This material weakness resulted in adjustments to our warrant valuations in connection with the 2021 audit. In response to the material weakness, we took a number of remediation steps to enhance our internal controls, including implementing additional procedures and utilizing external consulting resources with experience and expertise in U.S. GAAP and public company accounting and reporting requirements to assist management with its accounting and reporting of complex and/or non-recurring transactions and related disclosures.

 

In connection with the audit of our financial statements as of and for the year ended December 31, 2022 (the “2022 audit”), our management determined that the material weakness identified in connection with the 2021 audit had not been fully remediated and resulted in adjustments to the accounting treatment related to convertible debt, the business combination and goodwill impairment during the 2022 audit, which resulted in the late filing of the 2022 Annual Report.

 

In connection with the audit of our financial statements as of and for the year ended December 31, 2023, our management identified material weaknesses in our internal control over financial reporting related to limited accounting personnel and resources resulting in lack of segregation of duties, and to the fact that we have not designed and implemented effective Information Technology General Controls related to access controls to financing accounting systems.

 

We intend to continue to take steps to enhance our internal controls, including implementing additional internal procedures and utilizing well-established external consulting resources with experience and expertise in U.S. GAAP and public company accounting and reporting requirements.

 

If we are unable to remediate the material weaknesses and achieve and maintain effective internal control over financial reporting and effective disclosure controls, our business could be adversely affected.

 

Our right to use our “shelf” Form S-3 registration statement is sharply limited.

 

We filed a Form S-3 “shelf” registration statement with the SEC for the issuance of up to $150,000,000 of securities, and the SEC declared the registration statement effective on August 5, 2022. However, due to the “baby shelf” rules adopted by the SEC, the maximum amount of securities we can sell under this registration is now limited to one-third of our public float. Because our public float is very modest (e.g., $2.9 million at December 31, 2023), the maximum amount we could sell using this registration statement was under $1.0 million at that time. Therefore, the registration statement no longer constitutes an important tool for accessing the public markets to satisfy our needs for capital.

 

Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock.

 

If we fail to satisfy the continued listing requirements of Nasdaq, Nasdaq may take steps to delist our common stock. Such a delisting would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so.

 

On April 20, 2023, we received a notification letter from the Listing Qualifications Department of Nasdaq indicating that, as a result of our delay in filing the 2022 Annual Report, we were not in compliance with the timely filing requirements for continued listing under Nasdaq Listing Rule 5250(c)(1). The notification letter had no immediate effect on the listing or trading of our common stock on the Nasdaq Capital Market. On May 2, 2023, the Company filed the Form 10-K with the SEC and was subsequently notified by Nasdaq on May 4, 2023 that it had regained compliance with Nasdaq’s listing rule 5250(c)(1) as a result thereof and that the matter was closed.

 

On November 20, 2023, we received a letter (the “Bid Price Deficiency Notice”) from The Nasdaq Stock Market (“Nasdaq”) notifying the Company that, because the closing bid price for its common stock has been below $1.00 per share for 30 consecutive business days, it no longer complies with the minimum bid price requirement for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”), and Listing Rule 5810(c)(3)(A) provides that a failure to meet the Minimum Bid Price Requirement exists if the deficiency continues for a period of 30 consecutive business days.

 

The Bid Price Deficiency Notice has no immediate effect on the listing of the Company’s common stock on The Nasdaq Capital Market. Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has been provided an initial compliance period of 180 calendar days, or until May 20, 2024 to regain compliance with the Minimum Bid Price Requirement. During the compliance period, the Company’s shares of common stock will continue to be listed and traded on The Nasdaq Capital Market. To regain compliance, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days during the 180 calendar day grace period.

 

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In the event the Company is not in compliance with the Minimum Bid Price Requirement by May 20, 2024, the Company may be afforded a second 180 calendar day grace period.

 

The Company intends to actively monitor the bid price for its common stock between now and May 20, 2024 and will consider available options to regain compliance with the Minimum Bid Price Requirement.

 

On November 21, 2023, the Company also received a letter (the “Equity Deficiency Letter”) from Nasdaq notifying the Company that, based on the Company’s stockholders’ deficit of ($1,640,552) as of September 30, 2023, as reported in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, it is no longer in compliance with the minimum stockholders’ equity requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(1), which requires listed companies to maintain stockholders’ equity of at least $2.5 million (the “Minimum Stockholders’ Equity Requirement”), or the alternative criteria of $35 million market value of listed securities or $500,000 in net income from continuing operations in the most recent fiscal year or two or the last three fiscal years—which alternatives, as noted in the Equity Deficiency Letter, the Company does not meet. The Company was given until January 5, 2024 to provide Nasdaq with a specific plan (the “Compliance Plan”) to achieve and sustain compliance with the Minimum Stockholders’ Equity Requirement or its alternatives. If the Company’s Compliance Plan is accepted, Nasdaq may grant an extension of up to 180 calendar days from the date of the Equity Deficiency Letter for the Company to evidence compliance.

 

The Company submitted a Compliance Plan to Nasdaq on January 5, 2024 to regain compliance with the Nasdaq Listing Rules. The Compliance Plan was accepted by Nasdaq and the Company was granted an extension of up to 180 calendar days from the date of the Equity Deficiency Letter (i.e., until May 20, 2024) for the Company to evidence compliance. If the Company does not regain compliance within the requisite time period, or if the Company fails to satisfy another Nasdaq requirement for continued listing, Nasdaq could provide notice that the Company’s securities will become subject to delisting, which delisting determination the Company has the right to appeal.

