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​

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

​

FORM 10-Q

​

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

​

For the quarterly period ended June 30, 2025

​

OR

​

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

​

For the transition period from ___________ to __________

​

Commission file number: 001-37846

​

QUOIN PHARMACEUTICALS LTD.

(Exact name of registrant as specified in its charter)

​

​ | ​ | ​
State of Israel |  | 92-2593104
(State or other jurisdiction of | ​ | (I.R.S. Employer
incorporation or organization) | ​ | Identification No.)

​

​ | ​ | ​
​ | ​ | ​
42127 Pleasant Forest Court |  | ​
Ashburn, VA | ​ | 20148-7349
(Address of principal executive offices) | ​ | (Zip Code)

​

(703) 980-4182

(Registrant’s telephone number, including area code)

​

N/A

(Former name, former address and former fiscal year, if changed since last report)

​

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

​

​ | ​ | ​ | ​ | ​
Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
American Depositary Shares, each representing thirty-five (35) Ordinary Shares, no par value per share | ​ | QNRX | ​ | The Nasdaq Stock Market LLC
Ordinary Shares, no par value per share* | ​ | ​ | ​ | N/A

* | Not for trading, but only in connection with the registration of the American Depositary Shares (“ADSs”) pursuant to requirements of the Securities and Exchange Commission.

​

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

​

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

​

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

​

Large accelerated filer | ☐ | Accelerated filer | ☐
Non-accelerated filer | ☒ | Smaller reporting company | ☒
Emerging growth company | ☐ | ​ | ​

​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

​

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

​

As of August 6, 2025, the registrant had 20,585,830 ordinary shares, no par value per share, outstanding, and 588,166 ADSs outstanding, with each ADS representing thirty-five (35) ordinary shares.

​

​

​

​

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QUOIN PHARMACEUTICALS LTD.

INDEX

| Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | 1
PART I-FINANCIAL INFORMATION | 3
| ​
Item 1. Financial Statements. | 3
| ​
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 17
| ​
Item 3. Quantitative and Qualitative Disclosures About Market Risk. | 24
| ​
Item 4. Controls and Procedures. | 25
| ​
PART II-OTHER INFORMATION | 26
| ​
Item 1. Legal Proceedings. | 26
| ​
Item 1A. Risk Factors. | 26
| ​
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. | 28
| ​
Item 3. Defaults Upon Senior Securities. | 28
| ​
Item 4. Mine Safety Disclosures. | 28
| ​
Item 5. Other Information. | 28
| ​
Item 6. Exhibits. | 29
| ​
SIGNATURES | 30

​

​

​

​

Table of Contents

GENERAL INFORMATION

Unless otherwise indicated or the context otherwise requires, all references in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to the terms “Quoin,” “Quoin Ltd.,” the “Company,” “us,” “we”, “our” and the “Registrant” refer to Quoin Pharmaceuticals Ltd., an Israeli company, and its consolidated subsidiaries. In this Quarterly Report, the U.S. Securities and Exchange Commission is referred to as the “SEC”, the Securities Act of 1933, as amended, is referred to as the “Securities Act” and the Securities Exchange Act of 1934, as amended, is referred to as the “Exchange Act.”

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

AND SUMMARY OF RISK FACTORS

Certain information included in this Quarterly Report may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Forward-looking statements are often characterized by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “continue,” “believe,” “should,” “intend,” “project” or other similar words, but are not the only way these statements are identified.

These forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, statements that contain projections of results of operations or of financial condition, expected capital needs and expenses, statements relating to the research, development, completion and use of our products, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future.

Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. We have based these forward-looking statements on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.

Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things:

| ● | our limited operating history and the difficulties encountered by a small developing company;

| ● | our history of losses and need for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;

| ● | we must raise additional capital to fund our operations in order to continue as a going concern;

| ● | our lack of revenue and potential inability to be profitable;

| ● | uncertainties of cash flows and inability to meet working capital needs;

| ● | our ability to obtain regulatory approvals;

| ● | our ability to generate favorable pre-clinical and clinical trial results;

| ● | our ability to identify and develop potential product candidates;

| ● | additional costs or delays associated with unsuccessful clinical trials;

| ● | the inability to predict the timing of revenue from sales of a future product;

| ● | the extensive regulatory requirements and future developmental and regulatory challenges we will still face even if we obtain approval for a product candidate;

| ● | our ability to obtain or maintain orphan drug designation or data exclusivity for our product candidates;

1

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| ● | our ability to obtain Orphan Disease and Rare Pediatric Disease designations for our product candidates;

| ● | the potential oversight of programs or product candidates that may be more profitable or more successful;

| ● | our manufacturing processes may not be validated and our methodology may not be accepted by the scientific community;

| ● | the ability to conduct clinical trials, because of difficulties enrolling patients or other reasons;

| ● | the requirements of being a publicly traded company may strain our resources;

| ● | potential adverse effects resulting from failure to maintain effective internal controls;

| ● | our ability to comply with the applicable continued listing requirements of Nasdaq;

| ● | the potential negative impact on our securities price and trading volume if securities or industry analysts do not publish reports about us or if they adversely change their recommendations about our business;

| ● | the potential volatility of the market price for our ADSs;

| ● | the potential dilution of our shareholders’ potential ownership due to future issuances of share capital;

| ● | the requirement for holders of ADSs to act through the depositary to exercise their rights;

| ● | the potential limitations on ADS holders with respect to the transfer of their ADSs;

| ● | the risks of securities class action litigation; and

| ● | other risks and uncertainties, including those listed under described in Part I – Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024 (“Form 10-K”), as well as our subsequent reports filed with the SEC.

You are urged to carefully review and consider the various disclosures made throughout this Quarterly Report which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

You should not put undue reliance on any forward-looking statements. Although the forward-looking statements in this Quarterly Report are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

​

2

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

QUOIN PHARMACEUTICALS LTD.

Condensed Consolidated Balance Sheets

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | December 31,
​ |  | 2025 |  | 2024
​ |  | (unaudited) |  | ​
ASSETS | ​ | ​ | ​ | ​ | ​ | ​
Current assets: |  | ​ |  |  | ​ |
Cash and cash equivalents | ​ | $ | 1,668,492 | ​ | $ | 3,623,343
Investments | ​ | ​ | 6,121,830 | ​ | ​ | 10,433,535
Prepaid expenses and other current assets | ​ |  | 688,933 | ​ |  | 869,126
Total current assets | ​ |  | 8,479,255 | ​ |  | 14,926,004
Prepaid expenses - long term | ​ | ​ | — | ​ | ​ | 300,000
Intangible assets, net | ​ |  | 433,334 | ​ |  | 483,334
Total assets | ​ | $ | 8,912,589 | ​ | $ | 15,709,338
​ | ​ | ​ | ​ | ​ | ​ | ​
LIABILITIES AND SHAREHOLDERS’ EQUITY | ​ |  |  | ​ |  |
Current liabilities: | ​ |  |  | ​ |  |
Accounts payable | ​ | $ | 873,684 | ​ | $ | 905,704
Accrued expenses | ​ |  | 1,717,564 | ​ |  | 1,528,977
Accrued interest and financing expense | ​ |  | 1,146,251 | ​ |  | 1,146,251
Due to officers - short term | ​ |  | 600,000 | ​ |  | 600,000
Total current liabilities | ​ |  | 4,337,499 | ​ |  | 4,180,932
​ | ​ | ​ | ​ | ​ | ​ | ​
Due to officers - long term | ​ | ​ | 2,023,733 | ​ | ​ | 2,323,733
Total liabilities | ​ | $ | 6,361,232 | ​ | $ | 6,504,665
​ | ​ | ​ | ​ | ​ | ​ | ​
Commitments and contingencies | ​ |  |  | ​ |  |
​ | ​ | ​ | ​ | ​ | ​ | ​
Shareholders’ equity: | ​ |  |  | ​ |  |
Ordinary shares, no par value per share, 100,000,000 ordinary shares authorized at June 30, 2025 and December 31, 2024, respectively - 20,585,830 (588,166 ADS’s) ordinary shares issued and outstanding at June 30, 2025 and 8,948,164 (255,661 ADS’s) ordinary shares issued and outstanding at December 31, 2024 | ​ | $ | — | ​ | $ | —
Additional paid in capital | ​ |  | 65,225,266 | ​ |  | 64,370,465
Accumulated deficit | ​ |  | (62,673,909) | ​ |  | (55,165,792)
Total shareholders’ equity | ​ |  | 2,551,357 | ​ |  | 9,204,673
​ | ​ | ​ | ​ | ​ | ​ | ​
Total liabilities and shareholders’ equity | ​ | $ | 8,912,589 | ​ | $ | 15,709,338

​

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements

​

3

Table of Contents

QUOIN PHARMACEUTICALS LTD.

