What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2023-05-02 compared with 2022-03-31 · 1287 added, 879 removed, 565 unchanged (79% of the section changed)

Quantitative and Qualitative Disclosures about Market Risk.

applicable to smaller reporting companies.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required

to provide the information otherwise required under this Item.

Consolidated Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 23 )

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(the “Company”) as of December

2021 and December 31, 2020 , the related consolidated statements of operations, stockholders’

equity and cash flows for the year ended December 31, 2021 and for the nine months ended December

31, 2020 , and the related notes to the consolidated financial statements (collectively, the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2021 and December 31, 2020 , and the results of its operations and its cash flows for

the year ended December 31, 2021 and for the nine months ended December 31, 2020 ,

in conformity with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

31, 2022 and December 31, 2021, the related consolidated statements of operations and comprehensive loss, stockholders’ equity

and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as

the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all

material respects, the financial position of the Company as of December 31, 2022 and December 31, 2021, and the results of its

operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting

principles generally accepted in the United States of America.

Concern Uncertainty

The accompanying

consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note

2 to the consolidated financial statements, the Company’s current liquidity position and projected cash needs raise substantial

doubt about its ability to continue as a going concern.

Management’s plans regarding these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an

opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the

Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange

Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Those standards require that we plan and perform the audit to

obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to

error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for

the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis,

evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the

accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the

consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

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does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Intangible Assets – Business Combination

Audit Matter Description

described in Note 7 to the consolidated financial statements, the Company’s warrant

liability balance was $1.7 million at December 31, 2021.

Certain of the warrants for the purchase of shares of common stock issued

by the Company require liability classification and are recorded at fair value each reporting period.

The Company determines the fair

value of the warrants classified as liabilities utilizing a Monte Carlo simulation model.

identified the warrant liabilities as a critical matter because, auditing the Company’s

valuation of its warrant liabilities was especially challenging as the fair value is based on various inputs and significant assumptions

used in Monte Carlo simulation models and certain of the assumptions were based on management’s judgement, and therefore are not

objectively verifiable.

described in Note 3 of the consolidated financial statements, the Company completed its majority interest acquisition of NanoSynex,

(“NanoSynex”) on May 26, 2022, in a business combination.

In connection with this acquisition, the Company recorded

an in-process research and development (“IPR&D”) intangible asset in the amount of $5.7 million based

on the fair value of the IPR&D at the acquisition date.

The fair value of this acquired intangible asset was estimated using the excess

earnings method which is a form of an income-based approach.

The excess earnings valuation model requires certain significant assumptions in estimating fair value of the IPR&D.

identified the assessment of the fair value of the IPR&D intangible asset as a critical audit matter.

This required a high

degree of auditor judgment and an increased audit effort in determining the reasonableness of the fair value of the IPR&D due to

the measurement uncertainty related to the selection of the valuation methodology and the significant assumptions used in the estimation.

We Addressed the Matter in Our Audit

primary procedures we performed to address the critical audit matter included:

an understanding of the Company’s processes

related to the determination of the fair value of the warrants.

the methodology used by the Company to estimate

the fair value by using a valuation specialist to review the Monte Carlo simulation models and assumptions used by the Company for

reasonableness.

the accuracy and completeness of the underlying

data used by the Company.

the reasonableness of management’s inputs

by tracing the inputs to contracts and comparing third-party data and analyses.

changes in the fair value by comparing to prior

periods and performing sensitivity analyses to evaluate the reasonable changes in the Company’s assumptions.

primary procedures we performed to address this critical audit matter included:

● Obtaining an understanding of the Company’s process and control over the valuation of

IPR&D intangible asset including the significant assumptions used in the valuation.

● Testing the clerical accuracy of the valuation model prepared by the Company’s specialist.

● Evaluating the reasonableness of the key assumptions by considering past performance and third-party market data where appropriate,

and whether such assumptions were consistent with our understanding and evidence obtained in other areas of the audit.

● Involving internal valuation professionals as an auditor’s specialist to assist in evaluating the valuation methodology used

by management by comparing with methodologies commonly used to value IPR&D intangible assets and to review and opine on significant

assumptions utilized in the valuation model.

Goodwill and IPR&D Impairment Assessment

Critical Audit Matter Description

As described in Notes 1 and 7 to the consolidated

financial statements, the Company recorded goodwill and indefinite-lived intangible assets in connection with its acquisition of majority

ownership of NanoSynex.

Goodwill represents the excess of the purchase price over the fair market value of assets acquired and liabilities

assumed, and the intangible asset represents the estimated acquisition date fair value of acquired IPR&D.

Goodwill and indefinite-lived

intangible assets are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that

these assets may be impaired.

Goodwill is tested for impairment at the reporting unit level and indefinite-lived intangible assets are

tested at the individual asset level.

The Company determined that its goodwill was impaired and recorded an impairment loss of approximately

$4.2 million.

Management’s estimates of the fair value

of the reporting unit and of the IPR&D were determined using the discounted cash flow method and excess earnings method, respectively.

The determination of fair value using these income approach techniques involves significant assumptions which are highly subjective.

We identified goodwill and IPR&D impairment

assessments as a critical audit matter due to the significant judgment and subjectivity exercised by management when developing the fair

value measurements, and a high degree of auditor judgment and an increased audit effort required in evaluating management’s significant

How We Addressed the Matter in Our Audit

The primary procedures we performed to address this critical

audit matter included:

● Obtaining an understanding and evaluating the design of internal controls related to the impairment of goodwill and IPR&D.

● Evaluating the appropriateness of methods used in developing the fair value measurements by management.

● Testing the completeness and accuracy of underlying data used in management’s fair value estimates, including mathematical accuracy.

● Evaluating the reasonableness of the key assumptions by considering past performance and third-party market data where appropriate,

and whether such assumptions were consistent with our understanding and evidence obtained in other areas of the audit.

● Involving internal valuation professionals as an auditor’s specialist to assist in evaluating the valuation methodologies used

by management for the goodwill impairment assessment by comparing the methodologies to those utilized by other companies holding similar

assets, and to review and opine on significant assumptions utilized in the valuation model.

Accounting for Financial Instruments – Convertible Debt with Warrants

Critical Audit Matter Description

As described in Notes 11 to the consolidated

financial statements, the Company issued a convertible debenture and common stock purchase warrants in the principal amount of $3.3M during

the year ended December 31, 2022.

We identified the accounting for this complex

financial instrument as a critical audit matter.

This includes both the evaluation of the various features as potential embedded derivatives

and the determination of the respective fair value of the instruments and the embedded features, as well as the determination of the appropriate

classification of warrants between equity and liabilities.

The application of the accounting guidance applicable to issuing a complex

financial instrument requires significant judgment.

Determination of appropriate classification

of warrants requires management’s judgments relating to the interpretations of relevant accounting guidance based on specific provisions

of the warrant agreement.

And accounting for the convertible notes and embedded conversion features requires management’s judgments

related to initial and subsequent recognition of the debt and related features, use of a valuation model, and key inputs used in the selected

valuation model.

How We Addressed the Matter in Our Audit

The primary procedures we performed to address this critical

audit matter included:

● Obtaining an understanding of the Company’s process and controls over the execution of complex financial instruments.

● Inspecting the agreements associated with the transactions and evaluating management’s technical accounting analysis, including

the identification of potential embedded derivatives, and the application of the relevant accounting literature.

Utilizing an auditor’s specialist to assist in

assessing management’s analysis of the transaction, including (i) evaluating the contracts to identify relevant terms that affect

the recognition of the financial instruments, (ii) assessing the appropriateness of conclusions reached by management, and (iii)

reviewing the valuation model for derivatives, performing independent calculations, and examining the significant assumptions

utilized in the valuation model.

BAKER TILLY US, LLP

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Total current assets

Restricted cash

Right-of-use assets

Property and equipment, net

Equipment held for lease, net

Intangible assets, net

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Accounts payable

Accrued vacation

Accrued expenses and other current liabilities

Notes payable, current portion

R&D grant liability

Deferred revenue, current portion

Operating lease liability, current portion

Short term debt - related party

Warrant liabilities

Warrant liabilities - related party

Convertible debt - related party

Total current liabilities

Notes payable, net of current portion

Operating lease liability, net of current portion

Deferred revenue, net of current portion

Deferred tax liability

Total liabilities

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Stockholders’ equity

Series Alpha convertible preferred stock, $ 0.001 par value;

7,000 shares authorized;

0 and 180 shares issued and outstanding as of December 31, 2021 and December 31, 2020

Qualigen Therapeutics, Inc.

stockholders’ equity:

Common stock, $ 0.001 par value;

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Additional paid-in capital

Accumulated other comprehensive income

Accumulated deficit

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( 84,744,629 )

Total Qualigen Therapeutics, Inc.

stockholders’ equity

Noncontrolling interest

Total Stockholders’ Equity

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THERAPEUTICS, INC.

STATEMENTS OF OPERATIONS

For the Year Ended

For the Nine Months Ended

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Years Ended

Net product sales

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Sales and marketing

Impairment loss on construction in progress

Goodwill and fixed asset impairment

Total expenses

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( 22,663,036 )

OTHER (INCOME) EXPENSE, NET

(Gain) loss on change in fair value of warrant liabilities

OTHER EXPENSE (INCOME), NET

Gain on change in fair value of warrant liabilities

( 4,723,187 )

Gain on loan extinguishment

Interest (income) expense, net

Other income, net

Total other (income) expense, net

Total other expense (income), net

( 4,771,326 )

LOSS BEFORE PROVISION FOR INCOME TAXES

LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES

( 21,299,717 )

( 17,891,710 )

PROVISION FOR INCOME TAXES

(BENEFIT) PROVISION FOR INCOME TAXES

( 21,034,643 )

( 17,897,137 )

Net loss attributable to noncontrolling interest

( 2,394,100 )

Net loss attributable to Qualigen Therapeutics, Inc.

$ ( 18,640,543 )

$ ( 17,897,137 )

Net loss per common share, basic and diluted

Weighted—average number of shares outstanding, basic and diluted

Other comprehensive loss, net of tax

$ ( 21,034,643 )

$ ( 17,897,137 )

Foreign currency translation adjustment

Other comprehensive loss

( 20,983,922 )

( 17,897,137 )

Comprehensive loss attributable to noncontrolling interest

( 2,394,100 )

Comprehensive loss attributable to Qualigen Therapeutics, Inc.

$ ( 18,589,822 )

$ ( 17,897,137 )

accompanying notes are an integral part of these consolidated financial statements.

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STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

D-1 Convertible

Alpha Convertible

at December 31, 2020

Other Comprehensive

Total Qualigen Therapeutics, Inc.

Stockholders’

Noncontrolling

Total Stockholders’

Balance at December 31, 2021 -

$ 101,274,073

issued upon cash-exercise of warrants

issued upon net-exercise of warrants

of Series Alpha preferred shares upon closing of private placement

Issuance of Series Alpha preferred shares upon closing of

private placement, shares

of Series Alpha preferred stock for conversion of notes payable

Issuance of Series Alpha preferred stock for conversion of

notes payable, shares

of common stock for conversion of preferred stock

of common stock for conversion of notes payable and accrued interest

of common stock for conversion of notes payable and accrued interest , shares

of reverse recapitalization

of reverse recapitalization , shares

and warrants issued to advisor upon closing of private placement

and warrants issued to advisor upon closing of private placement , shares

value of shares issued to advisor upon closing of private placement

value of warrants issued to advisor upon closing of private placement

and warrants issued pursuant to Securities Purchase Agreements

and warrants issued pursuant to Securities Purchase Agreements , shares

value of warrants issued for professional services

issued pursuant to Securities Purchase Agreements

and offering costs of Securities Purchase Agreements

$ ( 84,744,629 )

Stock issued upon exercise of warrants

Stock-based compensation

Common stock and prefunded warrants issued for business acquisition

Noncontrolling interest adjustments relating to Stock-based compensation

Foreign currency translation adjustment

Fair value of warrant modification for professional services

Fair value of warrant modification for business acquisition

Issuance of rounded shares as a result of the reverse stock split

( 18,640,543 )

value of warrant modifications pursuant to Securities Purchase Agreements

issued for professional services

exercised , shares

( 18,640,543 )

( 2,394,100 )

at December 31, 2021

Balance at December 31, 2022 -

$ 110,528,050

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Alpha Convertible

at March 31, 2020

$ ( 47,301,126 )

$ ( 1,927,770 )

of Series Alpha preferred shares upon closing of private placement

of Series Alpha preferred stock for conversion of notes payable

of common stock for conversion of preferred stock

Stockholders’

Balance at December 31, 2020

$ ( 66,847,492 )

Stock issued upon cash-exercise of warrants

Stock issued upon net-exercise of warrants

Issuance of common stock for conversion of preferred stock

Fair value of warrants issued for professional services

Shares issued pursuant to Securities Purchase Agreements

Commission and offering costs of Securities Purchase Agreements

( 2,960,465 )

of common stock for conversion of notes payable and accrued interest

of reverse recapitalization

Fair value of warrant modifications pursuant to Securities Purchase Agreements

Stock issued for professional services

Stock-based compensation

( 17,897,137 )

and warrants issued to advisor upon closing of private placement

value of shares issued to advisor upon closing of private placement

value of warrants issued to advisor upon closing of private placement

and warrants issued pursuant to Securities Purchase Agreements

and offering costs of Securities Purchase Agreements

( 17,897,137 )