 

If we are unable to maintain compliance with Nasdaq’s continued listing requirements, and in the event of a delisting, we would take action to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s other listing requirements.

 

Losing our Nasdaq other listing would seriously harm us, by undermining our ability to raise capital and decreasing our attractiveness to possible merger partners.

 

Item 1B. Unresolved Staff Comments.

 

Not applicable.

 

Item 1C. Cybersecurity

 

Our processes for assessing, identifying, and managing material risks from cybersecurity threats are not advanced. None of our personnel are trained specialists in cybersecurity; we rely on off-the-shelf” security software. We have not conducted employee training regarding cybersecurity or conducted internal tests or simulations. Nonetheless, we believe that, due to the nature and status of our business, our cybersecurity position is currently satisfactory for our situation. We do not believe that cybersecurity risks have materially affected (or are reasonably likely to materially affect) us.

 

We have only four employees and so disclosure of cybersecurity events to management would occur organically, or would in the first instance be observed by management.

 

For information of ours which resides on our CROs’ computer systems, we rely on the CROs’ own cybersecurity processes and systems.

 

Item 2. Properties.

 

None. The lease for our previous operating facilities at 2042 Corte Del Nogal, Carlsbad, California had been in the name of our subsidiary Qualigen, Inc. We sold Qualigen, Inc. in 2023 and the Company has no responsibility for the lease going forward. The Company had also utilized such facility (in addition to Qualigen, Inc.’s use), but now has removed from it. The Company is currently essentially “virtual.”

 

Item 3. Legal Proceedings.

 

None.

 

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Item 4. Mine Safety Disclosures.

 

Not applicable.

 

PART II

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Our common stock has been listed and traded on the Nasdaq Capital Market under the symbol “QLGN” since May 26, 2020.

 

Holders

 

As of March 25, 2024, there were 287 registered holders of record of our common stock. This figure does not reflect the beneficial ownership of shares held in nominee name.

 

Securities Authorized for Issuance Under Equity Compensation Plans

 

See Part III, Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” for information relating to our equity compensation plans.

 

Recent Sales of Unregistered Securities

 

No further disclosure is required in response to this Item.

 

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

 

None.

 

Item 6. [Reserved]

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

You should read the following discussion and analysis of our financial condition and results of operations together with the consolidated financial statements and related notes that are included elsewhere in this Annual Report. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or in other parts of this Annual Report. See “Cautionary Note Regarding Forward-Looking Statements” for additional information. Unless otherwise indicated, all information in this Annual Report on Form 10-K gives effect to a 1-for-10 reverse stock split of our common stock that became effective on November 23, 2022, and all references to shares of common stock outstanding and per share amounts give effect to the reverse stock split.

 

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).

 

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. QN-302 is currently undergoing a Phase 1a clinical trial at START Midwest in Grand Rapids, Michigan, and HonorHealth in Scottsdale, Arizona.

 

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.

 

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On November 23, 2022, we effected a 1-for-10, reverse stock split of our outstanding shares of common stock (the “Reverse Stock Split”). The Reverse Stock Split reduced our shares of outstanding common stock, stock options, and warrants to purchase shares of our common stock. Fractional shares of common stock that would have otherwise resulted from the Reverse Stock Split were rounded down to the nearest whole share and cash in lieu of fractional shares was paid to stockholders. All share and per share data for all periods presented in this Annual Report on Form 10-K have been adjusted retrospectively to reflect the Reverse Stock Split. The number of authorized shares of common stock and the par value per share remains unchanged.

 

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.

 

Recent Developments

 

Phase 1 Clinical Trial of QN-302

 

On August 1, 2023, we announced that the FDA has cleared our IND application for QN-302. Based on this clearance, we chose Translational Drug Development, LLC (“TD2”) to serve as our contract research organization to conduct a Phase 1 clinical trial in patients with advanced or metastatic solid tumors. The Phase 1 trial (NCT06086522) is designed as a multicenter, open-label, dose escalation, safety, pharmacokinetic, and pharmacodynamic study with dose expansion to evaluate safety, tolerability, and antitumor activity of QN-302 in patients with advanced solid tumors that have not responded to or that have recurred following treatment with available therapies. On November 7, 2023, we announced that the first patient had been enrolled and dosed in the dose escalation (Phase 1a) portion of the study. Subject to available funding (which is, however, not all currently in hand), we anticipate that Phase 1a of the trial can be completed by the end of 2024. The exact number of patients to be enrolled in the trial will depend on the observed safety profile, which will determine the number of patients per dose level, as well as the number of dose escalations required to meet the Maximum Tolerated Dose (“MTD”). Once the MTD has been established in dose escalation, dose expansion will begin.

 

Sale of Diagnostics Business

 

On July 20, 2023, we sold all of the issued and outstanding shares of common stock of Qualigen, Inc., a wholly-owned subsidiary and the legal entity operating our FastPack™ diagnostic business, to Chembio Diagnostics, Inc. (“Chembio”), a subsidiary of Biosynex, S.A. As consideration for the shares of Qualigen, Inc., we received cash payments of approximately $4.9 million, which payment is subject to post-closing adjustments. An additional $450,000 was delivered by Chembio to an escrow account to satisfy our indemnification obligations. Any amounts remaining in the escrow account that have not been offset or reserved for claims will be released to us within five business days following January 20, 2025. Following the consummation of the transaction, Qualigen, Inc. became a wholly-owned subsidiary of Chembio.