Condensed Consolidated Statements of Operations (Unaudited)

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended June 30, | ​ | Six months ended June 30,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
Operating expenses | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
General and administrative | ​ | $ | 1,742,594 | ​ | $ | 1,549,615 | ​ | $ | 3,325,632 | ​ | $ | 3,122,601
Research and development | ​ |  | 2,050,585 | ​ |  | 587,503 | ​ |  | 4,424,724 | ​ | ​ | 1,472,801
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total operating expenses | ​ |  | 3,793,179 | ​ |  | 2,137,118 | ​ |  | 7,750,356 | ​ | ​ | 4,595,402
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other (income) and expenses | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Unrealized loss | ​ | ​ | 6,004 | ​ | ​ | 2,177 | ​ | ​ | 5,878 | ​ | ​ | 8,686
Realized and accrued interest income | ​ |  | (103,245) | ​ |  | (165,262) | ​ |  | (248,117) | ​ |  | (302,775)
Total other income | ​ | ​ | (97,241) | ​ | ​ | (163,085) | ​ | ​ | (242,239) | ​ | ​ | (294,089)
Net loss | ​ | $ | (3,695,938) | ​ | $ | (1,974,033) | ​ | $ | (7,508,117) | ​ | $ | (4,301,313)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loss per ADS | ​ |  | ​ | ​ |  |  | ​ |  |  | ​ |  |
Loss per ADS | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Basic | ​ | $ | (6.28) | ​ | $ | (13.68) | ​ | $ | (12.79) | ​ | $ | (42.09)
Fully-diluted | ​ | $ | (6.28) | ​ | $ | (13.68) | ​ | $ | (12.79) | ​ | $ | (42.09)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted average number of ADS’s outstanding | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Basic | ​ |  | 588,166 | ​ |  | 144,278 | ​ |  | 587,253 | ​ |  | 102,186
Fully-diluted | ​ |  | 588,166 | ​ |  | 144,278 | ​ |  | 587,253 | ​ |  | 102,186

​

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements

​

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QUOIN PHARMACEUTICALS LTD.

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

Three and six months ended June 30, 2024

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | ​ |  | Additional |  | ​ | ​ |  | ​ | ​
​ | ​ | Ordinary | ​ | ​ | ​ | Paid in | ​ | Accumulated | ​ | ​ | ​
​ |  | Shares |  | ADS’s |  | Capital |  | Deficit |  | Total
Balance at January 1, 2024 |  | 987,220 |  | 28,206 |  | $ | 51,867,336 | ​ | $ | (46,203,320) | ​ | $ | 5,664,016
Net loss |  | — |  | — |  |  | — | ​ |  | (2,327,280) | ​ |  | (2,327,280)
Issuance of ADS’s, pre-funded warrants and warrants, net | ​ | 2,808,750 | ​ | 80,250 | ​ | ​ | 5,482,472 | ​ | ​ | — | ​ | ​ | 5,482,472
Stock based compensation | ​ | — | ​ | — | ​ | ​ | 306,314 | ​ | ​ | — | ​ | ​ | 306,314
Balance at March 31, 2024 | ​ | 3,795,970 | ​ | 108,456 | ​ | $ | 57,656,122 | ​ | $ | (48,530,600) | ​ | $ | 9,125,522
Net loss | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | (1,974,033) | ​ | ​ | (1,974,033)
Exercise of pre-funded warrants | ​ | 184,000 | ​ | 5,257 | ​ | ​ | 18 | ​ | ​ | — | ​ | ​ | 18
Reversal of accrued offering expenses | ​ | — | ​ | — | ​ | ​ | 13,707 | ​ | ​ | — | ​ | ​ | 13,707
Stock based compensation | ​ | — | ​ | — | ​ | ​ | 313,122 | ​ | ​ | — | ​ | ​ | 313,122
Balance at June 30, 2024 | ​ | 3,979,970 | ​ | 113,713 | ​ | $ | 57,982,969 | ​ | $ | (50,504,633) | ​ | $ | 7,478,336

​

Three and six months ended June 30, 2025

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ |  | ​ |  | Additional |  | ​ | ​ |  | ​ | ​
​ |  | Ordinary | ​ | ​ | ​ | Paid in | ​ | Accumulated | ​ | ​ | ​
​ |  | Shares |  | ADS’s |  | Capital |  | Deficit |  | Total
Balance at January 1, 2025 | ​ | 8,948,164 | ​ | 255,661 | ​ | $ | 64,370,465 | ​ | $ | (55,165,792) | ​ | $ | 9,204,673
Net loss | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | (3,812,179) | ​ | ​ | (3,812,179)
Exercise of pre-funded warrants and warrants, net |  | 11,637,666 |  | 332,505 |  | ​ | 172,958 |  | ​ | — |  | ​ | 172,958
Stock based compensation |  | — |  | — |  | ​ | 360,357 |  | ​ | — |  | ​ | 360,357
Balance at March 31, 2025 | ​ | 20,585,830 | ​ | 588,166 | ​ | $ | 64,903,780 | ​ | $ | (58,977,971) | ​ | $ | 5,925,809
Net loss | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | (3,695,938) | ​ | ​ | (3,695,938)
Stock based compensation | ​ | — | ​ | — | ​ | ​ | 321,486 | ​ | ​ | — | ​ | ​ | 321,486
Balance at June 30, 2025 |  | 20,585,830 |  | 588,166 |  | $ | 65,225,266 | ​ | $ | (62,673,909) | ​ | $ | 2,551,357

​

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements

​

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QUOIN PHARMACEUTICALS LTD.

Condensed Consolidated Statements of Cash Flows (unaudited)

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Six Months Ended June 30,
​ |  | 2025 |  | 2024
Cash flows used in operating activities: | ​ | ​ | ​ | ​ | ​ | ​
Net loss | ​ | $ | (7,508,117) | ​ | $ | (4,301,313)
Stock based compensation | ​ |  | 681,843 | ​ |  | 619,436
Amortization of intangibles | ​ |  | 50,000 | ​ |  | 50,000
Realized and unrealized gain and accrued interest on investments | ​ | ​ | (140,996) | ​ | ​ | (121,026)
Changes in assets and liabilities: | ​ |  | ​ | ​ |  | ​
Increase in accounts payable and accrued expenses | ​ |  | 156,567 | ​ |  | 371,070
Decrease (increase) in prepaid expenses and other assets | ​ |  | 480,193 | ​ |  | (59,662)
Net cash used in operating activities | ​ | $ | (6,280,510) | ​ | $ | (3,441,495)
​ | ​ | ​ | ​ | ​ | ​ | ​
Cash flows provided (used) in investing activities: | ​ |  |  | ​ |  |
Purchase of investments | ​ | $ | — | ​ | $ | (9,649,774)
Proceeds from redemption of investments | ​ | ​ | 4,452,701 | ​ | ​ | 8,339,000
Net cash provided (used) in investing activities | ​ | $ | 4,452,701 | ​ | $ | (1,310,774)
​ | ​ | ​ | ​ | ​ | ​ | ​
Cash flows provided by financing activities: | ​ |  |  | ​ |  |
Payment of amounts due to officers | ​ | $ | (300,000) | ​ | $ | (300,000)
Proceeds from sale of equity securities, net | ​ |  | 172,958 | ​ | ​ | 5,496,197
Net cash (used) provided in financing activities | ​ | $ | (127,042) | ​ | $ | 5,196,197
​ | ​ | ​ | ​ | ​ | ​ | ​
Net change in cash and cash equivalents: | ​ |  | (1,954,851) | ​ |  | 443,928
Cash and cash equivalents - beginning of period | ​ |  | 3,623,343 | ​ |  | 2,401,198
Cash and cash equivalents - end of period | ​ | $ | 1,668,492 | ​ | $ | 2,845,126
​ | ​ | ​ | ​ | ​ | ​ | ​
Supplemental information - Non cash items: | ​ |  |  | ​ |  |
Offering expenses associated with warrant modification | ​ | $ | — | ​ | $ | 209,225

​

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements

​

​

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NOTE 1 – ORGANIZATION AND BUSINESS

Quoin Pharmaceuticals Ltd. (“Quoin Ltd.,” or the “Company”), formerly known as Cellect Biotechnology Ltd. (“Cellect”), is the holding company for Quoin Pharmaceuticals, Inc., a Delaware corporation (“Quoin Inc.”). Quoin Inc. was incorporated in Delaware on March 5, 2018. On October 28, 2021, Cellect completed the business combination with Quoin Inc., with Quoin Inc. surviving as a wholly-owned subsidiary of Cellect (the “Merger”). Immediately after completion of the Merger, Cellect changed its name to “Quoin Pharmaceuticals Ltd.”

Effective April 9, 2025, the ratio of American Depositary Shares (“ADSs”) evidencing ordinary shares changed from 1 ADS representing one (1) ordinary share to 1 ADS representing thirty-five (35) ordinary shares (the “Ratio Change”), which resulted in a 1 for 35 reverse split of the issued and outstanding ADSs (the “Reverse Split”). Our Ordinary Shares were not affected by this adjustment. Except as specifically provided, ADSs and related option and warrant information presented in these unaudited condensed consolidated financial statements and accompanying footnotes has been retroactively adjusted to reflect the Ratio Change and the Reverse Split.

The Company is a late-stage clinical specialty pharmaceutical company focused on the development and commercialization of therapeutic products that treat rare and orphan diseases for which there are currently very limited or no approved treatments or cures. The Company’s lead product, QRX003, is under clinical development as a potential treatment for Netherton Syndrome (“NS”), a rare hereditary genetic disease. QRX003 is currently being tested in two pivotal registrational clinical studies under an open Investigational New Drug (“IND”) application with the Food and Drug Administration (“FDA”). The Company has opened five clinical sites in the United States (“US”) and intends to open a sixth US clinical site at Northwestern University. The Company is expanding its trials internationally into the Middle East, the United Kingdom and additional countries in Europe, including Spain and Germany. QRX003 is currently being tested in two pediatric NS patients at the Children’s Hospital in Dublin, Ireland and the Company intends to expand this study to include additional children with NS in Spain, the United Kingdom and potentially other countries. QRX003 is also being developed as a potential treatment for Peeling Skin Syndrome with the first subject being treated in New Zealand. In addition, the Company has entered into a Research Agreements with the Queensland University of Technology (“QUT”), under which the Company has obtained an option for a global license to QRX008 for the potential treatment of scleroderma, as well as a Research Agreement with University College Cork (“UCC”) for the development of novel topical formulations of rapamycin (sirolimus) as potential treatments for a number of rare and orphan diseases, including microcystic lymphatic malformations, venous malformations and angiofibroma’s. To date, no products have been commercialized and no revenue has been generated by the Company.

