Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q (this "Quarterly Report") and the audited financial statements and notes thereto as of and for the twelve months ended December 31, 2024, which are contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on September 30, 2025. As used in this Quarterly Report, unless the context suggests otherwise, "we," "us," "our," or "Qualigen" refer to Qualigen Therapeutics, Inc. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.

Cautionary Note Regarding Forward Looking Statements

This Quarterly Report contains forward-looking statements by the Company that involve risks and uncertainties and reflect the Company's judgment as of the date of this Report. These statements generally relate to future events or the Company's 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 the Company's 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.

Some of the factors that we believe could cause actual results to differ from those anticipated or predicted include:

	●	our ability to procure sufficient working capital to continue and complete the development, testing and launch of our prospective drug products;
	●	our ability to successfully develop any drugs;
	●	our ability to progress our drug candidates through preclinical and clinical development;
	●	our ability to obtain the requisite regulatory approvals for our clinical trials and to begin and complete such trials according to any projected timeline;
	●	our ability to complete enrollment in our clinical trials as contemplated by any projected timeline;
	●	the likelihood that future clinical trial data will be favorable or that such trials will confirm any improvements over other products or lack negative impacts;
	●	our ability to successfully commercialize any drugs;
	●	the likelihood that patents will issue on our in-licensed patent applications;

	●	our ability to protect our intellectual property; and
	●	our ability to compete.

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 Quarterly 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 Quarterly 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 Quarterly Report, they may not be predictive of results or developments in other future periods. Any forward-looking statement that we make in this Quarterly Report speaks only as of the date of this Quarterly Report, and we disclaim any intent or obligation to update these forward-looking statements beyond the date of this Quarterly 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.

Overview

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

Our lead program, QN-302, is an investigational small molecule G-quadruplexes (G4)-selective transcription inhibitor with strong binding affinity to G4s prevalent in cancer cells (such as pancreatic cancer). Such binding could, by stabilizing the G4s against DNA "unwinding," help inhibit cancer cell proliferation.

Our Pan-RAS program, which is currently at the preclinical stage, 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 thereby leaving the proteins from the mutated RAS unable to cause further harm. In theory, such mechanism of action may be effective in the treatment of about one quarter of all cancers, including certain forms of pancreatic, colorectal, and lung cancers. The investigational compounds within our Pan-RAS portfolio are designed to suppress the interaction of endogenous RAS with c-RAF, upstream of the KRAS, HRAS and NRAS effector pathways.

In addition, under a Co-Development Agreement dated April 11, 2024 with Marizyme, Inc. ("Marizyme"), we are entitled to receive quarterly a 33% payment in the nature of royalties (capped at double the amount of Funding Payment cash we provide to Marizyme) on any Net Sales (as defined with a meaning tantamount to gross profit on net sales) of Marizyme's DuraGraft™ vascular conduit solution, which is indicated for adult patients undergoing coronary artery bypass grafting surgeries and is intended for the flushing and storage of the saphenous vein grafts used in coronary artery bypass grafting surgery. No such payments-in-the-nature-of-royalties would accrue until after DuraGraft has been launched in the United States and a cumulative total of $500,000 of DuraGraft Net Sales have been made in the United States. To date we have provided $700,000 of Funding Payments to Marizyme.

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

Recent Developments

Marizyme

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

In addition, as of September 30, 2025, we have advanced $4,066,900 to Marizyme against which Marizyme had previously delivered its demand promissory notes to us of like principal amounts (the "Marizyme Note"). The Marizyme Note bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Note at any time and from time to time, in whole or in part, without premium or penalty.

