Qualigen Therapeutics, Inc.

Previous wording

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).

Current wording

We are an early-clinical-stage therapeutics company focused on developing treatments for adult and pediatric cancer. Our business now consists of one early-clinical-stage therapeutic program (QN-302) and one preclinical therapeutic program (Pan-RAS) , and a co-development agreement with Marizyme, Inc. (“Marizyme”).

Previous wording

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 undergoing a Phase 1a clinical trial at START Midwest in Grand Rapids, Michigan, and HonorHealth in Scottsdale, Arizona.

Current wording

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.

Previous wording

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.

Current wording

We do not expect to be profitable before products from our therapeutics pipeline are commercialized. To experience losses while therapeutic products are still under development is, of course, typical for biotechnology companies. Given our financial situation, the company slowed the development of the aforementioned therapeutic products beginning in the second quarter of 2024. We have also implemented dramatic expense controls in an effort to stem the rate of losses. Management and the board are strategically reviewing plans on how to best advance our therapeutics pipeline, and will ramp up development when properly funded through either capital markets or strategic partnerships.

Previous wording

On April 11, 2024, we entered into a Co-Development Agreement with Marizyme. Under the Co-Development Agreement (as amended on August 6, 2024), we agreed to pay Marizyme a Funding Payment of up to $1,750,000 and an Exclusivity Fee of $200,000. The Exclusivity Fee of $200,000 and a Funding Payment of $500,000 was paid to Marizyme on April 12, 2024. The Exclusivity Fee entitles us to an exclusivity period until May 31, 2024 for purposes of proposing and outlining a broader strategic relationship with Marizyme with regard to Marizyme’s DuraGraft business. The Funding Payment is designed to provide financial support for commercialization of Marizyme’s DuraGraft™ vascular conduit solution, which is indicated for adult patients undergoing coronary artery bypass grafting surgeries and is intended for the flushing and storage of the saphenous vein grafts used in coronary artery bypass grafting surgery. In return for the Funding Payment we will receive quarterly a 33% payment in the nature of royalties on any Net Sales (as defined with a meaning tantamount to gross profit on net sales) of DuraGraft, capped at double the amount of the Funding Payment cash provided. No such payments-in-the-nature-of-royalties would accrue until after DuraGraft has been launched in the United States and a cumulative total of $500,000 of DuraGraft Net Sales have been made in the United States.

Current wording

On April 11, 2024, we entered into a Co-Development Agreement with Marizyme. Under the Co-Development Agreement (as amended on August 6, 2024), we agreed to pay Marizyme a Funding Payment of up to $1,750,000 and an Exclusivity Fee of $200,000. The Exclusivity Fee of $200,000 and a Funding Payment of $500,000 was paid to Marizyme on April 12, 2024. The Exclusivity Fee entitled us to an exclusivity period until May 31, 2024 for purposes of proposing and outlining a broader strategic relationship with Marizyme with regard to Marizyme’s DuraGraft business. The Funding Payment is designed to provide financial support for commercialization of Marizyme’s DuraGraft™ vascular conduit solution, which is indicated for adult patients undergoing coronary artery bypass grafting surgeries and is intended for the flushing and storage of the saphenous vein grafts used in coronary artery bypass grafting surgery. In return for the Funding Payment we will receive quarterly a 33% payment in the nature of royalties on any Net Sales (as defined with a meaning tantamount to gross profit on net sales) of DuraGraft, capped at double the amount of the Funding Payment cash provided. No such payments-in-the-nature-of-royalties would accrue until after DuraGraft has been launched in the United States and a cumulative total of $500,000 of DuraGraft Net Sales have been made in the United States.

Previous wording

On July 15, 2024, the Company advanced $1,250,000 to Marizyme, Inc., a Nevada corporation (“Marizyme”), against which Marizyme had previously delivered its demand promissory note to the Company of like principal amount dated July 12, 2024 (the “Marizyme Note”). The Marizyme Note bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Note at any time and from time to time, in whole or in part, without premium or penalty.

Current wording

In addition, as of March 31, 2025, the Company has advanced had $2,562,400 to Marizyme, Inc., a Nevada corporation (“Marizyme”), against which Marizyme had previously delivered its demand promissory notes to the Company of like principal amounts (the “Marizyme Note”). The Marizyme Note bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Note at any time and from time to time, in whole or in part, without premium or penalty.

Previous wording

Our condensed consolidated financial statements historically have not separated our diagnostics-related activities from our therapeutics-related activities. All of our historically reported revenue was diagnostics-related. Before the third quarter of 2023, our reported expenses represented the total of our diagnostics-related and therapeutics-related expenses. In this Quarterly Report, all diagnostics-related revenues and expenses have been reclassified to discontinued operations (See Note 5 - Discontinued Operations).

Current wording

Our condensed consolidated financial statements historically have not separated our diagnostics-related activities from our therapeutics-related activities. All of our historically reported revenue was diagnostics-related

Previous wording

This discussion and analysis is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to 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.