​

NOTE 2 - LIQUIDITY RISKS AND OTHER UNCERTAINTIES

The unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) assuming the Company will continue as a going concern. At June 30, 2025, the Company had cash and cash equivalents balances totaling $1.7 million and investments of $6.1 million. The Company has incurred net losses every year since inception and has an accumulated deficit of approximately $62.7 million at June 30, 2025. The Company has a limited operating history and has historically funded its operations through debt and equity financings. The Company incurred net losses of approximately $7.5 million, and negative cash flows from operations of $6.3 million for the six months ended June 30, 2025.

The Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise additional debt or equity capital. There can be no assurance that such capital will be available in sufficient amounts or on terms acceptable to the Company. The accompanying unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability of the recorded assets or the classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

Based upon the Company’s current business plans and cash, cash equivalents and investments on hand, management has concluded that there is substantial doubt about our ability to continue as a going concern for a period of at least one year from the issuance of the unaudited consolidated financial statements included in this report. In order to address the Company’s capital needs, the Company intends to consider multiple alternatives, including, but not limited to, the sale of equity or debt securities, grants or entering into collaborative, strategic, and/or licensing transactions. There can be no assurance that the Company will be able to complete any such financing, collaborative or strategic transaction in a timely manner or on acceptable terms. As a result, the Company may have to significantly limit its operations and its business, financial condition and results of operations would be materially harmed. The Company is subject to risks common to development stage biopharmaceutical companies including, but not limited to, unanticipated clinical trial costs and the ability to estimate such occurrences, if any, on its cash, liquidity, additional financing requirements, and availability. The Company does not expect to generate revenue from product sales unless and until the Company successfully completes development

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and obtains marketing approval for one or more of its product candidates, which the Company expects will take a number of years and is subject to significant uncertainty. Additional financing will be required to complete the research and development of the Company’s therapeutic targets and its other operating requirements until it achieves commercial profitability, if ever. Such financing may not be available at acceptable terms, if at all. If the Company is unable to obtain additional funding when it becomes necessary, the development of its product candidates will be impacted and the Company would likely be forced to delay, reduce, or terminate some or all of its development programs.

Other risks and uncertainties:

The Company is subject to risks common to development stage biopharmaceutical companies including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, product liability, pre-clinical and clinical trial outcome risks, regulatory approval risks, uncertainty of market acceptance and additional financing requirements.

The Company’s products require approval or clearance from the FDA prior to commencing commercial sales in the United States. There can be no assurance that the Company’s products will receive all of the required approvals or clearances. Approvals or clearances are also required in foreign jurisdictions in which the Company may license or sell its products.

There can be no assurance that the Company’s products, if approved, will be accepted in the marketplace, nor can there be any assurance that any future products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed.

The Company is also dependent on several third party suppliers, in some cases a single source supplier including the contract research organization managing both of the Company’s current clinical studies, the supplier of the active pharmaceutical ingredient (API), as well as the contract manufacturer of the drug product for clinical development.

Nasdaq Listing

On April 29, 2024, the Company received a letter from the Listing Qualifications staff of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying the Company that the closing bid price per ADS was below the required minimum of $1.00 for a period of 30 consecutive business days and that the Company did not meet the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). Pursuant to Nasdaq Rule 5810(c)(3)(A), the Company had an initial period of one hundred eighty (180) calendar days, or until October 28, 2024, which was subsequently extended for an additional one hundred eighty (180) calendar days, or until April 28, 2025. To regain compliance with the Minimum Bid Price Requirement, on April 9, 2025, the Company effected the Ratio Change and Reverse Split (see Note 1). On April 29, 2025, the Company received a letter from Nasdaq stating that the Company’s closing bid price per ADS was at $1.00 or greater for the last 13 consecutive business days. Accordingly, the Company regained compliance with Listing Rule 5550(a)(2) and the matter was closed.

There can be no assurance that the Company will be able to maintain compliance with Nasdaq’s Minimum Bid Price Requirement for continued listing. If the Company’s ADSs were delisted from Nasdaq, it would have a material negative impact on the actual and potential liquidity of the Company’s securities, as well as a material negative impact on the Company’s ability to raise future capital.

​

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation:

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of June 30, 2025 and for the three and six months then ended. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the operating results for the year or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related disclosures as of December 31, 2024 and for the year then ended which are included in the Company’s Annual Report on Form 10- K, filed with the SEC on March 13, 2025.

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Reclassification:

Certain balances in the unaudited condensed consolidated statement of operations for the three and six month period June 30, 2024, have been reclassified to conform to the presentation in the consolidated statement of operations for the year ended December 31, 2024, specifically the reclassification of travel expenses allocated between general and administrative expenses and research and development expenses. Such reclassifications did not have a material impact on the unaudited condensed consolidated financial statements.

Use of Estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could materially differ from those estimates. Management considers many factors in developing the estimates and assumptions that are used in the preparation of these financial statements including: expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: settlement of debt or other obligations, stock-based compensation, research and development expense recognition, intangible asset estimated useful lives and impairment assessments, allowances of deferred tax assets, and cash flow assumptions regarding going concern considerations.

Cash and cash equivalents:

The Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. The Company, from time to time during the periods presented, has had bank account balances in excess of federally insured limits where substantially all cash is held in the United States. The Company has not experienced losses in such accounts. The Company believes that it is not subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Investments:

Investments as of June 30, 2025 and December 31, 2024 consist of U.S. Treasury Bills and Notes, which are classified as trading securities, totaling $6.1 million and $10.4 million, respectively. The Company determines the appropriate balance sheet classification of its investments at the time of purchase and evaluates the classification at each balance sheet date. All of the Company’s U.S. Treasury Bills and Notes held on June 30, 2025 have maturities within nine months from the balance sheet date. As of June 30, 2025, the carrying value of the Company’s U.S. Treasury Bills and Notes approximates their fair value due to their short-term maturities.

Long-lived assets:

Long-lived assets are comprised of acquired technology and licensed rights to use technology, which are considered platform technology with alternative future uses beyond the current products in development. Such intangible assets are being amortized on a straight-line basis over their expected useful life of 10 years.

The Company assesses the impairment for long-lived assets whenever events or circumstances indicate the carrying value may not be recoverable. Factors the Company considers that could trigger an impairment review include the following:

| ● | Significant changes in the manner of the Company’s use of the acquired assets or the strategy for its overall business,

| ● | Significant underperformance relative to expected historical or projected development milestones,

| ● | Significant negative regulatory or economic trends, and

| ● | Significant technological changes which could render the platform technology obsolete.

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The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. During the three and six months ended June 30, 2025 and 2024, there were no impairment indicators which required an impairment loss measurement.

Operating Segment:

The Company operates in one business segment, which includes the business of research and development activities related to the development of therapeutic products that treat rare and orphan diseases for which there are currently very limited or no approved treatments or cures. The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (“CODM”). The Company’s CODM is its Chief Executive Officer, who reviews and evaluates consolidated net loss for purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods.

In addition to the significant expense categories included within consolidated net loss presented on the Company’s unaudited condensed consolidated statements of operations, see below for disaggregated amounts that comprise research and development expenses:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended June 30, | ​ | Six months ended June 30,
​ | ​ | 2025 |  | 2024 |  | 2025 |  | 2024
External clinical development expenses | ​ | $ | 1,637,683 | ​ | $ | 206,277 | ​ | $ | 3,334,914 | ​ | $ | 763,237
Personnel related and stock-based compensation | ​ |  | 258,072 | ​ |  | 260,349 | ​ |  | 687,490 | ​ |  | 472,619
Other research and development expenses | ​ |  | 154,830 | ​ |  | 120,877 | ​ |  | 402,320 | ​ |  | 236,945
Total research and development expenses | ​ | $ | 2,050,585 | ​ | $ | 587,503 | ​ | $ | 4,424,724 | ​ | $ | 1,472,801

​

Research and development:

Research and development costs are expensed as incurred. Research and development expenses include personnel costs associated with research and development activities, including third-party contractors to perform research, conduct clinical trials and manufacture drug supplies and materials. The Company accrues for costs incurred by external service providers, including contract research organizations and clinical investigators, based on its estimates of service performed and costs incurred. These estimates include the level of services performed by third parties, patient enrollment in clinical trials when applicable, administrative costs incurred by third parties, and other indicators of the services completed. Based on the timing of amounts invoiced by service providers, the Company may also record payments made to those providers as prepaid expenses that will be recognized as expenses in future periods as the related services are rendered.

Stock based compensation:

The Company recognizes compensation costs resulting from the issuance of stock-based awards to employees, non-employees and directors as an expense in the consolidated statements of operations over the requisite service period based on a measurement of fair value for each stock-based award. The fair value of each option grant is estimated as of the date of grant using the Black-Scholes option-pricing model, net of actual forfeitures. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period.