Balance at December 31, 2021

$ 101,274,073

issued for professional services

$ ( 84,744,629 )

Balance, value

$ 101,274,073

at December 31, 2020

$ ( 84,744,629 )

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STATEMENTS OF CASH FLOWS

For the Year Ended

December 31, 2021

December 31, 2020

For the Years Ended December 31

CASH FLOWS FROM OPERATING ACTIVITIES

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Amortization of right-of-use assets

Impairment loss on construction in progress

Gain on CARES Act loan extinguishment

Accounts receivable reserves and allowances

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Common stock issued for professional services

Warrants issued for professional services

Fair value of warrants issued for professional services

Stock-based compensation

(Gain) loss on change in fair value of warrant liabilities

Fair value of warrant modification for professional services

Goodwill and fixed asset impairment

Change in fair value of warrant liabilities

( 4,723,187 )

Write off of patents and licenses

Changes in operating assets and liabilities:

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Prepaid expenses and other assets

( 1,531,056 )

Accounts payable

Accrued expenses and other current liabilities

Due to related party

R&D grant liability

Operating lease liability

Deferred revenue

Deferred tax liability

Net cash used in operating activities

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Purchases of property and equipment

Purchases of equipment held for lease

Payments for patents and licenses

Cash and cash equivalents acquired in reverse recapitalization

Net cash acquired in business combination

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of Series Alpha preferred shares upon closing of private placement

Net proceeds from warrant exercises

Net proceeds from the issuance of notes payable

Proceeds from issuance of shares and warrants pursuant to Securities Purchase Agreements

Proceeds from issuance of convertible debt - related party

Offering costs of Securities Purchase Agreements

( 1,360,800 )

Principal payments on notes payable

( 1,323,536 )

Fractional share payments related to the reverse stock split

Net cash provided by financing activities

Net change in cash

Net change in cash and restricted cash

( 10,520,787 )

CASH - beginning of period

CASH - end of period

( 6,438,298 )

Effect of exchange rate changes on cash and restricted cash

Cash and restricted cash - beginning of period

Cash and restricted cash - end of period

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

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NONCASH FINANCING AND INVESTING ACTIVITIES:

Issuance of common stock for professional services

Issuance of common stock for conversion of debt and accrued interest

Issuance of common stock for conversion of preferred stock before closing of reverse recapitalization

Issuance of preferred stock for conversion of debt

Fair value of shares issued to advisor upon closing of private placement

Fair value of warrants issued to advisor upon closing of private placement

Effect of reverse recapitalization

Issuance of common stock for conversion of preferred stock after closing of reverse recapitalization

Right-of-use assets obtained in exchange for operating lease liabilities

CARES Act loan interest forgiven

Fair value of shares issued for cashless warrant exercises

Net transfers to inventory from equipment held for lease

Warrant modifications pursuant to Securities Purchase

Fair value of warrant modifications pursuant to Securities Purchase Agreements

Fair value of warrant liabilities on date of exercise

Fair value of warrant modifications for business acquisition

Fair value of assets acquired

$ ( 5,896,278 )

Fair value of liabilities assumed, net of goodwill

Fair value of Alpha Capital/Qualigen warrants repriced due to acquisition

Fair value of Qualigen prefunded warrant issued in exchange for NanoSynex stock

Fair value of Qualigen common stock issued in exchange for NanoSynex stock

Net cash acquired in business combination (Note 3)

accompanying notes are an integral part of these consolidated financial statements.

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Inc., now a subsidiary of Qualigen Therapeutics, Inc., was incorporated in Minnesota in 1996 to design, develop, manufacture and sell

point-of-care quantitative immunoassay diagnostic products for use in physician offices and other point-of-care settings worldwide, and

was reincorporated in Delaware in 1999.

Physician Office Laboratory (“POL”) market quantitative immunoassay diagnostic products for use in physician offices and

other point-of-care settings worldwide, and was reincorporated in Delaware in 1999.

In May 2020, Qualigen, Inc.

completed a reverse recapitalization

transaction with Ritter Pharmaceuticals, Inc.

(“Ritter”) and Ritter was renamed Qualigen Therapeutics, Inc.

All shares of

Qualigen, Inc.’s capital stock were exchanged for Qualigen Therapeutics, Inc.’s capital stock in the merger.

Ritter/Qualigen

Therapeutics common stock, which was previously traded on the Nasdaq Capital Market under the ticker symbol “RTTR,” commenced

trading on the Nasdaq Capital Market, on a post-reverse-stock-split adjusted basis, under the trading symbol “QLGN” on May

Qualigen Therapeutics, Inc.

(the “Company”) operates in one business segment.

May 2020, Qualigen, Inc.

completed a reverse recapitalization transaction with Ritter Pharmaceuticals, Inc.

(“Ritter”) and

Ritter was renamed Qualigen Therapeutics, Inc., recognized as a reverse recapitalization.

All shares of Qualigen, Inc.’s capital

stock were exchanged for Qualigen Therapeutics, Inc.’s capital stock in the merger.

Ritter/Qualigen Therapeutics common stock,

which was previously traded on the Nasdaq Capital Market under the ticker symbol “RTTR,” commenced trading on the Nasdaq

Capital Market, on a post-reverse-stock-split adjusted basis, under the trading symbol “QLGN” on May 26, 2020.

was determined to be the accounting acquirer in a reverse recapitalization based upon the terms of the merger and other factors.

All references to financial figures of the Company presented in the accompanying consolidated financial statements and in these Notes

through May 22, 2020 are to those of Qualigen, Inc.

All references to financial figures after May 22, 2020 are to those of Qualigen Therapeutics,

and Qualigen, Inc.

May 26, 2022, the Company acquired 2,232,861 shares of Series A-1 Preferred Stock of NanoSynex, Ltd.

(“NanoSynex”) from Alpha

Capital Anstalt (“Alpha Capital”), a related party, in exchange for 350,000 reverse split adjusted shares of the Company’s common stock and a prefunded warrant

to purchase 331,464 reverse split adjusted shares of the Company’s common stock at an exercise price of $ 0.001 per share.

These warrants were subsequently exercised on September 13, 2022 .

Concurrently with this transaction,

the Company also purchased 381,786 shares of Series B preferred stock from NanoSynex for a total purchase price of $ 600,000 .

The transactions

resulted in the Company acquiring a 52.8 % interest in NanoSynex.

The Company envisions future synergies from the integration of its own

proprietary results-proven FastPack diagnostics platform with the innovative NanoSynex technology.

NanoSynex is a micro-biologics diagnostics

company domiciled in Israel.

of Presentation

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GAAP”), Regulation S-X and rules and regulations of the Securities and Exchange Commission

2020, the Company changed its fiscal year end from March 31st to December 31st.

In this annual report we show the twelve-month year

ended December 31, 2021 (“Fiscal 2021”) and nine months ended December 31, 2020 (the “Transition Period”).

All references in this report to the Transition Period are to the nine months ended December 31, 2020;

and references to Fiscal 2021

are to the calendar 12-month fiscal year ending December 31, 2021.

of Consolidation

accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary.

accompanying consolidated financial statements include the accounts of the Company and its majority owned subsidiaries.

All intercompany

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The Company views its operations and manages its business in one operating segment.

All long-lived assets of the Company

reside in the US.

In general, the functional currency

of the Company and its subsidiaries is the U.S.

dollar, however for NanoSynex, the functional currency is the local currency, New Israeli

Shekels (NIS).

As such, assets and liabilities for NanoSynex are translated into U.S.

dollars and the effects of foreign currency translation

adjustments are reflected as a component of accumulated other comprehensive income within the Company’s consolidated statements

of changes in stockholders’ equity.

uses estimates and assumptions in preparing its consolidated financial statements in accordance with U.S.

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and expenses.

The most significant estimates relate to the estimated fair value of warrant liabilities, stock-based compensation, write-off

of patents and licenses, amortization and depreciation, inventory reserves, allowances for doubtful accounts and returns, and warranty

The most significant estimates relate to the estimated fair value of in-process research and development, goodwill, warrant

liabilities, stock-based compensation, amortization and depreciation, inventory reserves, allowances for doubtful accounts and returns,

and warranty costs.

Actual results could vary from the estimates that were used.

November 23, 2022, the Company effected a 1-for-10, as determined by the Company’s board of directors, reverse stock split of its

outstanding shares of common stock (the “Reverse Stock Split”).

The Reverse Stock Split reduced the Company’s shares

of outstanding common stock, stock options, and warrants to purchase shares of our common stock.

Fractional shares of common stock that

would have otherwise resulted from the Reverse Stock Split were rounded down to the nearest whole share and cash in lieu of payments

were made to stockholders.

All share and per share data for all periods presented in the accompanying financial statements and the related

disclosures have been adjusted retrospectively to reflect the Reverse Stock Split.

The number of authorized shares of common stock and

the par value per share remains unchanged.

Company considers all highly liquid investments purchased with an initial maturity of 90 days or less and money market funds to be cash

Company maintains its cash in bank deposits which exceed federally insured limits and could potentially be subject to significant concentrations

of credit risk on cash.

The Company reviews the financial stability of its depository institutions on a regular basis, and has not experienced

any losses in such accounts

Restricted cash includes cash that is restricted due to Israeli banking regulations.

Company maintains the majority of its cash in accounts at banking institutions in the U.S.

that are of high quality.

Cash held in these accounts often exceed the FDIC insurance limits.

If such banking institutions were to fail, the Company could lose

all or a portion of amounts held in excess of such insurance limitations.

The FDIC recently took control of two such banking institutions,

Silicon Valley Bank on March 10, 2023 and Signature Bank on March 12, 2023.

While the Company did not have an account at either of these two banks, in

the event of failure of any of the financial institutions where the Company maintains its cash and cash equivalents, there can be no

assurance that the Company would be able to access uninsured funds in a timely manner or at all.

Any inability to access or delay in

accessing these funds could adversely affect our business and financial position.

is recorded at the lower of cost or net realizable value.

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as excess or obsolete.

of Long-Lived Assets

Company assesses potential impairments to its long-lived assets when there is evidence that events or changes in circumstances indicate

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the net book value of the assets and their estimated fair values.

During the nine months ended December 31, 2020, the Company recognized

$ 1.4 million of such impairment losses on the construction-in-progress on a FastPack pouch filling machine project.

During the year ended

December 31, 2021, no such impairment losses were recorded.

During the fiscal year ending December 31, 2022 the Company recorded

an impairment loss of $ 4,239,000 related to the NanoSynex acquisition.

segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation

by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

To date, the Company

has viewed its operations and managed its business as one segment operating primarily within the United States and Israel.

Receivable, Net

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OF ACCOUNTS RECEIVABLE

December 31, 2021

December 31, 2020

Accounts Receivable

Less Allowances

Less Reserves and Allowances

Accounts receivable,

and Development

Company expenses research and development costs as incurred including therapeutics license costs.

for acquired in process research and development (IPR&D), the Company expenses research and development costs as incurred including

therapeutics license costs.

has received R&D grants from Israel Innovation Authority (IIA) and from the European Commission.

These grants may provide cash funding

to NanoSynex from time to time in advance of the applicable costs being incurred.

When such cash funding is received from these grants

in advance, the proceeds are recorded as a current or non-current R&D grant liability based on the time from the consolidated balance

sheets date to the expected future date of recognition as a reduction to research and development expenses.

Company expenses all costs as incurred in connection with patent applications (including direct application fees, and the legal and consulting

expenses related to making such applications) and such costs are included in general and administrative expenses in the consolidated

statement of operations.

and Handling Costs

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such shipping and handling costs totaled approximately $ 267,000 and $ 113,000 ,

respectively, for the year ended December 31, 2021 and nine months ended December 31, 2020 .

Other shipping and handling costs included in general and administrative, research and development, and sales and marketing expenses

totaled approximately $ 12,000 and $ 9,000 for the year ended December 31, 2021 and nine months ended December

respectively, for the years December 31, 2022 and 2021.

Other shipping and handling costs included in general and administrative, research

and development, and sales and marketing expenses totaled approximately $ 14,000 and $ 12,000 for the years ended December 31, 2022 and

2021, respectively.

from Contracts with Customers

We apply the following five-step model in accordance

with ASC 606, Revenue from Contracts with Customers , in order to determine the revenue:

identification of the promised goods or services in the contract;

(ii) determination of whether the promised goods or services are performance

obligations, including whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including

the constraint on variable consideration;

Company applies the following five-step model in accordance with ASC 606, Revenue from Contracts with Customers, in order to determine

(i) identification of the promised goods or services in the contract;

(ii) determination of whether the promised goods or services

are performance obligations, including whether they are distinct in the context of the contract;

(iii) measurement of the transaction

price, including the constraint on variable consideration;

(iv) allocation of the transaction price to the performance obligations;

and (v) recognition

of revenue when (or as) the Company satisfies each performance obligation.

(v) recognition of revenue when (or as) the Company satisfies each performance obligation.

Company generates revenue from selling FastPack System analyzers, accessories and disposable products used with the FastPack System.

Disposable products include reagent packs which are diagnostic tests for PSA, testosterone, thyroid disorders, pregnancy, and Vitamin

Disposable products include reagent packs, which are diagnostic tests for prostate-specific antigen, testosterone, thyroid disorders,

pregnancy, and Vitamin D.