 

Amendment and Settlement Agreement with NanoSynex Ltd.

 

On July 20, 2023, we entered into and effectuated the NanoSynex Amendment, by which we agreed to, among other things, forfeit 281,000 Series B Preferred Shares of NanoSynex held by us, resulting in our ownership in NanoSynex being reduced from approximately 52.8% to approximately 49.97% of the voting equity of NanoSynex. In addition, we agreed to cancel approximately $3.0 million of promissory notes which NanoSynex had issued to us under the NanoSynex Funding Agreement, relieving NanoSynex of any repayment obligations to us with respect to such notes. The NanoSynex Amendment superseded any NanoSynex Funding Agreement obligations to provide funding to NanoSynex, except we agreed to provide future loans as follows: (i) $560,000 on or before November 30, 2023, and (ii) $670,000 on or before March 31, 2024. However, on November 22, 2023, in full settlement of any additional funding obligations to NanoSynex, we forfeited certain of our shares of Series A-1 Preferred Stock of NanoSynex in an amount that reduced our ownership in NanoSynex from approximately 49.97% to 39.90%. Accordingly, NanoSynex was deconsolidated from our financial statements as of July 20, 2023, and is reported as Discontinued Operations in this Annual Report. Our investment in NanoSynex will be accounted for in the future as an equity method investment.

 

Critical Accounting Policies and Estimates

 

Our 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. Before the third quarter of 2023, our reported expenses represented the total of our diagnostics-related and therapeutics-related expenses. In this Annual Report, all diagnostics-related revenues and expenses have been reclassified to discontinued operations (See Note 5 - Discontinued Operations).

 

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This discussion and analysis is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these 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 consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to impairment of goodwill and other intangible assets, fair value of 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 consolidated financial statements appearing in “Item 8. Financial Statements and Supplementary Data,” 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:

 

  Research and development
     
  Discontinued operations
     
  Impairment of long-lived assets
     
  Business combinations
     
  Derivative financial instruments and warrant liabilities
     
  Stock-based compensation
     
  Income taxes

 

Warrant Liabilities

 

In 2004, Qualigen, Inc. issued Series C preferred stock warrants to investors and brokers in connection with a private placement. These warrants were subsequently extended and survived the May 2020 Ritter reverse recapitalization transaction and are now exercisable for Qualigen Therapeutics common stock. These warrants contain a provision that if the Company issues shares (except in certain defined scenarios) at a price below the warrants’ exercise price, the exercise price will be re-set to such new price and the number of shares underlying the warrants will be increased in the same proportion as the exercise price decrease. For accounting purposes, such warrants give rise to warrant liabilities. Accounting principles generally accepted in the United States of America (“U.S. GAAP”) require us to recognize the fair value of these warrants as warrant liabilities on our Consolidated Balance Sheets and to reflect period-to-period changes in the fair value of the warrant liabilities on our Consolidated Statements of Operations. The estimated fair value of these warrant liabilities was approximately $0.1 million and $3.6 million at December 31, 2023 and 2022, respectively. There were 455,623 of these warrants outstanding at December 31, 2023 and 1,349,571 of these warrants outstanding at December 31, 2022.

 

Because the fair value of the above liability classified warrants will be determined each quarter on a “mark-to-market” basis , significant variability in our future quarterly and annual Consolidated Statement of Operations and Consolidated Balance Sheets could occur 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.

 

On December 22, 2022, as part of the 2022 Debenture financing, we issued to Alpha a common stock warrant (exercisable from June 22, 2023 through June 22, 2028) to purchase 2,500,000 shares of our common stock. The exercise price of the warrant was modified from $1.65 to $0.73 on December 5, 2023, and was further modified to $0.26 on February 27, 2024. The warrant may be exercised by Alpha, in whole or in part before June 22, 2028. The warrant was originally liability classified, but was modified on December 5, 2023 to allow for equity classification. The estimated fair value of this warrant upon reclassification from warrant liabilities to equity was approximately $1.6 million and the estimated fair value of this warrant which was included in warrant liabilities-related party on December 31, 2022 was approximately $2.8 million.

 

25
 

 

Results of Operations

 

Comparison of the Years Ended December 31, 2023 and 2022

 

  

For the Years Ended

December 31,

 
   2023   2022 
EXPENSES          
General and administrative  $6,095,607    10,274,600 
Research and development   5,209,250    4,486,120 
Total expenses   11,304,857    14,760,720 
           
LOSS FROM OPERATIONS   (11,304,857)   (14,760,720)
           
OTHER EXPENSE (INCOME), NET          
Gain on change in fair value of warrant liabilities   (2,035,469)   (907,203)
Interest expense, net   1,524,722    34,397 
Loss on voluntary conversion of convertible debt   1,077,287     
Loss on debt extinguishment   625,653     
Loss on fixed asset disposal   21,747     

Other income, net

   (38,994)     
Total other expense (income), net   1,174,946    (872,806)
           
LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES   (12,479,803)   (13,887,914)
           
(BENEFIT) PROVISION FOR INCOME TAXES   (4,793)   6,548 
           
NET LOSS FROM CONTINUING OPERATIONS   (12,475,010)   (13,894,462)
           
DISCONTINUED OPERATIONS          
Loss from discontinued operations, net of tax   (683,008)   (7,140,181)
Loss on disposal of discontinued operations, net of tax   (602,232)    
LOSS FROM DISCONTINUED OPERATIONS   (1,285,240)   (7,140,181)
           
