| Organization and Summary of Significant Accounting Policies and Estimates | NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES AND ESTIMATES Organization Qualigen, Inc., now a subsidiary of Qualigen Therapeutics,
Inc., was incorporated in Minnesota in 1996 to design, develop, manufacture and sell point-of-care quantitative immunoassay diagnostic
products for use in physician offices and other point-of-care settings worldwide, and was reincorporated in Delaware in 1999. Qualigen
Therapeutics, Inc. (the “Company”) operates in one business segment. In May 2020, Qualigen, Inc. completed a reverse recapitalization
transaction with Ritter Pharmaceuticals, Inc. (“Ritter”) and Ritter was renamed Qualigen Therapeutics, Inc., recognized as
a reverse recapitalization. All shares of Qualigen, Inc.’s capital stock were exchanged for Qualigen Therapeutics, Inc.’s
capital stock in the merger. Ritter/Qualigen Therapeutics common stock, which was previously traded on the Nasdaq Capital Market under
the ticker symbol “RTTR,” commenced trading on the Nasdaq Capital Market, on a post-reverse-stock-split adjusted basis, under
the trading symbol “QLGN” on May 26, 2020. Qualigen, Inc. was determined to be the accounting
acquirer in a reverse recapitalization based upon the terms of the merger and other factors. All references to financial figures of the
Company presented in the accompanying condensed consolidated financial statements and in these Notes through May 22, 2020 are to those
of Qualigen, Inc. All references to financial figures after May 22, 2020 are to those of Qualigen Therapeutics, Inc. and Qualigen, Inc. Basis of Presentation The accompanying unaudited condensed consolidated
financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States
of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) applicable to interim reports
of companies filing as a smaller reporting company. These financial statements should be read in conjunction with the audited financial
statements and notes thereto contained in the Company’s Transition Report on Form 10-K for the fiscal year ended December 31, 2020
filed with the SEC on March 31, 2021. In the opinion of management, the accompanying condensed consolidated interim financial statements
include all adjustments necessary in order to make the financial statements not misleading. The results of operations for interim periods
are not necessarily indicative of the results to be expected for the full year or any other future period. Certain notes to the financial
statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal
year as reported in the Company’s Transition Report on Form 10-K have been omitted. The accompanying condensed consolidated balance
sheet at March 31, 2021 has been derived from the audited balance sheet at December 31, 2020 contained in such Form 10-K. Principles of Consolidation The Company’s unaudited interim condensed consolidated
financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany balances and transactions have
been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP. The Company views
its operations and manages its business in one operating segment. All long-lived assets of the Company reside in the US. Accounting Estimates Management uses estimates and assumptions in preparing
its condensed consolidated financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The most significant
estimates relate to the estimated fair value of warrant liabilities, stock-based compensation, write-off of patents and licenses, amortization
and depreciation, inventory reserves, allowances for doubtful accounts and returns, and warranty costs. Actual results could vary from
the estimates that were used. Cash and Cash Equivalents The Company considers all highly liquid investments
purchased with an initial maturity of 90 days or less and money market funds to be cash equivalents. The Company maintains its cash and cash equivalents
in bank deposits which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes
it is not exposed to any significant credit risks on cash and cash equivalents. Inventory, Net Inventory is recorded at the lower of cost or net
realizable value. Cost is determined using the first-in, first-out method. The Company reviews the components of its inventory on a periodic
basis for excess or obsolete inventory, and records specific reserves for identified items. Long-Lived Assets The Company assesses potential impairments to its
long-lived assets when there is evidence that events or changes in circumstances indicate that assets may not be recoverable. An impairment
loss would be recognized when the sum of the expected future undiscounted cash flows is less than the carrying amount of the assets. The
amount of impairment loss, if any, will generally be measured as the difference between the net book value of the assets and their estimated
fair values. During the three months ended March 31, 2021 and 2020, no such impairment losses have been recorded. Accounts Receivable, Net The Company grants credit to domestic physicians,