Faraday Investment

In September 2025 we consummated a Subscription Agreement (the "Subscription Agreement") with certain investors including Faraday Future Intelligent Electric Inc. (NASDAQ: FFAI)(the "Lead Investor" or "Faraday") pursuant to which the investors purchased $41.0 million (the "Offering") of our common stock and shares of a newly created Series B Convertible Preferred Stock, par value $0.001 per share (the "Series B Preferred Stock"). Up to $6.8 million of the net proceeds from the Offering will be used to pay existing debt and fund our existing business operations, and the balance of the cash proceeds and contributed currency will be used for the establishment of our cryptocurrency treasury operations, using AlxCrypto. AIxCrypto (AIxC) is committed to building a world-leading ecosystem that integrates Artificial Intelligence (AI) and blockchain, bridging Web2 and Web3. This ecosystem unites a decentralized protocol, distributed network, AI DePIN and EAI RWA value regeneration, and a DeAI Agent product and technology platform designed to achieve optimal trading performance. Its core products include the BesTrade DeAI Agent and the AIxC ecosystem products.

Critical Accounting Policies and Estimates

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

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

While our significant accounting policies are more fully described in Note 1 to our condensed consolidated financial statements, 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:

	●	Derivative financial instruments and warrant liabilities
	●	Short-term notes receivable
	●	Convertible notes

Derivative Financial Instruments and Warrant Liabilities

On April 12, 2024, in connection with an 8% Convertible Debenture in the principal amount of $1,100,000 issued to Yi Hua Chen ("Chen") (see Note 7 - Warrant Liabilities), we issued a liability classified warrant to Chen purchase 36,001 shares of our common stock, exercisable until February 27, 2029, which remains outstanding and exercisable as of September 30, 2025.

As a result of a partial voluntary conversion of the 2024 Alpha Debenture on September 9, 2024, as of September 30, 2024 the Company no longer had sufficient shares to settle the 2024 Alpha Warrant in full until shareholder approval was obtained, and a portion (2,314 warrant shares) was reclassified to liabilities (see Note 7 - Warrant Liabilities and Note 12 - Stockholders' Equity).

The fair value of 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 in the fair value of the warrant liabilities and a quarter-to-quarter decrease in our stock price would result in a decrease in the fair value of the warrant liabilities.

Short-Term Notes Receivable

As of September 30, 2025, we had advanced to Marizyme $4,066,900, against which Marizyme delivered demand promissory notes to us of like principal amounts (the "Marizyme Notes"). As of September 30, 2025, accrued interest related to the Marizyme Notes was $542,207. Interest income of $177,611 and $428,915 for the three and nine months ended September 30, 2025, respectively was recognized in other income in the condensed consolidated statement of operations.

The Marizyme Notes bear at interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest at any time and from time to time, in whole or in part, without premium or penalty.

Under ASC 326-20, known as the current expected credit loss ("CECL") model, we were required to estimate credit losses expected over the life of an exposure (or pool of exposures) based on historical information, current information, and reasonable and supportable forecasts. We are unable to use our historical data to estimate losses as it has no relevant loss history to date. To determine the estimate of expected credit losses, we used a probability-weighted approach that incorporates multiple settlement scenarios, including recovery of amounts due upon an acquisition of the debtor, and recovery in different liquidation scenarios, and determines the expected recoverable amount of the loan in each scenario. This model requires management to make certain assumptions including the likelihood of each outcome, the estimated value of the debtor's assets, and our expected claim and recovery rate on the debtor's assets in the event of an insolvency or a liquidation proceeding. As of September 30, 2025, the estimate for expected credit losses on the Marizyme Notes is $261,000. Given the inherently uncertain nature of the debtor's financial condition and future outcomes, actual credit losses may differ materially from this estimate. We will continue to monitor relevant events and conditions and update its assumptions and allowance as necessary.

2025 Convertible Note

On April 28, 2025, we entered into a Secured Convertible Note (the "2025 Convertible Note") with Alpha Capital Anstalt ("Alpha", or "Holder"), pursuant to which we issued to Alpha a non-interest-bearing note with a principal of $264,000, and an original issue discount ("OID") of 20%, or $44,000, in exchange for $220,000 cash, less $20,000 in expenses. The Note is convertible at any time at Alpha's option, into shares of our common stock at a price equal to $3.80 per share (the "Conversion Price"), subject to certain adjustments. The Convertible Note bears no interest, and the principal will be due on January 28, 2026 (the "Maturity Date").

