UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 20212022

or

Commission File Number 001-37428

Qualigen Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

2042 Corte Del Nogal, Carlsbad, California 92011

(Address of principal executive offices) (Zip Code)

(760) 918-9165

Registrant’s telephone number, including area code

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

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.

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, 2021,2022, the aggregate market value of the registrant’s common stock held by non-affiliates was approximately $$57,063,765 21,943,148based on the closing price for the common stock of $1.99$5.70 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, 2022,April 11, 2023, there were 35,295,5415,052,463 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for the 2022 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the period covered by this Annual Report on Form 10-K, are incorporated by reference in Part III, Items 10 to 14 of this Annual Report on Form 10-K. Except for the portions of the Proxy Statement specifically incorporated by reference in this Form 10-K, the Proxy Statement shall not be deemed to be filed as part hereof.None.

TABLE OF CONTENTS

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:

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.

PART I

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

Item 1. Business

Overview

We are a diversified life sciences company focused on developing treatments for adult and pediatric cancers with potential for Orphan Drug designation, while also commercializing diagnostics.

Our cancer therapeutics pipeline includes QN-302, QN-247RAS (formerly RAS-F) and RAS-F. QN-247.

Our investigationallead oncology therapeutics program, QN-302, compound is aan investigational small molecule G4 selectiveG-quadruplexes (G4)-selective transcription inhibitor with strong binding affinity to G4s prevalent in cancer cells. Such binding could, by stabilizing the G4s against DNA “unwinding,” help inhibit cancer cell proliferation. QN-302 is currently undergoing Good Laboratory Practice (GLP) toxicology studies.

Our RAS portfolio 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. Preventing this binding could stop tumor growth, especially in RAS-driven tumors such as pancreatic, colorectal and lung cancers.

Our investigational QN-247 compound binds nucleolin, a key multi-functional regulatory phosphoprotein that is a DNA coated gold nanoparticleoverexpressed in cancer drug candidate that hascells. Such binding could inhibit the potential to target various types of cancer; the nanoparticle conjugate technology is similar to the core nanoparticle coating technology used in our blood-testing diagnostic products.cancer cells’ proliferation. The foundational aptamer of QN-247 is QN-165 (formerly referred to as AS1411), which the Company has deprioritized as a drug candidate for treating COVID-19 and other viral-based infectious diseases. RAS-F is a family of RAS oncogene protein-protein interaction inhibitor small molecules for preventing mutated RAS genes’ proteins from binding to their effector proteins; preventing this binding could stop tumor growth, especially in RAS-driven tumors such as pancreatic, colorectal and lung cancers. Although we have no ongoing development efforts for STARS, a DNA/RNA-based therapeutic device product concept for removing precisely targeted tumor-produced and viral compounds from circulating blood, we are currently identifying strategic partnering opportunities.

In addition to our oncology drug pipeline, we have an established diagnostics business.

Our revenue driver is our FastPack Systemproprietary blood-based diagnostics platform which includes diagnostic instruments and test kits that are sold commercially primarily in the United States, as well as certain European countries. The FastPack System menu includes a rapid, highly accurate immunoassay diagnostic testing system for cancer, men’s health, hormone function, and vitamin D status. We provide analyzers to our customers (physician offices, clinics and small hospitals) at low cost in order to increase sales volumes of higher-margin test kits. We currently use our diagnostics distribution partner Sekisui Diagnostics, LLC (“Sekisui”) for most FastPack distribution worldwide pursuant to a distribution agreement, but maintain direct distribution for certain house accounts, including selling our total testosterone test kits to Low T Center, Inc. (“Low T”), the largest men’s health group in the United States, with 40 locations. The distribution agreement with Sekisui will expire on March 31, 2022, at which time the services currently provided by Sekisui will revert to us and we will recognize 100% of the revenue from the sales of our FastPack diagnostic instruments and test kits. We have licensed and technology-transferred our FastPack System technology to Yi Xin Zhen Duan Jishu (Suzhou) Ltd. for the China diagnostics market.

On May 26, 2022, we acquired a 52.8% interest in NanoSynex, Ltd. (“NanoSynex”). NanoSynex is a micro-biologics diagnostic company domiciled in Israel. NanoSynex’s technology is an Antimicrobial Susceptibility Testing (AST) 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. See Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional details.

Completion of Reverse Recapitalization Transaction with Ritter Pharmaceuticals, Inc.

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.

Product CandidatesCancer Drug Pipeline and Diagnostic Products

Therapeutics and Diagnostics Pipeline

Our lead drug compound QN-302 (formerly SOP1812) is being developed to target regulatory regions of cancer genes that down-regulate gene expression in multiple cancer pathways for potential treatment of G4-targeted tumors (e.g., pancreatic cancer). The investigational compounds within our RAS portfolio are designed to suppress the interaction of endogenous RAS with c-RAF, upstream of the KRAS, HRAS and NRAS effector pathways. Our anticancer drug candidate, QN-247 (formerly referred to as ALAN or AS1411-GNP) is aptamer-based and currently in development to treat a variety of cancer types, including liquid and solid tumors. Our RAS-F portfolio is designed to suppress the interaction of endogenous RAS with c-RAF, upstream of the KRAS, HRAS and NRAS effector pathways.

Our deprioritized programs (and thus not featured in the chart above) include QN-165 (formerly referred to as AS1411), a drug candidate for the potential broad-spectrum treatment of infectious diseases such as COVID-19, and our Selective Target Antigen Removal System (STARS) is, a therapeutic device product concept, currently in discovery stage, designed to remove circulating tumor cells, viruses, inflammation factors and immune checkpoints.

Our deprioritized, non-core drug candidate QN-165QN-302 (formerly referred to as AS1411, thus not featured in the chart above) is a drug candidate for the potential broad-spectrum treatment of infectious diseases such as COVID-19.

QN-302 (formerly referred to as SOP1812)

We exclusively in-licensed the global rights to the G4 selective transcription inhibitor platform from University College London (“UCL”) in January 2022. The licensed technology comprises lead compound QN-302 (formerly 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 G4G-Quadruplex (G4) binding concept is derived from over 30 years in nucleic acid research, including that ofresearch 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 those cancer genes, which have a high prevalence of enriched G4s in a process that can be predicted by bioinformatics.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. This has been supported by in-vitro and in-vivo studies that have shown that G4 stabilization by QN-302 results in inhibition of target gene expression and cessation of cell growth in a variety of G4 prevalent cancers, including pancreatic ductal adenocarcinoma (“PDAC”) which represents 98% of pancreatic cancers.

Pancreatic cancer is the tenth most common cancer and fifththird deadliest cancer in the United States and has one of the lowest rates of survival of all cancer types, with 98%91% of those diagnosed dying from the disease and one in four dying within the first month of diagnosis. The chemotherapy drug gemcitabineGemcitabine has been standard of care for patients with metastatic pancreatic cancer for more than 15 years. Numerous clinical trials have tested new drugs, either alone or in combination, with gemcitabine.Gemcitabine. We believe that QN-302 has the potential to demonstrate superior efficacy and activity against PDACpancreatic ductal adenocarcinoma (“PDAC”) compared to existing agents, with a distinct mechanism of action and promising preclinical target profile.

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, which represents 98% of pancreatic cancers. In vitroin-vitro studies, show QN-302 potently inhibitswas potent in inhibiting the growth of several PDAC cell lines at low nMnanomolar concentrations. Likewise,Similarly, in in-vivo studies, QN-302 showsshowed a longer survival duration in a KPC genetic mouse model for pancreatic cancer than gemcitabineGemcitabine has historically shown. Additional preclinical in-vivostudies suggest activity in gemcitabine resistantgemcitabine-resistant PDAC. Data from therapy studies on three patient-derived PDAC xenografts indicatedfurther demonstrated that QN-302 had significant anti-tumor activity in PDAC.three patient-derived PDAC xenograft models. Early safety indicators suggest no significant adverse toxic effects at proposed therapeutic doses in pancreatic cancer mouse in-vivo models.

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.

We planThere 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.

RAS (formerly RAS-F)

In July 2020, we entered into an exclusive worldwide license agreement with University of Louisville (“UofL”) 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 in-licensed the “RAS” compound family of drug candidates and will seek to obtain Orphan Drug statusidentify 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 RAS inhibitor licensed products.

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 QN-302the many other activated pathways.

In March 2022 and October 2022, we signed amendments to our sponsored research agreement with UofL to extend our partnership. Under the amended agreement, the collaboration extends until the third quarter of 2023 and commits additional resources to support ongoing discovery and preclinical efforts for one or more indications, such as PDAC. Orphan Drug status, if obtained, would be expected to confer advantages that may include faster regulatory review and increased market protection.the RAS platform.

QN-247 (formerly referred to as ALAN or AS1411-GNP)

QN-247 is an aptamer-basedoligonucleotide-based drug candidate that is designed to treat different types of cancer,nucleolin-expressing cancers, including liquid and solid tumors. QN-247 inhibits nucleolin, a key multi-functional regulatory proteinphosphoprotein that is overexpressed in cancer cells; QN-247cells, and may thereby be able to inhibit the cells’ proliferation. QN-247 has shown promise in preclinical studies for the treatment of acute myeloid leukemia (“AML”). This novel technology may have several other potential applications, including enhancement of radiation therapy, enhancement of tumor imaging, and delivery of other anti-cancer compounds directly to tumor cells.