clinics, and distributors. The Company performs ongoing credit evaluations of its customers and generally requires no collateral. Customers
can purchase certain products through a financing agreement that the Company has with an outside leasing company. Under the agreement,
the leasing company evaluates the credit worthiness of the customer. Upon acceptance of the product by the customer, the leasing company
remits payment to the Company at a discount. This financing arrangement is without recourse to the Company. The Company provides an allowance for doubtful accounts
and returns equal to the estimated uncollectible amounts or expected returns. The Company’s estimates are based on historical collections
and returns and a review of the current status of trade accounts receivable. Accounts receivable is comprised of the following
at:
March 31, 2021 December 31, 2020
Accounts Receivable $ 867,617 $ 629,630
Less Allowance (5,382 ) (13,873 )
$ 862,235 $ 615,757 Research and Development The Company expenses research and development costs
as incurred. Shipping and Handling Costs The Company includes shipping and handling fees billed
to customers in net sales. Shipping and handling costs associated with inbound and outbound freight are generally recorded in cost of
sales which totaled approximately $30,000 and $31,000, respectively, for the three months ended March 31, 2021 and 2020. Other shipping
and handling costs included in general and administrative, research and development, and sales and marketing expenses totaled approximately
$1,000 and $2,000 for the three months ended March 31, 2021 and 2020, respectively. Revenue from Contracts with Customers Effective April 1, 2020, the Company adopted Accounting
Standards Codification (“ASC”) Topic 606 (“ASC 606”), Revenue from Contracts with Customers, using the modified
retrospective approach. The adoption of ASC 606 did not have a material impact on the measurement or on the recognition of revenue of
contracts for which all revenue had not been recognized as of April 1, 2020. Therefore, no cumulative adjustment has been made to the
opening balance of accumulated deficit at April 1, 2020. The comparative information has not been restated and continues to be reported
under the accounting standards in effect for the periods presented. The core principle of ASC 606 is that a
company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration
to which the company expects to be entitled in exchange for those goods or services. Product Sales The Company generates revenue from selling FastPack
System analyzers, accessories and disposable products used with the FastPack System. Disposable products include reagent packs which are
diagnostic tests for PSA, testosterone, thyroid disorders, pregnancy, and Vitamin D. The Company provides disposable products and equipment
in exchange for consideration, which occurs when a customer submits a purchase order and the Company provides disposable products and
equipment at the agreed upon prices in the invoice. Generally, customers purchase disposable products using separate purchase orders after
the equipment (“analyzer”) has been provided to the customer. The initial delivery of the equipment and reagent
packs represents a single performance obligation and is completed upon receipt by the customer. The delivery of each subsequent individual
reagent pack represents a separate performance obligation because the reagent packs are standardized, are not interrelated in any way,
and the customer can benefit from each reagent pack without any other product. There are no significant discounts, rebates, returns or
other forms of variable consideration. Customers are generally required to pay within 30 days. The performance obligation arising from the delivery
of the equipment is satisfied upon the delivery of the equipment to the customer. The disposable products are shipped Free on Board (“FOB”)
shipping point. For disposable products that are shipped FOB shipping point, the customer has the significant risks and rewards of ownership
and legal title to the assets when the disposable products leave the Company’s shipping facilities, thus the customer obtains control
and revenue is recognized at that point in time. The Company has elected the practical expedient and
accounting policy election to account for the shipping and handling as activities to fulfil the promise to transfer the disposable products
and not as a separate performance obligation. The Company’s contracts with customers generally
have an expected duration of one year or less, and therefore the Company has elected the practical expedient in ASC 606 to not disclose
information about its remaining performance obligations. Any incremental costs to obtain contracts are recorded as selling, general and
administrative expense as incurred due to the short duration of the Company’s contracts. License Revenue The Company enters into out-license agreements with
counterparties to develop and/or commercialize its products in exchange for nonrefundable upfront license fees and/or sales-based royalties. If the license to the Company’s intellectual