Company provides disposable products and equipment in exchange for consideration, which occurs when a customer submits a purchase order

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obtain contracts are recorded as selling, general and administrative expense as incurred due to the short duration of the Company’s

Company enters into out-license agreements with counterparties to develop and/or commercialize its products in exchange for nonrefundable

Company entered into an out-license agreement with Yi Xin to develop and/or commercialize its products in exchange for nonrefundable

upfront license fees and/or sales-based royalties.

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the measure of progress and related revenue recognition.

During the year ended December 31, 2021 and the nine months ended December 30,

2020, the Company recognized license revenue of approximately $ 632,004

respectively.

During years ended December 31, 2022 and 2021, the Company recognized license

revenue of approximately $ 0 and $ 632,000 , respectively.

Asset and Liability Balances

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Alternatively, when

payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied.

element arrangements included contracts that combined both the Company’s analyzer and a customer’s future reagent purchases

payment precedes the performance of the related services, the Company records deferred revenue until the performance obligations are

performance obligations include contracts that combine both the Company’s analyzer and a customer’s future reagent purchases

under a single contract.

In some sales contracts, the Company provided analyzers at no charge to customers.

Title to the analyzer was

maintained by the Company and the analyzer was returned by the customer to the Company at the end of the purchase agreement.

the year ended December 31, 2021 and nine months ended December 31, 2020 , product sales

are stated net of an allowance for estimated returns of approximately $ 150,000 and $ 18,300 , respectively.

received in advance from customers pursuant to certain

collaborative research license agreements, deposits against future product sales, multiple element arrangements and extended warranties

are recorded as a current or non-current deferred revenue liability based on the time from the Consolidated Balance Sheet date to the

future date of revenue recognition.

and Development

Company expenses research and development costs as incurred.

April 1, 2020, the Company adopted Accounting Standard Update (“ASU”) No.

In some sales contracts, the Company provides analyzers at no charge to customers.

Title to the analyzer is

maintained by the Company and the analyzer is returned by the customer to the Company at the end of the purchase agreement.

the years December 31, 2022 and 2021, product sales are stated net of an allowance for estimated returns of approximately $ 96,000 and

$ 150,000 , respectively.

received in advance from customers pursuant to certain collaborative research license agreements, deposits against future product sales,

multiple element arrangements and extended warranties are recorded as a current or non-current deferred revenue liability based on the

time from the Consolidated Balance Sheet date to the future date of revenue recognition.

April 1, 2020, the Company adopted Accounting Standards Update (“ASU”) No.

2018-11, Leases (Topic 842) Targeted Improvements

(“Topic 842”).

The Company determines if a contract contains a lease at inception.

The Company’s material operating

lease consists of a single office/manufacturing/warehouse/laboratory space.

Operating lease assets and liabilities are recognized at

the lease commencement date.

Operating lease liabilities represent the present value of lease payments not yet paid.

Operating lease

assets represent the Company’s right to use an underlying asset and are based upon the operating lease liabilities adjusted for

prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets.

the present value of lease payments not yet paid, the Company used the incremental secured borrowing rate for an existing secured loan

corresponding to the maturities of the leases.

Company’s leases typically contain rent escalations over the lease term.

The Company recognizes rent expense for these leases on

a straight-line basis over the lease term.

Additionally, tenant incentives used to fund leasehold improvements are recognized when received

and reduce the Company’s right-of-use (“ROU”) asset related to the lease.

These are amortized through the ROU asset

as reductions of expense over the lease term.

The Company’s office/manufacturing/warehouse/laboratory lease agreement does not

contain any material residual value guarantees or material restrictive covenants.

to the adoption of Topic 842, the Company’s policy elections were as follows:

Company has used the practical expedients under U.S.

GAAP which allow it to not reassess whether any expired or existing contracts

are considered a lease, along with grandfathering lease classifications, and treatment of indirect costs;

Company has elected to exclude short-term leases having initial terms of 12 months or less;

Company has elected not to separate non-lease components from its leases to account for them separately;

Company has elected not to avail itself of the practical expedient of using hindsight to determine the lease term;

Company has elected the alternative transition option, by recognizing a cumulative effect adjustment to the opening balance of accumulated

deficit in the period of adoption (as of April 1, 2020, the adoption of Topic 842 did not have a material effect on retained earnings).

In accordance with the guidance in Topic 842, the Company recognizes lease liabilities and corresponding

right-of-use-assets for all leases with terms of greater than 12 months.

Leases with a term of 12 months or less will be accounted for

in a manner similar to the guidance for operating leases prior to the adoption of Topic 842.

(See Note 13-Commitments and Contingencies).

and Equipment, Net

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conditions are present that indicate impairment.

consist of patent-related costs and costs for license agreements.

Management reviews the carrying value of intangible assets that are

being amortized on an annual basis or sooner when there is evidence that events or changes in circumstances may indicate that impairment

The Company considers relevant cash flow and profitability information, including estimated future operating results, trends

and other available information, in assessing whether the carrying value of intangible assets being amortized can be recovered.

the Company determines that the carrying value of intangible assets will not be recovered from the undiscounted future cash flows expected

to result from the use and eventual disposition of the underlying assets, the Company considers the carrying value of such intangible

Company accounts for business combinations using the acquisition method pursuant to FASB ASC Topic 805.

This method requires, among other

things, that results of operations of acquired companies are included in Qualigen’s financial results beginning on the respective

acquisition dates, and that assets acquired and liabilities assumed and noncontrolling interests are recognized at fair value as of the

acquisition date.

Intangible assets acquired in a business combination are recorded at fair value using a discounted cash flow model.

We have third-party valuations completed for intangible assets in a business combination using a discounted cash flow analysis, incorporating

various assumptions.

The discounted cash flow model requires assumptions about the timing and amount of future net cash flows, the cost

of capital and terminal values from the perspective of a market participant.

Each of these factors can significantly affect the value

of the intangible asset.

Any excess of the fair value of consideration transferred (the “Purchase Price”) over the fair values

of the net assets acquired is recognized as goodwill.

The fair value of assets acquired and liabilities assumed in certain cases may

be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition

Legal costs, due diligence costs, business valuation costs and all other acquisition-related costs are expensed when incurred.

represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets

acquired, when accounted for using the purchase method of accounting.

Goodwill has an indefinite useful life and is not amortized

but is reviewed for impairment annually and whenever events or changes in circumstances indicate that the carrying value of the

goodwill may not be recoverable.

In testing for impairment, the fair value of the reporting unit is compared to the carrying value.

If the net assets assigned to the reporting unit exceed the fair value of the reporting unit, an impairment loss equal to the

difference is recorded.

As a result of the annual goodwill impairment analysis, the Company recognized a $ 4,239,000

non-cash goodwill and fixed asset impairment charge in the valuation of its business acquisition of NanoSynex for the year ended

December 30, 2022.

For more information, refer to Note 1 - Organization and Summary of Significant Accounting Policies and Estimates

and Note 7 - Goodwill, IPR&D and other Intangibles.

in process R&D (IPR&D) represents the fair value assigned to the research and development assets that have not reached technological

The value assigned to IPR&D is determined by estimating the costs to develop the acquired technology into commercially

viable products, estimating the resulting revenue from the projects, and discounting the net cash flow to present value.

and cost projections used to value acquired IPR&D are, as applicable, reduced based on the probability of success of developing the

Additionally, projections consider relevant market sizes and growth factors, expected trends in technology and the nature

and expected timing of new product introductions.

The rates utilized to discount the net cash flow to its present value are commensurate

with the stage of development of the project and uncertainties in the economic estimates used in the projections.

Upon the acquisition

of acquired IPR&D, an assessment is completed as to whether the acquisition constitutes an acquisition of a single asset or a group

Multiple factors are considered in this assessment, including the nature of the technology acquired, the presence or absence

of separate cash flows, the development process and stage of completion, quantitative significance, and the Company’s rationale

for entering into the transaction.

a business is acquired, as defined under the applicable accounting standards, then the acquired IPR&D is capitalized as an intangible

If an asset or group of assets is acquired that do not meet the definition under the applicable accounting standards, then the

acquired IPR&D is expensed on its acquisition date.

Future costs to develop these assets are recorded to research and development

expense in the Company’s consolidated statements of operations and comprehensive loss as they are incurred.

is evaluated for impairment annually using the same methodology as described above for calculating fair value.

If the carrying value

of the acquired IPR&D exceeds the fair value, then the intangible asset is written down to its fair value, with the resulting adjustment

recorded as a charge to operations.

Changes in estimates and assumptions used in determining the fair value of acquired IPR&D could

result in an impairment.

Intangible Assets, Net

intangible assets consist of patent-related costs and costs for license agreements.

Management reviews the carrying value of other intangible

assets that are being amortized on an annual basis or sooner when there is evidence that events or changes in circumstances may indicate

that impairment exists.

The Company considers relevant cash flow and profitability information, including estimated future operating

results, trends and other available information, in assessing whether the carrying value of intangible assets being amortized can be

the Company determines that the carrying value of other intangible assets will not be recovered from the undiscounted future cash flows

expected to result from the use and eventual disposition of the underlying assets, the Company considers the carrying value of such intangible

assets as impaired and reduces them by a charge to operations in the amount of the impairment.

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been obtained.

Patent and licenses costs are charged to operations if it is determined that the patent or license will not be obtained.

carrying value of the patents of approximately $ 159,000 and $ 169,000 at December 31, 2021 and December

31, 2020 , respectively, are stated net of accumulated amortization of approximately $ 320,000 and $ 303,000 , respectively.

of patents charged to operations for the year ended December 31, 2021 and the nine months ended December

31, 2020 were approximately $ 17,000 and $ 10,000 , respectively.

Total future estimated amortization of patent costs for the five

succeeding years is approximately $ 19,000 for the year ending December 31, 2022, approximately $ 18,000 for the year ending December 31,

2023, approximately $ 15,000 for year 2024, approximately $ 14,000 for years 2025 and 2026, and approximately $ 79,000 thereafter.

carrying value of the licenses of approximately $ 12,000 and $ 19,000 at December 31, 2021 and December

31, 2020 are stated net of accumulated amortization of approximately $ 407,000 and $ 400,000 , respectively.

Amortization of licenses

charged to operations for the year ended December 31, 2021 and nine months ended December 31, 2020

was approximately $ 7,000 and $ 5,000 , respectively.

Total future estimated amortization of license costs for the five succeeding

years is approximately $ 7,000 for the year ending December 31, 2022 and $ 5,000 for the year 2023.

Patent and license costs are charged to operations if it is determined that the patent or license will not be obtained.

Financial Instruments and Warrant Liabilities

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instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported

in the Consolidated Statements of Operations.

Depending on the features of the derivative financial instrument, the Company uses either

the Black-Scholes option-pricing model or a Monte-Carlo simulation to value the derivative instruments at inception and subsequent valuation

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity,

is re-assessed at the end of each reporting period (See Note 7).

in the consolidated statements of operations and comprehensive loss.

Depending on the features of the derivative financial instrument,

the Company uses either the Black-Scholes option-pricing model or a Monte-Carlo simulation to value the derivative instruments at inception

and subsequent valuation dates.

The classification of derivative instruments, including whether such instruments should be recorded as

liabilities or as equity, is re-assessed at the end of each reporting period (See Note 10-Warrant Liabilities and Note 11- Convertible

Debt - Related Party).

Value Measurements

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The guidance establishes three levels of the fair value hierarchy as follows:

1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to

access at the measurement date;

2 - Inputs other than quoted prices that are observable for the assets or liabilities either directly or indirectly, including inputs

in markets that are not considered to be active;

1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or

liabilities that the Company has the ability to access at the measurement date;

2 - Inputs other than quoted prices that are observable for the assets or liability either

directly or indirectly, including inputs in markets that are not considered to be active;

3 - Inputs that are unobservable.

Value of Financial Instruments

accounts receivable, accounts payable, accrued liabilities, and debt are carried at amortized cost, which management believes approximates

accounts receivable, prepaids, accounts payable, and accrued liabilities are carried at cost, which management believes approximates

fair value due to the short-term nature of these instruments.

expense consists primarily of print and digital media promotional materials for a distributor.

Advertising costs are expensed as incurred.

Advertising expense for the years ended December 31, 2022 and 2021 amounted to $ 50,000 and $ 0 , respectively.

Comprehensive

loss consists of net income and foreign currency translation adjustments.

Comprehensive gains (losses) have been reflected in the statements

of operations and comprehensive loss and as a separate component in the statements of stockholders’ equity for all periods presented.

compensation cost for equity awards granted to employees and non-employees is measured at the grant date based on the calculated fair

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in future years.

For more information, refer to Note 17-Income Taxes.

and Excise Taxes

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corresponding tax payable.

These balances are removed from the balance Consolidated Balance Sheet as cash is collected from customers

and remitted to the tax authority.

These balances are removed from the consolidated balance sheet as cash is collected from customers and remitted

to the tax authority.

Company’s warranty policy generally provides for one year of coverage against defects and nonperformance within published specifications

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and costs to repair.

warranty liabilities were approximately $ 60,000 and $ 25,000 , respectively, at December 31, 2021 and December

31, 2020 and are included in accrued expenses and other current liabilities on the Consolidated Balance Sheets.