We determined the 2025 Convertible Note does not contain a substantial premium and therefore we elected to account for the Convertible Note under the fair value option in accordance with ASC 825-10-15-4. We determined the fair value of the Convertible Note was $311,943 at issuance. The difference between the $220,000 proceeds received and fair value was recorded as a loss upon issuance in the amount of $91,943. Issuance costs incurred in connection with the transaction were expensed immediately.

On June 4, 2025 we paid down $132,000 in principal at the request of Alpha. As of September 30, 2025 we reassessed the fair value of the 2025 Convertible Note at $213,367, with a loss on the change in fair value of $71,298 and $33,424 recorded in the three and nine months ended September 30, 2025, respectively.

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024:

		For the Three Months Ended September 30,
		2025				2024
EXPENSES
General and administrative		$	1,891,108			$	1,145,152
Research and development			105,576				123,429
Credit loss expense - short-term note receivable			(567,000	)			-
Total expenses			1,429,684				1,268,581
LOSS FROM OPERATIONS			(1,429,684	)			(1,268,581	)
OTHER EXPENSE (INCOME), NET
Loss (Gain) on change in fair value of warrant liabilities			148,346				(1,231	)
Loss on change in fair value of derivative liabilities			-				495,693
Loss on change in fair value of convertible note			197,667				-
Interest expense			455,941				408,359
Interest income			(193,819	)			(48,082	)
Loss on voluntary conversion of convertible debt into common stock			-				27,790
Gain on settlements of accounts payable			-				(348,305	)
Other income, net			-				(6,547	)
Total other expense (income), net			608,135				527,677
			-				-
LOSS BEFORE (BENEFIT FROM) PROVISION FOR INCOME TAXES			(2,037,819	)			(1,796,258	)
(BENEFIT FROM) PROVISION FOR INCOME TAXES			-				(2,198	)
			-				-
NET LOSS FROM CONTINUING OPERATIONS			(2,037,819	)			(1,794,060	)
DISCONTINUED OPERATIONS
Loss on disposal of discontinued operations, net of tax			-				-
GAIN (LOSS) FROM DISCONTINUED OPERATIONS			-				-
NET LOSS			(2,037,819	)			(1,794,060	)
Deemed dividend arising from warrant down-round provision		$	(867,796	)		$	(27,587	)
			-				-
Weighted-average number of shares outstanding, basic and diluted (after stock split)		$	(2,905,615	)		$	(1,821,647	)
Total net loss per common share, basic and diluted		$	(4.68	)		$	(4.70	)
Weighted-average number of shares outstanding, basic and diluted (after stock split)			620,694				387,878

Expenses

General and Administrative Expenses

General and administrative expenses increased from $1.1 million for the three months ended September 30, 2024, to $1.9 million for the three months ended September 30, 2025, an increase of $0.8 million or 72%. This is primarily due to an increase in professional fees of $1.3 million as we needed more legal and accounting consultants to assist with our audit, offset by a decrease in payroll expenses of $0.3 million resulting from a downsizing of our workforce and a decrease in investor relations expense of $0.2 million resulting from our no longer needing to seek additional investors in the current quarter.

Research and Development Costs

Research and development expenses decreased from approximately $123,000 for the three months ended September 30, 2024, to approximately $105,000 for the three months ended September 30, 2025, a decrease of $18,000 million or 15%. This was primarily due to all research and development being slowed down in 2025, resulting in decreases in QN-302 clinical trail expenses of approximately $97,000 and License Fees of approximately $22,000, offset by increased billing for lab services of approximately $104,000.

Credit Loss Expense - Short-Term Note Receivable

Credit loss expense - short-term note receivable increased from $0 for the three months ended September 30, 2024, to $0.6 million for the three months ended September 30, 2025, an increase of $0.6 million or 100%. This is due to Marizyme notes first being recorded in July 2024, and no assessment being performed until December 31, 2024, therefore no reserve was recorded for the three months ended September 30, 2024.