Since the Company has a limited history of trading as a public company, the Company’s expected stock volatility is based on a weighting of its historical volatility along with a group of a publicly traded set of peer companies. The Company utilizes the simplified method to estimate the expected term. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield was assumed to be zero as the Company has not paid dividends since its inception and does not anticipate paying dividends in the foreseeable future.

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Fair value of financial instruments:

The Company considers its cash and cash equivalents, investments, accounts payable, accrued expenses to meet the definition of financial instruments. The carrying amounts of these financial instruments approximated their fair values due to the short maturities.

The Company measures fair value as required by ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

Earnings (loss) per share:

The Company reports loss per share in accordance with ASC 260-10, Earnings Per Share, which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. The calculation of diluted net earnings (loss) per share gives effect to ordinary shares equivalents; however, other than unexercised prefunded warrants as described below, potential common shares are excluded if their effect is anti-dilutive.

For the three and six months ended June 30, 2025 and 2024, the number of shares excluded from the diluted net earnings (loss) per share included outstanding warrants to purchase 1,108,159 ADSs and outstanding stock options to purchase 180,055 ADSs, and outstanding warrants to purchase 256,809 ADSs and outstanding stock options to purchase 7,943 ADSs, respectively, as their inclusion in the denominator would be anti-dilutive.

​

NOTE 4 – ACCRUED INTEREST AND FINANCING EXPENSE

On October 2, 2020, Quoin Inc. issued promissory notes (the “2020 Notes”) to certain investors (“2020 Noteholders”). The 2020 Notes were mandatorily convertible into 12 ADSs, subject to adjustment and were converted in 2021. The ADSs issued to the 2020 Noteholders did not include accrued interest. Two of the five 2020 Noteholders received their amount due during the year ended December 31, 2022 and the Company’s estimate of the liability to the remaining three 2020 Noteholders was estimated to be $1,146,000 as of June 30, 2025 and December 31, 2024. Two of the remaining three 2020 Noteholders are related parties to the Company, the aggregate estimated liability to these parties was $339,000 as of June 30, 2025 and December 31, 2024.

There was no interest expense recognized in both the three and six month periods ended June 30, 2025 and 2024.

​

NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company applies fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. For certain instruments, including cash and cash equivalents, accounts payable, and accrued expenses, it was estimated that the carrying amount approximated fair value because of the short maturities of these instruments.

Fair value is estimated using various valuation models, which utilize certain inputs and assumptions that market participants would use in pricing the asset or liability. The inputs and assumptions used in valuation models are classified in the fair value hierarchy as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Quoted market prices for similar instruments in an active market; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations inputs of which are observable and can be corroborated by market data.

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Level 3: Unobservable inputs and assumptions that are supported by little or no market activity and that are significant to the fair value of the asset and liability. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining the appropriate hierarchy levels, the Company analyzes the assets and liabilities that are subject to fair value disclosure. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.

​

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis by fair value hierarchy at June 30, 2025 and December 31, 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
June 30, 2025 |  | ​ | Level 1 |  | ​ | Level 2 |  | Level 3 |  | Total
US Treasury Bills and Notes |  | $ | 6,121,830 |  | $ | — | ​ | $ | — | ​ | $ | 6,121,830
Total US Treasury Bills and Notes Asset |  | $ | 6,121,830 |  | $ | — | ​ | $ | — | ​ | $ | 6,121,830

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
December 31, 2024 |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
US Treasury Bills and Notes | ​ | $ | 10,433,535 | ​ | $ | — | ​ | $ | — | ​ | $ | 10,433,535
Total US Treasury Bills and Notes Asset | ​ | $ | 10,433,535 | ​ | $ | — | ​ | $ | — | ​ | $ | 10,433,535

​

​

NOTE 6 – STOCK BASED COMPENSATION

In March 2022, the Board of Directors of the Company approved the Amended and Restated Equity Incentive Plan (the “Amended Plan”), which was approved by the shareholders at the Company’s Annual General Meeting of Shareholders held on April 12, 2022, which increased the number of ordinary shares reserved for issuance under such equity incentive plan to 15% of the Company’s outstanding ordinary shares on a fully-diluted basis, or 9,850,995 ordinary shares represented by 281,455 ADSs as of June 30, 2025. Under the Amended Plan, the Company may grant options to its directors, officers, employees, consultants, advisers and service providers. As of June 30, 2025, 101,400 ADSs remained available for issuance.

The following table summarizes stock-based activities under the Amended Plan:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Weighted |  | Weighted
​ | ​ | ​ | ​ | Average | ​ | Average
​ | ​ | ADS Underlying | ​ | Exercise | ​ | Contractual
​ | ​ | Options | ​ | Price | ​ | Terms
Outstanding at December 31, 2024 |  | 55,541 | ​ | $ | 150.47 |  | 9.76
Granted |  | 124,514 | ​ | ​ | 9.07 |  | ​
Canceled |  | — | ​ | ​ | — |  | ​
Outstanding at June 30, 2025 |  | 180,055 | ​ | $ | 52.69 |  | 9.30
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Exercisable options at June 30, 2025 |  | 2,043 | ​ | $ | 2,576.66 |  | 7.88

​

The above table does not include options to acquire 31,469 granted to certain Company directors in lieu of cash payment of a portion of their respective 2025 annual retainer fees, which are subject to shareholder approval the Company’s Annual General Meeting scheduled to be held August 21, 2025.

The intrinsic value of exercisable options at June 30, 2025 was $0.

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Stock options granted during the six months ended June 30, 2025 were valued using the Black-Scholes option-pricing model with the following weighted average assumptions:

​

​ | ​ | ​ | ​ | ​
​ |  | June 30, |
​ | ​ | 2025 |
Expected volatility |  | ​ | 108.4 | %
Risk-free interest rate |  | ​ | 4.4 | %
Expected dividend yield |  | ​ | 0.0 | %
Expected life of options in years |  | ​ | 6.4 | ​
Exercise Price | ​ | $ | 9.07 | ​
Fair value of common stock | ​ | $ | 9.07 | ​
Estimate fair value of option | ​ | $ | 7.73 | ​

​

The Company did not grant any options in the six months ended June 30, 2024.

Stock based compensation expense was approximately $321,000 ($86,000 included in research and development expense and $235,000 included in general and administrative expenses) in the three months ended June 30, 2025 and approximately $682,000 ($206,000 included in research and development expense and $476,000 included in general and administrative expenses) in the six months ended June 30, 2025.

Stock based compensation expense was approximately $313,000 ($68,000 included in research and development expense and $245,000 included in general and administrative expenses) in the three months ended June 30, 2024 and approximately $619,000 ($118,000 included in research and development expense and $501,000 included in general and administrative expenses) in the six months ended June 30, 2024.

At June 30, 2025, the total unrecognized compensation expense related to non-vested options was approximately $3.1 million and is expected to be recognized over the remaining weighted average service period of approximately 3.35 years.

​

NOTE 7 – PREPAID EXPENSES

Prepaid expenses are as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | December 31,
​ | ​ | 2025 | ​ | 2024
Prepaid R&D costs | ​ | $ | 499,905 | ​ | $ | 772,083
Prepaid insurance | ​ |  | 135,434 | ​ |  | 309,889
Prepaid expense | ​ |  | 53,594 | ​ |  | 87,154
Total | ​ | $ | 688,933 | ​ | $ | 1,169,126
Less: Short-term portion | ​ | ​ | (688,933) | ​ | ​ | (869,126)
Long-term portion | ​ | $ | — | ​ | $ | 300,000

​

​

NOTE 8 - ACCRUED EXPENSES

Accrued expenses are as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | December 31,
​ | ​ | 2025 | ​ | 2024
Research contract expenses (note 12) | ​ | $ | 667,310 | ​ | $ | 183,094
Payroll (note 11) | ​ |  | 736,656 | ​ |  | 940,539
Payroll taxes (note 11) | ​ |  | 62,264 | ​ |  | 77,726
Professional fees | ​ |  | 100,843 | ​ |  | 323,497
Other expenses | ​ |  | 150,491 | ​ |  | 4,121
Total | ​ | $ | 1,717,564 | ​ | $ | 1,528,977

​

​

​

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NOTE 9 – IN-LICENSED TECHNOLOGY

Skinvisible:

In October 2019, Quoin Inc. entered into the Exclusive Licensing Agreement (as amended from time to time, the “License Agreement”) with Skinvisible Pharmaceuticals, Inc. (“Skinvisible”), under which Skinvisible granted the Company an exclusive royalty-bearing license relating to the production and manufacture of prescription drug products related to certain patents held by Skinvisible, including those related to QRX003 and QRX004. The Company made Skinvisible a one-time non-refundable, non-creditable license fee of $1 million (the “License Fee”). In addition, the Company agreed to pay Skinvisible a single digit royalty percentage of the Company’s net sales revenues for any licensed product covered by the patent rights licensed under the License Agreement. The Company also agreed to pay Skinvisible 25% of any revenues the Company receives as royalties in the event that the Company sublicenses any licensed products to a third party. The License Agreement also requires that the Company make a one-time $5 million payment to Skinvisible upon receiving approval in the U.S. or European Union, whichever occurs first, for the first drug product developed using intellectual property licensed thereunder. There were no milestone or royalty obligations due at June 30, 2025 and December 31, 2024.

