Quoin Pharmaceuticals, Ltd.

Previous wording

We are a late-stage clinical specialty pharmaceutical company focused on the development and commercialization of therapeutic products that treat rare and orphan diseases for which there are currently either no approved or very limited treatments or cures. Our lead product, QRX003, is in late-stage clinical development as a potential treatment for Netherton Syndrome, a rare hereditary genetic disease. QRX003 is currently being tested in three regulatory clinical studies under an open IND application with the FDA. We have opened five clinical sites in the US and intend to open a sixth US clinical site at Northwestern University. We are expanding our trials internationally into the Middle East, the United Kingdom and additional countries in Western and Eastern Europe. QRX003 is currently being tested in a pediatric NS patient at the Children’s Hospital in Dublin, Ireland and we intend to expand this study to include additional children with NS in Spain, the United Kingdom and potentially other countries. QRX003 is also being developed as a potential treatment for Peeling Skin Syndrome with the first subject being treated in New Zealand. In addition, we entered into two separate Research Agreements with the Queensland University of Technology, under which we have obtained an option for global licenses to QRX007 for the potential treatment of NS and QRX008 for the potential treatment of scleroderma, as well as a Research Agreement with University College Cork for the development of novel topical formulations of Rapamycin (sirolimus) as potential treatments for a number of rare and orphan diseases for which there are either limited or no approved therapies or cures. Other development products in our pipeline include QRX004 as a potential treatment for Recessive Dystrophic Epidermolysis Bullosa.

Current wording

We are a late-stage clinical specialty pharmaceutical company focused on the development and commercialization of therapeutic products that treat rare and orphan diseases for which there are currently either no approved or very limited treatments or cures. Our lead product, QRX003, is in late-stage clinical development as a potential treatment for Netherton Syndrome, a rare hereditary genetic disease. QRX003 is currently being tested in two pivotal registrational clinical studies under an open IND application with the FDA. We have opened five clinical sites in the US and intend to open a sixth US clinical site at Northwestern University. We are expanding our trials internationally into the Middle East, the United Kingdom and additional countries in Europe, including Spain and Germany. QRX003 is currently being tested in two pediatric NS patients at the Children’s Hospital in Dublin, Ireland and we intend to expand this study to include additional children with NS in Spain, the United Kingdom and potentially other countries. QRX003 is also being developed as a potential treatment for Peeling Skin Syndrome with the first subject being treated in New Zealand. In addition, we entered into a Research Agreement with the Queensland University of Technology, under which we have obtained an option for a global license to QRX008 for the potential treatment of scleroderma, as well as a Research Agreement with University College Cork for the development of novel topical formulations of Rapamycin (sirolimus) as potential treatments for a number of rare and orphan diseases for which there are either limited or no approved therapies or cures, including microcystic lymphatic malformations, venous malformations and angiofibroma’s.

Previous wording

On April 29, 2024, we received a letter from the Listing Qualifications staff Nasdaq notifying us that the closing bid price per ADS was below the required minimum of $1.00 for a period of 30 consecutive business days and that we did not meet the Minimum Bid Price Requirements set forth in Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Rule 5810(c)(3)(A), we had an initial period of one hundred eighty (180) calendar days, or until October 28, 2024, which was subsequently extended for an additional one hundred eighty (180) calendar days, or until April 28, 2025, to regain compliance with Nasdaq’s Minimum Bid Price Requirement.

Current wording

On April 29, 2024, we received a letter from the Listing Qualifications staff of Nasdaq notifying us that the closing bid price per our American Depositary Shares (“ADSs”) evidencing our ordinary shares (“Ordinary Shares”) was below the required minimum of $1.00 for a period of 30 consecutive business days and that we did not meet the Minimum Bid Price Requirements set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). Pursuant to Nasdaq Rule 5810(c)(3)(A), we had an initial period of one hundred eighty (180) calendar days, or until October 28, 2024, which was subsequently extended for an additional one hundred eighty (180) calendar days, or until April 28, 2025, to regain compliance with Nasdaq’s Minimum Bid Price Requirement. In order to regain compliance with the Minimum Bid Price Requirement, on April 9, 2025 we effected a change in the ratio of our ADSs from one (1) ADS representing one (1) Ordinary Share to one (1) ADS representing thirty-five (35) Ordinary Shares (the “Ratio Change”), which resulted in a 1 for 35 reverse split of the issued and outstanding ADSs (the “Reverse Split”). Our Ordinary Shares were not affected by this adjustment. On April 29, 2025, we received a letter from Nasdaq stating that our closing bid price per ADS was at $1.00 or greater for the last 13 consecutive business days. Accordingly, we regained compliance with Listing Rule 5550(a)(2) and the matter was closed.