Other Expense (Income), Net

Gain on Change in Fair Value of Warrant Liabilities

During the three months ended September 30, 2025 and 2024, we experienced a loss of approximately $148,000 and a gain of approximately $1,000, respectively, on change in fair value of warrant liabilities, primarily due to changes in our stock price and expiration of warrants during the prior period, and changes in our stock price in the prior period. Typically, a decline in our stock price would result in a decline in the fair value of our warrant liabilities, generating a gain, while an increase in our stock price would result in an increase in the fair value of our warrant liabilities, generating a loss.

Gain on Change in Fair Value of Derivative Liabilities

During the three months ended September, 2025 we experienced no change in fair value of derivative liabilities, compared to a loss of approximately $496,000 for the three months ended September 30, 2024. We did not hold any derivative liabilities in 2025.

Loss on Change in Fair Value of Convertible Debt

During the three months ended September 30, 2025 we experienced an approximately $198,000 loss on change in fair value of convertible debt, compared to no change for the three months ended September 30, 2024. We did not hold any convertible debt in 2024.

Interest Expense

Interest expense increased from $0.4 million for the three months ended September 30, 2024 to $0.5 million for the three months ended September 30, 2025 due to a $0.4 million decrease for the settlement of convertible debentures in 2024, offset by interest on the amortized penalty on the 2025 Convertible Note and 2025 promissory notes for $0.5 million.

Interest Income

Interest income increased from approximately $48,000 for the three months ended September 30, 2024 to $0.2 million for the three months ended September 30, 2025 due to a $0.1 million increase from the recording of interest on Marizyme notes receivable issued in 2024 and 2025.

Gain on Voluntary Conversions of Convertible Debt into Common Stock

During the three months ended September 30, 2025 we experienced $0 on voluntary conversions of convertible debt into common stock, compared to a gain of $28,000 for the three months ended September 30, 2024. No debt was converted into stock in 2025.

Gain on Settlement of Accounts Payable

There was an approximately $348,000 gain from settlements of accounts payable during the three months ended September 30, 2024, which was generated from the writing off of invoices with several vendors who had previously over billed. There was no gain from settlements of accounts payable in the three months ended September 30, 2025.

Other Income (Net)

There was approximately $7,000 in other income recorded in the three months ended September 30, 2024, as at the time bank interest was being recorded to other income. It is being recorded to interest income in the three months ended September 30, 2025.

Comparison of the Nine months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024:

		For the Nine Months Ended September 30,
		2025				2024
EXPENSES
General and administrative		$	5,780,572			$	3,186,575
Research and development			156,558				1,242,101
Credit loss expense - short-term note receivable			(99,000	)			-
Total expenses			5,838,130				4,428,676
LOSS FROM OPERATIONS			(5,838,130	)			(4,428,676	)
OTHER EXPENSE (INCOME), NET
Loss (Gain) on change in fair value of warrant liabilities			93,148				(361,137	)
Loss on change in fair value of derivative liabilities			-				321,080
Loss on change in fair value of convertible note			159,793				-
Interest expense			635,607				808,477
Interest income			(449,249	)			(48,082	)
Loss on issuance of convertible debt			91,943				358,279
Gain on voluntary conversion of convertible debt into common stock			-				(56,010	)
Loss on monthly redemptions of convertible debt into common stock			-				208,852
Gain on settlements of accounts payable							(348,305	)
Other income, net							(9,262	)
Total other expense (income), net			531,242				873,892
LOSS BEFORE (BENEFIT FROM) PROVISION FOR INCOME TAXES			(6,369,372	)			(5,302,568	)
			-				-
(BENEFIT FROM) PROVISION FOR INCOME TAXES			35				800
NET LOSS FROM CONTINUING OPERATIONS			(6,369,407	)			(5,303,368	)
DISCONTINUED OPERATIONS
Loss on disposal of discontinued operations, net of tax			-				(100,000	)
GAIN (LOSS) FROM DISCONTINUED OPERATIONS			-				(100,000	)
			-
NET LOSS			(6,369,407	)			(5,403,368	)
			-				-
Deemed dividend arising from warrant down-round provision		$	(869,382	)		$	(87,604	)
			-				-
Weighted-average number of shares outstanding, basic and diluted (after stock split)		$	(7,238,789	)		$	(5,490,972	)
Total net loss per common share, basic and diluted		$	(4.35	)		$	(24.93	)
Weighted-average number of shares outstanding, basic and diluted (after stock split)			1,662,223				220,221

Expenses

General and Administrative Expenses

General and administrative expenses increased from $3.2 million for the nine months ended September 30, 2024, to $5.7 million for the nine months ended September 30, 2025, an increase of $2.5 million or 78%. This is primarily due to an increase in investor relation fees of $1.2 million as we paid consultants to help raise capital, plus $2.4 million increase in consultant fees offset by a decrease in payroll expenses of $1.0 million and decrease in insurance expense of $0.2 million.