​

NOTE 10 - INTANGIBLE ASSETS

Intangible assets are as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | December 31,
​ | ​ | 2025 | ​ | 2024
Technology license – Skinvisible | ​ | $ | 1,000,000 | ​ | $ | 1,000,000
Total cost | ​ |  | 1,000,000 | ​ |  | 1,000,000
Accumulated amortization | ​ |  | (566,666) | ​ |  | (516,666)
Net book value | ​ | $ | 433,334 | ​ | $ | 483,334

​

The Company recorded amortization expense of approximately $25,000 and $25,000 in the three months ended June 30, 2025 and 2024, respectively. The Company recorded amortization expense of approximately $50,000 and $50,000 in the six months ended June 30, 2025 and 2024, respectively. The annual amortization expense expected to be recorded for existing intangible assets for the years 2025 through 2029, is approximately $50,000, $100,000, $100,000, 100,000 and $83,000, respectively.

​

NOTE 11 - RELATED PARTY TRANSACTIONS

Employment Agreements and Due to Officers/Founders:

Due to the limited funding of Quoin Inc. prior to the consummation of the Merger, the compensation, including salary, office and car allowances and other benefits, due to Dr. Myers and Ms. Carter under their respective employment agreements, as well as reimbursement of expenses and other amounts paid by Dr. Myers and Ms. Carter to third parties on behalf of Quoin Inc., were not paid by Quoin Inc. to Dr. Myers and Ms. Carter, and were accrued as indebtedness to Dr. Myers and Ms. Carter. Following the closing of the Merger, Quoin Inc. began making payments of $25,000 per month to each of Dr. Myers and Ms. Carter to repay the above-described non-interest-bearing indebtedness. The Company repaid $75,000 and $75,000 of such indebtedness to Dr. Myers and $75,000 and $75,000 to Ms. Carter in the three months ended June 30, 2025 and 2024, respectively. The Company repaid $150,000 and $150,000 of such indebtedness to Dr. Myers and $150,000 and $150,000 to Ms. Carter in the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, approximately $1.5 million and $1.1 million of such indebtedness was outstanding to Dr. Myers and Ms. Carter, respectively.

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Amounts due to officers at June 30, 2025 and December 31, 2024 consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | December 31,
​ | ​ | 2025 | ​ | 2024
Salaries and other compensation | ​ | $ | 2,623,733 |  | $ | 2,923,733
Less: Short-term portion | ​ |  | (600,000) |  | ​ | (600,000)
Long-term portion | ​ | $ | 2,023,733 | ​ | $ | 2,323,733

​

Interest Payable:

See Note 4 for interest payable on the 2020 Notes.

​

NOTE 12 – RESEARCH, CONSULTING AGREEMENTS AND COMMITMENTS

Research agreements

In November 2020, Quoin Inc. entered into a Master Service Agreement with Therapeutics Inc. for the management of the preclinical and clinical development of QRX003 for Netherton Syndrome. The initial term of the agreement was three years with automatic one year extensions, and the agreement required the execution of individual work orders. Quoin Inc. may terminate any work order for any reason with 90 days written notice subject to costs incurred through termination and a defined termination fee, unless there is a material breach by Therapeutics Inc. A work order was entered into in June 2022 for the first QRX003 clinical study at an expected estimated cost of approximately $4.4 million. An additional work order was entered into in December 2022 for a second QRX003 clinical study at an expected estimated cost of approximately $830,000. An amended and restated change order for the two studies was entered into in December 2024 at an estimated total remaining cost from August 2024 of approximately $3.6 million for the two studies combined. For the three and six months ended June 30, 2025 and 2024, the Company incurred a research and development expense under these agreements of approximately $348,000 and $759,000 and $162,000 and $650,000 respectively.

In November 2021, the Company entered into a research agreement with Queensland University of Technology (QUT) for a pre-clinical research program for the development of a product to treat Netherton Syndrome of approximately $250,000. In May 2022, the Company entered into a second research agreement with QUT for the development of a product to treat Scleroderma of approximately $610,000. Each agreement remains in place until the completion of the research program, which in each case was initially anticipated to be 18 months from execution. For the three and six months ended June 30, 2025 and 2024, the Company did not incur any costs related to these agreements. In July 2025 the Company announced that, in light of the expected near - term completion of the QRX003 clinical program for Netherton Syndrome, the Company has discontinued Netherton Syndrome research program with QUT. The Company is planning to schedule a meeting with QUT to discuss the future direction of the Scleroderma research program.

In June 2024, the Company signed a research agreement with The School of Pharmacy at University College Cork, Ireland (UCC). The scope of the agreement encompasses the development of novel topical formulations of rapamycin (sirolimus) as potential treatments for a number of rare and orphan diseases for which there are currently no approved therapies or cures. Under the terms of the agreement, based on the achievement of certain milestones, the Company will fund up to approximately €567,000 ($668,000) plus VAT over an anticipated 2-1/2 year period to support the UCC research program to investigate the development of a number of topical rapamycin formulations for future development as potential treatments for several rare and orphan diseases. Following completion of the research program, the Company will have the option to advance the clinical development of rapamycin formulations developed by UCC. Work on this research project commenced in December 2024. For the three and six months ended June 30, 2025, the Company incurred a research and development expense under these agreements of approximately $60,000 and $120,000 respectively.

Performance milestones and Royalties

See Note 9 for asset and in-licensed technology commitments.

​

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NOTE 13 – SHAREHOLDERS’ EQUITY

In January and February 2025, certain investors in the December 2024 Offering exercised (i) the remaining outstanding 320,362 December 2024 Pre-Funded Warrants, (ii) 9,143 Series F Warrants and 3,000 Series G Warrants, resulting in net proceeds to the Company of approximately $173,000.

Warrants

The following table summarizes warrant activities during the six months ended June 30, 2025:

​

​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Weighted
​ | ​ | ADSs | ​ | Average
​ | ​ | Underlying | ​ | Exercise Price
​ | ​ | Warrants | ​ | Per ADS
Outstanding and exercisable at December 31, 2024 | ​ | 1,440,664 |  | $ | 16.80
Exercised Pre-Funded and Common Warrants |  | (332,505) | ​ | ​ | 0.58
Outstanding and exercisable at June 30, 2025 | ​ | 1,108,159 | ​ | $ | 21.92

​

As of June 30, 2025, outstanding Warrants expire in 2026, 2027 and 2029, and the outstanding Warrants have an approximate intrinsic value of $0.

​

NOTE 14 – CONTINGENCIES

From time to time, the Company may become involved in various legal matters arising in the ordinary course of business. Management is unaware of any matters requiring accrual for related losses in the unaudited condensed consolidated financial statements.

​

NOTE 15 – LICENSE AGREEMENTS

As of June 30, 2025, the Company had nine commercial license and supply agreements outstanding, whereby the Company will receive a royalty or other proceeds from the specified product revenues from the licensor, if and when the underlying products are approved and commercialized or sold via compassionate use or early access programs. No royalty revenues have been received through June 30, 2025 from any of these agreements.

​

NOTE 16 – SUBSEQUENT EVENTS

Subsequent to the end of the second quarter of 2025, on July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, extending key provisions of the 2017 Tax Cuts and Jobs Act including, but not limited to, the restoration of 100% bonus depreciation, the introduction of new Section 174A permitting immediate expensing of domestic research and experimental expenditures, modifications to Section 163(j) interest expense limitations, updates to the rules governing global intangible low-taxed income, amendments to energy credit provisions, and the expansion of Section 162(m) aggregation requirements. The Company is currently assessing the impact of the OBBBA and an estimate of the impact on the Company’s consolidated financial statements is not yet available.

​

​

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes thereto included in Part I-Item 1 of this Form 10-Q. This discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Our actual results could differ materially from those discussed in these forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” in this Form 10-Q.

Overview

We are a late-stage clinical specialty pharmaceutical company focused on the development and commercialization of therapeutic products that treat rare and orphan diseases for which there are currently either no approved or very limited treatments or cures. Our lead product, QRX003, is in late-stage clinical development as a potential treatment for Netherton Syndrome, a rare hereditary genetic disease. QRX003 is currently being tested in two pivotal registrational clinical studies under an open IND application with the FDA. We have opened five clinical sites in the US and intend to open a sixth US clinical site at Northwestern University. We are expanding our trials internationally into the Middle East, the United Kingdom and additional countries in Europe, including Spain and Germany. QRX003 is currently being tested in two pediatric NS patients at the Children’s Hospital in Dublin, Ireland and we intend to expand this study to include additional children with NS in Spain, the United Kingdom and potentially other countries. QRX003 is also being developed as a potential treatment for Peeling Skin Syndrome with the first subject being treated in New Zealand. In addition, we entered into a Research Agreement with the Queensland University of Technology, under which we have obtained an option for a global license to QRX008 for the potential treatment of scleroderma, as well as a Research Agreement with University College Cork for the development of novel topical formulations of Rapamycin (sirolimus) as potential treatments for a number of rare and orphan diseases for which there are either limited or no approved therapies or cures, including microcystic lymphatic malformations, venous malformations and angiofibroma’s.

Our mission is to develop and commercialize proprietary therapeutic drug products that treat rare and orphan diseases, particularly those where none currently exists. To achieve this, we plan to:

| ● | complete the late-stage clinical testing of QRX003 in NS and, if successful, file for marketing approval in the United States and other territories;

| ● | prepare to commercialize QRX003 by establishing our own sales infrastructure in the U.S. and Europe and entering into distribution partnerships in other territories such as those currently established for Canada, Australia/New Zealand, the Middle East, China, Hong Kong, Taiwan, Latin America, Central and Eastern Europe, Turkey and Singapore; and

| ● | pursue business development activities by seeking partnering, licensing, merger and acquisition opportunities or other transactions to further expand our pipeline and drug-development capabilities.