Current wording

This discussion and analysis is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to determination of allowance for credit losses, fair value of derivative financial instruments and warrant liabilities, and stock-based compensation. We base our estimates on historical experience, known trends and events and various other factors we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Previous wording

General and administrative expenses decreased from $1.3 million for the three months ended September 30, 2023, to $1.1 million for the three months ended September 30, 2024, a decrease of $0.2 million or 15%. This is primarily due to decreases in payroll of $0.2 million, professional fees of $0.1 million and insurance of $0.1 million offset by an increase in investor relations expenses of $0.2 million.

Current wording

General and administrative expenses increased from $1.1 million for the three months ended March 31, 2024, to $2.5 million for the three months ended March 31, 2025, an increase of $1.4 million or 135%. This is primarily due to an increase in investor relations expense of $1.4 million as we raised funding, plus in professional fees of $0.5 million offset by a decrease in payroll expenses of $0.4 million.

Previous wording

Research and development expenses decreased from $1.4 million for the three months ended September 30, 2023, to $0.1 million for the three months ended September 30, 2024, a decrease of $1.3 million or 91%. This was primarily due to decreases in QN-302 program expenses of $0.8 million, a decrease in RAS program expenses of $0.2 million, a decrease in payroll of $0.2 million and a decrease in stock-based compensation of $0.1 million.

Current wording

Research and development expenses decreased from $0.4 million for the three months ended March 31, 2024, to $33,000 for the three months ended March 31, 2025, a decrease of $0.3 million or 90%. This was primarily due all research and development being slowed down in 2025, resulting in decreases in QN-302 program expenses of $216,000, a decrease in RAS program expenses of $15,000, a decrease in payroll of $62,000 and a decrease in stock-based compensation of $25,000

Previous wording

During the three months ended September 30, 2024 and 2023, we experienced a gain of approximately $1,000 and a loss of approximately $0.1 million, respectively, on change in fair value of warrant liabilities, primarily due to changes in our stock price and expiration of warrants during the current period, and changes in our stock price in the prior period. Typically, a decline in our stock price would result in a decline in the fair value of our warrant liabilities, generating a gain, while an increase in our stock price would result in an increase in the fair value of our warrant liabilities, generating a loss.

Current wording

During the three months ended March 31, 2025 and 2024, we experienced a gain of approximately $39,000 and a loss of approximately $0.1 million, respectively, on change in fair value of warrant liabilities, primarily due to changes in our stock price and expiration of warrants during the prior period, and changes in our stock price in the prior period. Typically, a decline in our stock price would result in a decline in the fair value of our warrant liabilities, generating a gain, while an increase in our stock price would result in an increase in the fair value of our warrant liabilities, generating a loss.

Previous wording

During the three months ended September 30, 2024 we experienced a gain of approximately $0.5 million on change in fair value of derivative liabilities, compared to $0 for the three months ended September 30, 2023. The fair value of derivative liabilities declined during the current period due to changes in our stock price and a reduction in the remaining term of the underlying instruments. Derivative liabilities in the prior period had no fair value.

Current wording

During the three months ended March 31, 2025 we experienced $0 on change in fair value of derivative liabilities, compared to a gain of $0.2 million for the three months ended March 31, 2024. The fair value of derivative liabilities declined during the current period due to derivative liabilities all being settled in 2024.

Previous wording

As of September 30, 2024, we had approximately $338,000 in cash and an accumulated deficit of $122.2 million. For the nine months ended September 30, 2024 and year ended December 31, 2023, we used cash of $4.0 million and $11 million, respectively, in operations.

Current wording

Our financial position is weak. As of March 31, 2025 we had approximately $30,000 in cash and net accounts payable of approximately $1.5 million. We are in arrears on accounts payable to important partners. We have incurred recurring losses from operations, and have an accumulated deficit of $125.7 million at March 31, 2025. We expect to continue to incur losses subsequent to the balance sheet date of March 31, 2025. For the three months ended March 31, 2025 and year ended December 31, 2024, we used cash of $1.6 million and $6.4 million, respectively, in operations.

Previous wording

Our current liabilities at September 30, 2024 include approximately $1.6 million of accounts payable, $1.9 million of convertible debt and derivative liabilities, $0.6 million of accrued expenses and other current liabilities, $0.3 million in warrant liabilities.

Current wording

Our current liabilities at March 31, 2025 include approximately $1.5 million of accounts payable, $0.8 million of short-term debt, $0.3 million of accrued expenses and other current liabilities, $0.2 million of warrant liabilities.

Previous wording

We currently expect our cash balances to fund operations into the fourth 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 Quarterly Report were issued. There is no assurance that we will ever achieve profitable operations, or, if achieved, could be sustained on a continuing basis.

Current wording

From January to June 2025, the Company borrowed a total of $3,515,000 from nine investors as short-term borrowings, each due within six months after the date of borrowing. Additionally, in July 2025, the Company plans to close a private placement transaction to raise additional funding through the sale of equity. We expect these proceeds to provide liquidity for the company through calendar year end. We expect to continue to have net losses and negative cash flow from operations, which will challenge our liquidity. These factors raise substantial doubt regarding our ability to continue as a going concern for the one-year period following the date that the financial statements in this Quarterly Report were issued.

