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COMMITMENTS AND CONTINGENCIES | 3 Months Ended
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Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | NOTE 13 — COMMITMENTS AND CONTINGENCIES Leases The Company leases its facilities under a long-term operating lease agreement. On December 15, 2021, the Company’s wholly-owned subsidiary Qualigen, Inc. entered into a Second Amendment to Lease with Bond Ranch LP. This Amendment extended the Company’s triple-net leasehold on the Company’s existing 22,624-square-feet headquarters/manufacturing facility at 2042 Corte del Nogal, Carlsbad, California for the 61-month period of November 1, 2022 to November 30, 2027. Over the 61 months, the base rent payable by Qualigen, Inc. will total $1,950,710; however, the base rent for the first 12 months of the 61-month period is only $335,966. Additionally, under the Second Amendment to Lease Qualigen, Inc. is entitled to a $339,360 tenant improvement allowance. The tables below show the operating lease right-of-use assets and operating lease liabilities and the balances as of March 31, 2023 and December 31, 2022, including the changes during the periods: SCHEDULE OF OPERATING LEASE RIGHT OF USE ASSETS AND OPERATING LEASE LIABILITIES
|  | Operating lease right-of-use assets
Net right-of-use assets at December 31, 2022 |  | $ | 1,422,538 |
Less amortization of operating lease right-of-use assets |  |  | (57,637 | )
Operating lease right-of-use assets at March 31, 2023 |  | $ | 1,364,901 |
|  | Operating lease liabilities
Lease liabilities at December 31, 2022 |  | $ | 1,542,564 |
Less principal payments on operating lease liabilities |  |  | (57,731 | )
Lease liabilities at March 31, 2023 |  |  | 1,484,833 |
Less non-current portion |  |  | (1,236,024 | )
Current portion at March 31, 2023 |  | $ | 248,809 |
As of March 31, 2023, the Company’s operating leases have a weighted-average remaining lease term of 4.6 years and a weighted-average discount rate of 8.9%. SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES
Year Ending December 31, |  | Amount |
2023 (nine months) |  |  | 276,256 |
2024 |  |  | 379,392 |
2025 |  |  | 390,773 |
2026 |  |  | 402,497 |
2027 |  |  | 379,164 |
Total |  |  | 1,828,082 |
Less present value discount |  |  | (343,249 | )
Operating lease liabilities |  | $ | 1,484,833 |
Total lease expense was approximately $116,000 and $114,000 for the three months ended March 31, 2023 and 2022, respectively. Lease expense was recorded in cost of product sales, general and administrative expenses, research and development and sales and marketing expenses. Termination of Sekisui Distribution Agreement Sekisui’s Distribution Agreement expired on March 31, 2022. As of March 31, 2023, the Company had a commitment to purchase leased FastPack rental systems back from Sekisui at Sekisui’s net book value in the amount of $154,000, which is included in equipment held for lease and accounts payable on the condensed consolidated balance sheet. NanoSynex Funding Commitment As a condition to the NanoSynex Acquisition, the Company agreed to provide NanoSynex with up to $10.4 million of future funding in the form of promissory notes to the Company based on NanoSynex’s achievement of certain future development milestones and subject to other terms and conditions described in the Funding Agreement entered into with NanoSynex. Of this amount approximately $2.4 million was funded during the year ended December 31, 2022, and an additional $0.5 million was funded in February 2023 (See Note 2 - Liquidity for further details regarding the terms and conditions of the Funding Agreement). Litigation and Other Legal Proceedings On November 9, 2021, the Company was named as a defendant in an action brought by Mediant Communications Inc. (“Mediant”) in the U.S. District Court for the Southern District of New York. The complaint alleged that Qualigen entered into an implied contract with Mediant, whereby Qualigen retained Mediant to distribute proxy materials and subsequently conduct shareholder vote tabulations. The Company filed a Motion to Dismiss with the District Court and on March 14, 2022 a hearing was held at which the presiding judge ruled in favor of the Motion to Dismiss. The Company and Mediant settled the litigation on April 5, 2022 in the amount of $96,558, at which time the amount was paid by the Company.

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