To date, no products have been commercialized and no revenue has been generated. We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain marketing approval for one or more of our product candidates, which we expect will take a number of years and is subject to significant uncertainty. Accordingly, we will need to raise additional capital prior to the commercialization of QRX003 or any other product candidate. Until such time, if ever, as we can generate substantial revenue from product sales, we expect to finance our operating activities through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to continue our operations. See “Liquidity and Capital Resources”.

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Recent Developments

ADS Ratio Change and Nasdaq Listing

On April 29, 2024, we received a letter from the Listing Qualifications staff of Nasdaq notifying us that the closing bid price per our American Depositary Shares (“ADSs”) evidencing our ordinary shares (“Ordinary Shares”) was below the required minimum of $1.00 for a period of 30 consecutive business days and that we did not meet the Minimum Bid Price Requirements set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). Pursuant to Nasdaq Rule 5810(c)(3)(A), we had an initial period of one hundred eighty (180) calendar days, or until October 28, 2024, which was subsequently extended for an additional one hundred eighty (180) calendar days, or until April 28, 2025, to regain compliance with Nasdaq’s Minimum Bid Price Requirement. In order to regain compliance with the Minimum Bid Price Requirement, on April 9, 2025 we effected a change in the ratio of our ADSs from one (1) ADS representing one (1) Ordinary Share to one (1) ADS representing thirty-five (35) Ordinary Shares (the “Ratio Change”), which resulted in a 1 for 35 reverse split of the issued and outstanding ADSs (the “Reverse Split”). Our Ordinary Shares were not affected by this adjustment. On April 29, 2025, we received a letter from Nasdaq stating that our closing bid price per ADS was at $1.00 or greater for the last 13 consecutive business days. Accordingly, we regained compliance with Listing Rule 5550(a)(2) and the matter was closed.

Except as specifically provided, ADSs and related option and warrant information presented herein, including our unaudited condensed consolidated financial statements and accompanying footnotes, has been retroactively adjusted to reflect the Ratio Change and the Reverse Split.

There can be no assurance that we will be able to maintain compliance with Nasdaq’s Minimum Bid Price Requirement for continued listing. If our ADSs were delisted from Nasdaq, it would have a material negative impact on the actual and potential liquidity of our securities, as well as a material negative impact on our ability to raise future capital.

Components of Our Results of Operations

Operating Expenses

Our current operating expenses consist of two components - research and development expenses, and general and administrative expenses.

Research and Development Expenses

Research and development costs are expensed as incurred. Research and development expenses include personnel costs associated with research and development activities, including third-party contractors to perform research, conduct clinical trials and manufacture drug supplies and materials. We utilize outside consultants and third parties to conduct the majority of our research and development, under the supervision of our management team.

Future research and development expenses may include:

| ● | employee-related expenses, such as salaries, bonuses and benefits, consultant-related expenses, share-based compensation, overhead related expenses and travel related expenses for our research and development personnel;

| ● | expenses incurred under agreements with CROs, as well as consultants that support the implementation of the clinical studies described above;

| ● | manufacturing and packaging costs in connection with conducting clinical trials and for stability and other studies required to support the NDA filing as well as manufacturing drug product for commercial launch;

| ● | formulation, research and development expenses related to QRX003; and other product candidates we may choose to develop; and

| ● | costs for sponsored research.

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Research and development activities will continue to be central to our business plan. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to be significant over the next several years as personnel and compensation costs increase and we conduct late-stage clinical studies and prepare to seek regulatory approval for QRX003 and any other future product candidate.

The duration, costs and timing of clinical trials of QRX003 and any other future product candidate will depend on a variety of factors that include, but are not limited to:

| ● | the number of trials required for approval;

| ● | the per patient trial costs;

| ● | the number of patients that participate in the trials;

| ● | the number of sites included in the trials;

| ● | the countries in which the trial is conducted;

| ● | the length of time required to enroll eligible patients;

| ● | the number of doses that patients receive;

| ● | the drop-out or discontinuation rates of patients;

| ● | the potential additional safety monitoring or other studies requested by regulatory agencies;

| ● | the duration of patient follow-up;

| ● | the timing and receipt of regulatory approvals; and

| ● | the efficacy and safety profile of our product candidates.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation and employee related expenses including non-cash stock-based compensation, professional fees and other corporate expenses. We anticipate that our general and administrative expenses will increase in the future to support our continued research and development activities. These increases will likely include compensation and employee-related expenses including stock-based compensation, increased costs related to the potential hiring of personnel, travel costs and fees to outside consultants, lawyers and accountants.

Other Expenses (income)

Other expenses (income) consist primarily of interest income and unrealized loss (gain) on investments.

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Results of Operations – Three months ended June 30, 2025 compared to the three months ended June 30, 2024

The following table sets forth our results of operations for the three months ended June 30, 2025, compared to the three months ended June 30, 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended June 30, | ​ | ​ | ​
​ | ​ | 2025 | ​ | 2024 | ​ | Change
Operating Expenses |  | ​ |  |  | ​ |  |  | ​ |
General and administrative | ​ | $ | 1,742,594 | ​ | $ | 1,549,615 | ​ | $ | 192,979
Research and development | ​ |  | 2,050,585 | ​ |  | 587,503 | ​ |  | 1,463,082
Total operating expenses | ​ |  | 3,793,179 | ​ |  | 2,137,118 | ​ |  | 1,656,061
Other (income) and expenses | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Unrealized loss | ​ |  | 6,004 | ​ |  | 2,177 | ​ |  | 3,827
Realized and accrued interest income | ​ |  | (103,245) | ​ |  | (165,262) | ​ |  | 62,017
Total other income | ​ | ​ | (97,241) | ​ | ​ | (163,085) | ​ | ​ | 65,844
Net loss | ​ | $ | (3,695,938) | ​ | $ | (1,974,033) | ​ | $ | (1,721,905)

​

General and Administrative Expenses

General and administrative expenses were approximately $1,743,000 and $1,550,000, in the three months ended June 30, 2025 and 2024, respectively, representing an increase of $193,000, or approximately 12.5%. The increase was primarily due to an increase of $155,000 in consulting costs, $51,000 in marketing and website expenses, $50,000 in legal and professional fees and $25,000 in corporate Delaware tax costs, offset by, decreases of $41,000 in payroll and benefits, $33,000 in travel costs, $26,000 in insurance costs, and non-cash stock-based compensation expense of $10,000 due to increased allocation of such costs to research and development expenses.

Research and Development Expenses

Our research and development expenses during the three months ended June 30, 2025 and 2024 were approximately $2,051,000 and $588,000, respectively, representing an increase of $1,463,000, or approximately 248.8%. The increase was primarily due to $1,431,000 in increased external expenditures on our development programs, including work related to the clinical studies for the development of QRX003, an $18,000 increase in non-cash stock-based compensation expense allocated to research and development expenses, and $14,000 of increased other research and development expenditures including our research collaboration with University College Cork. See “Components of Our Results of Operations - Research and Development Expenses” above.

We amortize licensed or acquired intellectual property over its expected useful life, included in research and development expenses set out above. Amortization of intangible assets was approximately $25,000 and $25,000 in each of the three month periods ended June 30, 2025 and 2024.

Other Expenses:

We had approximately $6,000 in unrealized loss and $103,000 in realized gain and accrued interest income in the three months ended June 30, 2025 from our cash and cash equivalents and investments in marketable debt securities. We had approximately $2,000 in unrealized loss and $165,000 in realized gain and accrued interest income in the three months ended June 30, 2024 from our cash and cash equivalents and investments in marketable debt securities.

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Results of Operations – Six months ended June 30, 2025 compared to the six months ended June 30, 2024

The following table sets forth our results of operations for the six months ended June 30, 2025, compared to the six months ended June 30, 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Six months ended June 30, | ​ | ​ | ​
​ | ​ | 2025 | ​ | 2024 | ​ | Change
Operating Expenses |  | ​ |  |  | ​ |  |  | ​ |
General and administrative | ​ | $ | 3,325,632 | ​ | $ | 3,122,601 | ​ | $ | 203,031
Research and development | ​ |  | 4,424,724 | ​ |  | 1,472,801 | ​ |  | 2,951,923
Total operating expenses | ​ |  | 7,750,356 | ​ |  | 4,595,402 | ​ |  | 3,154,954
Other (income) and expenses | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Unrealized loss | ​ |  | 5,878 | ​ | ​ | 8,686 | ​ | ​ | (2,808)
Realized and accrued interest income | ​ | ​ | (248,117) | ​ | ​ | (302,775) | ​ | ​ | 54,658
Total other income | ​ |  | (242,239) | ​ |  | (294,089) | ​ |  | 51,850
Net loss | ​ | $ | (7,508,117) | ​ | $ | (4,301,313) | ​ | $ | (3,206,804)

​

General and Administrative Expenses

General and administrative expenses were approximately $3,326,000 and $3,123,000, in the six months ended June 30, 2025 and 2024, respectively, representing an increase of $203,000, or approximately 6.5%. The increase was primarily due to an increases of $175,000 in consulting expenses, $139,000 in legal and professional fees, $102,000 in public company costs, $59,000 in marketing and website expenses and $34,000 in corporate Delaware tax costs, offset by, decreases of $235,000 in payroll and benefits, $54,000 in insurance costs and non-cash stock-based compensation expense of $26,000 due to increased allocation of such costs to research and development expenses.