Research and Development Costs

Research and development expenses decreased from $1.2 million for the nine months ended September 30, 2024, to $0.2 million for the nine months ended September 30, 2025, a decrease of $0.9 million or 81%. This was primarily due to all research and development being slowed down in 2025, resulting in decreases in QN-302 program expenses of approximately $200,000 and a decrease in Marizyme research expense of $700,000.

Credit Loss Expense - Short-Term Note Receivable

Credit loss expense - short-term note receivable increased from $0 for the nine months ended September 30, 2024, to $0.1 million for the nine months ended September 30, 2025, an increase of $0.1 million or 100%. This is due to Marizyme notes first being recorded in July 2024, and no assessment being performed until December 31, 2024, therefore no reserve was required for the nine months ended September 30, 2024.

Other Expense (Income), Net

Gain on Change in Fair Value of Warrant Liabilities

During the nine months ended September 30, 2025 and 2024, we experienced a loss of approximately $0.1 million and a gain of approximately $0.4 million, respectively, on change in fair value of warrant liabilities, primarily due to changes in our stock price and expiration of warrants during the prior period, and changes in our stock price in the prior period. Typically, a decline in our stock price would result in a decline in the fair value of our warrant liabilities, generating a gain, while an increase in our stock price would result in an increase in the fair value of our warrant liabilities, generating a loss.

Gain on Change in Fair Value of Derivative Liabilities

During the nine months ended September 30, 2025 we experienced no change in fair value of derivative liabilities, compared to a loss of approximately $321,000 for the nine months ended September 30, 2024. We did not hold any derivative liabilities in 2025.

Gain on Change in Fair Value of Convertible Debt

During the nine months ended September 30 2025 we experienced an approximately $160,000 loss on change in fair value of convertible debt, compared to no change for the nine months ended September 30, 2024. We did not hold any convertible debt in 2024.

Interest Expense

Interest expense decreased from $0.8 million for the nine months ended September 30, 2024 to $0.6 million for the nine months ended September 30, 2025 due to a decrease in total debt held year over year, as convertible debentures from were settled in 2024 and did not continue to accrue interest.

Interest Income

Interest income increased from $48,000 for the nine months ended September 30, 2024 to $0.4 million for the nine months ended September 30, 2025 due to a $0.3 million increase from the recording of interest on Marizyme notes receivable issued in 2024 and 2025.

Loss on Issuance of Convertible Debt

During the nine months ended September 30, 2024 we incurred a loss on issuance of convertible debt of approximately $358,000 due to the fair value of the 2024 Alpha Debenture and derivative liabilities exceeding the cash proceeds. During the nine months ended September 30, 2025 we incurred a loss on issuance of convertible debt of approximately $92,000 due to the fair value of the 2025 Convertible Note and derivative liabilities exceeding the cash proceeds.

Loss on Monthly Redemptions of Convertible Debt into Common Stock

During the nine months ended September 30, 2025 we experienced $0 on monthly redemptions of convertible debt into common stock, compared to a loss of approximately $209,000 for the nine months ended September 30, 2024. No debt was converted into stock in 2025.

Gain on Voluntary Conversions of Convertible Debt into Common Stock

During the nine months ended September 30, 2025 we experienced $0 on voluntary conversions of convertible debt into common stock, compared to a gain of approximately $56,000 for the nine months ended September 30, 2024. No debt was converted into stock in 2025.