Previous wording

There can be no assurance that we will be able to maintain compliance with Nasdaq’s Minimum Bid Price Requirement for continued listing. If our ADSs are delisted from Nasdaq, it will have a material negative impact on the actual and potential liquidity of our securities, as well as a material negative impact on our ability to raise future capital.

Current wording

There can be no assurance that we will be able to maintain compliance with Nasdaq’s Minimum Bid Price Requirement for continued listing. If our ADSs were delisted from Nasdaq, it would have a material negative impact on the actual and potential liquidity of our securities, as well as a material negative impact on our ability to raise future capital.

Previous wording

General and administrative expenses were approximately $1,583,000 and $1,573,000, in the three months ended March 31, 2025 and 2024, respectively, representing an increase of $10,000, or approximately 0.6%. The increase was primarily due to an increase of $108,000 in legal and professional fees and $113,000 in public company costs, offset by, a decrease of $28,000 in insurance costs and a decreases in payroll and benefits of $154,000 and non-cash stock-based compensation expense of $16,000 due to increased allocation of such costs to research and development expenses.

Current wording

General and administrative expenses were approximately $1,743,000 and $1,550,000, in the three months ended June 30, 2025 and 2024, respectively, representing an increase of $193,000, or approximately 12.5%. The increase was primarily due to an increase of $155,000 in consulting costs, $51,000 in marketing and website expenses, $50,000 in legal and professional fees and $25,000 in corporate Delaware tax costs, offset by, decreases of $41,000 in payroll and benefits, $33,000 in travel costs, $26,000 in insurance costs, and non-cash stock-based compensation expense of $10,000 due to increased allocation of such costs to research and development expenses.

Previous wording

Our research and development expenses during the three months ended March 31, 2025 and 2024 were approximately $2,374,000 and $885,000, respectively, representing an increase of $1,489,000, or approximately 168.2%. The increase was primarily due to $1,140,000 in increased external expenditures on our development programs, including work related to the clinical studies for the development of QRX003, an increase of payroll and benefits of $147,000 and $70,000 of non-cash stock-based compensation expense allocated to research and development expenses, and $131,000 of increased other research and development expenditures including our research collaboration with University College Cork. See “Components of Our Results of Operations - Research and Development Expenses” above.

Current wording

Our research and development expenses during the three months ended June 30, 2025 and 2024 were approximately $2,051,000 and $588,000, respectively, representing an increase of $1,463,000, or approximately 248.8%. The increase was primarily due to $1,431,000 in increased external expenditures on our development programs, including work related to the clinical studies for the development of QRX003, an $18,000 increase in non-cash stock-based compensation expense allocated to research and development expenses, and $14,000 of increased other research and development expenditures including our research collaboration with University College Cork. See “Components of Our Results of Operations - Research and Development Expenses” above.

Previous wording

We had approximately $145,000 in realized and accrued interest income in the three months ended March 31, 2025 from our cash and cash equivalents and investments in marketable debt securities. We had $6,500 in unrealized loss and $138,000 in realized gain and accrued interest income in the three months ended March 31, 2024 from our cash and cash equivalents and investments in marketable debt securities.

Current wording

We had approximately $6,000 in unrealized loss and $103,000 in realized gain and accrued interest income in the three months ended June 30, 2025 from our cash and cash equivalents and investments in marketable debt securities. We had approximately $2,000 in unrealized loss and $165,000 in realized gain and accrued interest income in the three months ended June 30, 2024 from our cash and cash equivalents and investments in marketable debt securities.

Previous wording

We have incurred net losses every year since inception and had an accumulated deficit of approximately $59.0 million at March 31, 2025. We have a limited operating history and have historically funded our operations through debt and equity financings. We incurred net losses of approximately $3.8 million and negative cash flows from operations of $2.6 million for the three months ended March 31, 2025. At March 31, 2025, we had cash and cash equivalent balances totaling $3.8 million and investments of $7.7 million. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of planned clinical trials and our expenditures on other research and development activities. Despite our recent financing in December 2024, pursuant to which we raised gross proceeds of approximately $6.8 million, based upon the Company’s current business plans and cash, cash equivalents and investments on hand, management has concluded that there is substantial doubt about our ability to continue as a going concern for a period of at least one year from the issuance of the unaudited consolidated financial statements included in this report. We need to raise further capital through the sale of additional equity or debt securities or other debt instruments, strategic relationships or grants to support our future operations. We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain marketing approval for one or more of our product candidates, which we expect will take a number of years and is subject to significant uncertainty. Additional financing will be required to complete the research and development of our therapeutic targets and our other operating requirements, which may not be available at acceptable terms, if at all. If we are unable to improve our liquidity position, we may not be able to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate revenue and raise capital from financing transactions. There can be no assurance that we will be successful in accomplishing these objectives.