Research and Development Expenses

Our research and development expenses during the six months ended June 30, 2025 and 2024 were approximately $4,425,000 and $1,473,000, respectively, representing an increase of $2,952,000, or approximately 200.4%. The increase was primarily due to $2,572,000 in increased external expenditures on our development programs, including work related to the clinical studies for the development of QRX003, an $89,000 increase in non-cash stock-based compensation expense allocated to research and development expenses, and $292,000 of increased other research and development expenditures including our research collaboration with University College Cork. See “Components of Our Results of Operations - Research and Development Expenses” above.

We amortize licensed or acquired intellectual property over its expected useful life, included in research and development expenses set out above. Amortization of intangible assets was approximately $50,000 and $50,000 in each of the six month periods ended June 30, 2025 and 2024.

Other Expenses:

We had approximately $6,000 in unrealized loss and $248,000 in realized and accrued interest income in the six months ended June 30, 2025 from our cash and cash equivalents and investments in marketable debt securities. We had approximately $9,000 in unrealized loss and $303,000 in realized gain and accrued interest income in the six months ended June 30, 2024 from our cash and cash equivalents and investments in marketable debt securities.

Liquidity and Capital Resources

We have incurred net losses every year since inception and had an accumulated deficit of approximately $62.7 million at June 30, 2025. We have a limited operating history and have historically funded our operations through debt and equity financings. We incurred net losses of approximately $7.5 million and negative cash flows from operations of $6.3 million for the six months ended June 30, 2025. At June 30, 2025, we had cash and cash equivalent balances totaling $1.7 million and investments of $6.1 million. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of planned clinical trials and our expenditures on other research and development activities. Despite our recent financing in December 2024, pursuant to which we raised gross

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proceeds of approximately $6.8 million, based upon our current business plans and cash, cash equivalents and investments on hand, management has concluded that there is substantial doubt about our ability to continue as a going concern for a period of at least one year from the issuance of the unaudited consolidated financial statements included in this report. We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain marketing approval for one or more of our product candidates, which we expect will take a number of years and is subject to significant uncertainty. Additional financing will be required to complete the research and development of our therapeutic targets and our other operating requirements, which may not be available at acceptable terms, if at all. If we are unable to improve our liquidity position, we may not be able to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate revenue and raise capital from financing transactions. There can be no assurance that we will be successful in accomplishing these objectives.

We continue to seek sources of financing to fund our continued operations and research and development programs, including grants. To raise additional capital, we may sell additional equity or debt securities, or enter into collaborative, strategic, and/or licensing transactions. There can be no assurance that we will be able to complete any financing transaction in a timely manner or on acceptable terms or otherwise enter into a collaborative or strategic transaction. If we are unable to obtain additional funding when it becomes necessary, the development of our product candidates will be impacted and we would likely be forced to delay, reduce, or terminate some or all of our development programs or cease operations altogether, all of which could have a material adverse effect on our business, results of operations and financial condition.

Future Funding Requirements

We will need to obtain further funding through public or private offerings of our capital stock, debt financing, collaboration and licensing arrangements or other sources, the requirements for which will depend on many factors, including:

| ● | the scope, timing, rate of progress and costs of our drug development efforts, preclinical development activities, the timing of laboratory testing and clinical trials for our product candidates;

| ● | the number and scope of clinical programs we decide to pursue;

| ● | the cost, timing and outcome of preparing for and undergoing regulatory review of our product candidates;

| ● | the scope and costs of development and commercial manufacturing activities;

| ● | the cost and timing associated with commercializing our product candidates, if they receive marketing approval;

| ● | the extent to which we acquire or in-license other product candidates and technologies;

| ● | the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

| ● | our ability to establish and maintain collaborations on favorable terms, if at all;

| ● | our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our product candidates and, ultimately, the sale of our products, following FDA approval;

| ● | our implementation of operational, financial and management systems; and

| ● | the costs associated with being a public company.

Adequate additional funding may not be available to us on acceptable terms, or at all. If we are unable to raise capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of QRX003, any future product candidate, or potentially discontinue operations.

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To the extent that we raise additional capital through the sale of our equity or convertible debt securities, and pursuant to the exercise of the warrants issued to the investors in our prior public offerings, the ownership interest of our equity holders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our equity holders. Debt financing and preferred equity 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 collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or proposed products, or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts or grant rights to develop and market any future product that we would otherwise prefer to develop and market ourselves.

Summary Statement of Cash Flows

As of June 30, 2025, we had approximately $7,790,000 in cash and cash equivalents and investments in marketable securities. The table below presents our cash flows for the six month periods ended June 30, 2025 and 2024:

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​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Six Months Ended June 30,
​ |  | 2025 |  | 2024
Net cash used in operating activities | ​ | $ | (6,280,510) | ​ | $ | (3,441,495)
Net cash provided (used) in investing activities | ​ |  | 4,452,701 | ​ |  | (1,310,774)
Net cash (used) provided in financing activities | ​ |  | (127,042) | ​ |  | 5,196,197
Net change in cash and cash equivalents | ​ | $ | (1,954,851) | ​ | $ | 443,928

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Operating Activities

Net cash used in operating activities was approximately $6,281,000 and $3,441,000 in the six months ended June 30, 2025 and 2024, respectively. The increase in 2025 was primarily due to an increase in net loss, offset by an increase in stock based compensation, a decrease in accounts payable and accrued expenses and a decrease in prepaid expenses.

Investing Activities

Investment activities provided net cash of $4,453,000 and used net cash of $1,311,000 in the six months ended June 30, 2025 and 2024, respectively. The cash provided in investing activities for the six months ended June 30, 2025 consisted of net sales and redemptions of US Treasury Bills and Notes. The cash used in investing activities for the six months ended June 30, 2024 consisted of net purchases of short maturity US Treasury Bills and Notes from the proceeds of the March 2024 public offering.

Financing Activities

Net cash used by financing activities was approximately $127,000 for the six months ended June 30, 2025. The net cash provided increased due to the receipt of approximately $173,000 in net proceeds from the exercise of warrants, partially offset by repayments of amounts due to officers of $300,000. Net cash provided by financing activities was approximately $5,196,000 for the six months ended June 30, 2024. The net cash provided increased due to the receipt of approximately $5.5 million in net proceeds from our March 2024 public offering partially offset by repayments of amounts due to officers of $300,000.

Research and Development Commitments

In October 2019, Quoin Inc. entered into the Exclusive Licensing Agreement (as amended from time to time, the “License Agreement”) with Skinvisible Pharmaceuticals, Inc. (“Skinvisible”), under which Skinvisible granted us an exclusive royalty-bearing license relating to the production and manufacture of prescription drug products related to certain patents held by Skinvisible, including those related to QRX003 and QRX004. We made Skinvisible a one-time non-refundable, non-creditable license fee of $1 million (the “License Fee”). In addition, we agreed to pay Skinvisible a single digit royalty percentage of our net sales revenues for any licensed product covered by the patent rights licensed under the License Agreement. We also agreed to pay Skinvisible 25% of any revenues we receive as royalties in the event that we sublicense any licensed products to a third party. The License Agreement also requires that we make a $5 million payment to Skinvisible upon receiving approval in the U.S. or European Union, whichever occurs first, for the first drug product developed using intellectual property licensed thereunder.

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In November 2020, Quoin Inc. entered into a Master Service Agreement with Therapeutics Inc. for the management of the preclinical and clinical development of QRX003 for Netherton Syndrome. The initial term of the agreement was three years with automatic one year extensions, and the agreement required the execution of individual work orders. Quoin Inc. may terminate any work order for any reason with 90 days written notice subject to costs incurred through termination and a defined termination fee, unless there is a material breach by Therapeutics Inc. A work order was entered into in June 2022 for the first QRX003 clinical study at an expected estimated cost of approximately $4.4 million through 2024. An additional change order was entered into in December 2022 for a second QRX003 clinical study at an expected estimated cost of approximately $830,000. An amended and restated change order for the two studies was entered into in December 2024 at an estimated total remaining cost from August 2024 of approximately $3.6 million for the two studies combined. For the three and six months ended June 30, 2025 and 2024, we incurred research and development expenses under these agreements of approximately $348,000 and $759,000, and $162,000 and $650,000 respectively.

In November 2021, we entered into a research agreement with Queensland University of Technology (QUT) for a pre-clinical research program for the development of a product to treat Netherton Syndrome of approximately $250,000. In May 2022, we entered into a second research agreement with QUT for the development of a product to treat Scleroderma of approximately $610,000. Each agreement remains in place until the completion of the research program, which in each case was initially anticipated to be 18 months from execution. For the three and six months ended June 30, 2025 and 2024, we did not incur any costs related to these agreements. In July 2025 we announced that, in light of the expected near-term completion of the QRX003 clinical program for Netherton Syndrome, we have discontinued Netherton Syndrome research program with QUT. We are planning to schedule a meeting with QUT to discuss the future direction of the Scleroderma research program.

In June 2024, we entered into a research agreement with The School of Pharmacy at UCC. The scope of the agreement encompasses the development of novel topical formulations of Rapamycin (sirolimus) as potential treatments for a number of rare and orphan diseases for which there are currently very limited or no approved therapies or cures. Under the terms of the agreement, based on the achievement of certain milestones, we will fund up to approximately €567,000 ($668,000) plus VAT over an anticipated 2-1/2 year period to support the UCC research program to investigate the development of a number of topical rapamycin formulations for future development as potential treatments for several rare and orphan diseases. Following completion of the research program, we will have the option to advance the clinical development of rapamycin formulations developed by UCC. Work on this research project commenced in December 2024. For the three and six months ended June 30, 2025, we incurred a research and development expense under these agreements of approximately $60,000 and $120,000 respectively.