property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue
from nonrefundable upfront fees allocated to the license when the license is transferred to the customer and the customer can benefit
from the license. For licenses that are bundled with other performance obligations, management uses judgment to assess the nature of the
combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time
and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable upfront fees. The
Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of progress and related revenue
recognition. During the three months ended March 31, 2021 and 2020, the Company recognized license revenue of $479,000 and $0, respectively. Collaborative Research Revenue Prior to the adoption of ASC 606, the Company recognized
research revenue over the term of various agreements, as negotiated contracted amounts were earned or reimbursable costs were incurred
related to those agreements. Negotiated contracted amounts were earned in relative proportion to the performance required under the applicable
contracts. Any amounts received prior to satisfying these revenue recognition criteria were recorded as deferred revenue. To determine revenue recognition for contracts with
customers within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii)
identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the
performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies the relevant performance obligations. Collaborative research revenue is recognized as research
services are performed over the development periods for each agreement. During the three months ended March 31, 2021 and 2020, the Company
recognized collaborative research revenue of $0 and $45,000, respectively. Contract Balances The timing of the Company’s revenue recognition
may differ from the timing of payment by the Company’s customers. The Company records a receivable when revenue is recognized prior
to payment and there is an unconditional right to payment. Alternatively, when payment precedes the provision of the related services,
the Company records deferred revenue until the performance obligations are satisfied. Prior to the adoption of ASC 606 effective April
1, 2020 (using the modified retrospective approach), the Company accounted for its revenue arrangements under ASC 605, Revenue Recognition
(“ASC 605”). Under ASC 605, revenue arrangements with multiple deliverables were evaluated for proper accounting
treatment. In these arrangements, the Company recorded revenue as separate units of accounting if the delivered items have value to the
customer on a stand-alone basis, if the arrangement includes a general right of return relative to the delivered items, and if delivery
or performance of the undelivered items is considered probable and substantially within the Company’s control. Under ASC 605, revenues from product sales which
included both the analyzer and various immunoassay products (“reagents”) were generally recognized upon shipment, as no significant
continuing performance obligations remained post shipment. Cash payments received in advance were classified as deferred revenue and recorded
as a liability. The Company was generally not contractually obligated to accept returns, except for defective products. Revenue was recorded
net of an allowance for estimated returns. Multiple element arrangements included contracts that
combined both the Company’s analyzer and a customer’s future reagent purchases under a single contract. In some sales contracts,
the Company provided analyzers at no charge to customers. Title to the analyzer was maintained by the Company and the analyzer was returned
by the customer to the Company at the end of the purchase agreement. During the three months ended March 31, 2021 and 2020,
product sales are stated net of an allowance for estimated returns of approximately $0 and $12,000, respectively. Deferred Revenue Prior to the adoption of ASC 606, payments received
in advance from customers pursuant to certain collaborative research and license agreements, deposits against future product
sales, multiple element arrangements and extended warranties are recorded as a current or non-current deferred revenue liability based
on the time from the balance sheet date to the future date of revenue recognition. The adoption of ASC 606 had no material effect
on deferred revenue. Operating Leases The Company adopted ASC Topic
842, Leases Property and Equipment, Net Property and equipment are stated at cost and are
presented net of accumulated depreciation. Depreciation is provided for on a straight-line basis over the estimated useful lives of the
related assets as follows:
Machinery and equipment 5 years
Computer equipment 3 years
Molds and tooling 5 years
Office furniture and equipment 5 years Leasehold improvements are amortized on a straight-line
basis over the shorter of the lease term or their estimated useful lives. The Company occasionally designs and builds its own machinery.