Gain on Settlement of Accounts Payable

There was an approximately $348,000 gain from settlements of accounts payable during the nine months ended September 30, 2024, which was generated from the writing off of invoices with several vendors who had previously over billed. There was no gain from settlements of accounts payable in the nine months ended September 30, 2025.

Other Income (Net)

There was approximately $9,000 in other income recorded in the nine months ended September 30, 2024, as at the time bank interest was being recorded to other income. It is being recorded to interest income in the nine months ended September 30, 2025.

Discontinued Operations

There was a $100,000 loss from discontinued operations during the nine months ended September 30, 2024, which was generated from the early settlement of an escrow account from the sale of Qualigen, Inc. There was no loss from discontinued operations in the nine months ended September 30, 2025 (See Note 5 - Discontinued Operations).

Liquidity and Capital Resources

Our financial position is weak. As of September 30, 2025 we had approximately $38.8 million in cash and net accounts payable of approximately $1.3 million. We are in arrears on accounts payable to important partners. We have incurred recurring losses from operations, and have an accumulated deficit of $129.6 million at September 30, 2025. We expect to continue to incur losses subsequent to the balance sheet date of September 30, 2025. For the nine months ended September 30, 2025 and year ended December 31, 2024, we used cash of $4.8 million and $6.4 million, respectively, in operations.

Our current liabilities at September 30, 2025 include approximately $1.3 million of accounts payable, $3.3 million of short-term debt, and $0.4 million of warrant liabilities.

From January to July 2025, we borrowed a total of $3,640,000 from nine investors as short-term borrowings, each due within six months after the date of borrowing. In July 2025, we closed a private placement transaction to raise additional funding through the sale of equity, for a net total of $4,258,000. In September 2025, we closed a subscription agreement to raise additional funding through the sale of equity for a net total of $37,700,000. While this $37.7 million of cash was received, up to $6.8 million of the net cash proceeds will be used to pay existing debt and fund our existing research and development operations, and the balance of the cash proceeds will be used for the establishment of our new cryptocurrency treasury operations, and will therefore not readily be available to fund immediate operations.

Additionally, during the nine months ended September 30, 2025, we repaid approximately $1.1 million of outstanding promissory notes.

We expect to continue to have net losses and negative cash flow from operations, which will challenge our liquidity. While we are establishing cryptocurrency treasury operations, it is newly established and there are no guarantees it will generate revenue. These factors raise substantial doubt regarding our ability to continue as a going concern for the one-year period following the date that the financial statements in this Quarterly Report were issued.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our common stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through third-party funding, commercialization, marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.

Contractual Obligations and Commitments

We have no material contractual obligations that are not fully recorded on our condensed consolidated balance sheets 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 FDA 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 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.

We have multiple license agreements with ULRF. Under these agreements, we have taken over development, regulatory approval and commercialization of various drug compounds from ULRF and are responsible for maintenance of the related intellectual property portfolio. 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, but we will be required to pay ULRF a percentage of any sublicense income.

In January 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.) We are further developing the program's lead compound under the name QN-302. The License Agreement requires (if and when applicable) tiered royalty payments in the low to mid-single digits, clinical/regulatory/sales milestone payments, and sharing of a percentage of any non-royalty sublicensing consideration paid to the Company. In November 2023, we became obligated to pay $100,000 to UCL Business Limited upon the first patient dosing of QN-302, which was paid in January 2024.