Previous wording

Historically, our principal sources of cash have, in addition to previous revenue from product sales and license revenues from the FastPack product of line of Qualigen, Inc. (which we divested in July 2023), included proceeds from the issuance of common and preferred equity and proceeds from the issuance of debt. 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.

Current wording

Historically, our principal sources of cash have, in addition to previous revenue from product sales and license revenues from the FastPack product of line of Qualigen, Inc. (which we divested in July 2023), included proceeds from the issuance of common and preferred equity and proceeds from warrant exercises and the issuance of debt. 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.

Previous wording

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 and Chen under the terms of the Debentures and/or trigger certain adjustments to the Debentures or warrants held by Alpha and Chen.

Current wording

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.

Previous wording

On July 15, 2024, the Company advanced to Marizyme, Inc., a Nevada corporation (“Marizyme”) $1,250,000 against which Marizyme had previously delivered its demand promissory note to the Company of like principal amount dated July 12, 2024 (the “Marizyme Note”). The Marizyme Note bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Note at any time and from time to time, in whole or in part, without premium or penalty.

Current wording

On July 15, 2024, the Company advanced to Marizyme, Inc., a Nevada corporation (“Marizyme”) $1,250,000 against which Marizyme had previously delivered its demand promissory note to the Company of like principal amount dated July 12, 2024 (the “Marizyme Note”). During the three month periods ending March 31, 2025 and December 31, 2024, the Company advanced additional funds of $0.3 million and $1.0 million, respectively. The Marizyme Note bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Note at any time and from time to time, in whole or in part, without premium or penalty.

Previous wording

During the nine months ended September 30, 2023, operating activities used $4.6 million of cash, primarily resulting from a loss from continuing operations of $10.0 million. Cash flows from operating activities for the nine months ended September 30, 2023 were positively impacted by adjustments for a $1.1 million non cash loss on voluntary conversion of convertible debt, accretion of discount of $1.2 million on convertible debt, $1.0 million in stock-based compensation expense, a $1.0 million increase in accounts payable, a $0.4 million increase in accrued expenses and other current liabilities, and cash provided by discontinued operations of $2.6 million. Cash flows from operating activities for the nine months ended September 30, 2023 were negatively impacted by adjustments for a $1.4 million decrease in fair value of warrant liabilities and a $0.6 million increase in prepaid expenses and other assets.

Current wording

During the three months ended March 31, 2025, operating activities used $1.6 million of cash, primarily resulting from a loss from continuing operations of $2.7 million. Cash flows from operating activities for the three months ended March 31, 2025 were positively impacted by adjustments for $0.2 million change in provision for credit losses of short-term notes receivable, $0.1 million in amortization of premium on notes payable, , a decrease in prepaid expenses of $0.9 millon, and an increase in accrued expenses of $0.1 million. Cash flows from operating activities for the three months ended March 31, 2025 were negatively impacted by adjustments for a $39,000 gain on change in fair value of warrant liabilities, a $0.1 million increase in accrued interest on short-term notes receivable, and a $40,000 increase in accounts payable.

Previous wording

During the nine months ended September 30, 2024, operating activities used $4.0 million of cash, primarily resulting from a loss from continuing operations of $5.3 million. Cash flows from operating activities for the nine months ended September 30, 2024 were positively impacted by adjustments for $0.4 million loss on issuance of convertible debt, $0.1 million in stock-based compensation expense, $0.4 million in accretion of discount on convertible debt, $0.2 million loss on monthly redemptions of convertible debt into common stock, a $0.3 million loss on change in fair value of derivative liabilities, and a $0.6 million decrease in prepaid expenses and other assets and a $0.2 million increase in accrued expenses and other current liabilities. Cash flows from operating activities for the nine months ended September 30, 2024 were negatively impacted by adjustments for a $0.4 million gain on change in fair value of warrant liabilities, a $0.1 million gain on voluntary conversion of convertible debt into common stock and a $0.6 million decrease in accounts payable.

Current wording

During the three months ended March 31, 2024, operating activities used $0.8 million of cash, primarily resulting from a loss from continuing operations of $2.0 million. Cash flows from operating activities for the three months ended March 31, 2024 were positively impacted by adjustments for a $0.1 million loss on change in fair value of warrant liabilities, a $0.1 loss on monthly redemptions of convertible debt into common stock, $0.4 million non cash loss on voluntary conversion of convertible debt, accretion of discount of $0.1 million on convertible debt, $0.6 million in stock-based compensation expense, a $0.7 million decrease in prepaid expenses, and a $0.3 million increase in accrued expenses and other current liabilities. Cash flows from operating activities for the three months ended March 31, 2024 were negatively impacted by adjustments for a $0.2 million decrease in fair value of warrant liabilities and a $0.4 million decrease in accounts payable.

Previous wording

Net cash used in financing activities for the nine months ended September 30, 2023 was approximately $0.4 million, due to monthly redemption payments on convertible notes payable.

Current wording

Net cash provided by financing activities for the three months ended March 31, 2024 was approximately $0.5 million, resulting from the issuance of convertible notes payable.