NET LOSS   (13,760,250)   (21,034,643)
           
Net loss attributable to non-controlling interest from discontinued operations   (343,038)   (2,394,100)
           
Net loss attributable to Qualigen Therapeutics, Inc.  $(13,417,212)  $(18,640,543)
           
Net loss per common share, basic and diluted - continuing operations  $(2.46)  $(3.62)
Net loss per common share, basic and diluted - discontinued operations  $(0.19)  $(1.24)
Weighted—average number of shares outstanding, basic and diluted   5,072,709    3,840,340 
           
Other comprehensive loss, net of tax          
Net loss  $(13,760,250)  $(21,034,643)
Foreign currency translation adjustment from discontinued operations   119,473    50,721 
Other comprehensive loss   (13,640,777)   (20,983,922)
Comprehensive loss attributable to noncontrolling interest from discontinued operations   (304,735)   (2,394,100)
Comprehensive loss attributable to Qualigen Therapeutics, Inc.  $(13,336,042)  $(18,589,822)

 

26
 

 

Expenses

 

General and Administrative Expenses

 

General and administrative expenses decreased from $10.3 million for the year ended December 31, 2022 to $6.1 million for the year ended December 31, 2023. This decrease was due to a $3.8 million decrease in stock-based compensation expense, a $0.4 million decrease in payroll related expenses, a $0.3 million decrease in insurance expenses, and a $0.2 million decrease in license fees, offset by an increase of $0.5 million in professional fees. (The foregoing comparison, and all other comparisons presented in this Item, exclude Qualigen, Inc. and NanoSynex, Ltd. results for both years.)

 

Research and Development Costs

 

Research and development expenses increased from $4.5 million for the year ended December 31, 2022 to approximately $5.2 million for year ended December 31, 2023. This increase in research and development expenses for the year ended December 31, 2023 compared to for the year ended December 31, 2022 was primarily due to a $2.1 million increase in pre-clinical and clinical research costs for QN-302, offset by a $1.0 million decrease in pre-clinical research costs for QN-247 a $0.3 million decrease in preclinical research costs for Pan-RAS, and a $0.1 million decrease in preclinical research costs for QN-165.

 

Other Expense (Income)

 

Change in Fair Value of Warrant Liabilities

 

During the year ended December 31, 2023 we experienced a $2.0 million gain in other income because of the change in fair value of the warrant liabilities arising from our liability classified warrants described above. The estimated fair value of these warrant liabilities decreased to $0.1 million as of December 31, 2023 from $3.6 million as of December 31, 2022 due to a reduction in fair value of the warrant liabilities resulting from an associated decrease in the market price of our common stock, and the reclassification at fair value of a liability classified warrant to equity of $1.6 million. For the year ended December 31, 2022, the gain on change in fair value of warrant liabilities was $0.9 million due to an associated decrease in the market price of our common stock. 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.

 

The remaining liability classified warrants expire on June 26, 2024. Because the fair value of the warrant liabilities will be determined each quarter on a “mark-to-market” basis, this item is likely to, until then, continue to result in variability in our future quarterly Consolidated Statements of Operations based on unpredictable changes in our public market common stock price and the number of warrants outstanding at the end of each quarter.

 

Interest (Income) Expense, Net

 

There was $1.5 million in net interest expense during the year ended December 31, 2023 compared to net interest income of $34,000 during the year ended December 31, 2022. The increase was due to the interest on the 2022 Debenture.

 

Loss on Voluntary Conversion of Convertible Debt

 

During the year ended December 31, 2023 we issued 841,726 shares of common stock upon Alpha’s partial voluntary conversion of the 2022 Debenture at $1.32 per share for a total of $1,111,078 principal converted. Upon conversion, we recognized a loss on voluntary conversion of convertible debt of approximately $1.1 million.

 

Loss on Debt Extinguishment

 

During the year ended December 31, 2023, we issued 309,665 shares of common stock in lieu of cash for the October and December 2023 monthly redemptions, for a total of $220,000 principal redeemed, pursuant to the terms of the 2022 Debenture at a weighted average share price of $0.71. Upon redemption in shares, we recognized a loss on partial debt extinguishment of $34,315. The modification of the 2022 Debenture during the year ended December 31, 2023 met the criteria to be accounted for as a debt extinguishment in the amount of $591,338. Accordingly, we recognized an additional loss on partial debt extinguishment of that amount.

 

Loss on Fixed Asset Disposal

 

During the year ended December 31, 2023, we incurred a $21,747 loss on fixed asset disposal due to disposal of research and development equipment previously used for QN-165.

 

Liquidity and Going Concern

 

Our financial position is weak. As of December 31, 2023, we had approximately $0.4 million in cash and net accounts payable of over $2.2 million. We are in arrears on accounts payable to important partners. We have incurred recurring losses from operations and have an accumulated deficit of $116.8 million at December 31, 2023. We expect to continue to incur losses subsequent to the consolidated balance sheet date of December 31, 2023. For the years ended December 31, 2023 and 2022, we used cash of $10.3 million and $13.2 million, respectively, in operations. We sold our Qualigen, Inc. FastPack® diagnostics products business in 2023.