QN-247 is an enhanced version of QN-165 (which in turn was formerly referred to as AS1411), where the DNA oligonucleotide aptamer is conjugated. A key component of this drug candidate,QN-247, DNA oligonucleotide aptamer QN-165, has been shown, primarily on a preclinical basis, to have the potential to target and destroy cancer cells. This component has been administered in Phase 1 and Phase 2 clinical trials to over 100 AML or renal cell carcinoma cancer patients and appears to be well tolerated with no evidence of severe side effects,adverse events in such trials, with at least seven patients appearing to have long-lasting clinical responses where their cancers disappeared or shrank substantially. (QN-165 may also be useful against infectious diseases – see below.)responses.

QN-247 is an enhanced version of QN-165 (which

An in turn was formerly referred to as AS1411) where the DNA aptamer is attached to a gold nanoparticle.

In a Qualigen-sponsored University of Louisville (“UofL”) in-vitro preclinical study involving tumor-associated macrophages, QN-247 was shown to have stronger anti-cancer activity than QN-165 alone did. Tumor-associated macrophages are a class of immune cells present in high numbers around solid tumors and affect most aspects of tumor cell biology; they drive pathological phenomena including tumor cell proliferation, tumor angiogenesis, invasion and metastasis, immunosuppression, and drug resistance. In most cancers, the tumor-associated macrophages have an M2 phenotype, which may inhibit the anti-tumor effects of immune checkpoint inhibitor drugs, such as Merck’s Keytruda (pembrolizumab). We believe that converting these M2 macrophages to the M1 phenotype could enhance the activity of these immune checkpoint inhibitors. In the UofL study, QN-247 increased the conversion of M2 macrophages to the M1 phenotype, while also reducing the overall proliferation of macrophages.

A UofL in-vitro preclinicalvivo efficacy study with a triple negative breast cancer cells (MDA-MB-231) indicated that(TNBC) MDA-MB-231 xenograft mouse model was performed with 12 daily doses (1 mg/kg) of QN-247. This study showed statistically significant reductions in mean tumor volumes for all QN-247 in combination with radiation therapy, resulted in reduced tumor cell colony size (i.e., resulted in increased tumor cell necrosis)formulations compared to radiation alone.baseline and to vehicle control. QN-247 formulations with higher oligonucleotide loading appeared to reduce tumor volumes more than lower oligonucleotide loading. No evidence of adverse toxicity was observed.

We plan to seek to obtain Orphan Drug status for QN-247 for one or more indications, such as pancreatic cancer, AML and pediatric neuroblastoma. Orphan Drug status, if obtained, would be expected to confer advantages that may include faster regulatory review and increased market protection.

In October 2020, we entered into an amendeda sponsored research agreement with UofL to advance development of our QN-247 drug candidate. The work being performed under the original sponsored research agreement, entered into in August 2018 compriseswhich was subsequently amended in October 2020, pursuant to which UofL performed various animal studies to assess antitumor efficacy and safety of different QN-247 compositions designed to treat pediatric and adult AML. Under the amendedcompositions. The sponsored research agreement with UofL is performing preclinical studiesfor QN-247 expired on AMLAugust 31, 2022, and on additional indications including glioblastoma, a malignant brain cancer that is difficult to treat because most drugs cannot pass the blood-brain membrane, and non-small cell lung cancer, which comprises approximately 85% of the 1.6 million global lung cancer cases each year. Additionally, we and UofL will study how QN-247 may inhibit metastasis of cancer cells as a potential adjuvant therapy.

RAS-F

In July 2020, we entered into an exclusive worldwide license agreement with UofL for the intellectual property covering the “RAS-F” family of RAS oncogene protein-protein interaction inhibitor small molecule drug candidates, which would work by blocking RAS mutations directly and thereby inhibiting tumor formation (especially in pancreatic, colorectal and lung cancers). Pursuant to the license agreement, we in-licensed the “RAS-F” compound family of drug candidates and 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 percentagesQN-247 was amended on net sales of RAS protein-protein interaction inhibitor licensed products.January 9, 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 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. There is currently no FDA-approved direct RAS protein inhibitor available. Drugs that target signaling downstream of RAS are available; however, such drugs have shown disappointing clinical activity because RAS is a “hub” that activates multiple effectors, so drugs that block a single pathway downstream do not account for the many other activated pathways.

In March 2022, we signed an amendment to our active sponsored research agreement with UofL to extend our partnership. Under the revised agreement, the collaboration extends until the first quarter of 2023 and commits additional resources to support ongoing discovery and preclinical efforts for the RAS-F platform.

STARS™

Our FastPack diagnostic system and related core technologies are now the basis for potential blood-filtering therapeutic applications for the treatment of cancer and infectious disease. Our Selective Target Antigen Removal System (“STARS”) therapeutic device concept is intended to utilize core expertise in advanced reagents and coatings to remove disease associated agents, including viruses and tumor-produced compounds, directly from a patient’s blood. The key components of STARS, membranes coated with target capture reagents, will utilize several proprietary processes developed and used in the FastPack product lines. Proprietary STARS cartridges are expected to be designed for use with conventional dialysis or hemofiltration machines to remove immune checkpoints, metastatic cells and inflammation factors from cancer patients’ bloodstreams. We believe STARS may also be able to be developed to treat infectious diseases, by removing circulating viruses sufficiently to facilitate patient stabilization and recovery. Although we have no ongoing development efforts for STARS, we are currently identifying strategic partnering opportunities.

In August 2020, the United States Patent and Trademark Office issued to us patent No. 10,744,258 entitled “Devices and Methods for On-Line Whole Blood Treatment” regarding our STARS technology.

QN-165 (formerly referred to as AS1411)

In June 2020, we entered into an exclusive royalty-bearing license agreement with UofL for UofL’s intellectual property for the use of QN-165 as a drug candidate for the treatment of COVID-19. In September 2020 we and UofL jointly filed a United StatesU.S. provisional patent application, entitled “Methods of inhibiting or treating coronavirus infection, and methods for delivering an anti-nucleolin agent.” The application was filed in conjunction with Drs. Paula J. Bates and Kenneth E. Palmer from UofL, and covers methods for using QN-165 as an antiviral drug candidate to prevent SARS-CoV-2 from entering the body through mucous membranes in the nose, mouth and eyes. As stated in the patent application, we believe that QN-165 could be administered by means of inhalers, nose spray or eye drops to individuals who have recently come in contact with SARS-CoV-2, or are at high risk of contracting the virus.

We believe that the mechanism by which QN-165 is believed to work, by blocking the ability of viruses to replicate in the body, may also make the drug candidate effective against future mutations in COVID-19 as well as against other dangerous viruses including seasonal influenza. Moreover, we believe that in addition to its proposed use as a therapeutic, QN-165 might be able to be used as a protective defense or prophylaxis against COVID-19 and/or other viral-based diseases such as seasonal influenza.

On July 13, 2021, we filedsubmitted an Investigational New Drug (“IND”) application with the U.S. Food and Drug Administration (“FDA”) to seekFDA seeking approval to commence Phase 1b/2a clinical studies withof QN-165 in hospitalized COVID-19 patients. On August 11, 2021, the FDA informed us that additional preclinical studies would be required in order for suchthe IND application to be cleared. There can be no assurance when (if ever)cleared to proceed into the FDA would clear this IND application or any other IND application we may file.clinic with QN-165. We havethen decided to deprioritizeallocate our resources to focus on our oncology pipeline, and deprioritized the development of QN-165 programprogram. Qualigen is seeking to out-license QN-165 to a partner that has interest and expertise in antiviral development, such as our therapeutics strategy is focused on oncology.dengue, influenza, RSV and other infectious diseases. Due to its mechanism and in vivo potency, we believe that QN-165 could potentially be developed as a first-line treatment against emerging viruses and biothreats.

FastPack^®

The FastPack System is a patent-protected rapid, onsite immunoassay testing system consisting of the FastPack Analyzer and the FastPack test pouch, a single-use, disposable, foil packet which includes the FastPack reagent chemistry. Since the initial conception of the system, we have developed successive versions of the analyzer and test pouch, known as “1.0,” “IP” and “PRO”, and have expanded our assay menu to nine tests, including tests for prostate cancer, thyroid function, metabolic disorders, and research applications. We have sold FastPack products in the United States and overseas for over 20 years, and since inception, our sales of FastPack products have exceeded $120$127 million. We manufacture the FastPack products at our FDA and International Standards Organization (“ISO”) certified Carlsbad, California facility. We maintain direct distribution for certain house accounts, including Low T, but pursuant to a distribution agreement, our diagnostics distribution partner Sekisui holdsAs of April 2022 most FastPack sales are distributed through various distribution rights until March 31, 2022, after which time we will resume full commercial responsibility.partners in North America as well as in Europe (primarily Axon Labs in Germany and Switzerland). We also sell direct to clinics and physician offices located throughout North America.

In July 2020, we submitted an official notification to the FDA to commence sales in the United States of our FastPack SARS-CoV-2 IgG test for COVID-19 antibodies, which was designed for use with our new FastPack PRO. The test was previously submitted to the FDA for Emergency Use Authorization (“EUA”). In April 2021, we withdrew this EUA. During the nine months during which the EUA was with the FDA, alternative tests and testing practices became widespread and we determined that there was no longer a viable business case for scale-up of the test.

Strategic Partners

As ofIn January 2022, we have entered into a royalty-bearing license agreement with UCL, includingwith respect to intellectual property and know-how covering lead and backup compounds for our G4 selective transcription inhibitor program, QN-302.

We have entered intoare party to a royalty-bearing license agreement for key components of QN-247 fromwith UofL and we have commissioned sponsored research from UofL’s development teams in order to optimize and prepare QN-247 for human trials. A separate team at UofL, funded by us under a sponsored research agreement, is developing RAS-F. We have an active royalty-bearing license agreement for the RAS-F program as well.