Current wording

proceeds of approximately $6.8 million, based upon our current business plans and cash, cash equivalents and investments on hand, management has concluded that there is substantial doubt about our ability to continue as a going concern for a period of at least one year from the issuance of the unaudited consolidated financial statements included in this report. We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain marketing approval for one or more of our product candidates, which we expect will take a number of years and is subject to significant uncertainty. Additional financing will be required to complete the research and development of our therapeutic targets and our other operating requirements, which may not be available at acceptable terms, if at all. If we are unable to improve our liquidity position, we may not be able to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate revenue and raise capital from financing transactions. There can be no assurance that we will be successful in accomplishing these objectives.

Previous wording

We continue to seek sources of financing to fund our continued operations and research and development programs. To raise additional capital, we may sell additional equity or debt securities, or enter into collaborative, strategic, and/or licensing transactions. There can be no assurance that we will be able to complete any financing transaction in a timely manner or on acceptable terms or otherwise enter into a collaborative or strategic transaction. If we are unable to obtain additional funding when it becomes necessary, the development of our product candidates will be impacted and we would likely be forced to delay, reduce, or terminate some or all of our development programs or cease operations altogether, all of which could have a material adverse effect on our business, results of operations and financial condition.

Current wording

We continue to seek sources of financing to fund our continued operations and research and development programs, including grants. To raise additional capital, we may sell additional equity or debt securities, or enter into collaborative, strategic, and/or licensing transactions. There can be no assurance that we will be able to complete any financing transaction in a timely manner or on acceptable terms or otherwise enter into a collaborative or strategic transaction. If we are unable to obtain additional funding when it becomes necessary, the development of our product candidates will be impacted and we would likely be forced to delay, reduce, or terminate some or all of our development programs or cease operations altogether, all of which could have a material adverse effect on our business, results of operations and financial condition.

Previous wording

As of March 31, 2025, we had approximately $11,553,000 in cash and cash equivalents and investments in marketable securities. The table below presents our cash flows for the three month periods ended March 31, 2025 and 2024:

Current wording

As of June 30, 2025, we had approximately $7,790,000 in cash and cash equivalents and investments in marketable securities. The table below presents our cash flows for the six month periods ended June 30, 2025 and 2024:

Previous wording

Net cash used in operating activities was approximately $2,594,000 and $1,434,000 in the three months ended March 31, 2025 and 2024, respectively. The increase in 2025 was mostly due to an increase in net loss, offset by an increase in stock based compensation, and increase in accounts payable and accrued expenses and a decrease in prepaid expenses.

Current wording

Net cash used in operating activities was approximately $6,281,000 and $3,441,000 in the six months ended June 30, 2025 and 2024, respectively. The increase in 2025 was primarily due to an increase in net loss, offset by an increase in stock based compensation, a decrease in accounts payable and accrued expenses and a decrease in prepaid expenses.

Previous wording

Investment activities provided net cash of $2,770,000 and used net cash of $4,466,000 in the three months ended March 31, 2025 and 2024, respectively. The cash provided in investing activities for the three months ended March 31, 2025 consisted of net sales of US Treasury Bills and Notes. The cash used in investing activities for the three months ended March 31, 2024 consisted of net purchases of short maturity US Treasury Bills and Notes from the proceeds of our March 2024 public offering (the “March 2024 Offering”).

Current wording

Investment activities provided net cash of $4,453,000 and used net cash of $1,311,000 in the six months ended June 30, 2025 and 2024, respectively. The cash provided in investing activities for the six months ended June 30, 2025 consisted of net sales and redemptions of US Treasury Bills and Notes. The cash used in investing activities for the six months ended June 30, 2024 consisted of net purchases of short maturity US Treasury Bills and Notes from the proceeds of the March 2024 public offering.

Previous wording

Net cash provided by financing activities was approximately $23,000 for the three months ended March 31, 2025. The net cash provided increased due to the receipt of approximately $173,000 in net proceeds from the exercise of warrants, partially offset by repayments of amounts due to officers of $150,000. Net cash provided by financing activities was approximately $5,332,000 for the three months ended March 31, 2024. The net cash provided increased due to the receipt of approximately $5.5 million in net proceeds from the March 2024 Offering partially offset by repayments of amounts due to officers of $150,000.

Current wording

Net cash used by financing activities was approximately $127,000 for the six months ended June 30, 2025. The net cash provided increased due to the receipt of approximately $173,000 in net proceeds from the exercise of warrants, partially offset by repayments of amounts due to officers of $300,000. Net cash provided by financing activities was approximately $5,196,000 for the six months ended June 30, 2024. The net cash provided increased due to the receipt of approximately $5.5 million in net proceeds from our March 2024 public offering partially offset by repayments of amounts due to officers of $300,000.