 

27
 

 

On February 26, 2024, we entered into a Securities Purchase Agreement (“Agreement”) with Alpha. The transactions contemplated by the Agreement closed on February 27, 2024, at which time we delivered to Alpha a new Debenture and warrant, as described in this paragraph, and Alpha paid the Company a cash purchase price of $500,000 (less expenses). Pursuant to the Agreement, we issued to Alpha an 8% Convertible Debenture (the “2024 Debenture”) in the principal amount of $550,000. The 2024 Debenture has a maturity date of 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 $0.6111 per share, subject to adjustment as described in the 2024 Debenture. The 2024 Debenture accrues interest on its outstanding principal balance at the rate of 8% per annum, payable at maturity. Pursuant to the terms of the Agreement, we also issued to Alpha a 5-year common stock purchase warrant to purchase (at $0.26 per share) 900,016 shares of common stock of the Company. 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 1,800,032 additional warrants), which would (if and when Alpha exercises such option) provide us up to an additional $1.0 million in cash proceeds (less expense reimbursement, and not including any possible cash proceeds from any future exercise of the additional warrants).

 

We currently expect our cash balances to fund operations only into the second quarter of 2024. 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 Annual Report were issued.

 

There is no assurance that we will ever achieve profitable operations, or, if achieved, could be sustained on a continuing basis. In order to fully execute our business plan, we will require significant additional financing for planned research and development activities, capital expenditures, QN-302 clinical trials, and preclinical development of Pan-RAS, as well as commercialization activities.

 

Historically, our principal sources of cash have, in addition to revenue from FastPack product sales and license revenues (see Note 5 - Discontinued Operations), included proceeds from the issuance of common and preferred equity and proceeds from the issuance of debt. In December 2022 and February 2024 we raised approximately $3.0 million and $0.5 million, respectively from the sale of convertible debentures to Alpha. There can be no assurance that further financing can be obtained on favorable terms, or at all. If we are unable to obtain funding, we could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, and we could be unable to continue operations.

 

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. In addition, any future financing (depending on the terms and conditions) may be subject to the approval of Alpha under the terms of the Debentures and/or trigger certain adjustments to the Debentures or warrants held by Alpha.

 

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.

 

Our current liabilities at December 31, 2023 include $2.2 million of accounts payable, $0.6 million of accrued expenses and other current liabilities, $0.1 million in warrant liabilities, and $1.3 million of convertible debt to a related party.

 

Contractual Obligations and Commitments

 

We have no material contractual obligations that are not fully recorded on our 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.

 

28
 

 

We have multiple license and sponsored research 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. We agreed to reimburse ULRF for sponsored research expenses of up to $2.7 million and prior patent costs of up to $112,000 for Pan-RAS. As of December 31, 2023, there were no remaining un-expensed amounts under this sponsored research agreement for Pan-RAS. 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.

 

We previously had sponsored research agreements with ULRF for QN-247 and QN-165. As of December 31, 2023, there were no remaining un-expensed amounts under these sponsored research agreements and the agreements were terminated effective August 31, 2022, and November 30, 2021 respectively.

 

On January 13, 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 is included in accounts payable in our consolidated balance sheet.

 

Alpha Convertible Debt

 

On December 22, 2022, pursuant to the terms of a Securities Purchase Agreement, dated December 21, 2022 (the “Alpha Purchase Agreement”), we issued to Alpha, in exchange for $3,000,000 in cash (less $50,000 for expense reimbursement), the 2022 Debenture with an original face amount of $3,300,000 due on December 22, 2025, plus 2,500,000 common stock warrants exercisable (from June 22, 2023 through June 22, 2028) at $1.65 per share.

 

Commencing June 1, 2023 and continuing on the first day of each month thereafter until the earlier of (i) December 22, 2025 and (ii) the full redemption of the 2022 Debenture, we must redeem $110,000 plus accrued but unpaid interest, liquidated damages and any amounts then owing under the 2022 Debenture. The Monthly Redemption Amount must be paid in cash; provided that after the first two monthly redemptions, we may (if the Equity Conditions, as defined in the 2022 Debenture, are then satisfied or have been waived) elect to pay all or a portion of a Monthly Redemption Amount in shares of our common stock, based on a conversion price equal to the lesser of (i) the then applicable conversion price of the 2022 Debenture and (ii) 85% of the average of the VWAPs (as defined in the 2022 Debenture) for the five consecutive trading days ending on the trading day that is immediately prior to the applicable Monthly Redemption Date.

 

The 2022 Debenture accrues interest at the rate of 8% per annum, which began accruing on December 1, 2023, and will be payable on a quarterly basis. Interest may be paid in cash or shares of common stock or a combination thereof at our option; provided that the Equity Conditions have been satisfied.

 

Alpha has waived the Equity Conditions for certain Monthly Redemption Amounts, but Alpha is not required to continue such waivers beyond May 2024. For the foreseeable future, we do not expect to be able to satisfy the Equity Conditions; as a result, where there is no waiver of the Equity Conditions we would not have the opportunity to make 2022 Debenture payments in the form of stock rather than in the form of cash, even for types of payments for which payment in the form of stock would have been allowed.

 

The 2022 Debenture is convertible into our common stock at any time at the holder’s option; the conversion price was originally $1.32 but pursuant to a Securities Purchase Agreement amendment it was reduced to $0.73 on December 5, 2023 and then on February 27, 2024 it was adjusted downward to $0.26 per share by virtue of the operation of a “ratchet” antidilution provision. (The exercise price of the warrants issued with the 2022 Debenture was originally $1.65 but pursuant to the Securities Purchase Agreement amendment it was reduced to $0.73 on December 5, 2023 and then on February 27, 2024 it was adjusted downward to $0.26 per share by virtue of the operation of a “ratchet” antidilution provision.)