In 2016, we entered into an agreement with Sekisui, whereby Sekisui distributes our diagnostic product line worldwide. As described above, this distribution agreement will expire on March 31, 2022.development of RAS and the QN-247 program.

We in-license patents from DIAsource ImmunoAssays S.A. and Future Diagnostics B.V., for reagents that are used in our FastPack Vitamin D assay.

We had exclusive rights to the core QN-165 aptamer from Advanced Cancer Therapeutics, LLC; this agreement terminated on March 1, 2022.

Sales Channels

We currently sellPrior to April 2022, most of our FastPack diagnostic product line primarilysales were through our diagnostics distribution partner Sekisui underDiagnostics, LLC (“Sekisui”) pursuant to a distribution agreement. The distribution agreement wherebywith Sekisui receives a portionexpired on March 31, 2022, at which time the activities formerly provided by Sekisui reverted to us. As of April 2022, most of our FastPack sales revenue. In the United States, Sekisui commercializes the FastPack product lineare through its own direct sales force andvarious distribution agreements withpartners in North America, including McKesson Medical-Surgical, Henry Schein Medical, Medline Industries and National Distribution & Contracting, the largest distributors of physician office laboratory products in the United States. Outside of the United States, Sekisui commercializeswe sell the FastPack product line through a network of distributors in Europe Asia, Middle East,(primarily Axon Labs in Germany and North Africa. Our distribution agreement with Sekisui will expire on March 31, 2022, at which time the services currently provided by Sekisui will revert to us and we will recognize 100% of the revenue from the sales of our FastPack diagnostic instruments and test kits. Once the distribution agreement expires, we do not expect any interruption to our diagnostics sales and marketing engine as we willSwitzerland). We also continue to leverage established partnerships withsell our various distributorstestosterone test kits directly to Low T Center, Inc. (“Low T”), the largest men’s health group in both the United States, and abroad.

with 40 locations. Low T was acquired by SynergenX in September 2022. The combined company currently operates 64 locations.

In addition, among

Product sales to McKesson accounted for 48% of our other directtotal revenues and product sales accounts, we currently sell FastPack products directly to Low T. Sales to SekisuiT accounted for 62%26% of our total revenues during the fiscal year ended December 31, 2021, and sales to Low T accounted for 22% of our total revenues during this period.2022. The remaining revenue was comprised of warranties and product sales and warranties to our other distributors and direct sales accounts as well as license revenues.accounts.

In October 2020, we entered into an agreement with Yi Xin Zhen Duan Jishu (Suzhou) Ltd (“Yi Xin”), pursuant to which we granted Yi Xin obtained exclusive rights to manufacture and sell new generations of FastPack-based products as well as Yi Xin-manufactured versions of our existing FastPack 1.0, IP and PRO product lines in China. We would beare entitled to receive royalties on any such sales. After May 1, 2022, Yi Xin will havehas the right to sell its new generations of FastPack-based diagnostic test systems throughout the world, other than to our then-current FastPack customers; and on a worldwide basis, except in the United States, Yi Xin will also havehas the right to sell Yi Xin-manufactured versions of our existing FastPack 1.0, IP and PRO product lines. We would beare entitled to receive royalties on any of these sales, as well.sales. After March 31, 2022, Yi Xin will havehas the right to buy Qualigen FastPack 1.0, IP and PRO products from us at distributor prices for resale in the United States, again excluding resales toward our then-current FastPack customers.

Manufacturing

We develop, manufacture and assemble our diagnostic products at our approximately 23,000 square feet facility in Carlsbad, California. Our laboratory and manufacturing practices are governed by a series of internally published Standard Operating Procedures, in accordance with FDA and ISO guidelines. While we produce many of our own raw materials and sub-components for diagnostic products, we also purchase certain materials from third-party suppliers such as Amcor, Enstrom, Gilson, Hi-Tech Products, Hamamatsu, Sigma Aldrich, Surmodics, 3M, Thermo Fisher Scientific, Equitech-Bio, Surmodics, OYC Americas, Amcor, 3M,and VWR Gilson, Impact Project Management, Enstrom, Hi-Tech Products, and Hamamatsu.International.

We do not have in-house manufacturing capability for our therapeutics product candidates.

Research and Development

For research and development of our drug candidates, we are leveraging the scientific and technical resources and laboratory facilities of UofL and UCL, through technology licensing, sponsored research, and other consulting agreements, which are focused on Aptameraptamer technology and applications in the cancer and infectious disease fields.applications. We would engage contract research organizations (“CROs”) for any clinical trials of our drug candidates. We intend to focus our internal research and development on oversight of these organizations and continuing support of the FastPack diagnostic line.

Regulatory Matters

We have obtained 17 FDA clearances/approvals and 28 CE Marks for our diagnostic products (FastPack analyzers, immunoassays, control kits, calibration kits and verifications kits) to date. We have not obtained FDA or other regulatory approval for any drug candidate.

Medical Device Regulatory Clearances and Approvals

The medical devices that we manufacture and market are subject to regulation by numerous worldwide regulatory bodies, including the FDA and comparable international regulatory agencies. These agencies require manufacturers of medical devices to comply with applicable laws and regulations governing development, testing, manufacturing, labeling, marketing and distribution. Medical devices are also generally subject to varying levels of regulatory control based on the risk level of the device.

In the United States, unless an exemption applies, before we can commercially distribute medical devices, we must obtain, depending on the type of device, either premarket notification clearance or premarket approval (“PMA”) from the FDA. The FDA classifies medical devices into one of three classes. Devices deemed to pose lower risks are placed in either class I or II, which typically requires the manufacturer to submit to the FDA a premarket notification requesting permission to commercially distribute the device. Some low-risk devices are exempted from this requirement. Devices deemed by the FDA to pose the greatest risks, such as life-sustaining, life-supporting or implantable devices, or devices deemed not substantially equivalent to a previously cleared device, are placed in class III, generally requiring PMA.

The premarket notification process requires that a premarket notification (510(k)) be made to the FDA to demonstrate that a new device is as safe and effective as, or substantially equivalent to, a legally marketed device (the “predicate” device). This process is generally known as obtaining 510(k) clearance for a new device. Under this process, applicants must submit performance data to establish substantial equivalence. In some instances, data from human clinical trials must also be submitted in support of a 510(k) premarket notification. If so, these data must be collected in a manner that conforms to the applicable Investigational Device Exemption (“IDE”) regulations. The FDA must issue a decision finding substantial equivalence before commercial distribution can occur. Changes to cleared devices that do not significantly affect the safety or effectiveness of the device can generally be made without additional 510(k) premarket notifications; otherwise, a new 510(k) is required.

The PMA approval process requires the submission of a PMA application to the FDA to demonstrate that the new device is safe and effective for its intended use. This approval process applies to most Class III devices and generally requires clinical data to support the safety and effectiveness of the device, obtained in adherence with IDE requirements. The FDA will approve the PMA application if it finds that there is a reasonable assurance that the device is safe and effective for its intended purpose and that the proposed manufacturing is in compliance with the Quality System Regulation (“QSR”). For novel technologies, the FDA may seek input from an advisory panel of medical experts and seek their views on the safety, effectiveness and benefit-risk of the device. The PMA process is generally more detailed, lengthier and more expensive than the 510(k) process.

In the European Union (“EU”), we are required to comply with the Medical DeviceIn-Vitro Diagnostic Regulation (“MDR” or “EU MDR”IVDR”), which became effective May 2021, superseding existing Medical Device Directives. Medical devices that have a valid CEEC Certificate to the prior Directives (issued before May 2021) can continue to be sold until May 20242025 or until the CEEC Certificate expires, whichever comes first, providing there are no significant changes to the design or intended use. The CE Mark, which is required to sell medical devices in the EU is affixed following a Conformity Assessment and either approval from the appointed independent Notified Body or through self-certification by the manufacturer. The selected pathway to CE marking is based on device risk classification. CE marking indicates conformity to the applicable General Safety and Performance Requirements (“GSPRs”) for the MDR.IVDR. The MDRIVDR changes multiple aspects of the regulatory framework for CE marking, such as increased clinical evidence requirements, changes to labelling,labeling, and new requirements, including Unique Device Identification (“UDI”), and many new post-market reporting obligations. MDRIVDR also modifies and increases the compliance requirements for the medical device industry and will continue to require significant investment over the next few years to transition all products by May 2024.2025. The CE mark continues to be a prerequisite for successful registration in many other global geographies.

We are also required to comply with the regulations of every other country where we commercialize products before we can launch or maintain new products on the market. Regulatory requirements are becoming more stringent, with the China National Medical Product Administration (“NMPA”) recently increasing the regulatory requirements to market and maintain products in China, and the introduction of such regulatory requirements in many countries in the Middle East and Southeast Asia that previously did not have medical device regulations, or had minimal regulations. As a result of the United Kingdom’s departure from the EU, we also expect a U.K. Regulation to be implemented beginning July 2023, with requirements to sell in the U.K. already in place including appointment of a U.K. Responsible Person and device registration with The Medicines and Healthcare products Regulatory Agency (“MHRA”). In addition, other EU countries continue to impose significant local registration requirements despite the implementation of MDR.

The FDA and other worldwide regulatory agencies and competent authorities actively monitor compliance to local laws and regulations through review and inspection of design and manufacturing practices, record-keeping, reporting of adverse events, labeling and promotional practices. The FDA can ban certain medical devices, detain or seize adulterated or misbranded medical devices, order recall or market withdrawal of these devices and require notification of health professionals and others with regard to medical devices that present unreasonable risks of substantial harm to the public health. The FDA may also enjoin and restrain a company for certain violations of the Food, Drug and Cosmetic Act (“FDCA”) and the Safe Medical Devices Act, pertaining to medical devices, or initiate action for criminal prosecution of such violations. Regulatory agencies and authorities in the countries where we do business can halt production in or distribution within their respective country or otherwise take action in accordance with local laws and regulations.