The costs of these projects, which includes the cost of construction and other direct costs attributable to the construction, are capitalized
as construction in progress. No provision for depreciation is made on construction in progress until the relevant assets are completed
and placed in service. The Company’s policy is to evaluate the remaining
lives and recoverability of long-term assets on at least an annual basis or when conditions are present that indicate impairment. Intangible Assets, Net Intangibles consist of patent-related costs and costs
for in-license agreements. Management reviews the carrying value of intangible assets that are being amortized on an annual
basis or sooner when there is evidence that events or changes in circumstances may indicate that impairment exists. The Company considers
relevant cash flow and profitability information, including estimated future operating results, trends and other available information,
in assessing whether the carrying value of intangible assets being amortized can be recovered. If the Company determines that the carrying value
of intangible assets will not be recovered from the undiscounted future cash flows expected to result from the use and eventual disposition
of the underlying assets, the Company considers the carrying value of such intangible assets as impaired and reduces them by a charge
to operations in the amount of the impairment. Costs related to acquiring patents and licenses are
capitalized and amortized over their estimated useful lives, which is generally 5 to 17 years, using the straight-line method. Amortization
of patents and licenses commences once final approval of the patent has been obtained. Patent and licenses costs are charged to operations
if it is determined that the patent will not be obtained. The carrying value of the patents of approximately
$172,000 and $169,000 at March 31, 2021 and December 31, 2020, respectively, are stated net of accumulated amortization of approximately
$307,000 and $303,000, respectively. Amortization of patents charged to operations for the three months ended March 31, 2021 and 2020
were approximately $3,000 for each period. Total future estimated amortization of patent costs for the five succeeding years is approximately
$11,000 for the remaining nine months in the year ending December 31, 2021, approximately $15,000 for each of the years ending December
31, 2022 through 2023, approximately $14,000 for year 2024, approximately $11,000 for year 2025 and approximately $106,000 thereafter. The carrying value of the in-licenses of
approximately $17,000 and $19,000 at March 31, 2021 and December 31, 2020 are stated net of accumulated amortization of approximately
$402,000 and $400,000, respectively. Amortization of licenses charged to operations for each of the three month periods ended March 31,
2021 and 2020 was approximately $2,000. Total future estimated amortization of license costs is approximately $5,000 for the
remaining nine months in the year ending December 31, 2021, approximately $7,000 for the year ending December 31,
2022 and approximately $5,000 for the year ending December 31, 2023. Derivative Financial Instruments and Warrant
Liabilities The Company does not use derivative instruments to
hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued
stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For
derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value
and is then re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements of operations.
Depending on the features of the derivative financial instrument, the Company uses either the Black-Scholes option-pricing model or a
Monte Carlo simulation to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative
instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting
period (see Note 8). Fair Value Measurements The Company determines the fair value measurements
of applicable assets and liabilities based on a three-tier fair value hierarchy established by accounting guidance and prioritizes the
inputs used in measuring fair value. The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations
based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority
to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three
levels of the fair value hierarchy as follows:
● Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;
● Level 2 - Inputs other than quoted prices that are observable for the assets or liability either directly or indirectly, including inputs in markets that are not considered to be active; and
● Level 3 - Inputs that are unobservable. Fair Value of Financial Instruments Cash and cash equivalents, accounts receivable, accounts
payable, accrued liabilities, and debt are carried at cost, which management believes approximates fair value due to the short-term nature
of these instruments. Stock-Based Compensation Stock-based compensation cost for equity awards granted
to employees and non-employees is measured at the grant date based on the calculated fair value of the award using the Black-Scholes option-pricing
model, and is recognized as an expense, under the straight-line method, over the requisite service period (generally the vesting period
of the equity grant). If the Company determines that other methods are more reasonable, or other methods for calculating these assumptions
are prescribed by regulators, the fair value calculated for the Company-issued stock options could change significantly. Higher volatility
and longer expected lives would result in an increase to stock-based compensation expense to employees and non-employees determined at
the date of grant. Income Taxes Deferred income taxes are recognized for temporary
differences in the basis of assets and liabilities for financial statement and income tax reporting that arise due to net operating loss
carry forwards, research and development credit carry forwards and from using different methods and periods to calculate depreciation
and amortization, allowance for doubtful accounts, accrued vacation, research and development expenses, and state taxes. A provision has
been made for income taxes due on taxable income and for the deferred taxes on the temporary differences. The components of the deferred
tax asset and liability are individually classified as current and noncurrent based on their characteristics. Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Realization
of the deferred income tax asset is dependent on generating sufficient taxable income in future years. Sales and Excise Taxes Sales and other taxes collected from customers and