 

Both the 2022 Debenture and the accompanying warrants provide for “ratchet” antidilution adjustments to their conversion price and exercise price.

 

Both the 2022 Debenture and the accompanying warrants include a beneficial ownership blocker of 9.99%, which may only be waived by Alpha upon 61 days’ notice to the Company.

 

29
 

 

We granted Alpha resale registration rights for the common shares underlying the 2022 Debenture and the accompanying warrants.

 

On December 5, 2023, we entered into an Amendment No. 1 with regard to Securities Purchase Agreement, with Alpha, which, among other things, revised certain provisions of the 2,500,000 warrants to clarify the intention that such 2,500,000 warrants would not be liability-classified for GAAP purposes.

 

During the year ended December 31, 2023, we recognized an extinguishment loss on voluntary conversion of convertible debt of approximately $1.1 million, an extinguishment loss of $0.6 million upon October and December 2023 share redemptions and the modification of the 2022 Debenture in December 2023, and recorded accrued interest of approximately $1.5 million, in other expenses in the consolidated statements of operations. During the year ended December 31, 2023 we paid Monthly Redemption Amounts of $550,000 in cash and $220,000 in common stock, and as of December 31, 2023 the remaining 2022 Debenture principal balance was approximately $1.4 million, the remaining discount was approximately $0.1 million, and the fair value of the suite of bifurcated embedded derivative features was $0.

 

Reference is also made to the 2024 Debenture, which was issued to Alpha after the end of the 2023 fiscal year and is described above.

 

NanoSynex Funding Agreement

 

As a condition to our acquisition of a majority voting equity interest in NanoSynex from Alpha and NanoSynex, we entered into a Master Agreement for the Operational and Technological Funding of NanoSynex (the “Funding Agreement”), on May 26, 2022, pursuant to which we agreed to fund NanoSynex up to an aggregate of approximately $10.4 million, subject to NanoSynex’s achievement of certain performance milestones specified in the Funding Agreement and the satisfaction of other terms and conditions described in the Funding Agreement.

 

During the year ended December 31, 2022, we funded a total of approximately $2.4 million and in February 2023 we funded an additional $0.5 million to NanoSynex under the Funding Agreement.

 

On July 20, 2023, we entered into the NanoSynex Amendment, which amended the Funding Agreement, pursuant to which the Company agreed to, among other things, forfeit 281,000 Series B Preferred Shares of NanoSynex held by the Company, resulting in our ownership in NanoSynex being reduced from approximately 52.8% to approximately 49.97% of the voting equity of NanoSynex. In addition, we agreed to cancel approximately $3.0 million of promissory notes which NanoSynex had issued to us under the NanoSynex Funding Agreement, relieving NanoSynex of any repayment obligations to us with respect to such notes. The surrender of shares reducing our interest in NanoSynex from approximately 52.8% to approximately 49.97% occurred on July 20, 2023. Accordingly, NanoSynex was deconsolidated from our financial statements as of July 20, 2023, and is reported as Discontinued Operations in this Annual Report.

 

The NanoSynex Amendment superseded any payment obligations contemplated by the original Funding Agreement and amended our obligations to provide funding to NanoSynex, except we agreed to provide future funding as follows: (i) $560,000 on or before November 30, 2023, and (ii) $670,000 on or before March 31, 2024, in each case issued in the form of a promissory note to the Company with a face value in the amount of such funding. However, on November 22, 2023, in full settlement of any additional funding obligations to NanoSynex, we forfeited certain of our shares of Series A-1 Preferred Stock of NanoSynex in an amount that reduced our ownership in NanoSynex from approximately 49.97% to 39.90%. Our investment in NanoSynex will be accounted as an equity method investment prospectively from the July 20, 2023 deconsolidation date.

 

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.

 

30
 

 

Cash Flows

 

The following table sets forth the significant sources and uses of cash for the periods set forth below:

 

   For the Twelve Months Ended 
   December 31, 
   2023   2022 
Net cash (used in) provided by:          
Operating activities  $(10,304,263)  $(13,247,541)
Investing activities   4,215,943    (183,763)
Financing activities   (550,000)   2,910,515 
Effect of exchange rate on cash       22,639 
Net decrease in cash and restricted cash  $(6,638,320)  $(10,498,150)

 

Net Cash Used in Operating Activities

 

During the year ended December 31, 2023, operating activities used $10.3 million of cash, primarily resulting from a loss from continuing operations of $12.5 million. Cash flows from operating activities for the year ended December 31, 2023 were positively impacted by adjustments for a $1.1 million non cash loss on voluntary conversion of convertible debt, a $0.6 million non cash loss on convertible debt extinguishment, accretion of discount of $1.5 million on convertible debt, a $1.6 million increase in accounts payable, and $1.1 million in non cash stock-based compensation expense. Cash flows from operating activities for the year ended December 31, 2023 were negatively impacted by adjustments for a $2.0 million decrease in fair value of warrant liabilities, a $0.3 million increase in prepaid expenses and other assets, a $0.2 million decrease in accrued expenses and other current liabilities, and cash used in discontinued operations of $1.2 million.