International sales of medical devices manufactured in the United States that are not approved by the FDA for use in the United States, or that are banned or deviate from lawful performance standards, are subject to FDA export requirements. Additionally, exported devices are subject to the regulatory requirements of each country to which the device is exported. Some countries do not have medical device regulations, but in most foreign countries, medical devices are regulated. Frequently, regulatory approval may first be obtained in a foreign country prior to application in the United States due to differing regulatory requirements; however, other countries, such as China, for example, require approval in the country of origin first. Most countries outside of the United States require that product approvals be recertified on a regular basis. The recertification process requires the evaluation of any device changes and any new regulations or standards relevant to the device and, where needed, conduct appropriate testing to document continued compliance. Where recertification applications are required, they must be approved in order to continue selling our products in those countries.

Medical Device Quality Assurance

We are committed to providing high quality products to our customers and the patients they serve. Our quality system starts with the initial product specification and continues through the design of the product, component specification process and the manufacturing, sale and servicing of the product. Our quality system is intended to build in quality and process control and to utilize continuous improvement concepts throughout the product life. Our quality system is also designed to enable us to satisfy various international quality system regulations, including those of the FDA with respect to products sold in the United States. All of our medical device manufacturing facilities and distribution centers are certified under the ISO 13485 quality system standard, established by the ISO for medical devices, which includes requirements for an implemented quality system that applies to component quality, supplier control, product design and manufacturing operations. This certification can be obtained only after a complete audit of a company’s quality system by an independent outside auditor, and maintenance of the certification requires that these facilities undergo periodic re-examination.

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 FDCA and its implementing regulations.

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

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.

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.

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.

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 REMS 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

We currently maintain a portfolio of 147Information regarding the issued allowed, in-licensed orpatents and pending patents, patent applications, and provisional patent applications covering various aspectsas of our products and product candidates in the United States, Canada, Mexico, Europe, Japan, China, Korea, Israel, South Africa, and Australia. In addition, we have seven issued and 28 pending trademark registrations in the United States pertaining to our diagnostics and therapeutics businesses. There are currently no contested proceedings or third party claims against any Qualigen intellectual property.December 31, 2022, is as follows:

Within our diagnostics patent portfolio, we hold two issued patents covering FastPack 1.0, IP and PRO and 23 issued patents covering FastPack 2.0. In addition, we in-licensed one issued patent covering our Vitamin D assay from DIAsource ImmunoAssays S.A.. We also, with Gen-Probe Incorporated, hold 24 issued joint patents covering FastPack Molecular, an inactive product program. Last, we hold five issued patents and 10 patents-pending covering our development-stage STARS theranostic system.

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.

Moreover, effective internal controls, particularly those related to revenue recognition,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.

In addition, discovery and disclosure of a material weakness, by definition, could have a material adverse impact on our financial statements. 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. However, 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 that the material weakness identified in connection with the 2021 audit has not been fully remediated and has 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 this Annual Report (see Item 9A. Controls and Procedures).

We cannot assure you that measures being taken in orderIf we are unable to remediate the material weakness described aboveand achieve and maintain effective internal control over financial reporting and effective disclosure controls, our business could be adversely affected. Certain customers and/or suppliers may choose not to do business with us and the price of our common stock could be adversely impacted. This could, in turn, negatively affect our ability to access equity capital markets.

Our failure to be current in our filings with the SEC could pose significant risks to our business, which could materially and adversely affect our financial condition and results of operations.

We are required, as a public reporting company, to provide investors on a regular basis with periodic reports that contain important financial and business information, including annual reports on Form 10-K and other periodic reports. Periodic reports help investors to make informed investment decisions about the purchase or sale of a reporting company’s securities. Our inability to timely file periodic reports with the SEC could have an adverse impact on our ability to, among other things, (i) raise funds in the public markets and (ii) attract and retain key employees, which could materially and adversely affect our financial condition and results of operations. In addition, the late filing of our Annual Report has also adversely affected our eligibility to use our Form S-3 registration statement. Use of that Form requires, among other things, that the issuer be current in its reports under the Exchange Act for at least 12 months. As a result of our being unable to use Form S-3, we will fully remediate such material weakness. We also cannot assurehave to meet more demanding requirements to register our securities, so it will be more difficult for us to effect public offering transactions, and our range of available financing alternatives could be narrowed.

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 this 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 has no immediate effect on the listing or trading of our common stock on the Nasdaq Capital Market. The notification letter states that, under Nasdaq rules, we have identified all60 calendar days, or until June 20, 2023, to submit a plan to regain compliance with Nasdaq’s continued listing requirements. Alternatively, we may also regain compliance with Nasdaq’s continued listing requirements at any time before June 20, 2023, by filing this Annual Report with the SEC, as well as any subsequent periodic financial reports that may become due, and continuing to comply with Nasdaq’s other continued listing requirements. We expect that the filing of this Annual Report will be sufficient to avoid the delisting of our existing control deficiencies or that we will notcommon stock.

We have in the past been in noncompliance with other Nasdaq continued listing rules. For example, on November 23, 2022, we effected a 1-for-10 reverse stock split of our outstanding common stock to cure our noncompliance, for a period of more than 30 consecutive business days, with Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share.

If we are unable to maintain compliance with Nasdaq’s continued listing requirements. 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 have additional material weaknesses.non-compliance with Nasdaq’s other listing requirements.

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties.

WeOur wholly-owned subsidiary Qualigen, Inc. currently leaseleases an approximately 23,000 square feet all-purpose facility in Carlsbad, California, where we conduct all our operations.California. Our partially owned subsidiary NanoSynex currently leases an R&D facility in Ness Ziona, Israel.

Item 3. Legal Proceedings.

The information set forth in “Litigation and Other Legal Proceedings” in Note 9 to the Consolidated Financial Statements included in this Annual Report is incorporated herein by reference.None.

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. Before that date, there was no public market for Qualigen, Inc. common stock. As a matter of corporate law we are a continuation of Ritter Pharmaceuticals, Inc. under a different name, although for purposes of securities reporting and applicable accounting principles Qualigen, Inc. was the accounting acquirer in the May 22, 2020 reverse recapitalization. Before May 26, 2020, Ritter Pharmaceuticals, Inc. common stock traded on the Nasdaq Capital Market under the symbol “RTTR.”

Holders

As of March 25, 2022,April 11, 2023, there were 692627 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

On December 3, 2021, we issued a common stock warrant (the “Warrant”) to a consultant, entitling the consultant to purchase up to 600,000 of our shares of common stock at an exercise price of $1.32 per share until June 3, 2023. We relied on the exemption from registration provided under Section 4(a)(2) of the Securities Act regarding transactions not involving a public offering.None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

PART II

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 a diversified life sciences company focused on developing treatments for adult and pediatric cancers with potential for Orphan Drug designation, while also commercializing diagnostics.

Our cancer therapeutics pipeline includes QN-302, QN-247RAS and RAS-FQN-247.

.

Our investigationallead oncology therapeutics program, QN-302, compound is aan investigational small molecule G4 selectiveG4-selective transcription inhibitor with strong binding affinity to G4s prevalent in cancer cells. Such binding could, by stabilizing the G4s against DNA “unwinding,” help inhibit cancer cell proliferation. QN-302 is currently undergoing Good Laboratory Practice (GLP) toxicology studies.

Our RAS portfolio 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. Preventing this binding could stop tumor growth, especially in RAS-driven tumors such as pancreatic, colorectal and lung cancers.

Our investigational QN-247 compound binds nucleolin, a key multi-functional regulatory phosphoprotein that is a DNA coated gold nanoparticleoverexpressed in cancer drug candidate that hascells. Such binding could inhibit the potential to target various types of cancer; the nanoparticle conjugate technology is similar to the core nanoparticle coating technology used in our blood-testing diagnostic products.cancer cells’ proliferation. The foundational aptamer of QN-247 is QN-165 (formerly referred to as AS1411), which the Company has deprioritized as a drug candidate for treating COVID-19 and other viral-based infectious diseases. RAS-F is a family of RAS oncogene protein-protein interaction inhibitor small molecules for preventing mutated RAS genes’ proteins from binding to their effector proteins; preventing this binding could stop tumor growth, especially in RAS-driven tumors such as pancreatic, colorectal and lung cancers. We are also identifying strategic partnering opportunities for STARS, a DNA/RNA-based therapeutic device product concept for removing precisely targeted tumor-produced and viral compounds from circulating blood.

On May 26, 2022, we acquired 2,232,861 shares of Series A-1 Preferred Stock of NanoSynex from Alpha in exchange for 3,500,000 shares of our common stock and a prefunded warrant to purchase 3,314,641 shares of our common stock at an exercise price of $0.001 per share. These warrants were subsequently exercised on September 13, 2022 and the shares of our common stock were subsequently subject to a 1 for 10 reverse split on November 23, 2022. Concurrently with this transaction, we also purchased 381,786 shares of Series B preferred stock from NanoSynex for a total purchase price of $600,000. The transactions resulted in our acquiring a 52.8% interest in NanoSynex. NanoSynex is a micro-biologics diagnostics company domiciled in Israel.

Because our therapeutic candidates are all still in the pre-clinical development stage, our only products that are currently commercially available are the for sale FastPack System diagnostic instruments and test kits. Our FastPack System diagnostic instruments and test kits are sold commercially primarily in the United States, as well as certain European countries. The FastPack System menu includes a rapid, point-of-carehighly accurate immunoassay diagnostic teststesting system for cancer, men’s health, hormone function, and vitamin D status. We provide analyzers to our customers (physician offices, clinics and small hospitals) at low cost in order to increase sales volumes of higher-margin test kits.