Warranty costs

were approximately $ 57,000 and $ 54,000 for the year ended December 31, 2021 and nine months ended December

31, 2020 , respectively, and are included in cost of product sales in the Consolidated Statements of Operations.

warranty liabilities were approximately $ 138,000 and $ 60,000 , respectively, at December 31, 2022 and December 31, 2021 and are included

in accrued expenses and other current liabilities on the Consolidated Balance Sheets.

Warranty costs were approximately $ 69,000 and $ 57,000

for the years ended December 31, 2022 and 2021, respectively, and are included in cost of product sales in the Consolidated Statements

of Operations.

Currency Translation

functional currency for the Company is the U.S.

The functional currency for NanoSynex, the Company’s newly acquired majority

owned subsidiary, is the New Israeli Shekel (NIS).

The financial statements of NanoSynex are translated into U.S.

dollars using exchange

rates in effect at each period end for assets and liabilities;

using exchange rates in effect during the period for results of operations;

and using historical exchange rates for certain equity accounts.

The adjustment resulting from translating the financial statements of

NanoSynex is reflected as a separate component of other comprehensive income (loss).

comprehensive loss related to the effects of foreign currency translation adjustments attributable to NanoSynex was $ 50,721 and $ 0 at

December 31, 2022 and 2021, respectively.

Accounting Pronouncements

May 2021, the FASB issued ASU No.

2021-04, Earnings Per Share (Topic 260), “ Debt-Modifications and Extinguishments

(Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written

Call Options (a consensus of the FASB Emerging Issues Task Force), which contains amendments that clarify and reduce diversity in an

issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified

after modification or exchange.

The amendments set forth in this ASU are effective for all entities for annual periods beginning after

December 15, 2021.

Early application of the amendments in this ASU is permitted for all entities.

The amendments in this ASU should be

applied prospectively.

The Company early adopted ASU No.

2021-04 on January 1, 2021.

August 2020, the FASB issued ASU No.

2020-06, “ Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an

Entity’s Own Equity ” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing

major separation models required under current U.S.

ASU 2020-06 removes certain settlement conditions that are required for equity

contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain

ASU 2020-06 is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within

those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must

be as of the beginning of the Company’s annual fiscal year.

The Company early adopted

2020-06 on January 1, 2021.

August 2018, the FASB issued ASU No.

2018-13, “ Fair Value Measurement (Topic 820):

Disclosure Framework — Changes to the

Disclosure Requirements for Fair Value Measurement, ” an amendment to the accounting guidance on fair value measurements.

guidance modifies the disclosure requirements on fair value measurements, including the removal of disclosures of the amount of and reasons

for transfers between Level 1 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes

for Level 3 fair value measurements.

The guidance also adds certain disclosure requirements related to Level 3 fair value measurements.

The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

adopted ASU No.

2018-13 on April 1, 2020 and the adoption of this guidance did not have a material impact on its financial statements.

July 2018, the FASB issued ASU No.

2018-11, Leases (Topic 842) Targeted Improvements (“Topic 842”), which provides

for an alternative transition method by allowing companies to continue to use the legacy guidance in Topic 840, Leases, including its

disclosure requirements, in the comparative periods presented in the year of adoption of the new leases standard and recognize a cumulative-effect

adjustment to the opening balance of retained earnings in the period of adoption rather than the earliest period presented.

adopted the standard as of April 1, 2020 and the most significant impact was the recognition of a ROU asset and lease liability for the

Company’s sole operating lease—the Company had no finance leases.

Adoption of the Topic 842 did not require the Company to

restate previously reported results as it elected to apply a modified retrospective approach at the beginning of the period of adoption

rather than at the beginning of the earliest comparative period presented.

June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No.

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2019-10, Financial Instruments

– Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842) , which extends the effective

– Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842) , which extended the effective

date of Topic 326 for certain companies until fiscal years beginning after December 15, 2022.

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the Company in the first quarter of fiscal year beginning January 1, 2023, and early adoption is permitted.

The Company has not completed

its review of the impact of this standard on its consolidated financial statements.

However, based on the Company’s history of

immaterial credit losses from trade receivables, management does not expect that the adoption of this standard will have a material effect

on the Company’s consolidated financial statements.

of the COVID-19 Pandemic

surrounding the SARS-CoV-2 virus that emerged in late 2019 and the ensuing global pandemic has had a dramatic impact on businesses globally

and our business as well.

The severity and duration of the pandemic and economic repercussions of the virus and government actions taken

in response to the pandemic remain uncertain and will ultimately depend on many factors, including the speed of global dissemination

and effectiveness of the vaccination and containment efforts throughout the world, the duration and spread of the virus, as well as seasonality,

variants or new outbreaks.

the United States, federal, state, and local government directives and policies have been put in place to manage public health

concerns and address the economic impacts, including reduced business activity and overall uncertainty presented by this new healthcare

Similar actions have been taken by governments around the world.

Our facilities could be required to temporarily curtail production

levels or temporarily cease operations based on government mandates or as a result of the pandemic.

To mitigate risks, we continue to

evaluate the extent to which COVID-19 may impact our business and operations and adjust risk mitigation planning and business continuity

activities as needed.

The Company adopted ASU 2016-13

on January 1, 2023.

Adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Economic Conditions

February 2022, Russia invaded Ukraine.

While the Company has no direct exposure in Russia and Ukraine, the Company continues to monitor

any broader impact to the global economy, including with respect to inflation, supply chains and fuel prices.

The full impact of the

conflict on the Company’s business and financial results remains uncertain and will depend on the severity and duration of the

conflict and its impact on regional and global economic conditions.

Cost Environment

the year ended 2022 and continuing into the current fiscal year, global commodity and labor markets experienced significant inflationary

pressures attributable to ongoing economic recovery and supply chain issues.

The Company is subject to inflationary pressures with respect

to raw materials, labor and transportation.

Accordingly, the Company continues to take actions with its customers and suppliers to mitigate

the impact of these inflationary pressures in the future.

Actions to mitigate inflationary pressures with suppliers include aggregation

of purchase requirements to achieve optimal volume benefits, negotiation of cost-reductions and identification of more cost competitive

While these actions are designed to offset the impact of inflationary pressures, the Company cannot provide assurance that

it will be successful in fully offsetting increased costs resulting from inflationary pressure.

COVID-19 Pandemic

COVID-19 pandemic has had a dramatic impact on businesses globally and on the Company’s business as well.

Sales of diagnostic products

fell significantly during 2020 and the Company’s net loss increased significantly, as deferral of patients’ non-emergency

visits to physician offices, clinics and small hospitals sharply reduced demand for FastPack tests.

Since then we have experienced some recovery in demand.

accounting standard updates are either not applicable to the Company or are not expected to have a material impact on the Company’s

consolidated financial statements.

2 — LIQUIDITY

Company has incurred recurring losses from operations and has an accumulated deficit at December 31, 2021.

The Company expects to continue

to incur losses subsequent to the Consolidated Balance Sheet date of December 31, 2021.

The Company’s reverse recapitalization

transaction with Ritter closed in May 2020 together with an associated new equity capital raise of approximately $ 4.0 million, and approximately

$ 1.9 million in convertible notes payable were converted into shares of the Company’s capital stock.

In July, August and December

2020, the Company raised an additional $ 30.0 million through three Securities Purchase Agreements with a single institutional investor,

and in December 2021, the Company raised an additional $ 8.82 million through a Securities Purchase Agreement with several institutional

investors (see Note 11).

Based on the Company’s current cash position, and assuming currently planned expenditures and level of

operations, the Company believes it has sufficient capital to fund operations for the 12-month period subsequent to the issuance of the

accompanying consolidated financial statements.

However, there is no assurance that profitable operations will ever be achieved, or if

achieved, could be sustained on a continuing basis.

Also, beyond such 12-month period, planned research and development activities, capital

expenditures, clinical and pre-clinical testing, and commercialization activities of the Company’s products are expected to require

significant additional financing.

Additional financing may not be available on acceptable terms or at all.

2 — LIQUIDITY AND GOING CONCERN

of December 31, 2022, the Company had approximately $ 7.0 million in cash and an accumulated deficit of $ 103.4 million.

For the years

ended December 31, 2022 and 2021, the Company used cash of $ 13.2 million and $ 14.7 million, respectively, in operations.

The Company’s

cash balances are expected to fund operations into the third quarter of 2023.

As a pre-clinical development-stage therapeutics biotechnology

company, the Company expects to continue to have net losses and negative cash flow from operations, which over time will challenge its

These factors raise substantial doubt about the Company’s ability to continue as a going concern for the one-year period

following the date that these financial statements were issued.

is no assurance that profitable operations will ever be achieved, or, if achieved, could be sustained on a continuing basis.

to fully execute its business plan, the Company will require significant additional financing for planned research and development activities,

capital expenditures, clinical and pre-clinical testing for its QN-302 clinical trials, preclinical development of RAS and QN-247, and

funding for NanoSynex operations (See Note 3-Acquisition), as well as commercialization activities.

Historically,

the Company’s principal sources of cash have included proceeds from the issuance of common and preferred equity and proceeds

from the issuance of debt.

In December 2021, the Company raised $ 8.8

million from the issuance of common stock to several institutional investors, and in December 2022 the Company raised $ 3.0

million from the sale of a convertible debt - related party (see Note 11-Convertible Debt - Related Party).

can be no assurance that further financing can be obtained on favorable terms, or at all.

If we are unable to obtain funding, we could

be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization

efforts, which could adversely affect our business prospects.

a condition to the NanoSynex closing, the Company agreed to provide NanoSynex with up to $ 10.4 million of future funding based on NanoSynex’s

achievement of certain future development milestones and subject to other terms and conditions described in the Master Agreement for

the Operational and Technological Funding of NanoSynex (the “Funding Agreement”) entered into with NanoSynex.

These funding

commitments are in the form of convertible promissory notes to be issued to the Company with a face value equal to the amount paid by

the Company to NanoSynex upon satisfaction of the applicable performance milestone, bearing interest at the rate of 9% per annum on the

principal balance from time to time outstanding under the particular promissory note, convertible at the option of the Company into additional

shares of NanoSynex in order for the Company to maintain at least a 50.1% controlling ownership interest in NanoSynex, should NanoSynex

issue additional shares.

The principal of the convertible notes are due and payable upon the sooner to occur of:

i) five years from the

date of issuance of the particular promissory note;

ii) the acquisition by any person or entity of all or substantially all of the share

capital of NanoSynex, through share purchase, issuance or shares or merger of NanoSynex, or the purchase of all or substantially all

of the assets of NanoSynex;

or iii) the initial public offering of NanoSynex.

The Company provided funding to NanoSynex of $ 2.4 million

during 2022 pursuant to this agreement.

The Company may terminate the Funding Agreement upon 120 days’ notice, but would still

be liable for any payments due for milestones achieved prior to termination.

the extent that the Company raises additional capital through the sale of equity or convertible debt securities, the ownership interests

of its common stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely

affect the rights of our common stockholders.

Debt financing, if available, may involve agreements that include covenants limiting or

restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If the Company raises additional funds through government or other third-party funding, commercialization, marketing and distribution

arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, it may have to relinquish valuable

rights to its technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be

favorable to the Company.

Additional funding may not be available to the Company on acceptable terms, or at all.

In addition, any future

financing (depending on the terms and conditions) may be subject to the approval of Alpha Capital, the holder of the Company’s

8% Senior Convertible Debenture (the “Debenture”), or trigger certain adjustments to the Debenture or warrants held by Alpha

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

The financial statements

do not include any adjustments that would be necessary should the Company be unable to continue as a going concern, and therefore, be

required to liquidate its assets and discharge its liabilities in other than the normal course of business and at amounts that may differ

from those reflected in the accompanying financial statements

3 — ACQUISITION

The Company acquired a 52.8 %

voting equity interest in NanoSynex on May 26, 2022 (the “NanoSynex Acquisition Date”) through:

(1) the purchase of 2,232,861

shares Preferred A-1 Stock of NanoSynex from Alpha Capital (a related party) for 350,000

reverse split adjusted shares of the Company’s common stock and a prefunded warrant to purchase 331,464

reverse split adjusted shares of the Company’s common stock at a purchase price of $ 0.001

per share ( these warrants were subsequently exercised on September 13, 2022) , and (2) the purchase of 381,786

shares of Series B preferred stock of NanoSynex from NanoSynex in exchange for $ 600,000

(collectively, the “NanoSynex Acquisition”).

acquisition of the majority interest of NanoSynex was accounted for as a business combination using the acquisition method, in accordance

with FASB ASC Topic 805.

Identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree are recognized

and measured as of the acquisition date at fair value.

Determining the fair value of assets acquired, liabilities assumed and noncontrolling

interest requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions

with respect to future cash flows, discount rates and asset lives among other items.