 

During the year ended December 31, 2022, operating activities used $13.2 million of cash, primarily resulting from a loss from continuing operations of $13.9 million. Cash flows from operating activities for the year ended December 31, 2022 were positively impacted by an adjustment for $4.8 million in non cash stock-based compensation expense. Cash flows from operating activities for the year ended December 31, 2022 were negatively impacted by cash used in discontinued operations of $2.6 million, a $0.9 million decrease in fair value of warrant liabilities, a $0.5 million decrease in accrued expenses and other current liabilities, and a $0.1 million increase in prepaid expenses.

 

Net Cash Provided By Investing Activities

 

During the year ended December 31, 2023, net cash provided by investing activities was approximately $4.2 million resulting from discontinued operations due to $4.9 million in proceeds received from the sale of Qualigen, Inc., offset by $0.5 million advanced to NanoSynex, and $0.2 million in purchases of property and equipment prior to deconsolidation.

 

During the year ended December 31, 2022, net cash used in investing activities was approximately $0.2 million, due to capital expenditures offset by cash acquired in the NanoSynex acquisition.

 

Net Cash Provided by Financing Activities

 

Net cash provided by financing activities for the year ended December 31, 2023, was approximately $0.6 million, due to monthly redemption payments which we made in the form of stock (rather than in the form of cash) on the 2022 Debenture.

 

Net cash provided by financing activities for the year ended December 31, 2022, was approximately $2.9 million, due to the issuance of convertible debt to Alpha.

 

Item 7A. 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.

 

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Item 8. Consolidated Financial Statements and Supplementary Data

 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 

    Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 23)   33
Consolidated Balance Sheets   35
Consolidated Statements of Operations and Comprehensive Loss   36
Consolidated Statements of Stockholders’ Equity   37
Consolidated Statements of Cash Flows   38
Notes to Consolidated Financial Statements   39

 

32
 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of Qualigen Therapeutics, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Qualigen Therapeutics, Inc. (the “Company”) as of December 31, 2023 and December 31, 2022, the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and December 31, 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern Uncertainty

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company’s current liquidity position and projected cash needs raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Critical Audit Matter

 

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

  

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Accounting for Financial Instruments – Modification of Convertible Debt with Warrants

 

Critical Audit Matter Description

 

As described in Note 8 to the consolidated financial statements, during the year ended December 31, 2023, the Company modified the conversion price and strike price of its convertible debenture and common stock purchase warrants, respectively. Further, the Company modified certain terms of its stock warrant agreements that were originally classified as liabilities enabling them to be classified as equity.

 

We identified the accounting for the modification of this complex financial instrument as a critical audit matter. This includes both the evaluation of the various features as potential embedded derivatives and the determination of the respective fair value of the instruments and the embedded features, as well as the determination of the appropriate classification of warrants between equity and liabilities. The application of the accounting guidance applicable to issuing and modifying a complex financial instrument requires significant judgment.

 

Determination of appropriate classification of warrants requires management’s judgments relating to the interpretations of relevant accounting guidance based on specific provisions of the warrant agreement. Accounting for the convertible notes and embedded conversion features requires management’s judgments related to initial and subsequent recognition of the debt and related features, use of a valuation model, and key inputs used in the selected valuation model.

 

How We Addressed the Matter in Our Audit

 

The primary procedures we performed to address this critical audit matter included:

 

  Inspecting the agreements associated with the transactions and evaluating management’s technical accounting analysis, including the application of the relevant accounting literature.
     
  Utilizing an auditor’s specialist to assist in assessing management’s analysis of the transaction, including (i) evaluating the contracts to identify relevant terms that affect the recognition of the financial instruments, (ii) assessing the appropriateness of conclusions reached by management, and (iii) reviewing the valuation model for derivatives, performing independent calculations, and examining the significant assumptions utilized in the valuation model.

 

/s/ Baker Tilly US, LLP

 

We have served as the Company’s auditor since 2018.

 

San Diego, California

April 5, 2024

 

34
 

 

QUALIGEN THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

 

   December 31,   December 31, 
   2023   2022 
ASSETS          
Current assets          
Cash  $401,803   $3,165,985 
Prepaid expenses and other current assets   764,964    1,366,704 
Current assets of discontinued operations       6,287,849 
Total current assets   1,166,767    10,820,538 
Property and equipment, net       26,242 
Other assets   866,481     
Non-current assets of discontinued operations       8,236,711 
Total Assets  $2,033,248   $19,083,491 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)          
Current liabilities          
Accounts payable  $2,222,983   $619,568 
Accrued expenses and other current liabilities   560,006    864,559 
Warrant liabilities   54,600    788,100 
Warrant liabilities - related party       2,834,547 
Convertible debt - related party   1,299,216    60,197 
Current liabilities of discontinued operations       3,441,198 
Total current liabilities   4,136,805    8,608,169 
Non-current liabilities of discontinued operations       1,708,732 
Total liabilities   4,136,805    10,316,901 
Commitments and Contingencies (Note 10)   -    - 
Stockholders’ equity (deficit)          
Qualigen Therapeutics, Inc. stockholders’ equity (deficit):          
Common stock, $0.001 par value; 225,000,000 shares authorized; 5,362,128 and 4,210,737 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively   43,262    42,110 
Additional paid-in capital   114,655,565    110,528,050 
Accumulated other comprehensive income       50,721 
Accumulated deficit   (116,802,384)   (103,385,172)
Total Qualigen Therapeutics, Inc. stockholders’ equity (deficit)   (2,103,557)   7,235,709 
Noncontrolling interest       1,530,881 
Total Stockholders’ Equity (deficit)   (2,103,557)   8,766,590 
Total Liabilities & Stockholders’ Equity (Deficit)  $2,033,248   $19,083,491 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

