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, 2024
or
☐** TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**
For the transition period from ________ to ________
Commission File Number:001-37846
(Exact name of registrant as specified in its charter)
| State of Israel | | 92-2593104 |
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| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
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42127 Pleasant Forest Court
Ashburn**,VA 20148-**7349
(Address of principal executive offices; Zip Code)
**Registrant’s telephone number, including area code: (703)**980-4182
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
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| American Depositary Shares, each representing one (1) Ordinary Shares, no par value per share | | QNRX | | The Nasdaq Stock Market LLC |
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| Ordinary Shares, no par value per share* | | | | N/A |
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| * | Not for trading, but only in connection with the registration of the American Depositary Shares pursuant to requirements of the Securities and Exchange Commission. |
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Securities registered or to be 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 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 an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Large accelerated filer | ☐ | | Accelerated filer | ☐ |
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| Non-accelerated filer | ☒ | | | Smaller reporting company | ☒ |
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| | | | | Emerging growth company | ☐ |
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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 Exchange Act). Yes☐ No☒
The aggregate market value of the registrant’s voting equity held by non-affiliates, computed by reference to the closing price at which the American Depositary Shares (“ADS”) were last sold on The Nasdaq Stock Market LLC as of June 30, 2024, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $2.3 million. The registrant has no non-voting common equity.
As of March 10, 2025, the registrant had 20,585,830 ordinary shares, no par value per share, outstanding, and 20,585,830 ADSs outstanding (assuming all ordinary shares are represented by ADSs), with each ADS representing one (1) ordinary share.
GENERAL INFORMATION
Unless otherwise indicated or the context otherwise requires, all references in this Annual Report on Form 10-K (the “Annual Report”) to the terms “Quoin,” “Quoin Ltd.,” the “Company,” “us,” “we”, “our” and the “Registrant” refer to Quoin Pharmaceuticals Ltd., an Israeli company, and its consolidated subsidiaries. In this Annual Report, the U.S. Securities and Exchange Commission is referred to as the “SEC”, the Securities Act of 1933, as amended, is referred to as the “Securities Act” and the Securities Exchange Act of 1934, as amended, is referred to as the “Exchange Act.”
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**
**** AND SUMMARY OF RISK FACTORS**
Certain information included in this Annual Report may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Forward-looking statements are often characterized by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “continue,” “believe,” “should,” “intend,” “project” or other similar words, but are not the only way these statements are identified.
These forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, statements that contain projections of results of operations or of financial condition, expected capital needs and expenses, statements relating to the research, development, completion and use of our products, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future.
Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. We have based these forward-looking statements on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.
Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things:
| ● | our limited operating history and the difficulties encountered by a small developing company; |
| ● | our history of losses and need for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all; |
| ● | our lack of revenue and potential inability to be profitable; |
| ● | uncertainties of cash flows and inability to meet working capital needs; |
| ● | our ability to obtain regulatory approvals; |
| ● | our ability to generate favorable pre-clinical and clinical trial results; |
| ● | our ability to identify and develop potential product candidates; |
| ● | additional costs or delays associated with unsuccessful clinical trials; |
| ● | the inability to predict the timing of revenue from sales of a future product; |
| ● | the extensive regulatory requirements and future developmental and regulatory challenges we will still face even if we obtain approval for a product candidate; |
| ● | our ability to obtain or maintain orphan drug designation or data exclusivity for our product candidates; |
| ● | our ability to obtain Orphan Disease and Rare Pediatric Disease designations for our product candidates; |
| ● | the potential oversight of programs or product candidates that may be more profitable or more successful; |
| ● | our manufacturing processes may not be validated and our methodology may not be accepted by the scientific community; |
| ● | the ability to conduct clinical trials, because of difficulties enrolling patients or other reasons; |
| ● | the requirements of being a publicly traded company may strain our resources; |
| ● | potential adverse effects resulting from failure to maintain effective internal controls; |
| ● | our ability to comply with the applicable continued listing requirements of Nasdaq; |
| ● | the potential negative impact on our securities price and trading volume if securities or industry analysts do not publish reports about us or if they adversely change their recommendations about our business; |
| ● | the potential volatility of the market price for our ADSs; |
| ● | the potential dilution of our shareholders’ potential ownership due to future issuances of share capital; |
| ● | the requirement for holders of ADSs to act through the depositary to exercise their rights; |
| ● | the potential limitations on ADS holders with respect to the transfer of their ADSs; |
| ● | the risks of securities class action litigation; and |
| ● | other risks and uncertainties, including those listed under Part I, Item 1A of this Annual Report titled “Risk Factors.” |
You are urged to carefully review and consider the various disclosures made throughout this Annual Report which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
You should not put undue reliance on any forward-looking statements. Although the forward-looking statements in this Annual Report are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
In addition, certain sections of this Annual Report contain information obtained from independent industry sources and other sources that we have not independently verified.