2022 Convertible Debenture

On December 22, 2022, we issued to Alpha an 8% Senior Convertible Debenture in the aggregate principal amount of $3,300,000 for a purchase price of $3,000,000 pursuant to the terms of a Securities Purchase Agreement, dated December 21, 2022 (the "2022 Securities Purchase Agreement"). The 2022 Debenture has a maturity date of December 22, 2025 and is convertible, at any time, and from time to time, until the 2022 Debenture is no longer outstanding, at Alpha's option, into shares of our common stock (the "Conversion Shares"), at a price initially equal to $1.32 per share, subject to adjustment as described in the 2022 Debenture and other terms and conditions described in the 2022 Debenture. On July 13, 2023, we obtained stockholder approval, for purposes of complying with Nasdaq Listing Rule 5635(d), for the issuance to Alpha of more than 20% of our issued and outstanding shares of common stock pursuant to the terms and conditions of (a) the 2022 Debenture, and (b) the common stock purchase warrant dated December 22, 2022 issued by us to Alpha. Between January 9 - 12, 2023, we issued 16,834 shares of common stock upon Alpha's partial conversion of the 2022 Debenture at $66.00 per share for a total of $1,111,078 in principal. In October and December 2023, we issued 6,193 shares of common stock to Alpha in lieu of cash for monthly redemption payments on the 2022 Debenture at a weighted average price of $35.52 per share. During the three and nine months ending September 30, 2024, we issued 30,378 and 103,865 shares of common stock, respectively to Alpha in lieu of cash for monthly redemption payments on and voluntary conversions of the 2022 Debenture at a weighted average conversion price of $13.00 and $13.66 per share, respectively, and a weighted average fair value of $12.97 and $15.19 per share, respectively.

2024 Convertible Debentures

On February 27, 2024, upon our receipt of a cash purchase price payment of $500,000 (less expenses), we issued to Alpha an 8% Convertible Debenture (the "2024 Alpha Debenture") in the principal amount of $550,000. The 2024 Alpha Debenture matures no later than December 31, 2024 and is convertible, at any time, and from time to time, at Alpha's option, into shares of common stock of the Company, at $30.56 per share, subject to adjustment as described in the 2024 Alpha Debenture. Except in respect of an Exempt Issuance, the 2024 Alpha Debenture contains a "ratchet" antidilution provision, with a $5.82 per share floor. The 2024 Alpha Debenture accrues interest on its outstanding principal balance at the rate of 8% per annum, payable at maturity. In connection with this issuance, we also issued to Alpha a 5-year common stock purchase warrant to purchase 18,001 shares of our common stock with an exercise price of $6.50 per share as of September 30, 2024.

We also granted to Alpha an option, exercisable until July 1, 2024, to purchase from us additional 8% Convertible Debentures, of like tenor, with face amounts of up to an aggregate of $1,100,000 (and with a proportional number of accompanying common stock warrants of like tenor, up to a total of 36,002 additional warrants). On April 11, 2024, Alpha assigned this option to Yi Hua Chen, who exercised it in full on April 12, 2024 (see Note 8 - Convertible Debt to the Company's condensed consolidated financial statements).

2025 Convertible Note

On April 28, 2025, we entered into a Secured Convertible Note (the "2025 Convertible Note") with Alpha Capital Anstalt ("Alpha", or "Holder"), pursuant to which we issued to Alpha a non-interest-bearing note with a principal of $264,000, and an original issue discount ("OID") of 20%, or $44,000, in exchange for $220,000 cash, less $20,000 in expenses. The Note is convertible at any time at Alpha's option, into shares of our common stock at a price equal to $3.80 per share (the "Conversion Price"), subject to certain adjustments. The Convertible Note bears no interest, and the principal will be due on January 28, 2026 (the "Maturity Date").

We determined the 2025 Convertible Note does not contain a substantial premium and therefore we elected to account for the Convertible Note under the fair value option in accordance with ASC 825-10-15-4. We determined the fair value of the Convertible Note was $311,943 at issuance. The difference between the $220,000 proceeds received and fair value was recorded as a loss upon issuance in the amount of $91,943. Issuance costs incurred in connection with the transaction were expensed immediately.

On June 4, 2025 the Company paid down $132,000 in principal at the request of Alpha. As of September 30, 2025 the Company reassessed the fair value of the 2025 Convertible Note at $339,736, with a loss on the change in fair value of $197,667 and $159,793 recorded in the three and nine months ended September 30, 2025, respectively.

Short-Term Promissory Notes

During the nine months ended September 30, 2025 we issued short term notes payable totaling $1.0 million for total net proceeds of $1.0 million. The notes are unsecured with a maturity date six months from the original issuance, and include a provision for a penalty in case of default totaling $1.1 million.

In July 2025, we repaid three lenders $1.2 million in satisfaction of their outstanding promissory notes. The additional $0.2 million was paid as a premium to the lenders and has been recorded under interest expense.