We have always utilized a “razor and blades” pricing strategy, providing analyzers to our customers (physician offices, clinics and small hospitals) at low cost in order to increase sales volumes of higher-margin test kits. We currently relyThrough the first quarter of 2022, we relied on our diagnostics distribution partner, Sekisui, for most FastPack distribution worldwide pursuant to a distribution agreement, but maintainagreement. We maintained direct distribution for certain house accounts, including selling our total testosterone test kits to Low T, the largest men’s health group in the United States, with 40 locations. The distribution agreementDistribution Agreement with Sekisui will expireexpired on March 31, 2022, at which timeand after that date the services currentlyactivities previously provided by Sekisui will reverthave reverted back to us and we will recognizehave recognized 100% of the revenue from the sales of our FastPack diagnostic instruments and test kits. We have licensed and technology-transferred our FastPack System technology to Yi Xin Zhen Duan Jishu (Suzhou) Ltd. for the China diagnostics market.

We do not expect to be profitable before products from our therapeutics pipeline are commercialized, because we foresee that research and development expenses on the therapeutics programs will significantly exceed the profits, if any, that we might havewill generate from our diagnostics products. To experience losses while therapeutic products are still under development is, of course, typical for biotechnology companies.

Our consolidated financial statements do not separate out our diagnostics-related activities andfrom our therapeutics-related activities. Although to date all of our reported revenue is diagnostics-related, our reported expenses represent the total of our diagnostics-related and therapeutics-related expenses.expenses

Completion of Reverse Recapitalization Transaction with RitterStock Split

On May 22, 2020,November 23, 2022, we completedeffected a “reverse recapitalization” transaction with Qualigen, Inc. (not to be confused with the Company);1-for-10, as determined by our merger subsidiary merged with and into Qualigen, Inc. with Qualigen, Inc. surviving as a wholly owned subsidiaryboard of the Company. The Company, which had previously been known as Ritter Pharmaceuticals, Inc., was renamed Qualigen Therapeutics, Inc., and the former stockholdersdirectors, reverse stock split of Qualigen, Inc. acquired, via the recapitalization, a substantial majority of theour outstanding shares of the Company. Ritter/Qualigen Therapeutics common stock which was previously traded on(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 Nasdaq Capital Market underReverse Stock Split were rounded down to 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.

Because Qualigen, Inc. was the accounting acquirernearest whole share and cash in the reverse recapitalization transaction,lieu of payments were made to stockholders. All share and per share data for all references to financial figures of “the Company”periods presented in this section and the accompanying financial statements and Notes are those of Qualigen, Inc.; the corresponding figures of Ritter Pharmaceuticals, Inc.related disclosures have been disregarded. Moreover, references in this Annual Reportadjusted retrospectively to “our” pre-May 22, 2020-merger history, securitiesreflect the Reverse Stock Split. The number of authorized shares of common stock and agreements are references to the pre-May 22, 2020 merger history, securities and agreements of Qualigen, Inc., except where otherwise expressly specified.

We are no longer pursuing the gastrointestinal disease treatment business on which Ritter Pharmaceuticals, Inc. had focused before the reverse recapitalization transaction.

Distribution and Development Agreement with Sekisui

In May 2016, through our wholly-owned diagnostics subsidiary Qualigen, Inc., we entered into a Distribution and Development Agreement (the “Distribution Agreement”) with Sekisui. Under the Distribution Agreement, Sekisui currently serves as the exclusive worldwide distributor for FastPack products (although we retain certain specific accounts for direct transactions). Sekisui’s exclusive distribution arrangements are effective until March 31, 2022.

Under the Distribution Agreement, we began development of a proposed “FastPack 2.0” product line, which if successfully introduced by us would have been distributed by Sekisui. Between May 2016 and January 2018, Sekisui paid us a total of approximately $5.5 million upon the achievement of specified development milestones.

Under this program, we developed a FastPack 2.0 diagnostic test for a new whole blood vitamin D assay, and we then conducted a clinical trial of it in March 2019. We determined in May 2019 that it was uncertain whether the results of the trial would enable the test to receive FDA approval, and our FastPack 2.0 project with Sekisui was discontinued. Currently no further FastPack 2.0 analyzer or test development is ongoing, and we have licensed and transferred our FastPack 2.0 technology to Yi Xin Zhen Duan Jishu (Suzhou) Ltd. for them to further develop and commercialize.

We became obligated to pay Sekisui $0.9 million for $0.5 million in research and development costs advanced by Sekisui to us and for the reimbursement of $0.4 million in certain out-of-pocket development and preclinical study expenses incurred by Sekisui. We satisfied these amounts (plus interest) by payment in full on July 21, 2020.

The Distribution Agreement with Sekisui is scheduled to expire on March 31, 2022, at which time the services currently provided by Sekisui will revert to us and we will recognize 100% of the revenue from the sales of our FastPack diagnostic instruments and test kits.

Technology Transfer Agreement with Yi Xin

Through our wholly-owned diagnostics subsidiary Qualigen, Inc., we entered into a Technology Transfer Agreement dated as of October 7, 2020 with Yi Xin, of Suzhou, China, which authorizes Yi Xin to develop, manufacture and sell new generations of diagnostic test systems based on our core FastPack technology. In addition, the Technology Transfer Agreement authorizes Yi Xin to manufacture and sell our current generations of FastPack System diagnostic products (1.0, IP and PRO) in China.

Under the Technology Transfer Agreement, we have received total net cash payments of approximately $670,000, of which approximately $632,000 is classified as license revenue, and approximately $38,000 is classified as product sales on the statement of operations for the fiscal year ended December 31, 2021. We will receive low- to mid-single-digit royalties on any future new-generations and current-generations product sales by Yi Xin.

We have provided technology transfer and patent/know-how license rights to facilitate Yi Xin’s development and commercialization.

We have provided Yi Xin the exclusive rights for China – which is a market we have not otherwise entered – both for Yi Xin’s new generations of FastPack-based products and for Yi Xin-manufactured versions of our existing FastPack product lines. Yi Xin will also have the right to sell its new generations of FastPack-based diagnostic test systems throughout the world (but not to or toward current customers of our existing generations of FastPack products); any such non-China sales would, until March 31, 2022, need to be through Sekisui. After March 31, 2022, Yi Xin will have the right to sell Yi Xin-manufactured versions of existing FastPack 1.0, IP and PRO product lines worldwide (other than in the United States and other than to or toward current non-US customers of those products). Yi Xin will also have the right, after March 31, 2022, to buy Qualigen-manufactured FastPack 1.0, IP and PRO products from us at distributor prices for resale in and for the United States (but not to or toward current U.S. customers of those products). We did not license Yi Xin to sell in the United States market any Yi Xin-manufactured versions of those legacy FastPack product lines, even after March 31, 2022.

par value per share remains unchanged.

We agreed in the Technology Transfer Agreement that we would not, after March 31, 2022, seek new FastPack customers outside the United States.

Yi Xin is a newly-formed company and is subject to many risks. There can be no assurance that Yi Xin will successfully commercialize any products or that we will receive any royalties from Yi Xin.

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 were so-called “exploding warrants” – as they contained a provision that if Qualigen, Inc. issued shares (except in certain defined scenarios) at a price below the warrants’ exercise price, the exercise price would be re-set to such new price and the number of shares underlying the warrants would be increased in the same proportion as the exercise price decrease. For accounting purposes, such “exploding warrants” give rise to “warrant liabilities”. Although the fair value of the warrants was immaterial at March 31, 2020, the operation of the “double-ratchet” provisions in these “exploding warrants” in connection with the reverse-recapitalization transaction now allow the holders to exercise for a significantly higher number of shares than before and at a significantly lower price than the current market price of our shares. 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 size of these warrant liabilities was quite large ($1.7 million and $8.3 million at December 31, 2021 and 2020 respectively) and caused a significant distortion of our Consolidated Balance Sheets and our results of operations for these periods. Because this fair value will be determined each quarter on a “mark-to-market” basis, this item could result in significant variability in our future quarterly and annual Consolidated Statement of Operations and Consolidated Balance Sheets based on changes in our public market common stock price. Pursuant to U.S. GAAP, a quarter-to-quarter increase in our stock price would result in an increase (possibly quite large) in the fair value of the warrant liabilities and a quarter-to-quarter decrease in our stock price would result in a decrease (possibly quite large) in the fair value of the warrant liabilities. Approximately 53% of these “exploding warrants” have been exercised as of December 31, 2021, which reduced the amplitude of this variability. (There were 2,481,614 of these “exploding warrants” outstanding at December 31, 2021 and 3,378,596 of these “exploding warrants” outstanding at December 31, 2020.) We will continue to encourage the holders of these warrants to exercise them, and if the number of outstanding “exploding warrants” is further reduced the potential amplitude of the changes in the warrant liabilities will correspondingly be further reduced.