Critical Accounting Estimates

There have been no material changes to our critical accounting estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are not required to provide the information otherwise required under this Item 3.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, which are designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation, as of the end of the period covered by this report, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15e under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

During the quarter ended June 30, 2025, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in legal or administrative proceedings or be subject to claims arising in the ordinary course of our business. We are currently not a party to any material legal or administrative proceedings, and we are not aware of any pending or threatened material legal or administrative proceedings against us.

Item 1A. Risk Factors.

Except as set forth below, there have been no material changes in our risk factors from the risks previously reported in Part 1, Item 1A, “Risk Factors” of our Form 10-K. You should carefully consider the factors discussed in Form 10-K, which could materially affect our business, financial condition or future results. The risks described in our Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our ADSs.

Our ADSs are listed on the Nasdaq Capital Market, which imposes, among other requirements, a minimum bid requirement.

On April 29, 2024, we received a letter from the Listing Qualifications staff of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying us that the closing bid price per ADS was below the required minimum of $1.00 for a period of 30 consecutive business days and that we did not meet the Minimum Bid Price Requirements set forth in Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Rule 5810(c)(3)(A), we had an initial period of one hundred eighty (180) calendar days, or until October 29, 2024, which was subsequently extended a further one hundred eighty (180) calendar days, or until April 28, 2025 (the “Compliance Period”), to regain compliance with Nasdaq’s Minimum Bid Price Requirement. To regain compliance with the Nasdaq Listing Rules, on April 9, 2025, we effected a change in the ratio of ADSs evidencing Ordinary Shares from one (1) ADS representing one (1) Ordinary Share to one (1) ADS representing thirty-five (35) Ordinary Shares. On April 29, 2025, we received a letter from Nasdaq stating that our closing bid price per ADS was at $1.00 or greater for the last 13 consecutive business days. Accordingly, we regained compliance with Listing Rule 5550(a)(2) and the matter was closed.

Nasdaq Listing Rule 5810(c)(3)(A)(iv) states that any listed company that fails to meet the Minimum Bid Price Requirement and has effected a reverse stock split over the prior one-year period, or has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, will not be eligible for an automatic 180-day grace compliance period and the Nasdaq Listing Qualifications Department is obligated to immediately issue a delisting determination. Therefore, if we were to fall out of compliance with the Minimum Bid Price Requirement prior to April 9, 2026, we would not be able to effect a reverse stock split and would immediately be issued a delisting determination. Further, the Nasdaq rule provides that a company will not be considered to have regained compliance with the Minimum Bid Price Requirement if the company takes an action to achieve compliance (such as a reverse split) and that action results in the Company’s security falling below the numeric threshold for another listing requirement.

There can be no assurance that we will be able to maintain compliance with Nasdaq’s Minimum Bid Price Requirement for continued listing. If our ADSs are delisted from Nasdaq, it will have a material negative impact on the actual and potential liquidity of our securities, as well as a material negative impact on our ability to raise future capital.

If we fail to meet any of Nasdaq’s listing standards, our ADS will be subject to delisting. If that were to occur, our ADS would be subject to rules that impose additional sales practice requirements on broker-dealers who sell our securities. The additional burdens imposed upon broker-dealers by these requirements could discourage broker-dealers from effecting transactions in our ADS. This would adversely affect the ability of investors to trade our ADS and would adversely affect the value of our ADS. Delisting from Nasdaq would cause us to pursue eligibility for trading of our ADS on other markets or exchanges, or on an over-the-counter market. In such case, our stockholders’ ability to trade or obtain quotations of the market value of our ADS would be severely limited because of lower trading volumes and transaction delays. These factors could contribute to lower prices and larger spreads in the bid and ask prices of these securities. There can be no assurance that our ADS, if delisted from Nasdaq, would be listed on a national securities exchange, a national quotation service or the over-the-counter markets. Delisting from Nasdaq could also result in negative publicity, adversely affect the

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market liquidity of our ADS, decrease securities analysts’ coverage of us or diminish investor, supplier and employee confidence. In addition, our stock could become a “penny stock,” which would make trading of our ADS more difficult.

The delisting of our ADS from Nasdaq may make it more difficult for us to raise capital on favorable terms in the future, or at all. Such a delisting would likely have a negative effect on the price of our ADS and would impair your ability to sell or purchase our ADS when you wish to do so. Further, if our ADS were to be delisted from Nasdaq, our ADS would cease to be recognized as a covered security, and we would be subject to additional regulation in each state in which we offer our securities. Moreover, there is no assurance that the actions that we have taken to restore our compliance with the Nasdaq Minimum Bid Price Requirement will stabilize the market price or improve the liquidity of our ADS, prevent our ADS from falling below the Nasdaq minimum bid price required for continued listing again or prevent future non-compliance with other applicable Nasdaq listing requirements.

We must raise additional capital to fund our operations in order to continue as a going concern.

As of June 30, 2025, we had an accumulated deficit of $62.7 million. As of June 30, 2025, our cash and cash equivalents and investments were $7.8 million. Despite our recent financing in December 2024, pursuant to which we raised gross proceeds of approximately $6.8 million, based on our current expected level of operating expenditures we believe our cash and cash equivalents and investments on hand, management has concluded that there is substantial doubt about our ability to continue as a going concern for a period of at least one year from the issuance of the unaudited consolidated financial statements included in this report. We will need to raise further capital through the sale of additional equity or debt securities or other debt instruments, strategic relationships or grants, or other arrangements to support our future operations. We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain marketing approval for one or more of our product candidates, which we expect will take a number of years and is subject to significant uncertainty. If we are unable to improve our liquidity position, we may not be able to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate revenue and raise capital from financing transactions. There can be no assurance that we will be successful in accomplishing these objectives. Without such additional capital, we may be required to curtail or cease operations and be required to realize our assets and discharge our liabilities other than in the normal course of business which could cause investors to suffer the loss of all or a substantial portion of their investment.

We have incurred significant losses since our inception and have limited cash available for our operations.

To date, we have not commercialized any products and have not generated any revenue. We have incurred net losses every year since inception and we have an accumulated deficit of approximately $62.7 million at June 30, 2025. We have historically funded our operations through debt and equity financings. At June 30, 2025, we had cash and cash equivalent balances totaling $1.7 million and investments of $6.1 million. We believe that we do not have sufficient cash for operating our business for twelve months from the date of filing this form 10-Q. We are subject to risks common to late-stage clinical specialty pharmaceutical companies including, but not limited to, unanticipated or higher than expected clinical trial costs and the ability to estimate such occurrences, if any, on our cash, liquidity, additional financing requirements, and availability. Accordingly, we may need to raise additional funds during this period. We have devoted a majority of our financial resources to research and development, including our preclinical and ongoing clinical development activities. To date, we have funded our operations primarily through our founders’ funding expenditures and the sale of equity and convertible securities.

We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. The net losses we incur may fluctuate significantly from quarter to quarter. We anticipate that our expenses will increase substantially if and as we:

| ● | continue and/or initiate clinical development of our product candidates, including—QRX003—a topical lotion comprised of a broad-spectrum serine protease inhibitor, formulated with the proprietary Invisicare® technology, which is under clinical development as a potential treatment for Netherton Syndrome (“NS”);

| ● | further enhance our internal control systems;

| ● | initiate the development of additional product candidates for other rare disease indications;

| ● | acquire or in-license other products and technologies and advance those product candidates into clinical trials;

| ● | seek marketing approvals for our product candidates that successfully complete clinical trials;

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| ● | ultimately establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;

| ● | maintain, expand and protect our intellectual property portfolio;

| ● | hire additional clinical, regulatory, research, executive and administrative personnel; and

| ● | create additional infrastructure to support our operations and our product development and planned future commercialization efforts.

Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to predict the timing or amount of increased expenses and when we will be able to achieve or maintain profitability, if ever. In addition, our expenses could increase beyond expectations if we are required by the FDA or other foreign regulatory agencies to perform studies and trials in addition to those that we currently anticipate.

Even if one or more of the product candidates that we independently develop is approved for commercial sale, we may incur significant costs associated with commercializing any approved product. Even if we are able to generate revenues from the sale of any approved products, we may not become profitable and may need to obtain additional funding to continue operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

During the second quarter of 2025, none of our directors or executive officers adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408(a) of Registration S-K).

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Item 6. Exhibits.

The following exhibits are included in this Form 10-Q or incorporated herein by reference:

Exhibit No. |  | Exhibit Description
3.1 | ​ | Amended and Restated Articles of Association of Quoin Pharmaceuticals Ltd. (incorporated by reference to Exhibit 3.1 to Annual Report on Form 10-K filed with the SEC on March 13, 2025).
31.1* | ​ | Certification of Chief Executive Officer pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934
31.2* | ​ | Certification of Chief Financial Officer pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934
32.1** | ​ | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
32.2** | ​ | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
101* | ​ | Information formatted in Inline XBRL (Extensible Business Reporting Language) : (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Shareholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.
104* | ​ | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101)

*Filed herewith

**Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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| Quoin Pharmaceuticals Ltd.
​ | ​ | ​
August 7, 2025 | By: | /s/ Gordon Dunn
|  | Name: Gordon Dunn
|  | Title: Chief Financial Officer

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