# FF EAI Robotics Ecosystem Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [FF EAI Robotics Ecosystem Inc.](/companies/ffr.md) (CIK 1460702)
- Form: 10-Q
- Filed: 2025-07-21
- Accepted by EDGAR: Jul 21, 2025, 17:27 ET
- Period: 2025-03-31
- Accession: 0001641172-25-020458
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1460702/000164117225020458/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1460702/000164117225020458/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $33.2k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$2.7m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $74.0k | us-gaap:InterestExpense |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $35 | us-gaap:IncomeTaxExpenseBenefit |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$1.82 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$1.82 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 1,456,714 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$1.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-03-31 | $30.2k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $2.8m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $2.8m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $2.8m | us-gaap:LiabilitiesCurrent |

## Management's discussion and analysis

As filed, 38,619 characters.

*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 June 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 $1,750,000 of Funding Payments to Marizyme (inclusive of a $1,250,000 demand promissory note dated July 15, 2024 which bears interest at 18% per annum).

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

### 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:

- Research and development
- Derivative financial instruments and warrant liabilities
- Stock-based compensation
- Income taxes

### 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, 2024.

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 March 31, 2025, the Company had advanced to Marizyme $2,562,400, against which Marizyme delivered demand promissory notes to the Company of like principal amounts (the “Marizyme Notes”). As of March 31, 2025, accrued interest related to the Marizyme Notes was $224,163. Interest income of $110,871 for the three months ended March 31, 2025 was recognized in other income in the condensed consolidated statement of operations. As of March 31, 2024 there were no amounts due to the Company under the Marizyme Notes.

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, the Company was 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. The Company is unable to use its historical data to estimate losses as it has no relevant loss history to date. To determine the estimate of expected credit losses, the Company 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 the Company’s expected claim and recovery rate on the debtor’s assets in the event of an insolvency or a liquidation proceeding. As of March 31, 2025, the estimate for expected credit losses on the Marizyme Notes is $557,000. Given the inherently uncertain nature of the debtor’s financial condition and future outcomes, actual credit losses may differ materially from this estimate. The Company will continue to monitor relevant events and conditions and update its assumptions and allowance as necessary.

### Results of Operations

### Comparison of the Three Months Ended March 31, 2025 and 2024

The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024:

| EXPENSES | For the Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| General and administrative | $2,494,532 | $1,057,364 |
| Research and development | 33,167 | 364,385 |
| Credit loss expense - short-term note receivable | 197,000 |  |
| Total expenses | 2,724,699 | 1,421,749 |
| **LOSS FROM OPERATIONS** | (2,724,699) | (1,421,749) |
| **OTHER EXPENSE (INCOME), NET** |  |  |
| (Gain) loss on change in fair value of warrant liabilities | (39,224) | 133,300 |
| Gain on change in fair value of derivative liabilities | — | (164,497) |
| Interest expense | 73,615 | 136,556 |
| Interest income | (112,953) | (1,619) |
| Loss on issuance of convertible debt | — | 358,279 |
| Loss on monthly redemptions of convertible debt into common stock | — | 147,197 |
| Total other expense (income), net | (78,562) | 609,216 |
| **LOSS BEFORE PROVISION FOR INCOME TAXES** | (2,646,137) | (2,030,965) |
| **(BENEFIT) PROVISION FOR INCOME TAXES** | 35 | 1,786 |
| **NET LOSS FROM CONTINUING OPERATIONS** | (2,646,172) | (2,032,751) |
| **DISCONTINUED OPERATIONS** |  |  |
| Loss on disposal of discontinued operations, net of tax | — | — |
| **GAIN (LOSS) FROM DISCONTINUED OPERATIONS** | — | — |
| **NET LOSS** | (2,646,172) | (2,032,751) |
| **Deemed dividend arising from warrant down-round provision** | $— | $(60,017) |
| **Net loss attributable to Qualigen Therapeutics, Inc** | $(2,646,172) | $(2,092,768) |
| **Total net loss per common share, basic and diluted** | $(1.82) | $(17.60) |
| Weighted-average number of shares outstanding, basic and diluted | 1,456,714 | 118,876 |

31

### Expenses

#### General and Administrative Expenses

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

#### Research and Development Costs

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

#### Credit Loss Expense – Short-Term Note Receivable

Credit loss expense – short-term note receivable increased from $0 for the three months ended March 31, 2024, to $0.2 million for the three months ended March 31, 2025, an increase of $0.2 million or 100%. This is due to Marizyme notes first being recorded in July 2024, therefore no reserve was required for the the three months ended March 31, 2024

### Other Expense (Income), Net

#### Gain on Change in Fair Value of Warrant Liabilities

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

#### Gain on Change in Fair Value of Derivative Liabilities

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

#### Interest Expense

Interest expense decreased from $0.1 million for the three months ended March 31, 2024 to $0.1 million for the three months ended March 31, 2025 due to a $0.1 million decrease for to the settlement of convertible notes in 2024, offset by an increase in $74,000 in amortization of accrued penalty for promissory notes issued in 2025.

#### Interest Income

Interest income increased from $2,000 for the three months ended March 31, 2024 to $0.1 million for the three months ended March 31, 2025 due to a $0.1 million increase from the recording of interest on Marizyme notes receivable issued in 2024 and 2025.

#### Loss on Issuance of Convertible Debt

During the three months ended March 31, 2025 we experienced $0 on issuance on convertible debt, compared to a loss of $0.4 million for the three months ended March 31, 2024. No convertible stock was issued in 2025.