Impact of COVID-19 Pandemic

The COVID-19 haspandemic had, and will continue toit or similar pandemics, epidemics or infectious disease outbreaks may, in the future, have, adverse impacts on the U.S. and world economy, health care systems, personnel availability, supply chains, social and political assumptions, and capital markets. ThoseThe impacts are expected to be especiallyfrom the pandemic were particularly serious for smaller companies such as ours. Our salesSales of our diagnostic products fell significantly in the nine months ended December 31,during 2020 (and net loss increased significantly), as deferral of patients’ non-emergency visits to physician offices, clinics and small hospitals sharply reduced demand for our FastPack tests. A resurgence ofWhile our FastPack sales began to rebound in 2021, the extent to which the COVID-19 pandemic, or similar pandemics, epidemic or infectious disease outbreak, could impact us in the future will depend on numerous evolving factors and future developments that we are unable to predict at this time, including: the timing, extent, trajectory and duration of the pandemic; the emergence of new vaccine resistant variantsvariants; the development, availability, distribution and effectiveness of vaccines and treatments; the imposition of protective public safety measures; and the impact of the pandemic on the global economy and demand for our products and services. We could again experience adverse impacts to our business as a result of any related economic recession that may occur in the future from COVID-19 or some other similar global pandemic, epidemic or infectious disease could have a similar impact on our future operations, although the degree of impact will probably depend on the extent of any lockdowns and similar actions taken in response to the pandemic as well as any personal and societal behavior changes arising from psychological factors.outbreak.

Critical Accounting Policies and Estimates

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, stock-based compensation, amortization and depreciation, inventory reserves, allowances for doubtful accounts and returns, and warranty costs. 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:

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 Qualigen, Inc. 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. The operation of the “double-ratchet” provisions in these warrants in connection with the NanoSynex acquisition and the convertible debenture financing transaction in 2022 now allow the holders to exercise for a significantly higher number of shares than before. 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 $0.8 million and $1.7 million at December 31, 2022 and 2021, respectively. There were 1,349,571 of these warrants outstanding at December 31, 2022 and 248,162 of these warrants outstanding at December 31, 2021.

On December 22, 2022, as part of the convertible debenture financing, the Company issued to Alpha a common stock warrant to purchase a number of shares of the common stock of the Company equal to the number of Conversion Shares issuable upon conversion of the Debenture as of the closing date. The exercise price of the warrant is $1.65 (equal to 125% of the Conversion Price of the Debenture on the closing date). The warrant entitles Alpha to purchase up to 2,500,000 shares of common stock of the Company and may be exercised by Alpha, in whole or in part, at any time on or after June 22, 2023 and before June 22, 2028. U.S. GAAP requires 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 this warrant liability was $2.8 million and $0 at December 31, 2022 and 2021, respectively.

Because the fair value of the above liability classified warrants will be determined each quarter on a “mark-to-market” basis , it could result in significant variability in our future quarterly and annual Consolidated Statement of Operations and Consolidated Balance Sheets based on changes in our public market common stock price. Pursuant to U.S. GAAP, a quarter-to-quarter increase in our stock price would result in an increase (possibly quite large) in the fair value of the warrant liabilities and a quarter-to-quarter decrease in our stock price would result in a decrease (possibly quite large) in the fair value of the warrant liabilities.

On January 1, 2021, the Company early adopted ASU No. 2021-04 Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) and ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”6, (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.”

During the nine months ended December 31, 2020, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, and Accounting Standards Codification Topic 842, Leases. The application of other existing accounting policies was not changed as of and for the year ended December 31, 2021.

Results of Operations

Comparison of the Twelve-Month YearYears Ended December 31, 2021 (“Fiscal 2021”)2022 and Nine Months Ended December 31, 2020 (the “Transition Period”)2021

The following table summarizes our results of operations for Fiscal 2021 and the Transition Period:

Revenues

Our operating revenues are primarily generated from sales of our FastPack diagnostic tests. Revenues for Fiscal 2021the year ended December 31, 2022 were $5.6approximately $5.0 million compared to $2.8approximately $5.7 million for the Transition Period, an increaseyear ended December 31, 2021, a decrease of $2.8 million, or 98%. $0.7 million. This increasedecrease was primarily due to $2.2 million in increased diagnostic product sales, as well the recognition of approximately $0.6 million in license revenue from Yi Xin under the Technology Transfer Agreement for the year ended December 31, 2021, compared with no license revenue infor the Transition Period.year ended December 31, 2022.

Net product sales

Net product sales are primarily generated from sales of our diagnostic tests. Net product sales for Fiscal 2021 and the Transition Periodyear ended December 31, 2022 were approximately $5.0 million, and $2.8which remained largely consistent with $5.0 million respectively, representing an increase of approximately $2.2 million, or 76%. This improvement was due to a recovery fromfor the effects of COVID-19 pandemic during the prior year as well as the fact that the Transition Period had only nine months versus a full twelve months in Fiscalended December 31, 2021.

License Revenue

License revenue for Fiscalthe year ended December 31, 2021 was $0.6 million, due to the recognition of revenue from Yi Xin under the Technology Transfer Agreement. There was no license revenue for the Transition Period.year ended December 31, 2022.

Expenses

Cost of Product Sales

Cost of product sales increased tofor the year ended December 31, 2022 were $4.3 million, which remained largely consistent with $4.3 million for Fiscal 2021, or 86% of net product sales, compared to $2.6 million for the Transition Period, or 93% of net product sales. The increase in dollars (even after recognizing and adjusting for the fact that the Transition Period had only nine months and Fiscal 2021 had twelve months) and decrease in percentage of net product sales were primarily due to increased unit sales of product, which resulted in economies of scale.year ended December 31, 2021.

General and Administrative Expenses

General and administrative expenses increased sharplydecreased from $7.1$11.7 million for the Transition Periodyear ended December 31, 2021 to $11.7 $10.8 million for Fiscal 2021.the year ended December 31, 2022. This increasedecrease was primarily due to $2.1a $0.3 million in employee/director stock-based compensation expense, a $0.7 million increasedecrease in professional fees, (including $0.3 a $0.3 million decrease in stock-based compensation),payroll-related expenses, a $0.6$0.3 million increasedecrease in insurance expenses, and a $1.2$0.3 million increasedecrease in payrollinvestor relations expenses, primarily due to the additionoffset by increases of a new President$0.2 million in legal expenses and Chief Strategy Officer position, higher strategic consulting and proxy distribution costs, as well as the fact that the Transition Period had only nine months versus a full twelve months$0.1 million in Fiscal 2021.

rent.

Research and Development Costs

Research and development costs include therapeutictherapeutics and diagnosticdiagnostics research and product development costs. Research and development costs increased sharplydecreased from $3.3$11.7 million for the Transition Periodyear ended December 31, 2021 to $11.7$6.8 million for Fiscal 2021.the year ended December 31, 2022. Of the $3.3$6.8 million of research and development costs for the Transition Period (nine months), $2.5year ended December 31, 2022, $4.5 million (75%(66%) was attributable to therapeutics and $0.8$2.3 million (25%(34%) was attributable to diagnostics. Of the $11.7 million of research and development costs for Fiscalthe year ended December 31, 2021, (twelve months), $10.4$10.3 million (88%) was attributable to therapeutics and $1.3$1.4 million (12%) was attributable to diagnostics.

The increase in diagnostic research and development costs was primarily due to $0.3$0.9 million in increased stock-based compensation expense, and $0.2 million resulting fromR&D expenses assumed in connection with the fact that the Transition Period had only nine months and Fiscal 2021 had twelve months.acquisition of NanoSynex. The increasedecrease in therapeutics research and development costswas primarily due to an increasea decrease of $5.6$6.4 million in expenses related to the potential application of QN-165 for the treatment of COVID-19 ($4.34.6 million in drug compound manufacturing costs, and a $1.3$1.8 million increase in other pre-clinical research costs), as well as pre-clinical research and development cost increasesdecreases of approximately $0.7$0.2 million for QN-247, $0.5a decrease in legal expenses of $0.3 million, for RAS, and an increase of approximately $0.8a decrease of $0.3 million in payroll-related expenses, primarily due to the additionoffset by an increase in QN-302 spending of a new Chief Medical Officer position,$1.1 million and an increase in RAS expenses of $0.3 million in increased patent costs for Fiscal 2021 (twelve months), all as compared to the Transition Period (nine months). On August 11, 2021, the FDA informed us that additional pre-clinical studies would be required in order for the FDA to clear the IND application that we filed on July 13, 2021 for clinical studies of QN-165 for the treatment of COVID-19 in hospitalized patients. We have since decided to deprioritize this QN-165 program.million.

For the future, we expect our therapeutic research and development costs to continue to significantly outweigh our diagnostic research and development costs, and to be relatively lower in periods when we are focusing on pre-clinical activities and meaningfully higher in periods when we are provisioning for and conducting clinical trials, if any.

Sales and Marketing Expenses

Sales and marketing expenses for Fiscal 2021the year ended December 31, 2022 increased to approximately $0.5$1.0 million as compared to $0.3$0.5 million for the Transition Period,year ended December 31, 2021, primarily due to an increase in payroll-related expenses and as a result of the fact thattermination of the Transition Period had only nine months and Fiscal 2021 had twelve months.Sekisui distribution agreement.

Goodwill and Fixed Asset Impairment Loss

DuringAs a result of annual goodwill impairment testing, we recognized a $4.2 million non-cash goodwill and fixed asset impairment charge in the Transition Period, we evaluatedvaluation of our business acquisition of NanoSynex for the ongoing valueyear ended December 31, 2022. For more information, refer to Note 1 - Organization and Summary of construction in progress related to new FastPack manufacturing equipment. Based on this evaluation, we determinedSignificant Accounting Policies and Estimates and Note 7 - Goodwill, IPR&D and other Intangibles of the asset was impaired and wrote it down by $1.4 million to its estimated fair value of $0. There was no impairment loss for Fiscal 2021.consolidated financial statements.