SUMMARY OF RISK FACTORS
An investment in our Company is subject to a number of risks. Set forth below is a high-level summary of some, but not all, of these risks. You should review and consider carefully the risks and uncertainties described in more detail in “Part I, Item 1A. Risk Factors” of this Annual Report, which includes a more complete discussion of the risks summarized below as well as a discussion of other risks related to our business and an investment in our securities.
Risks Related to Our Financial Position and Capital Requirements
| ● | We have a limited operating history that you can use to evaluate us, and the likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company. |
| ● | We have incurred significant losses since our inception and have limited cash available for our operations. |
| ● | We have never generated any revenue from product sales or any other sources since inception, and may never be profitable. |
| ● | We expect that we will need to raise additional capital, which may not be available on acceptable terms, or at all. |
Risks Related to the Discovery and Development of Product Candidates
| ● | Preclinical and clinical studies of our product candidates may not be successful. If we are unable to generate successful results from preclinical and clinical studies of our product candidates, or experience significant delays in doing so, our business may be materially harmed. |
| ● | We may not be successful in our efforts to identify or develop potential product candidates. |
| ● | If clinical trials of our product candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates. |
| ● | Any of our product candidates may cause undesirable side effects or have other properties impacting safety that could delay or prevent their regulatory approval or limit the scope of any approved label or market acceptance. |
| ● | Even if we complete the necessary preclinical studies and clinical trials, we cannot predict whether or when we will obtain regulatory approval to commercialize a product candidate and we cannot, therefore, predict the timing of any revenue from a future product. |
| ● | Even if we obtain regulatory approval for a product candidate, we will still face extensive regulatory requirements and our products may face future development and regulatory challenges. |
| ● | We may not be able to obtain or maintain orphan drug designation or exclusivity for our product candidates. |
| ● | We may pursue Rare Pediatric Disease designation for QRX003 for the treatment of NS or other of our product candidates. There is no assurance that we will obtain such designation. Moreover, a Rare Pediatric Disease designation by the FDA does not guarantee that the NDA for the product will qualify for a priority review voucher upon approval, and it does not lead to a faster development or regulatory review process, or increase the likelihood that any of our product candidates will receive marketing approval. |
| ● | We may use our financial and human resources to pursue a particular research program or product candidate and fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater likelihood of success. |
| ● | We expect competition in the marketplace for our product candidates, should any of them receive regulatory approval. |
Risks Related to Our Reliance on Third Parties
| ● | We rely on third parties to conduct some aspects of our compound formulation, research and preclinical studies, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such formulation, research or testing. |
| ● | We rely, or will rely, on third-party manufacturers to produce the supply of our preclinical product, clinical product candidates and commercial supplies of any approved product candidates. |
Risks Related to Our Intellectual Property
| ● | If we are unable to obtain or protect intellectual property rights related to our future products and product candidates, we may not be able to compete effectively in our markets. |
| ● | Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts. |
| ● | If we fail to obtain licenses or comply with our obligations in these agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business. |
Other Risks Related to Our Business Operations and Industry
| ● | Our future success depends on our ability to attract and retain key executives and to attract, retain and motivate qualified personnel. |
| ● | We may need to expand our organization and may experience difficulties in managing our growth, which could disrupt our operations. |
| ● | Our operations may be impacted from changes to current regulations and future legislation. |
Risks Related to Us Being an Israeli Company
| ● | Shareholders may have difficulties enforcing a U.S. judgment, including judgments based upon the civil liability provisions of the U.S. federal securities laws, against us or our executive officers and directors, or asserting U.S. securities laws claims in Israel. |
| ● | The rights and responsibilities of our shareholders are governed by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of U.S. corporations. |
| ● | Provisions of Israeli law may delay, prevent or otherwise impede a merger with, or an acquisition of, our company, which could prevent a change of control, even when the terms of such a transaction are favorable to us and our shareholders. |
Risks Related to Ownership of Our ADSs and Ordinary Shares
| ● | We do not know whether a market for our securities will be sustained and as a result it may be difficult for shareholders to sell our securities. |
| ● | The requirements of being a publicly traded company may strain our resources and divert management’s attention. |
| ● | Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business, results of operation or financial condition. In addition, current and potential shareholders could lose confidence in our financial reporting, which could have a material adverse effect on the price of the ADSs. |
| ● | Our failure to meet the continued listing requirements of the Nasdaq Capital Market could result in a delisting of our ADSs. |
| ● | The market price for our ADSs may be volatile. |
| ● | Substantial future sales or perceived potential sales of our ADSs in the public market could cause the price of our ADSs decline. |
| ● | Our shareholders may experience substantial dilution as a result of future issuances of our equity securities. |
| ● | We have not paid, and do not intend to pay, dividends on our ordinary shares and, therefore, unless our traded securities appreciate in value, our investors may not benefit from holding our securities. |
| ● | Holders of ADSs must act through the depositary to exercise their rights. |
| ● | Holders of ADSs may be subject to limitations on the transfer of their ADSs. |