Previous wording

In November 2020, Quoin Inc. entered into a Master Service Agreement with Therapeutics Inc. for the management of the preclinical and clinical development of QRX003 for Netherton Syndrome. The initial term of the agreement was three years with automatic one year extensions, and the agreement required the execution of individual work orders. Quoin Inc. may terminate any work order for any reason with 90 days written notice subject to costs incurred through termination and a defined termination fee, unless there is a material breach by Therapeutics Inc. A work order was entered into in June 2022 for the first QRX003 clinical study at an expected estimated cost of approximately $4.4 million through 2024. An additional change order was entered into in December 2022 for a second QRX003 clinical study at an expected estimated cost of approximately $830,000. An amended and restated change order for the two studies was entered into in December 2024 at an estimated total remaining cost from August 2024 of approximately $3.6 million for the two studies combined. For the three months ended March 31, 2025 and 2024, we incurred research and development expenses under these agreements of approximately $411,000 and $489,000 respectively.

Current wording

In November 2020, Quoin Inc. entered into a Master Service Agreement with Therapeutics Inc. for the management of the preclinical and clinical development of QRX003 for Netherton Syndrome. The initial term of the agreement was three years with automatic one year extensions, and the agreement required the execution of individual work orders. Quoin Inc. may terminate any work order for any reason with 90 days written notice subject to costs incurred through termination and a defined termination fee, unless there is a material breach by Therapeutics Inc. A work order was entered into in June 2022 for the first QRX003 clinical study at an expected estimated cost of approximately $4.4 million through 2024. An additional change order was entered into in December 2022 for a second QRX003 clinical study at an expected estimated cost of approximately $830,000. An amended and restated change order for the two studies was entered into in December 2024 at an estimated total remaining cost from August 2024 of approximately $3.6 million for the two studies combined. For the three and six months ended June 30, 2025 and 2024, we incurred research and development expenses under these agreements of approximately $348,000 and $759,000, and $162,000 and $650,000 respectively.

Previous wording

In November 2021, we entered into a research agreement with Queensland University of Technology (QUT) for a pre-clinical research program for the development of a product to treat Netherton Syndrome of approximately $250,000. In May 2022, we entered into a second research agreement with QUT for the development of a product to treat Scleroderma of approximately $610,000. Each agreement remains in place until the completion of the research program, which in each case was initially anticipated to be 18 months from execution. For the three months ended March 31, 2025 and 2024, we incurred research and development costs related to these agreements of approximately $0 and $0 respectively. We are planning to schedule a meeting with QUT to discuss the future direction of both research programs.

Current wording

In November 2021, we entered into a research agreement with Queensland University of Technology (QUT) for a pre-clinical research program for the development of a product to treat Netherton Syndrome of approximately $250,000. In May 2022, we entered into a second research agreement with QUT for the development of a product to treat Scleroderma of approximately $610,000. Each agreement remains in place until the completion of the research program, which in each case was initially anticipated to be 18 months from execution. For the three and six months ended June 30, 2025 and 2024, we did not incur any costs related to these agreements. In July 2025 we announced that, in light of the expected near-term completion of the QRX003 clinical program for Netherton Syndrome, we have discontinued Netherton Syndrome research program with QUT. We are planning to schedule a meeting with QUT to discuss the future direction of the Scleroderma research program.

Previous wording

On June 10, 2024, we entered into a research agreement with The School of Pharmacy at UCC. The scope of the agreement encompasses the development of novel topical formulations of Rapamycin (sirolimus) as potential treatments for a number of rare and orphan diseases for which there are currently very limited or no approved therapies or cures. Under the terms of the agreement, based on the achievement of certain milestones, we will fund up to approximately €567,000 ($614,000) plus VAT over an anticipated 2-1/2 year period to support the UCC research program to investigate the development of a number of topical rapamycin formulations for future development as potential treatments for several rare and orphan diseases. Following completion of the research program, we will have the option to advance the clinical development of rapamycin formulations developed by UCC. Work on this research project commenced in December 2024. For the three months ended March 31, 2025, we incurred $60,000 of research and development costs related to this agreement.

Current wording

In June 2024, we entered into a research agreement with The School of Pharmacy at UCC. The scope of the agreement encompasses the development of novel topical formulations of Rapamycin (sirolimus) as potential treatments for a number of rare and orphan diseases for which there are currently very limited or no approved therapies or cures. Under the terms of the agreement, based on the achievement of certain milestones, we will fund up to approximately €567,000 ($668,000) plus VAT over an anticipated 2-1/2 year period to support the UCC research program to investigate the development of a number of topical rapamycin formulations for future development as potential treatments for several rare and orphan diseases. Following completion of the research program, we will have the option to advance the clinical development of rapamycin formulations developed by UCC. Work on this research project commenced in December 2024. For the three and six months ended June 30, 2025, we incurred a research and development expense under these agreements of approximately $60,000 and $120,000 respectively.