Other Expense (Income)

Change in Fair Value of Warrant Liabilities

During Fiscal 2021the year ended December 31, 2022 we experienced (primarily due to a decrease in our stock price during the period) a $4.7$0.9 million gain in other income because of the change in fair value of the warrant liabilities arising from our “exploding warrants” series (containing a “double-ratchet” provision) issued by Qualigen, Inc. many years ago to brokers and investors in connection with a 2004 private placement. liability classified warrants described above. The estimated fair value of these warrants decreased increased to $3.6 million as of December 31, 2022 from $1.7 million as of December 31, 2021 from $8.3 millionprimarily due to the issuance of a new warrant as part of December 30, 2020.the convertible debt-related party financing transaction, offset by a reduction in fair value of the other liability classified warrants. For the Transition Period,year ended December 31, 2021, the lossgain on change in fair value of warrant liabilities was $8.3$4.7 million due to an associated increasedecrease 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.

Because the fair value of the warrant liabilities will be determined each quarter on a “mark-to-market” basis, this item is likely to continue to result in significant variability in our future quarterly and annual 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.

Gain on Loan Extinguishment

We recognized a $0.5 million gain on loan extinguishment in the Transition Period when the federal government forgave our CARES Act loan. There was no similar item in Fiscal 2021.

Interest (Income) Expense, Net

There was $43,000$27,000 in net interest incomeexpense during Fiscal 2021 versusthe year ended December 31, 2022 compared to net interest expenseincome of $48,000$43,000 during the Transition Period.year ended December 31, 2021. During the Transition Period, interest on $1.7 million principal amount of convertible notes payable ceased to accrue when they automatically converted in May 2020 upon the closing of the reverse recapitalization transaction. In addition, between April 1, 2020 andyear ended December 31, 20202022, we paid off our revolving factoring lineissued convertible debt which resulted in an increase of credit facility and repaid approximately $0.9 million to Sekisui. During the second quarter of Fiscal 2021 we paid off our Equipment Financing Agreements, which eliminated all of our notes payable. Interest income was generated during both periods from cash$47,000 in interest expense offset by a reduction of $20,000 in interest income compared to the year ended December 31, 2021, primarily due to lower interest bearing bank depository accounts.cash balances.

Other (Income) Expense,Income, Net

ThereOther income was $5,000 of other income during Fiscal 2021, and approximately $256,000 in other incomeimmaterial during the Transition period, of which $250,000 resulted from a license option fee for our FastPack 2.0 technology.years ended December 31, 2022 and 2021.

Liquidity and Capital ResourcesGoing Concern

As of December 31, 2021,2022, we had $17.5approximately $7.0 million of cash. However, wein cash. We have sufferedincurred recurring losses from operations and have an accumulated deficit of $103.4 million at December 31, 2022. We expect to continue to do so. Based onincur losses subsequent to the consolidated balance sheet date of December 31, 2022. For the years ended December 31, 2022 and 2021, we used cash of $13.2 million and $14.7 million, respectively, in operations. We currently expect our current cash position, and assuming currently planned expenditures and level of operations, we believe we have sufficient capitalbalances to fund operations forinto the twelve-month period subsequent to the datethird quarter of this Annual Report.

2023. As a pre-clinical development-stage therapeutics biotechnology company, we expect to continue to have net losses and negative cash flow from operations, which over time 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 these financial statements were issued.

There is no assurance that profitable operationswe will ever be achieved,achieve profitable operations, or, if achieved, could be sustained on a continuing basis. In order to fully execute our business plan, including full clinical trials of therapeutic drug candidates, we will require significant additional financing.financing for planned research and development activities, capital expenditures, clinical and pre-clinical testing for QN-302 clinical trials, to continue preclinical development of RAS, and to continue funding the NanoSynex operations (See Note 3-Acquisition), as well as commercialization activities.

Historically, our principal sources of cash have, in addition to revenue from FastPack product sales and license revenues, included proceeds from the issuance of common and preferred equity and proceeds from the issuance of debt. In December 2021, we raised $8.8 million from the issuance of common stock to several institutional investors, and in December 2022 we raised approximately $3.0 million from the sale of a convertible debenture 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, which could adversely affect our business prospects.

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 government or other 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 Debenture and/or trigger certain adjustments to the Debenture or warrants held by Alpha.

As a condition to the NanoSynex closing, the Company agreed to provide NanoSynex with up to $10.4 million of future funding based on NanoSynex’s achievement of certain future development milestones and subject to other terms and conditions described in the Master Agreement for the Operational and Technological Funding of NanoSynex (the “Funding Agreement”) entered into with NanoSynex. These funding commitments are in the form of convertible promissory notes to be issued to the Company with a face value equal to the amount paid by the Company to NanoSynex upon satisfaction of the applicable performance milestone, bearing interest at the rate of 9% per annum on the principal balance from time to time outstanding under the particular promissory note, convertible at the option of the Company into additional shares of NanoSynex in order for the Company to maintain at least a 50.1% controlling ownership interest in NanoSynex, should NanoSynex issue additional shares. The principal of the convertible notes are due and payable upon the sooner to occur of: i) five years from the date of issuance of the particular promissory note; ii) the acquisition by any person or entity of all or substantially all of the share capital of NanoSynex, through share purchase, issuance or shares or merger of NanoSynex, or the purchase of all or substantially all of the assets of NanoSynex; or iii) the initial public offering of NanoSynex. The Company provided funding to NanoSynex of $2.4 million during 2022 and an additional $0.5 million in February 2023 pursuant to this agreement. The Company may terminate the Funding Agreement upon 120 days’ notice, but would still be liable for any payments due for milestones achieved prior to termination.

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 Consolidated Balance Sheet as ofconsolidated balance sheet at December 31, 2021 included $1.72022 includes $3.6 million of current warrant liabilities. We do not consider that the warrant liabilities to constrain our liquidity, as a practical matter. Our current liabilities as ofat December 31, 2021 included2022 also include $0.9 millionof accounts payable, and $1.8$0.5 million of accrued vacation pay, $1.5 million of accrued expenses and other current liabilities.liabilities, a $0.8 million R&D grant liability, $0.2 million in operating lease liabilities, $0.1 million of notes payable (convertible debt to a related party), and $1.0 million in short term 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.

Lease Agreement with Bond Ranch LP

On December 15, 2021, our wholly-owned subsidiary Qualigen, Inc. entered into a Second Amendment to Lease with Bond Ranch LP. This Amendment extended the Company’sCompany’s triple-net leasehold on its existing 22,624-square-foot headquarters/manufacturing facility at 2042 Corte del Nogal, Carlsbad, California for the 61-month period of November 1, 2022 to November 30, 2027. Over the 61 months, the base rent payable will total $1,950,710; however, the base rent for the first 12 months of the 61-month period will be only $335,966. Additionally, Qualigen, Inc. iswas entitled to a $339,360 tenant improvement allowance. See Note 913-Commitments and Contingencies of the consolidated financial statements for additional details.

We have no material contractual obligations not fully recorded on our Consolidated Balance Sheet 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 FDAFDA 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 fixed and 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.

These commitments includeWe have multiple license and sponsored research agreements with UofL Research Foundation (“ULRF”). Under these agreements, we will takehave 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 $805,000 and prior patent costs of up to $200,000 for QN-247. As of December 31, 2021 we had up to $136,000 remaining due under this sponsored research agreement for QN-247. We also agreed to reimburse ULRF for sponsored research expenses of up to $1.8 $2.7 million and prior patent costs of up to $112,000 for RAS. As of December 31, 20212022 we had up to $0.7 million$748,000 remaining due under this sponsored research agreement for RAS. ThisWe also agreed to reimburse ULRF for sponsored research expenses of up to $830,000 and prior patent costs of up to $200,000 for QN-247. As of December 31, 2022, there were no remaining un-expensed amounts under this sponsored research agreement for RASQN-247 and the agreement was subsequently amended in March 2022 (see Note 15).terminated effective August 31, 2022. We also agreed to reimburse ULRF for sponsored research expenses of up to $430,000 and prior patent costs of up to $24,000 for QN-165. As of December 31, 20212022 we had no remaining un-expensed amounts due under this sponsored research agreement for QN-165. ForQN-165, and the agreement was terminated effective November 30, 2021. 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, and we will be required to pay a percentage of any sublicense income.

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.) The program’s lead compound will be further developed at Qualigen under the name QN-302 as a candidate for treatment of pancreatic ductal adenocarcinoma (PDAC), which represents the vast majority of pancreatic cancers. The Agreement requires (if and when applicable) tiered royalty payments in the low to mid-single digits, clinical/regulatory/sales milestone payments, and a percentage of any non-royalty sublicensing consideration paid to Qualigen.

Termination of Sekisui Distribution Agreement

Following the expiration of the Sekisui Distribution Agreement on March 31, 2022, the Company has a commitment to purchase leased FastPack rental systems back from Sekisui at its net book value, in the amount of $154,000 which is included in equipment held for lease and accrued expenses and other current liabilities on the consolidated balance sheet.

Technology Transfer Agreement with Yi Xin

Through our wholly-owned diagnostics subsidiary Qualigen, Inc., we entered into a Technology Transfer Agreement dated as of October 7, 2020, with Yi Xin, of Suzhou, China, which authorizes Yi Xin to develop, manufacture and sell new generations of diagnostic test systems based on our core FastPack technology. In addition, the Technology Transfer Agreement authorizes Yi Xin to manufacture and sell our current generations of FastPack System diagnostic products (1.0, IP and PRO) in China. We have provided technology transfer and patent/know-how license rights to facilitate Yi Xin’s development and commercialization.