The Company uses third-party valuations for intangible

assets in a business combination using a discounted cash flow analysis, incorporating various assumptions.

summary of the consideration transferred and fair value of assets acquired and liabilities assumed in the NanoSynex Acquisition is as

follows (all shares shown post 1 for 10 reverse split on November 23, 2022):

OF CONSIDERATION TRANSFERRED

Consideration transferred, net of cash acquired

Cash paid for NanoSynex preferred stock:

FMV of 350,000 shares of Qualigen stock issued to Alpha Capital Anstalt

FMV of 331,464

shares of Qualigen stock related to prefunded warrant issued to Alpha Capital Anstalt (See Note 15)

Total consideration paid for NanoSynex preferred stock

FMV of consideration related to related to repricing of 7,048 shares of Alpha Capital/Qualigen warrants *

NanoSynex cash acquired

Total consideration transferred, net of cash acquired

* See disclosure

under Noncompensatory Equity Classified Warrants regarding May 26, 2022 transaction-Note 15-Stockholders’ Equity

OF ASSETS ACQUIRED AND LIABILITIES

Purchase Price Allocation

Accounts receivable

Property and equipment

In process R&D

Accounts payable

Accrued expenses and other payables

R&D grant liability

( 1,362,264 )

Short term debt

Deferred tax liability

Noncontrolling interest assumed

( 3,882,225 )

Identifiable net assets acquired

( 1,215,169 )

Total consideration transferred, net of cash acquired

the year ended December 31, 2022, the Company made measurement period adjustments to the preliminary purchase price allocation which

(i) a decrease to noncontrolling interest of $ 117,775 , (ii) a decrease to goodwill of $ 106,621 .

The measurement period adjustments

were made to reflect facts and circumstances that existed as of the acquisition date and is reflected in the table above.

transaction costs, which were immaterial, have been expensed as incurred and charged to the Company’s consolidated statements of

operations and comprehensive loss.

There was no provision for reimbursement of transaction costs from the Company to NanoSynex.

represents the excess of the purchase price over the fair value of the net assets acquired as of the acquisition date.

Goodwill represents

the value of the future technology to be developed in excess of the identifiable assets as well as the operational synergies of the combined

companies to be recognized.

Goodwill has an indefinite useful life and is not amortized.

None of the Goodwill is expected to be deductible

for tax purposes.

a condition to the closing, the Company agreed to provide NanoSynex with up to $ 10.4 million of future funding based on NanoSynex’s

achievement of certain future development milestones and subject to other terms and conditions described in the Funding Agreement entered

into with NanoSynex.

(See Note 2-Liquidity for further details regarding the terms and conditions of the Funding Agreement).

Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2022 and 2021 include

approximately $ 5.1 million and $ 0 , respectively, of net loss associated with the results of operations of NanoSynex from the NanoSynex

Acquisition Date.

following proforma information has been prepared as if the NanoSynex Acquisition occurred on January 1, 2021.

The following unaudited

supplemental proforma consolidated results do not purport to reflect what the combined Company’s results of operations would have

been, nor do they project the future results of operations of the combined Company.

The unaudited supplemental proforma consolidated

results reflect the historical financial information of the Company and NanoSynex, adjusted to give effect to the NanoSynex Acquisition

as if it had occurred on January 1, 2021, as well as to record NanoSynex stock compensation expense and to record the net loss related

to the non-controlling interest, in accordance with generally accepted accounting principles:

OF PRO FORMA INFORMATION

Consolidated Pro Forma Financial

Results for the Years Ending

Net loss attributable to Qualigen Therapeutics, Inc.

$ ( 19,538,959 )

$ ( 17,897,137 )

4 — INVENTORY, NET

net consisted of the following at December 31, 2022 and December 31, 2021:

December 31, 2021

December 31, 2020

SCHEDULE OF INVENTORY

Raw materials

1 unchanged sentence

Finished goods

4 — PREPAID EXPENSES

expenses consisted of the following at December 31, 2021 and December 31, 2020 :

OF PREPAID EXPENSES

December 31, 2021

December 31, 2020

Total inventory

5 — PREPAID EXPENSES AND OTHER CURRENT ASSETS

expenses and other current assets consisted of the following at December 31, 2022 and December 31, 2021:

SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid insurance

Prepaid manufacturing expenses

Prepaid investor relations expenses

Other prepaid expenses

Prepaid expenses

Other current assets

Prepaid expenses and

other current assets

6 — PROPERTY AND EQUIPMENT, NET

and equipment, net consisted of the following at December 31, 2022 and December 31, 2021:

OF PROPERTY AND EQUIPMENT

December 31, 2021

December 31, 2020

SCHEDULE OF PROPERTY AND EQUIPMENT

Machinery and equipment

Construction in progress–equipment

Computer equipment

2 unchanged sentences

Furniture and fixtures

Less Accumulated depreciation

Equipment held for lease

Property and equipment, gross

Accumulated depreciation

( 4,623,446 )

( 4,541,238 )

expense relating to property and equipment was approximately $ 73,000 and $ 33,000 for the year ended December 31, 2021 and nine months

ended December 31, 2020 , respectively.

Fixed asset impairment

Property and equipment,

expense relating to property and equipment was approximately $ 92,000 and $ 73,000 for the years ended December 31, 2022 and 2021, respectively.

termination of the Sekisui Distribution Agreement on March 31, 2022, the Company had a commitment to purchase leased FastPack rental

systems back from Sekisui at Sekisui’s net book value, which was determined to be approximately $ 154,000 .

This amount is included

in equipment held for lease in the table above and in accrued expenses at December 31, 2022.

An assignment agreement is to be executed

by both parties to legally transfer title to this equipment from Sekisui to Qualigen.

7 — GOODWILL, IPR&D AND OTHER INTANGIBLES

OF GOODWILL AND OTHER INTANGIBLE

Estimated Useful Lives

Gross carrying amounts

Finite-lived intangible assets:

Developed-product-technology rights

Licensing rights

Accumulated amortization

Total finite-lived intangible assets, net

Indefinite-lived intangible assets:

In-process research and development

Total other intangible assets, net

Company periodically reviews goodwill for impairment in accordance with relevant accounting standards.

Goodwill is attributable to

the NanoSynex Acquisition.

Goodwill and intangible assets are recognized at fair value during the period in which an acquisition is

completed, from updated estimates during the measurement period, or when they are considered to be impaired.

These non-recurring

fair value measurements, primarily for goodwill and intangible assets acquired, were based on Level 3 inputs.

The Company estimates

the fair value of long-lived assets on a non-recurring basis based on a market valuation approach, engaging independent valuation

experts to assist in the determination of fair value.

In the fourth quarter of fiscal 2022, in conjunction with the annual

impairment assessment, the Company determined that the fair value of the reporting unit was less than the carrying value.

addition to continued losses in the reporting unit, the Company considered macroeconomic conditions including a deterioration in the

equity markets evidenced by sustained declines in the Company’s stock price, peer companies, and major market indices since

the acquisition date.

The Company engaged independent valuation experts to assist in determining the fair value of the reporting

As a result of this analysis, the Company recorded a $ 4,239,000 goodwill and fixed asset impairment charge associated with the reporting unit.

There were no impairments

to intangible assets and goodwill during the year ended December 31, 2021.

carrying value of the patents of approximately $ 140,000 and $ 159,000 at December 31, 2022 and December 31, 2021, respectively, are stated

net of accumulated amortization of approximately $ 339,000 and $ 320,000 , respectively.

Amortization of patents charged to operations for

the year ended December 31, 2022 and December 31, 2021 were approximately $ 18,000 and $ 17,000 , respectively.

Total future estimated amortization

of patent costs for the five succeeding years is approximately $ 18,000 for the year ending December 31, 2023, approximately $ 15,000 for

the year ending December 31, 2024, approximately $ 14,000 for years 2025, 2026 and 2027, and approximately $ 65,000 thereafter.

carrying value of the licenses of approximately $ 5,000 and $ 12,000 at December 31, 2022 and December 31, 2021 are stated net of accumulated

amortization of approximately $ 414,000 and $ 407,000 , respectively.

Amortization of licenses charged to operations for the year ended

December 31, 2022 and December 31, 2021 was approximately $ 7,000 and $ 7,000 , respectively.

Total future estimated amortization of license

costs for the five succeeding years is approximately $ 5,000 for the year ending December 31, 2023.

8 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

expenses and other current liabilities consisted of the following at December 31, 2022 and December 31, 2021:

OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

sales and use taxes

and license fees

and development

SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Board compensation

Equipment held for lease

Franchise, sales and use taxes

Interest (Convertible debt - related party)

Professional fees

Research and development

Warranty liability

Accrued liabilities

9 – SHORT TERM DEBT - RELATED PARTY

has four separate Notes Payable (the “Notes”) outstanding to Alpha Capital, dated between March 26, 2020 and September 2,

2021, aggregating to a total principal outstanding balance of $ 905,000 , and aggregate accrued interest of $ 45,722 for a total outstanding

balance of $ 950,722 as of December 31, 2022.

The Notes all accrue interest at 2.62 % per annum, accrued daily, and provide that the full

amount of principal and interest under each Note shall be due immediately prior to a Liquidation Event (the Maturity Date) unless due

earlier in accordance with the terms of the Notes.

“Liquidation Event” means either i) the merger or consolidation of NanoSynex

into any other entity, other than one in control or under control of NanoSynex or NanoSynex’s majority shareholder;

ii) a transaction

or series of transactions resulting in the transfer of all or substantially all of NanoSynex’s assets or issued and outstanding

share capital (other than to a company under the control of NanoSynex or NanoSynex’s majority shareholders;

or iii) an underwritten

public offering by NanoSynex of its ordinary shares.

Notwithstanding the above, if NanoSynex receives subsequent debt, convertible debt,

or equity funding with gross proceeds of USD $ 3,000,000 or more, then these Notes shall be due and payable upon the actual receipt of

such funding.

10 – WARRANT LIABILITIES

4 unchanged sentences

terms as adjusted.

exchange for the Series C Warrants, upon closing of the merger with Ritter, the holders received warrants to purchase an aggregate of

4,713,490 shares of the Company’s common stock at $ 0.72 per share, subject to adjustment.

As of December 31, 2021, the warrants

received in exchange for the Series C Warrants have remaining terms ranging from 1.9 to 2.5 years.

The warrants were determined to be

liability-classified pursuant to the guidance in ASC 480 and ASC 815-40, resulting from inclusion of a leveraged ratchet provision for

subsequent dilutive issuances.

exchange for the Series C Warrants, upon closing of the merger with Ritter, the holders received warrants to purchase shares of the Company’s

common stock at $ 7.195

per share, subject to adjustment.

As of December

31, 2022, the warrants have remaining terms ranging from 0.90

The warrants were determined to be liability-classified

pursuant to the guidance in ASC 480 and ASC 815-40, resulting from inclusion of a leveraged ratchet provision for subsequent dilutive

On April 25, 2022 the warrants were repriced from $ 7.195

with an additional 49,318

ratchet shares issued, and on May 26 2022 the

warrants were repriced from $ 6.00

with an additional 49,952

ratchet shares issued.

On December 22, 2022 the

warrants were repriced again from $ 5.136

with an additional 1,002,717

ratchet shares issued.

Additionally,

on December 22, 2022, in conjunction with the issuance of Convertible Debt - Related Party (Note 11), the Company issued to

Alpha Capital a warrant to purchase 2,500,000

shares of the Company’s common stock.

The exercise price of the warrant is $ 1.65

(equal to 125 %

of the conversion price of the Debenture on the closing date).

The warrant may be exercised by Alpha, in whole or in part, at any

time on or after June 22, 2023 and before June 22, 2028, subject to certain terms conditions described in the warrant, including the

Company’s receipt of the necessary stockholder approvals.

following table summarizes the activity in liability classified warrants for the year ended December 31, 2022:

SCHEDULE OF WARRANTS ACTIVITY

Common Stock Warrants

Range of Exercise

Total outstanding – December 31, 2021

Total outstanding – December 31, 2022

following table summarizes the activity in the Common Stock Warrants received in exchange for the Series C Warrants for the year ended

December 31, 2021:

OF WARRANTS ACTIVITY

Stock Warrants (received in exchange for the

Common Stock Warrants

Weighted– Average

Range of Exercise

Total outstanding –December 31, 2020

Series C preferred stock warrants exchanged for common stock warrants upon reverse

recapitalization

Total outstanding – December 31, 2021

Non-Exercisable

following table presents the Company’s fair value hierarchy for its Common Stock Warrant liabilities (all of which arise under

following table presents the Company’s fair value hierarchy for its Common Stock Warrant liabilities measured at fair value on

a recurring basis as of December 31, 2022:

SCHEDULE OF FAIR VALUE HIERARCHY FOR WARRANT LIABILITIES

Common Stock Warrant liabilities

Balance as of December 31, 2021

Issuance of Alpha warrants

Gain on change in fair value of warrant liabilities

Balance as of December 31, 2022

following table presents the Company’s fair value hierarchy for its Common Stock Warrant liabilities (all of which arose under

the warrants received in exchange for the Series C Warrants) measured at fair value on a recurring basis as of December 31, 2021:

OF FAIR VALUE HIERARCHY FOR WARRANT LIABILITIES

Common Stock Warrant liabilities

19 unchanged sentences

following are the weighted average and the range of assumptions used in estimating the fair value of warrant liabilities (weighted average

calculated based on the number of outstanding warrants on each issuance) as of December 31, 2021:

calculated based on the number of outstanding warrants on each issuance) as of December 31, 2022 and December 31, 2021:

OF ASSUMPTIONS OF WARRANT LIABILITIES

December 31, 2022

December 31, 2021

Risk-free interest rate

0.69 % — 0.84 %

Expected volatility (peer group)

2 unchanged sentences

value of the warrant liabilities is based on a valuation received from an independent valuation firm determined using a Monte-Carlo simulation.