In August 2025, we finalized the terms of the agreements with five investors for the $2.3 million in short-term promissory notes recorded in May 2025. The agreements include a due date six months from when the funding was received as well as a 30% premium due on repayment, meaning we will record an additional $690,000 in principal for the short-term promissory notes for a total due of $3.0 million. Interest expense was recorded for these premiums during the three and nine months ended September 30, 2025 in the amount of $342,231.

Marizyme

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

On July 15, 2024, the Company advanced to Marizyme $1,250,000 against which Marizyme had previously delivered its demand promissory note to the Company of like principal amount dated July 12, 2024 (the "Marizyme Note"). During the nine month periods ending September 30, 2025 and the year ended December 31, 2024, the Company advanced additional funds of $1.8 million and $2.3 million, respectively. The Marizyme Note bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Note at any time and from time to time, in whole or in part, without premium or penalty.

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 for the periods set forth below:

		For the Nine Months Ended September 30,
		2025				2024
Net cash (used in) provided by:
Operating activities		$	(4,828,986	)		$	(4,057,980	)
Investing activities			(1,809,500	)			(900,000	)
Financing activities			44,241,044				4,944,329
Net decrease in cash		$	37,602,558			$	(13,651	)

Net Cash Used in Operating Activities

During the nine months ended September 30, 2025, operating activities used $4.8 million of cash, primarily resulting from a loss from continuing operations of $6.5 million. Cash flows from operating activities for the nine months ended September 30, 2025 were positively impacted by adjustments for $0.6 million in amortization of premium on promissory notes, $0.3 million of issuance of common stock to consultants, a $0.4 million loss on change in fair value of warrant liabilities, a $0.2 million loss on change in fair value of convertible debt, a $0.1 million in loss on issuance of convertible debt, and a decrease in prepaid expenses of $1.2 million. Cash flows from operating activities for the nine months ended September 30, 2025 were negatively impacted by adjustments for $99,000 change in provision for credit losses of short-term notes receivable, a $0.4 million increase in accrued interest on short-term notes receivable, a decrease in accrued expenses of $0.1 million and a $0.3 million decrease in accounts payable.

During the nine months ended September 30, 2024, operating activities used $4.1 million of cash, primarily resulting from a loss from continuing operations of $5.3 million. Cash flows from operating activities for the nine months ended September 30, 2024 were positively impacted by adjustments for $0.1 million in stock based compensation, a $0.2 loss on monthly redemptions of convertible debt into common stock, accretion of discount of $0.5 million on convertible debt, a loss on issuance of convertible debt of $0.4 million, a $0.3 million loss on change in fair value of derivative liabilities, a $0.5 million decrease in prepaid expenses, and a $0.2 million increase in accrued expenses and other current liabilities. Cash flows from operating activities for the nine months ended September 30, 2024 were negatively impacted by adjustments for a $0.4 million decrease in fair value of warrant liabilities, a $0.1 million gain on voluntary conversion of convertible debt, a $48,000 increase in accrued interest on short-term notes receivable and a $0.6 million decrease in accounts payable.

Net Cash Provided by (Used in) Investing Activities

During the nine months ended September 30, 2025, net cash used in investing activities resulted from advances to Marizyme of $1.8 million.

During the nine months ended September 30, 2024, net cash provided from investing activities totaled $900,000 resulting from $0.4 million received from settlement of an escrow account for discontinued operations netted against advances to Marizyme of $1.3 million.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2025 was $44.2 million, which resulted from the issuance of short-term debt in the amount of $3.3 million, the issuance of convertible debt in the amount of $0.2 million, the issuance of preferred shares in the amount of $38.8 million, the issuance of common stock and warrants in the amount of $3.1 million, offset by repayment of convertible debt of $0.1 million and the repayment of promissory notes of $1 million.

Net cash provided by financing activities for the nine months ended September 30, 2024 was approximately $4.9 million, resulting from the issuance of convertible debt in the amount of $1.5 million, the issuance of common stock and warrants in the amount of $3.1 million, proceeds from warrant exercises of $0.4 million, .