#### Loss on Monthly Redemptions of Convertible Debt into common stock

During the three months ended March 31, 2025 we experienced $0 on monthly redemptions of convertible debt into common stock, compared to a loss of $0.1 million for the three months ended March 31, 2024. All convertible debt was settled prior to 2025.

#### Other Income, Net

Other income, net was immaterial during the three months ended March 31, 2025 and 2024.

### Liquidity and Capital Resources

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

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

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

Historically, our principal sources of cash have, in addition to previous revenue from product sales and license revenues from the FastPack product of line of Qualigen, Inc. (which we divested in July 2023), included proceeds from the issuance of common and preferred equity and proceeds from warrant exercises and the issuance of debt. There can be no assurance that further financing can be obtained on favorable terms, or at all. If we are unable to obtain funding, we could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, and we could be unable to continue operations.

During the year ended December 31, 2024 we raised approximately $8.0 million in new equity consisting of $4.6 million from the sale of Preferred Series A-2 Preferred Stock, $3.0 million from the sale of sommon stock and prefunded warrants in a public offering, and $0.4 million from warrant exercises. We also raised $1.5 million in new convertible debt, and $2.0 million in short-term debt, of which $1.1 million in convertible debt and accrued interest was exchanged for Preferred Series A-2 Preferred Stock, and $0.5 million was repaid in cash. The $2.0 million in short-term debt was also repaid in cash during the year. These equity and debt capital raises resulted in approximately $9.0 million in cash provided by financing activities during the year ended December 31, 2024.

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.

Delisting of our common stock from Nasdaq would have a serious negative effect on any future financing efforts. On April 24, 2025, the Company received a notice from Nasdaq notifying the Company that, because the Company was delinquent in filing its 2024 Form 10-K, the Company no longer complied with Nasdaq Listing Rule 5250(c), which requires companies with securities listed on Nasdaq to timely file all required periodic reports with the SEC. Therefore, in line with the Panel Monitor’s decision, the Company’s securities will be delisted from Nasdaq. If the Company did not request an appeal of this decision by May 1, 2025, trading of the Company’s common stock would have been suspended at the start of business on May 5, 2025. The Company appealed this decision to Nasdaq on May 1, 2025 and received a decision on June 24, 2025, stating that the Panel granted the Company’s request for continued listing on The Nasdaq Capital Market, subject to filing the 2024 10-K on June 30, 2025, and filing the form 10-Q for the period ended March 31, 2025 by July 18, 2025. The Company filed the Form 10-K for 2024 on June 30, 2025.

The accompanying financial statements have been prepared assuming that we will continue as a going concern. The financial statements do not include any adjustments that would be necessary should we 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.

### 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).

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

### 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:

| Net cash (used in) provided by: | For the Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Operating activities | $(1,589,399) | $(783,586) |
| Investing activities | (305,000) | — |
| Financing activities | 750,000 | 475,000 |
| Net decrease in cash and restricted cash | **$(1,144,399)** | **$(308,586)** |

#### Net Cash Used in Operating Activities

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

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

#### Net Cash Provided by (Used in) Investing Activities

During the three months ended March 31, 2025, net cash used in investing activities resulted from advances to Marizyme of $0.3 million.

During the three months ended March 31, 2024, there was no change in cash due to investing activites.

#### Net Cash Provided by Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2025 was $0.8 million, all of which resulted from the issuance of short term debt.

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

## Market risk

As filed, 163 characters.

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

## Controls and procedures

As filed, 4,970 characters.

### Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Disclosure controls and procedures are controls and other procedures designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on our management’s evaluation (with the participation of the individuals serving as our principal executive officer and principal financial officer) of our disclosure controls and procedures as required by Rules 13a-15 and 15d-15 under the Exchange Act, each of the individuals serving as our principal executive officer and principal financial officer has concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of March 31, 2025, the end of the period covered by this Quarterly Report on Form 10-Q.

### Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including the individuals serving as our principal executive officer and principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.

Management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013 Framework). Based on this assessment, our management concluded that, as of March 31, 2025, our internal control over financial reporting was not effective based on those criteria due to material weaknesses in our internal control over financial reporting described below.

### Material Weakness in Internal Control over Financial Reporting

During the year ended December 31, 2024 audit, we identified the lack of sufficient number of personnel within the accounting function to adequately segregate duties, the Company did not have a designed and implemented effective Information Technology General Controls (“ITGC”) related to access controls to financial accounting system, and the Company did not have formalized documentation of its processes and controls that could be evaluated for proper design and implementation.

We lack the resources to employ additional personnel to help mitigate these material weaknesses and we foresee that these material weaknesses will not be remediated until we receive additional funding to support our accounting department.

We cannot assure you that these or other measures will fully remediate the material weakness in a timely manner. Notwithstanding the identified material weakness, our management believes that the consolidated financial statements included in this report fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.

### Changes in Internal Control over Financial Reporting

Other than with respect to the remediation efforts discussed above, there was no change in our internal control over financial reporting that occurred during the first quarter of 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 640 characters.

The Company’s business, reputation, results of operations and financial condition, as well as the price of its stock, can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A of the Company’s 2024 Annual Report under the heading “Risk Factors.” When any one or more of these risks materialize, the Company’s business, reputation, results of operations and financial condition, as well as the price of its stock, can be materially and adversely affected. Except as described below, there have been no material changes to the Company’s risk factors since the 2024 Annual Report.

Filed Jul 21, 2025.
Source: SEC EDGAR, the filing index for accession 0001641172-25-020458. Last ingested by Listed: Oct 26, 2026, 17:26 ET. No prices; not investment advice.