11 — CONVERTIBLE DEBT - RELATED PARTY

December 22, 2022, the Company issued to Alpha Capital, an 8 % Senior Convertible Debenture in the aggregate principal amount of $ 3,300,000

for a purchase price of $ 3,000,000 pursuant to the terms of a Securities Purchase Agreement, dated December 21, 2022 (the “Alpha

Purchase Agreement”).

The Debenture is convertible, at any time, and from time to time, at Alpha’s option, into shares of

common stock of the Company (the “Conversion Shares”), at a price equal to $ 1.32 per share, subject to adjustment as described

in the Debenture (the “Conversion Price”) and other terms and conditions described in the Debenture, including the Company’s

receipt of the requisite stockholder approvals.

Additionally, on December 22, 2022, the Company issued to Alpha Capital a liability classified warrant to purchase

2,500,000 shares of the Company’s common stock (see Note 10-Warrant Liabilities).

The exercise price of the warrant is $ 1.65 (equal to 125 % of the conversion

price of the Debenture on the closing date).

The warrant may be exercised by Alpha Capital, in whole or in part, at any time on or after

June 22, 2023 and before June 22, 2028, subject to certain terms conditions described in the warrant, including the Company’s receipt

of the necessary stockholder approvals.

proceeds from the transaction will be dedicated to the Company’s efforts of advancing its QN-302 Investigative New Drug candidate

towards clinical trials and other working capital purposes.

June 1, 2023 and continuing on the first day of each month thereafter until the earlier of (i) December 22, 2025 and (ii) the full redemption

of the Debenture (each such date, a “Monthly Redemption Date”), the Company will redeem $ 110,000 plus accrued but unpaid

interest, liquidated damages and any amounts then owing under the Debenture (the “Monthly Redemption Amount”).

Redemption Amount will be paid in cash;

provided that after the first two monthly redemptions, the Company may elect to pay all or a

portion of a Monthly Redemption Amount in shares of common stock of the Company, based on a conversion price equal to the lesser of (i)

the then Conversion Price of the Debenture and (ii) 85 % of the average of the VWAPs (as defined in the Debenture) for the five consecutive

trading days ending on the trading day that is immediately prior to the applicable Monthly Redemption Date.

The Company may also redeem

some or all of the then outstanding principal amount of the Debenture at any time for cash in an amount equal to 105 % of the then outstanding

principal amount of the Debenture being redeemed plus accrued but unpaid interest, liquidated damages and any amounts then owing under

the Debenture.

These monthly redemption and optional redemptions are subject to the satisfaction of the Equity Conditions (as defined

in the Debenture), which includes a condition that we have obtained stockholder approval for such share issuances.

Debenture accrues interest at the rate of 8 % per annum, which does not begin accruing until December 1, 2023, and will be payable on

a quarterly basis.

Interest may be paid in cash or shares of common stock of the Company or a combination thereof at the option of the

provided that interest may only be paid in shares if the Equity Conditions have been satisfied, including the stockholder approval

condition as described above.

the Debenture and the Alpha Warrant provide for adjustments to the Conversion Price and Exercise Price, respectively, in connection with

stock dividends and splits, subsequent equity sales and rights offerings, pro rata distributions, and certain fundamental transactions.

Both the Debenture and the Alpha Warrant include a beneficial ownership blocker of 9.99%, which may only be waived by Alpha Capital upon

61 days’ notice to the Company.

Company filed a registration statement on Form S-3 (No.

333-269088) with the Securities and Exchange Commission on December 30, 2022

registering the resale by Alpha Capital of an aggregate of 5,157,087 shares of our common stock, which may be issuable to the selling

stockholder pursuant to the terms of the Debenture and Alpha Warrant.

Company evaluated the Debenture and Alpha Warrants (“Warrants”) and determined that the Warrants are freestanding financial

The Warrants are not considered indexed to an entity’s own stock, because the settlement amount would not equal the

difference between the fair value of a fixed number of the entity’s equity shares and a fixed strike price and all of the adjustment

features in Section 3(b) of the warrant agreement are not down round provisions, as defined in ASU 2017-11.

Accordingly, the warrants

are classified as a liability and recognized at fair value, with subsequent changes in fair value recognized in earnings.

proceeds were allocated to the initial fair value of the Warrants, with the residual balance allocated to the initial carrying value

of the Debenture.

The Company has not elected the fair value option for the Debenture.

The Debenture was recognized at proceeds received

after allocating the proceeds to the Warrants, and then allocating remaining proceeds to a suite of bifurcated embedded derivative features

(conversion option, contingent acceleration upon an Event of Default, and contingent interest upon an Event of Default), with the resulting

difference, if any, allocated to the loan host instrument.

The suite of derivative features was measured and determined to have no fair

original issue discount ($ 0.3 million), the initial fair value of the Warrant ($ 2.8 million), the initial fair value of the suite of

bifurcated embedded derivative features ($ 0 ), and the fees and costs paid to Alpha Capital and other third parties ($ 0.1 million) comprise

the debt discount.

debt discount shall be amortized to interest expense over the expected term of the Debenture using the effective interest method, in

accordance with ASC 835-30.

The debt host instrument of the Debenture will subsequently be measured at amortized cost using the effective

interest method to accrete interest over its term to bring the Debenture’s initial carrying value to the principal balance at maturity.

senior secured convertible debt comprises the following:

SCHEDULE OF SENIOR SECURED CONVERTIBLE DEBT

December 31, 2022

December 31, 2021

Senior secured convertible debenture

Discount on convertible debenture

( 3,239,803 )

Total convertible debt - related party

of December 31, 2022, there were no events of default or violation of any covenants under our financing obligations.

12 — EARNINGS (LOSS) PER SHARE

earnings (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted-average number of common shares

Diluted EPS is computed based on the sum of the weighted-average number of common shares and potentially dilutive common

shares outstanding during the period.

Potentially dilutive common shares consist of shares issuable from stock options and warrants.

earnings (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted-average number of common

shares outstanding.

Diluted EPS is computed based on the sum of the weighted-average number of common shares and potentially

dilutive common shares outstanding during the period.

Potentially dilutive common shares consist of shares issuable from stock

options and warrants as shown below.

following table reconciles net loss and the weighted-average shares used in computing basic and diluted EPS in the respective periods:

OF EARNINGS PER SHARE BASIC AND DILUTED

For the Year Ended

For the Nine Months Ended

SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED

For the Years Ended

Net loss used for basic earnings per share

4 unchanged sentences

Diluted weighted-average common shares outstanding

dilutive common shares excluded from the calculation above represent stock options and warrants because their effect is anti-dilutive.

OF DILUTIVE SECURITIES EXCLUDED FROM DILUTED NET LOSS PER SHARE

As of December 31,

Shares of common stock subject to outstanding options

Shares of common stock subject to outstanding warrants

Total common stock equivalents

dilutive common shares excluded from the calculation above represent stock options and warrants because their effect would be anti-dilutive.

13 — COMMITMENTS AND CONTINGENCIES

Company leases its facilities under a long-term operating lease agreement.

On December 15, 2021, our wholly-owned subsidiary Qualigen, Inc.

On December 15, 2021, our wholly-owned subsidiary Qualigen,

entered into a Second Amendment to Lease with Bond Ranch LP.

This Amendment

extended the Company’s triple-net leasehold on the Company’s existing 22,624 -square-feet

headquarters/manufacturing facility at 2042 Corte del Nogal, Carlsbad, California for the 61 -month

period of November 1, 2022 to November

months, the base rent payable by Qualigen, Inc.

will total $ 1,950,710 ;

however, the base rent for the first 12 months of the 61-month period will be only $ 335,966 .

Additionally, under the Second Amendment to Lease Qualigen, Inc.

is entitled to a $ 339,360

tenant improvement allowance.

The tables below show the operating

lease right-of-use assets and operating lease liabilities as of initial measurement at April 1, 2020 and the balances as of December

This Amendment extended the Company’s triple-net leasehold on

the Company’s existing 22,624 -square-feet headquarters/manufacturing facility at 2042 Corte del Nogal, Carlsbad, California for

the 61 -month period of November 1, 2022 to November 30, 2027 .

Over the 61 months, the base rent payable by Qualigen, Inc.

$ 1,950,710 ;

however, the base rent for the first 12 months of the 61 -month period is only $ 335,966 .

Additionally, under the Second Amendment

to Lease Qualigen, Inc.

is entitled to a $ 339,360 tenant improvement allowance.

tables below show the operating lease right-of-use assets and operating lease liabilities and the balances as of December 31, 2022 and 2021,

including the changes during the periods:

SCHEDULE OF OPERATING LEASE RIGHT OF USE ASSETS AND OPERATING LEASE LIABILITIES

Operating lease right-of-use assets

Operating lease

right-of-use assets

Net right-of-use assets at December 31, 2021

Additional operating lease right-of-use assets at December 31, 2021

Less amortization of operating lease right-of-use assets

Operating lease right-of-use assets at December 31, 2022

Operating lease liabilities

Lease liabilities arising from obtaining right-of-use assets at April 1, 2020:

Additional operating lease liabilities at December 31, 2021

Operating lease

Lease liabilities at December 31, 2021

Less principal payments on operating lease liabilities

10 unchanged sentences

Operating lease liabilities

lease expense was approximately $ 342,000 and $ 259,000 , respectively, for the year ended December 31, 2021 and nine months ended December

Lease expense was recorded in cost of product sales, general and administrative expenses, research and development and

sales and marketing expenses.

lease expense was approximately $ 462,000 and $ 342,000 , respectively, for the years ended December 31, 2022 and December 31, 2021.

expense was recorded in cost of product sales, general and administrative expenses, research and development and sales and marketing

of Sekisui Distribution Agreement

Distribution Arrangement expired on March 31, 2022.

Following the expiration of the Sekisui Distribution Agreement on March 31, 2022,

the Company had a commitment to purchase leased FastPack rental systems back from Sekisui at Sekisui’s net book value, in the amount

of $ 154,000 which is included in equipment held for lease and accrued expenses on the consolidated balance sheet.

Funding Commitment

a condition to the NanoSynex Acquisition, the Company agreed to provide NanoSynex with up to $ 10.4 million of future funding in the form

of promissory notes to the Company based on NanoSynex’s achievement of certain future development milestones and subject to other

terms and conditions described in the Funding Agreement entered into with NanoSynex.

Of this amount approximately $ 2.4 million was funded

during the year ended December 31, 2022, and an additional $ 0.5 million was funded in February 2023 (See Note 2-Liquidity for further details regarding the terms and conditions of the Funding Agreement).

and Other Legal Proceedings

November 9th, 2021, the Company was named as a defendant in an action brought by Mediant Communications Inc.

District Court for the Southern District

of New York .

The complaint alleges that Qualigen entered into an implied contract with Mediant,

whereby Qualigen retained Mediant to distribute proxy materials and subsequently conduct shareholder vote tabulations.

The Company believes

that the claims from Mediant are without merit and intends to vigorously defend the case.

The Company filed a Motion to Dismiss with

the District Court and on March 14, 2022 a hearing was held during which the presiding judge ruled in favor of the Motion to Dismiss.

The Company and Mediant are currently conducting settlement negotiations.

November 9, 2021, the Company was named as a defendant in an action brought by Mediant Communications Inc.

(“Mediant”) in

District Court for the Southern District of New York.

The complaint alleged that Qualigen entered into an implied contract with

Mediant, whereby Qualigen retained Mediant to distribute proxy materials and subsequently conduct shareholder vote tabulations.

filed a Motion to Dismiss with the District Court and on March 14, 2022 a hearing was held during which the presiding judge ruled in

favor of the Motion to Dismiss.

The Company and Mediant settled the litigation on April 5, 2022 in the amount of $ 96,558 , at which time

the amount was paid.

14 — RESEARCH AND LICENSE AGREEMENTS

University of Louisville Research Foundation

June 2018 and September 2020, the Company entered into license and sponsored research agreements with the University of Louisville Research

Foundation (“ULRF”) for QN-247, a novel aptamer-based compound that has shown promise as an anticancer drug.

Under the agreements,

the Company will take over development, regulatory approval and commercialization of the compound from ULRF and is responsible for maintenance

of the related intellectual property portfolio.

In return, ULRF received a $ 50,000 convertible promissory note in payment of an upfront

license fee, which was subsequently converted into the Company’s common stock, and the Company agreed to reimburse ULRF for sponsored

research expenses of up to $ 805,000 and prior patent costs of up to $ 200,000 .

In addition, the Company agreed to pay ULRF (i) royalties,

on patent-covered net sales associated with the commercialization of anti-nucleolin agent-conjugated nanoparticles, of 4% (on net sales

up to a cumulative $250,000,000) or 5% (on net sales above a cumulative $250,000,000), until expiration of the last to expire of the

licensed patents, (ii) 30% to 50% of any non-royalty sublicensee income received (50% for sublicenses granted in the first two years

of the ULRF license agreement, 40% for sublicenses granted in the third or fourth years of the ULRF license agreement, and 30% for sublicenses

granted in the fifth year of the ULRF license agreement or thereafter), (iii) reimbursements for ongoing costs associated with the preparation,

filing, prosecution and maintenance of licensed patents, incurred prior to June 2018, and (iv) payments ranging from $ 100,000 to $ 5,000,000

upon the achievement of certain regulatory and commercial milestones .