35
 

 

QUALIGEN THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 

       
   For the Years Ended
December 31,
 
   2023   2022 
EXPENSES          
General and administrative  $6,095,607    10,274,600 
Research and development   5,209,250    4,486,120 
Total expenses   11,304,857    14,760,720 
           
LOSS FROM OPERATIONS   (11,304,857)   (14,760,720)
           
OTHER EXPENSE (INCOME), NET          
Gain on change in fair value of warrant liabilities   (2,035,469)   (907,203)
Interest expense, net   1,524,722    34,397 
Loss on voluntary conversion of convertible debt   1,077,287     
Loss on debt extinguishment   625,653     
Loss on fixed asset disposal   21,747     
Other income, net   (38,994)    
Total other expense (income), net   1,174,946    (872,806)
           
LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES   (12,479,803)   (13,887,914)
           
(BENEFIT) PROVISION FOR INCOME TAXES   (4,793)   6,548 
           
NET LOSS FROM CONTINUING OPERATIONS   (12,475,010)   (13,894,462)
           
DISCONTINUED OPERATIONS          
Loss from discontinued operations, net of tax   (683,008)   (7,140,181)
Loss on disposal of discontinued operations, net of tax   (602,232)    
LOSS FROM DISCONTINUED OPERATIONS   (1,285,240)   (7,140,181)
           
NET LOSS   (13,760,250)   (21,034,643)
           
Net loss attributable to non-controlling interest from discontinued operations   (343,038)   (2,394,100)
           
Net loss attributable to Qualigen Therapeutics, Inc.  $(13,417,212)  $(18,640,543)
           
Net loss per common share, basic and diluted - continuing operations  $(2.46)  $(3.62)
Net loss per common share, basic and diluted - discontinued operations  $(0.19)  $(1.24)
Weighted-average number of shares outstanding, basic and diluted   5,072,709    3,840,340 
           
Other comprehensive loss, net of tax          
Net loss  $(13,760,250)  $(21,034,643)
Foreign currency translation adjustment from discontinued operations   119,473    50,721 
Other comprehensive loss   (13,640,777)   (20,983,922)
Comprehensive loss attributable to noncontrolling interest from discontinued operations   (304,735)   (2,394,100)
Comprehensive loss attributable to Qualigen Therapeutics, Inc.  $(13,336,042)  $(18,589,822)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

36
 

 

QUALIGEN THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

 

   Shares                      
   Common Stock  

Additional

  

Accumulated

Other Comprehensive

     

Total

Qualigen

Therapeutics, Inc.

Stockholders’

     

Total

Stockholders’

 
   Shares   Amount  

Paid-In

Capital

  

Income (Deficit)

  

Accumulated

Deficit

   Equity (Deficit)  

Noncontrolling

Interest

   Equity (Deficit) 
Balance at December 31, 2022   4,210,737   $42,110   $110,528,050   $50,721   $(103,385,172)  $7,235,709   $1,530,881   $8,766,590 
Voluntary conversion of convertible debt into common stock   841,726    842    1,111,740            1,112,582        1,112,582 
Redemptions of convertible debt into common stock   

309,665

    

310

    

254,006

    

    

    

254,316

    

    

254,316

 
Fair value of warrant modification for professional services           7,945            7,945        7,945 
Fair value of warrant reclassified from liabilities to equity           1,626,694            1,626,694        1,626,694 
Stock-based compensation           1,098,533            1,098,533    9,297    1,107,830 
Foreign currency translation adjustment           28,597    81,170        109,767    38,303    148,070 
Deconsolidation of discontinued operations               (131,891)       (131,891)   (1,235,443)   (1,367,334)
Net loss                   (13,417,212)   (13,417,212)   (343,038)   (13,760,250)
Balance at December 31, 2023   5,362,128   $43,262   $114,655,565   $   $(116,802,384)  $(2,103,557)  $   $(2,103,557)

 

   Common Stock  

Additional

  

Accumulated

Other

     

Total

Qualigen

Therapeutics, Inc.

     

Total

 
   Shares   Amount  

Paid-In

Capital

  

Comprehensive

Income

  

Accumulated

Deficit

  

Stockholders’

Equity

  

Noncontrolling

Interest

  

Stockholders’

Equity

 
Balance at December 31, 2021   3,529,018   $35,290   $101,274,073   $   $(84,744,629)  $16,564,734   $   $16,564,734 
Stock issued upon exercise of warrants   332,000    3,320    4,711            8,031        8,031 
Stock-based compensation           5,484,044            5,484,044        5,484,044 
Common stock and prefunded warrants issued for business acquisition   350,000    3,500    3,740,417            3,743,917    3,882,225    7,626,142 
 Noncontrolling interest adjustments relating to Stock-based compensation and other           (42,756)           (42,756)   42,756     
Foreign currency translation adjustment               50,721        50,721        50,721 
Fair value of warrant modification for professional services           67,370            67,370        67,370 
Fair value of warrant modification for business acquisition           696            696        696 
Issuance of rounded shares as a result of the reverse stock split   (281)       (505)           (505)       (505)
Net loss                   (18,640,543)   (18,640,543)   (2,394,100)   (21,034,643)
Balance at December 31, 2022   4,210,737   $42,110   $110,528,050   $50,721   $(103,385,172)  $7,235,709   $1,530,881   $8,766,590