subsequently remitted to government authorities are recorded as accounts receivable with corresponding tax payable. These balances are
removed from the balance sheet as cash is collected from customers and remitted to the tax authority. Warranty Costs The Company’s warranty policy generally provides
for one year of coverage against defects and nonperformance within published specifications for sold analyzers and for the term of the
contract for equipment held for lease. The Company accrues for estimated warranty costs in the period in which the revenue is recognized
based on historical data and the Company’s best estimates of analyzer failure rates and costs to repair. Accrued warranty liabilities were approximately $51,000
and $25,000, respectively, at March 31, 2021 and December 31, 2020 and are included in accrued expenses and other current liabilities
on the balance sheets. Warranty costs were approximately $25,000 and $27,000 for the three months ended March 31, 2021 and 2020, respectively,
and are included in cost of product sales in the statements of operations. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board
(“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Measurement of Credit Losses on Financial Instruments,
which supersedes current guidance by requiring recognition of credit losses when it is probable that a loss has been incurred. The new
standard requires the establishment of an allowance for estimated credit losses on financial assets including trade and other receivables
at each reporting date. The new standard will result in earlier recognition of allowances for losses on trade and other receivables and
other contractual rights to receive cash. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments – Credit Losses
(Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842), which extends the effective date of Topic 326 for certain companies
until fiscal years beginning after December 15, 2022. The new standard will be effective for the Company in the first quarter of fiscal
year beginning January 1, 2023, and early adoption is permitted. The Company has not completed its review of the impact of this standard
on its consolidated financial statements. However, based on the Company’s history of immaterial credit losses from trade receivables,
management does not expect that the adoption of this standard will have a material effect on the Company’s consolidated financial
statements. In August 2020, the FASB issued 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” (“ASU 2020-06”), which
simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. ASU 2020-06 removes
certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies
the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company for fiscal years beginning after
December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years
beginning after December 15, 2020 and adoption must be as of the beginning of the Company’s annual fiscal year. The Company is currently
evaluating the impact of this standard on its consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU 2014-09, Revenue
from Contracts with Customers (Topic 606) (“Topic 606”). The guidance in Topic 606 provides that an entity should recognize
revenue to depict the transfer of goods or services provided and establishes the following steps to be applied by an entity: (1) identify
the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate
the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies the
performance obligation. Topic 606 was effective for fiscal years beginning after December 15, 2019 for the Company, based on
the issuance of ASU 2020-05, which provided deferral of the effective date for an additional one year in response to the coronavirus (COVID-19)
pandemic. The Company adopted the new revenue standard as of April 1, 2020 using the modified retrospective approach. The adoption of
ASU 2014-09/Topic 606 did not have a material impact on its financial statements. In June 2018, the FASB issued ASU No. 2018-07, Improvements
to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718, Compensation—Stock Compensation, to include
share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees
and employees will be substantially aligned. ASU No. 2018-07 supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees.
The amendments in ASU No. 2018-07 are effective beginning in 2020, with early adoption permitted, but no earlier than a company’s
adoption date of Topic 606 Revenue from Contracts with Customers. The Company elected to adopt ASU 2018-07 as of April 1, 2020. The adoption
did not require the Company to restate previously reported results In July 2018,
the FASB issued ASU No. 2018-11, Leases (Topic 842) Targeted Improvements (“Topic 842”), which provides for an alternative
transition method by allowing companies to continue to use the legacy guidance in Topic 840, Leases, including its disclosure requirements,
in the comparative periods presented in the year of adoption of the new leases standard and recognize a cumulative-effect adjustment to
the opening balance of retained earnings in the period of adoption rather than the earliest period presented. The Company adopted the
standard as of April 1, 2020 and the most significant impact was the recognition of a right-of-use asset and lease liability
for the Company’s sole operating lease—the Company had no finance leases. Adoption of Topic 842 did not require the Company
to restate previously reported results as it elected to apply a modified retrospective approach at the beginning of the period of adoption
rather than at the beginning of the earliest comparative period presented. In August 2018, the FASB issued ASU No. 2018-13, “Fair
Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement,”
an amendment to the accounting guidance on fair value measurements. The guidance modifies the disclosure requirements on fair value measurements,
including the removal of disclosures of the amount of and reasons for transfers between Level 1 of the fair value hierarchy, the policy
for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. The guidance also adds certain
disclosure requirements related to Level 3 fair value measurements. The guidance is effective for fiscal years, and interim periods within
those fiscal years, beginning after December 15, 2019. The Company adopted ASU No. 2018-13 on April 1, 2020 and the adoption of this guidance
did not have a material impact on its financial statements. Other accounting standard updates are either not applicable
to the Company or are not expected to have a material impact on the Company’s condensed consolidated financial statements. |