Milestone payments for the first therapeutic indication would be

$ 100,000 for first dosing in a Phase 1 clinical trial, $ 200,000 for first dosing in a Phase 2 clinical trial, $ 350,000 for first dosing

in a Phase 3 clinical trial, $ 500,000 for regulatory marketing approval and $ 5,000,000 upon achieving a cumulative $ 500,000,000 of Licensed

Product sales;

the Company would also pay another $ 500,000 milestone payment for any additional regulatory marketing approval for each

additional therapeutic (or diagnostic) indication.

The Company also must pay ULRF shortfall payments if the total amounts actually paid

with respect to royalties and non-royalty sublicensee income for any year is less than the applicable annual minimum (ranging from $ 10,000

to $ 50,000 ) for such year.

research expenses related to these agreements for the year ended December 31, 2021 and nine months ended December

31, 2020 were approximately $ 325,000 and $ 14,000 , respectively, and these amounts are recorded in research and development expenses

in the Consolidated Statements of Operations.

Minimum annual royalties of $ 0 and $ 10,000 related to these agreements are included in

research and development expenses in the Consolidated Statements of Operations for the year ended December 31, 2021 and nine months ended

December 31, 2020 , respectively.

License costs were approximately $ 118,000 and $ 470,000

related to these agreements the year ended December 31, 2021 and nine months ended December 31,

2020 , respectively, and are included in research and development expenses in the Consolidated Statements of Operations.

March 2019, the Company entered into a sponsored research agreement and an option for a license agreement with ULRF for development of

several small-molecule RAS interaction inhibitor drug candidates.

Under the terms of this agreement, the Company will reimburse ULRF

for sponsored research expenses of up to $ 693,000 for this program.

In February 2021, the Company extended the term of this agreement

for an additional 18 months (expires July 2022) and increased the amount that the Company will reimburse ULRF for sponsored research

expenses from $ 693,000 to approximately $ 1.8 million.

In July 2020, the Company entered into an exclusive license agreement with ULRF

for RAS interaction inhibitor drug candidates.

Under the agreement, the Company will take over development, regulatory approval and commercialization

of the candidates from ULRF and is responsible for maintenance of the related intellectual property portfolio.

In return, ULRF received

approximately $112,000 for an upfront license fee and reimbursement of prior patent costs.

In addition, the Company has agreed to pay

ULRF (i) royalties, on patent-covered net sales associated with the commercialization, of 4% (on net sales up to a cumulative $250,000,000)

or 5% (on net sales above a cumulative $250,000,000), until expiration of the licensed patent, and 2.5% (on net sales for any sales not

covered by Licensed Patents), (ii) 30% to 50% of any non-royalty sublicensee income received (50% for sublicenses granted in the first

two years of the ULRF license agreement, 40% for sublicenses granted in the third or fourth years of the ULRF license agreement, and

30% for sublicenses granted in the fifth year of the ULRF license agreement or thereafter), (iii) reimbursements for ongoing costs associated

with the preparation, filing, prosecution and maintenance of licensed patents, incurred prior to July 2020, and (iv) payments ranging

from $ 50,000 to $ 5,000,000 upon the achievement of certain regulatory and commercial milestones .

Milestone payments for the first therapeutic

indication would be $ 50,000 for first dosing in a Phase 1 clinical trial, $ 100,000 for first dosing in a Phase 2 clinical trial, $ 150,000

for first dosing in a Phase 3 clinical trial, $ 300,000 for regulatory marketing approval and $ 5,000,000 upon achieving a cumulative $ 500,000,000

of Licensed Product sales.

The Company also must pay ULRF shortfall payments if the total amounts actually paid with respect to royalties

and non-royalty sublicensee income for any year is less than the applicable annual minimum (ranging from $ 20,000 to $ 100,000 ) for such

research expenses related to these agreements for the year ended December 31, 2021 and nine months ended December

31, 2020 were approximately $ 646,000 and $ 283,000 , respectively, and are recorded in research and development expenses in the

Consolidated Statements of Operations.

License costs related to these agreements for the year ended December 31, 2021 and nine months

ended December 31, 2020 were approximately $ 60,000 and $ 160,000 , respectively, and are included

in research and development expenses in the Consolidated Statements of Operations.

June 2020, the Company entered into an exclusive license agreement with ULRF for its intellectual property in the use of QN-165 as a

treatment for COVID-19.

Under the agreement, the Company will take over development, regulatory approval and commercialization of the

compound (for such use) from ULRF and is responsible for maintenance of the related intellectual property portfolio.

In return, ULRF

received approximately $ 24,000 for an upfront license fee and reimbursement of prior patent costs.

In addition, the Company was required

to enter into a separate sponsored research agreement with ULRF (for QN-165 as a treatment for COVID-19) for at least $ 250,000 .

2020, the Company executed a sponsored research agreement with ULRF (for QN-165 as a treatment for COVID-19) supporting up to approximately

$ 430,000 in research which satisfied this requirement.

addition, the Company has agreed to pay ULRF (i) royalties, on patent-covered net sales associated with the commercialization of QN-165

as a treatment for COVID-19, of 4% (on net sales up to a cumulative $250,000,000) or 5% (on net sales above a cumulative $250,000,000),

until expiration of the licensed patents, and 2.5% (on net sales for any sales not covered by Licensed Patents), (ii) 30% to 50% of any

Under the terms of this agreement, the Company was to reimburse ULRF

for sponsored research expenses of up to $ 693,000

for this program.

In February 2021, March 2022,

and October 2022, the Company extended the term of this agreement until September 2023 and increased the amount that the Company will

reimburse ULRF for sponsored research expenses to approximately $ 2.7

July 2020, the Company entered into an exclusive license agreement with ULRF for RAS interaction inhibitor drug candidates.

agreement, the Company will take over development, regulatory approval and commercialization of the candidates from ULRF and is responsible

for maintenance of the related intellectual property portfolio.

In return, ULRF received approximately $112,000 for an upfront license

fee and reimbursement of prior patent costs.

In addition, the Company has agreed to pay ULRF (i) royalties, on patent-covered net sales

associated with the commercialization, of 4% (on net sales up to a cumulative $250,000,000) or 5% (on net sales above a cumulative $250,000,000),

until expiration of the licensed patent, and 2.5% (on net sales for any sales not covered by Licensed Patents), (ii) 30% to 50% of any

non-royalty sublicensee income received (50% for sublicenses granted in the first two years of the ULRF license agreement, 40% for sublicenses

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agreement or thereafter), (iii) reimbursements for ongoing costs associated with the preparation, filing, prosecution and maintenance

of licensed patents, incurred prior to June 2020, and (iv) payments ranging from $ 50,000 to $ 5,000,000 upon the achievement of certain

regulatory and commercial milestones .

Milestone payments would be $ 50,000 for first dosing in a Phase 1 clinical trial, $ 100,000 for

first dosing in a Phase 2 clinical trial, $ 150,000 for first dosing in a Phase 3 clinical trial, $ 300,000 for regulatory marketing approval

and $ 5,000,000 upon achieving a cumulative $ 500,000,000 of Licensed Product sales.

The Company also must pay ULRF shortfall payments

if the total amounts actually paid with respect to royalties and non-royalty sublicensee income for any year is less than the applicable

annual minimum (ranging from $ 5,000 to $ 50,000 ) for such year.

research expenses related to these agreements for the year ended December 31, 2021 and nine months ended December

31, 2020 were approximately $ 243,000 and $ 14,000 , respectively, and are recorded in research and development expenses in the statements

of operations.

License costs related to these agreements for the year ended December 31, 2021 and nine months ended December

31, 2020 were approximately $ 28,000 and $ 24,000 , respectively, and are included in research and development expenses in the statements

of operations.

of licensed patents, incurred prior to July 2020, and (iv) payments ranging from $ 50,000

the achievement of certain regulatory and commercial milestones.

payments for the first therapeutic indication would be $ 50,000

for first dosing in a Phase 1 clinical trial,

for first dosing in a Phase 2 clinical trial,

for first dosing in a Phase 3 clinical trial,

for regulatory marketing approval and $ 5,000,000

upon achieving a cumulative $ 500,000,000

of Licensed Product sales.

The Company also must

pay ULRF shortfall payments if the total amounts actually paid with respect to royalties and non-royalty sublicensee income for any year

is less than the applicable annual minimum (ranging from $ 20,000

to $ 100,000 )

for such year.

research expenses related to these agreements for the years ended December 31, 2022 and December 31, 2021 were approximately $ 758,000

and $ 646,000 , respectively, and are recorded in research and development expenses in the Consolidated Statements of Operations.

costs related to these agreements for the years ended December 31, 2022 and December 31, 2021 were approximately $ 40,000 and $ 60,000 ,

respectively, and are included in research and development expenses in the Consolidated Statements of Operations.

June 2018 and September 2020, the Company entered into license and sponsored research agreements with the University of Louisville

Research Foundation (“ULRF”) for QN-247, a novel aptamer-based compound that has shown promise as an anticancer drug.

Under the agreements, the Company took over development, regulatory approval and commercialization of the compound from ULRF and is

responsible for maintenance of the related intellectual property portfolio.

In return, ULRF received a $ 50,000

convertible promissory note in payment of an upfront license fee, which was subsequently converted into the Company’s common

stock, and the Company agreed to reimburse ULRF for sponsored research expenses of up to $ 830,000

and prior patent costs of up to $ 200,000 .

The sponsored research agreement ended on August 31, 2022.

addition, the Company agreed to pay ULRF (i) royalties, on patent-covered net sales associated with the commercialization of

anti-nucleolin agent-conjugated nanoparticles, of 4% (on net sales up to a cumulative $250,000,000) or 5% (on net sales above a

cumulative $250,000,000), until expiration of the last to expire of the licensed patents, (ii) 30% to 50% of any non-royalty

sublicensee income received (50% for sublicenses granted in the first two years of the ULRF license agreement, 40% for sublicenses

granted in the third or fourth years of the ULRF license agreement, and 30% for sublicenses granted in the fifth year of the ULRF

license agreement or thereafter), (iii) reimbursements for ongoing costs associated with the preparation, filing, prosecution and

maintenance of licensed patents, incurred prior to June 2018, and (iv) payments ranging from $ 100,000

to $ 5,000,000

upon the achievement of certain regulatory and commercial milestones.

Milestone payments for the first therapeutic indication

would be $ 100,000

for first dosing in a Phase 1 clinical trial, $ 200,000

for first dosing in a Phase 2 clinical trial, $ 350,000

for first dosing in a Phase 3 clinical trial, $ 500,000

for regulatory marketing approval and $ 5,000,000

upon achieving a cumulative $ 500,000,000

of Licensed Product sales;

the Company would also pay another $ 500,000

milestone payment for any additional regulatory marketing approval for each additional therapeutic (or diagnostic) indication.

Company also must pay ULRF shortfall payments if the total amounts actually paid with respect to royalties and non-royalty

sublicensee income for any year is less than the applicable annual minimum (ranging from $ 10,000

to $ 50,000 )

for such year.

research expenses related to these agreements for the years ended December 31, 2022 and December 31, 2021 were approximately $ 164,000

and $ 325,000 , respectively, and these amounts are recorded in research and development expenses in the Consolidated Statements of Operations.

Minimum annual royalties of $ 0 and $ 0 related to these agreements are included in research and development expenses in the Consolidated

Statements of Operations for the years ended December 31, 2022 and December 31, 2021, respectively.

License costs related to these agreements

were approximately $ 94,000 and $ 118,000 for the years ended December 31, 2022 and December 31, 2021, respectively, and are included in

research and development expenses in the Consolidated Statements of Operations.

June 2020, the Company entered into an exclusive license agreement with ULRF for its intellectual property in the use of QN-165 as a

treatment for COVID-19.

Under the agreement, the Company took over development, regulatory approval and commercialization of the

compound (for such use) from ULRF and was responsible for maintenance of the related intellectual property portfolio.

ULRF received approximately $ 24,000 for

an upfront license fee and reimbursement of prior patent costs.

In addition, the Company executed a sponsored research agreement

with ULRF (for QN-165 as a treatment for COVID-19) supporting up to $ 430,000 .

This sponsored research agreement expired in November 2021 and effective October 31, 2022 the license agreement for

QN-165 was terminated.

research expenses related to these agreements for the years ended December 31, 2022 and December 31, 2021 were approximately $ 14,000 and $ 243,000 ,

respectively, and are recorded in research and development expenses in the Consolidated Statements of Operations.

License costs related

to these agreements for the years ended December 31, 2022 and December 31, 2021 were approximately $ 2,000 and $ 28,000 , respectively,

and are included in research and development expenses in the Consolidated Statements of Operations.

Cancer Therapeutics

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$ 3,000,000 .

For the year ended December 31, 2021 and the nine months ended December 31, 2020, there were approximately $ 2,000 and $ 285,000 ,

respectively in costs related to this agreement which are included in research and development expenses in the Consolidated Statements

of Operations.

November 2015, the Company entered into a long-term development and supply agreement with Prediction Biosciences SAS to develop and manufacture

diagnostic tests for use in the stroke point-of-care market.

The Company recognizes development revenue and product sales over the performance

period of the contract.

For both the year ended December 31, 2021 and nine months ended December 31, 2020, there was no collaborative

research revenue related to this agreement.