Under the terms of the Technology Transfer Agreement, we have provided Yi Xin the exclusive rights for China – which is a market we have not otherwise entered – both for Yi Xin’s new generations of FastPack-based products and for Yi Xin-manufactured versions of our existing FastPack product lines. Yi Xin has the right to sell its new generations of FastPack-based diagnostic test systems throughout the world (but not to or toward current customers of our existing generations of FastPack products); provided that any non-China sales would, until March 31, 2022, need to be through Sekisui. As of April 1, 2022, Yi Xin has right to sell Yi Xin-manufactured versions of existing FastPack 1.0, IP and PRO product lines worldwide (other than in the United States and other than to or toward current non-US customers of those products). Yi Xin also has the right, as of April 1, 2022, to buy Qualigen-manufactured FastPack 1.0, IP and PRO products from us at distributor prices for resale in and for the United States (but not to or toward current U.S. customers of those products). We did not license Yi Xin to sell in the United States market any Yi Xin-manufactured versions of those legacy FastPack product lines, even after March 31, 2022. We agreed in the Technology Transfer Agreement that we would not, after March 31, 2022, seek new FastPack customers outside the United States.

Under the Technology Transfer Agreement, we have received total net cash payments of approximately $670,000, of which approximately $632,000 was classified as license revenue, and approximately $38,000 is classified as product sales on the statement of operations for the fiscal year ended December 31, 2021. There were no revenues under this agreement for the fiscal year ended December 31, 2022. We will receive low- to mid-single-digit royalties on any future new-generations and current-generations product sales by Yi Xin.

Yi Xin is a newly-formed company and is subject to many risks. There can be no assurance that Yi Xin will successfully commercialize any products or that we will receive any royalties from Yi Xin.

Alpha Convertible Debt

On December 22, 2022, we issued an 8% Senior Convertible Debenture in the aggregate principal amount of $3,300,000 to Alpha for a purchase price of $3,000,000 pursuant to the terms of a Securities Purchase Agreement, dated December 21, 2022 (the “Alpha Purchase Agreement”). The Debenture is convertible, at any time, and from time to time, at Alpha’s option, into shares of our common stock (the “Conversion Shares”), at a price equal to $1.32 per share, subject to adjustment as described in the Debenture (the “Conversion Price”) and other terms and conditions described in the Debenture, including the Company’s receipt of the requisite stockholder approvals.

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 Debenture, we must redeem $110,000 plus accrued but unpaid interest, liquidated damages and any amounts then owing under the Debenture. The Monthly Redemption Amount must be paid in cash; provided that after the first two monthly redemptions, we may 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 Debenture and (ii) 85% of the average of the VWAPs (as defined in the Debenture) for the five consecutive trading days ending on the trading day that is immediately prior to the applicable Monthly Redemption Date. We may also redeem some or all of the then outstanding principal amount of the Debenture at any time for cash in an amount equal to 105% of the then outstanding principal amount of the Debenture being redeemed plus accrued but unpaid interest, liquidated damages and any amounts then owing under the Debenture. These monthly redemption and optional redemptions are subject to the satisfaction of the Equity Conditions (as defined in the Debenture), which includes a condition that we have obtained stockholder approval for such share issuances.

The Debenture accrues interest at the rate of 8% per annum, which does not begin accruing until December 1, 2023, and will be payable on a quarterly basis. Interest may be paid in cash or shares of common stock of the Company or a combination thereof at the option of the Company; provided that interest may only be paid in shares if the Equity Conditions have been satisfied, including the stockholder approval condition as described above.

Nanosynex Funding Agreement

As a condition to the NanoSynex acquisition, 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 have agreed to fund NanoSynex up to an aggregate of approximately $10.4 million over the next three years, 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.

We will receive in exchange for any payment made to NanoSynex under the Funding Agreement one or more promissory notes (which may contain convertible features) with a face value equal to the amount paid by the Company to NanoSynex upon satisfaction of the applicable performance milestones. Any promissory notes issued to us by NanoSynex under the Funding Agreement will bear interest at a rate of 9.00% per annum on the principal balance from time to time outstanding under the promissory note. The principal and interest under any promissory note issued to us under the Funding Agreement will be due and payable upon the sooner to occur of: (i) five years from the date of the particular promissory note; (ii) the acquisition by any person or entity of all or substantially all of the share capital of NanoSynex, through share purchase, issuance of shares or merger of NanoSynex or the purchase of all or substantially all of the assets of NanoSynex; or (iii) the initial public offering of NanoSynex. If at any time, our ownership of the share capital of NanoSynex on an issued and outstanding basis falls or is reasonably expected to fall below 50.1%, solely as a result of the exercise of existing or future options (or an equivalent instrument) or as a result of issuance of restricted, shares, restricted stock units (or an equivalent instruments), we, in our sole discretion, may elect to convert all or any portion of the outstanding principal amount of any promissory note into shares of NanoSynex’s most senior class of preferred shares existing immediately prior to such conversion, subject to the terms and conditions described in the promissory notes so that, following such conversion, we will regain 50.1% ownership of NanoSynex’s issued and outstanding share capital. During the year ended December 31, 2022 a total of approximately $2.4 million was funded and in February 2023 and additional $0.5 million was funded to NanoSynex under the Funding Agreement.

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.

Cash Flows

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

Net Cash Used in Operating Activities

During the year ended December 31, 2022, operating activities used $13.2 million of cash, primarily resulting from a net loss of $21.0 million. Cash flows from operating activities (as opposed to net loss) for the year ended December 31, 2022 were positively impacted by adjustments for $5.4 million in non cash stock-based compensation expense, a $4.2 million non cash goodwill impairment charge related to the acquisition of Nanosynex, $0.1 million in depreciation and amortization, as well as $0.4 million decrease in accounts receivable. Cash flows from operating activities (as opposed to net loss) for the year ended December 31, 2022 were negatively impacted by a $1.0 million gain on change in fair value of warrant liabilities (as described above), a $0.6 million increase in inventory and equipment held for lease, a $0.5 million decrease in R&D grant liability which was offset against NanoSynex R&D expenses, a $0.3 million decrease in deferred tax liability, a $0.1 million increase in prepaid expenses and other assets, and a $0.1 million decrease in accounts payable and accrued expenses.

During the year ended December 31, 2021, operating activities used $14.7 million of cash, primarily resulting from a net loss of $17.9 million. Cash flows from operating activities (as opposed to net loss) for the twelve months ended December 31, 2021 were positively impacted by aadjustments for $5.6 million increase in non cash stock-based compensation expense,expenses, a $1.3 million decrease in prepaid expenses and other assets, a $1.0 million increase in accrued expenses and other current liabilities and a $0.4 million increase in accounts payable, due to higher costs related to therapeutics research and development. The decrease in prepaid expenses reflected in the statements of cash flows from operating activities was primarily due to the expensing during the period of $1.2 million of previous prepayments to STA Pharmaceutical Co., Ltd., a subsidiary of WuXi AppTec, which was our manufacturer of QN-165 drug compounds. Cash flows from operating activities (as opposed to net loss) for the twelve months ended December 31, 2021 were negatively impacted by a $4.7 million gain on change in fair value of warrant liabilities (as described above), and a $0.4 million decrease in deferred revenue primarily resulting from recognition of Yi Xin license revenue.

During the Transition Period, operating activities used $10.2 million of cash, resulting from a net loss of $19.5 million, largely offset by the $8.3 million loss on change in fair value of warrant liabilities. Cash flows from operating activities (as opposed to net loss) for the Transition Period were impacted by the $8.3 million loss on change in fair value of warrant liabilities (as described above), $2.8 million in employee/director stock-based compensation expense, a $1.4 million impairment loss on construction in progress and a $0.4 million write-off of patents and licenses. Cash flows from operating activities (as opposed to net loss) for the Transition Period were negatively impacted by a $1.5 million increase in prepaid expenses, payment of $0.9 million owed to Sekisui, a $0.5 million gain on CARES Act loan extinguishment and a $0.4 million decrease in accounts payable. The increase in prepaid expenses reflected in the statements of cash flows from operating activities was primarily due to $1.2 million of upfront deposits paid to STA Pharmaceutical Co., Ltd., a subsidiary of WuXi AppTec, which was our manufacturer of QN-165 drug compounds.

Net Cash Used in Investing Activities

During Fiscalthe 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.

During the year ended December 31, 2021, net cash used in investing activities was approximately $0.1 million, primarily related to the purchase of property and equipment.

During the Transition Period, net cash used in investing activities was $0.1 million, primarily related to purchase of property and equipment, offset by cash and cash equivalents acquired in the May 2020 reverse recapitalization.

Net Cash Provided by Financing Activities

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

Net cash provided by financing activities for the year ended December 31, 2021 was approximately $8.4 million, due to $8.8 million of proceeds from sales of equity securities in a registered-direct offering to several institutional investors, and $0.5 million of net proceeds from warrant exercises, offset by $0.7 million in payments for offering costs related to the registered-direct offering and $0.1 million of principal payments on notes payable.

Net cash provided by financing activities for the Transition Period was $34.1 million, due to $34.0 million of proceeds from a reverse-recapitalization-time equity capital raise and later sales of equity securities in three registered-direct offerings to an institutional investor, $1.4 million in proceeds from the issuance of notes payable (including a $0.5 million CARES Act loan that ultimately was forgiven) and $1.3 million of net proceeds from warrant exercises, offset by $1.4 million in payments for offering costs related to the three registered-direct offerings and $1.3 million of principal payment of notes payable.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Not applicableWe are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to smaller reporting companies.provide the information otherwise required under this Item.

Item 8. Consolidated Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 23)23)

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, 20212022 and December 31, 2020,2021, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the yeartwo years in the period ended December 31, 2021 and for the nine months ended December 31, 2020,2022, and the related notes (collectively referred to as the consolidated“consolidated financial statements (collectively, the “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, 20212022 and December 31, 2020,2021, and the results of its operations and its cash flows for each of the yeartwo years in the period ended December 31, 2021 and for the nine months ended December 31, 2020,2022, 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.