March 2018, the Company extended a strategic partnership entered into in May 2016 with Sekisui Diagnostics, LLC (“Sekisui”).

The Company appointed Sekisui as its diagnostics commercial partner and exclusive worldwide distributor with the exception of certain

customer accounts retained by Qualigen;

Sekisui’s distribution arrangement is currently set to expire on March 31, 2022.

The agreement

contains a right of first refusal for Sekisui against any potential acquisition of the Company;

the right of first refusal is currently

set to expire on March 31, 2022.

were product sales to Sekisui of approximately $ 3.5 million and $ 1.6 million, respectively, for the year ended December 31, 2021 and

nine months ended December 31, 2020 , related to this agreement.

October 2020, the Company entered into a Technology Transfer Agreement with Yi Xin Zhen Duan Jishu (Suzhou) Ltd.

of Suzhou, China, for Yi Xin to develop, manufacture and sell new generations of diagnostic test systems based on the Company’s

core FastPack technology.

In addition, the Technology Transfer Agreement authorized Yi Xin to manufacture and sell the Company’s

current generations of FastPack System diagnostic products (1.0, IP and PRO) in China.

the Technology Transfer Agreement, we received net cash payments of $ 250,000 in the final quarter of the Transition Period classified

as deferred revenue as of the Consolidated Balance Sheet date of December 31, 2020, and $ 420,000 in the first quarter of 2021.

will also receive low- to mid-single-digit royalties on any future new-generations and current-generations product sales by Yi Xin.

these amounts, the Company recognized approximately $ 38,000 in product sales and $ 632,000 in license revenue included in the statement

of operations for the year ended December 31, 2021.

The Company provided technology transfer and patent/know-how license rights to facilitate

Yi Xin’s development and commercialization.

Company gave Yi Xin the exclusive rights for China – which is a market the Company has not otherwise entered – both for Yi

Xin’s new generations of FastPack-based products and for Yi Xin-manufactured versions of the Company’s existing FastPack

product lines.

Yi Xin will also have the right to sell its new generations of FastPack-based diagnostic test systems throughout the world

(but not to or toward current customers of the Company’s existing generations of FastPack products);

any such non-China sales would,

until March 31, 2022, need to be through Sekisui.

In addition, after March 31, 2022, Yi Xin will have the right to sell Yi Xin-manufactured

versions of existing FastPack 1.0, IP and PRO product lines worldwide (other than in the United States and other than to or toward current

customers of those products).

Also, after March 31, 2022, Yi Xin will have the right to buy Company-manufactured FastPack

1.0, IP and PRO products from the Company at distributor prices for resale in and for the United States (but not to or toward current

For the years ended December 31, 2022 and December 31, 2021, there were approximately $ 0 and $ 2,000 , respectively in costs

related to this agreement which are included in research and development expenses in the Consolidated Statements of Operations.

In October 2020, through our wholly-owned diagnostics subsidiary Qualigen, Inc.

we entered into a Technology Transfer

Agreement with Yi Xin Zhen Duan Jishu (Suzhou) Ltd.

(“Yi Xin”), of Suzhou, China, for Yi Xin to develop, manufacture and sell

new generations of diagnostic test systems based on the Company’s core FastPack technology.

In addition, the Technology Transfer Agreement

authorized Yi Xin to manufacture and sell the Company’s current generations of FastPack System diagnostic products (1.0, IP and PRO) in

The Company will receive low- to mid-single-digit royalties on any future new-generations and current-generations

product sales by Yi Xin.

We received total net cash payments of approximately $ 670,000 , of which approximately $ 632,000

is classified as license revenue, and approximately $ 38,000 is classified as product sales on the Consolidated Statements of Operations for the fiscal year ended December 31,

The Company provided technology transfer and patent/know-how license rights to facilitate Yi Xin’s development and commercialization.

The Company gave Yi Xin the exclusive rights for China – which is

a market we have not otherwise entered – both for Yi Xin’s new generations of FastPack-based products and for Yi Xin-manufactured

versions of our existing FastPack product lines.

Yi Xin also has the right to sell its new generations of FastPack-based diagnostic test

systems throughout the world (but not to or toward current customers of our existing generations of FastPack products).

After March 31,

2022, Yi Xin has the right to sell Yi Xin-manufactured versions of existing FastPack 1.0, IP and PRO product lines worldwide (other than

in the United States and other than to or toward current non-US customers of those products), as well as the right to buy Qualigen-manufactured

FastPack 1.0, IP and PRO products from us at distributor prices for resale in and for the United States (but not to or toward current

customers of those products).

the Company did not license Yi Xin to sell in the United States market any Yi Xin-manufactured

versions of those legacy FastPack 1.0, IP and PRO product lines, even after March 31, 2022.

In the Technology Transfer Agreement, the

Company confirmed that it would not, after March 31, 2022, seek new FastPack customers outside the United States.

All of the March 31,

2022 dates in this paragraph are as established by an August 2021 amendment of the Technology Transfer Agreement.

The Company did not license Yi Xin to sell in the U.S.

market any Yi Xin-manufactured versions of those

legacy FastPack 1.0, IP and PRO product lines.

In the Technology Transfer Agreement the Company also confirmed that after March 31, 2022

it would not seek new FastPack customers outside the U.S.

Pharmaceutical

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31, 2020 Consolidated Balance Sheet date, and all of which was included in research and development expenses in the statement of operations

for the twelve months ended December 31, 2021.

and development expenses related to this agreement for the year ended December 31, 2021 and the nine months ended 2020 were approximately

$ 3.2 million and $ 0 , respectively, and are recorded in research and development expenses in the Consolidated Statements of Operations.

for the year ended December 31, 2021.

and development expenses related to this agreement for the years ended December 31, 2022 and December 31, 2021 were approximately $ 9,000

and $ 3.2 million, respectively, and are recorded in research and development expenses in the Consolidated Statements of Operations.

UCL Business Limited

In January 2022, the Company entered into a License

Agreement with UCL Business Limited to obtain an exclusive worldwide in-license of a genomic quadruplex (G4)-selective transcription inhibitor

drug development program which had been developed at University College London, including lead and back-up compounds, preclinical data

and a patent estate.

(UCL Business Limited is the commercialization company for University College London.) The program’s lead compound

is now being developed at Qualigen under the name QN-302 as a candidate for treatment for pancreatic ductal adenocarcinoma (PDAC), which

represents the vast majority of pancreatic cancers.

The License Agreement required a $ 150,000 upfront payment, reimbursement of past patent

prosecution expenses (approximately $ 160,000 ), and (if and when applicable) tiered royalty payments in the low to mid-single digits, clinical/regulatory/sales

milestone payments and a percentage of any non-royalty sublicensing consideration paid to Qualigen.

For the years ended December 31, 2022 and 2021 there were license costs of approximately $ 338,000 and $ 0 , respectively,

related to this agreement which are included in research and development expenses in the Consolidated Statements of Operations.

15 — STOCKHOLDERS’ EQUITY

of December 31, 2022, and 2021 the Company had two classes of capital stock:

common stock and Series Alpha convertible preferred stock.

As of April 1, 2020 the Company had two classes of capital stock with one being divided into five series:

common stock and preferred

stock (Series A convertible preferred stock, Series B convertible preferred stock, Series C convertible preferred stock, Series D convertible

preferred stock and Series D-1 convertible preferred stock).

common stock and preferred stock.

of common stock generally vote as a class with the holders of the preferred stock and are entitled to one vote for each share held.

1 unchanged sentence

dividends when and if declared by the Board of Directors.

Following payment of the liquidation preference of the preferred stock, as

of March 31, 2020 any remaining assets would be distributed ratably among the holders of the common stock and, on an as-if-converted

basis, the holders of Series C convertible preferred stock, Series D convertible preferred stock and Series D-1 convertible preferred

stock) upon liquidation, dissolution or winding up of the affairs of the Company.

Following payment of the liquidation preference of

the preferred stock, as of December 31, 2021 any remaining assets would be distributed ratably among the holders of the common stock

and, on an as-if-converted basis, the holders of Series Alpha convertible preferred stock upon liquidation, dissolution or winding up

of the affairs of the Company.

The holders of common stock have no preemptive, subscription or conversion rights and there are no redemption

or sinking fund provisions.

December 1, 2021, the Company closed a Securities Purchase Agreement (dated November 29, 2021) with several institutional investors for

the purchase and sale of 5,880,000 shares of Company common stock to purchase shares of Company common stock for an exercise price of

$ 1.50 per share, for aggregate gross proceeds of $ 8.82 million.

Following payment of the liquidation preference of the preferred stock, any

remaining assets will be distributed ratably among the holders of the common stock and, on an as-if-converted basis, the holders of any

preferred stock upon liquidation, dissolution or winding up of the affairs of the Company.

The holders of common stock have no preemptive,

subscription or conversion rights and there are no redemption or sinking fund provisions.

December 1, 2021, the Company closed a Securities Purchase Agreement (dated November 29, 2021) with several institutional investors

for the purchase and sale of 588,000

reverse split adjusted shares of Company common stock at a reverse split adjusted exercise price of $ 15.00

per share, for aggregate gross proceeds of $ 8.82

December 22, 2022, the Company issued to Alpha Capital, an 8 %

Senior Convertible Debenture in the aggregate principal amount of $ 3,300,000

for a purchase price of $ 3,000,000

pursuant to the terms of a Securities Purchase Agreement, dated December 21, 2022.

The Debenture is convertible, at any time, and

from time to time, at Alpha’s option, into shares of common stock of the Company, at a price equal to $ 1.32

per share, and other terms and conditions described in the Debenture (see Note 11 -Convertible Debt - Related Party).

this transaction, the Company issued to Alpha Capital a warrant to purchase 2,500,000

shares of the Company’s common stock (see Note 10-Warrant Liabilities).

December 31, 2022, the Company has reserved 5,183,629 shares of authorized but unissued common stock for possible future issuance.

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Exercise of stock warrants

A, B, C, D, D-1, Alpha Convertible Preferred Stock

December 31, 2021 and 2020, there were no shares of Series A, B, C, D, D-1 convertible preferred stock outstanding.

All shares of Series

A, B, C, D, D-1 convertible preferred stock were converted into common stock at the time of the May 2020 reverse recapitalization transaction.

December 31, 2021, there were no shares of Series Alpha convertible preferred stock outstanding.

During the year ended December 31, 2021,

the holder of Series Alpha convertible preferred stock converted 180 of its shares of Series Alpha convertible preferred stock into an

aggregate of 243,416 shares of the Company’s common stock.

In the nine months ended December

31, 2020 , the holder of Series Alpha convertible preferred stock converted 5,180 of its shares of Series Alpha convertible preferred

stock into an aggregate of 7,004,983 shares of the Company’s common stock, and there were 180 shares of Series Alpha convertible

preferred stock outstanding at December 31, 2020 .

Securities Purchase Agreements

July 10, 2020, the Company closed a Securities Purchase Agreement (dated July 8, 2020) with a single institutional investor for the purchase

and sale for $ 8.0

million of (i) 1,140,570

shares of Company common stock, (ii) 780,198

pre-funded warrants ( i.e.

, warrants to

purchase shares of Company common stock, for which the exercise price is almost entirely prepaid) and (iii) 1,920,768

two-year warrants to purchase shares of Company

common stock for an exercise price of $ 5.25

Both sets of warrants included a 9.99 %

beneficial-ownership blocker provision.

pre-funded warrants were then exercised on July

21 and 22, 2020.

August 4, 2020, the Company closed a Securities Purchase Agreement (dated August 2, 2020) with a single institutional investor for the

purchase and sale for $ 10.0 million of (i) 1,717,106 shares of Company common stock, and (ii) 1,287,829 two-year warrants to purchase

shares of Company common stock for an exercise price of $ 6.00 per share.

The warrants included a 9.99 % beneficial-ownership blocker provision.

December 18, 2020, the Company closed a Securities Purchase Agreement (dated December 16, 2020) with a single institutional investor

for the purchase and sale for $ 12.0

million of (i) 2,370,786

shares of Company common stock, (ii) 1,000,000

pre-funded warrants ( i.e.

, warrants to

purchase shares of Company common stock, for which the exercise price is almost entirely prepaid), (iii) 1,348,314

two-year warrants to purchase shares of Company

common stock for an exercise price of $ 4.07

per share, and (iv) 842,696

warrants (first exercisable 6 months after issuance,

and with an expiration date 30 months after issuance) to purchase shares of Company common stock for an exercise price of $ 4.07

The warrants included a 9.99 %

beneficial-ownership blocker provision.

December 31, 2022 and 2021, there were no shares of preferred stock outstanding.

All shares of Series A, B, C, D, D-1 convertible preferred

stock were converted into common stock at the time of the May 2020 reverse recapitalization transaction.

the year ended December 31, 2021, the holder of Series Alpha convertible preferred stock converted 180 of its shares of Series Alpha

convertible preferred stock into an aggregate of 243,416 shares of the Company’s common stock.

Options and Equity Classified Warrants

Company recognizes all compensatory stock-based payments as compensation expense over the service period, which is generally the vesting

April 2020, the Company adopted the 2020 Stock Incentive Plan (the “2020 Plan”) which provides for the granting of incentive

or non-statutory common stock options to qualified employees, officers, directors, consultants and other service providers.

December 31, 2021 and December 31, 2020 there were 4,748,000

and 3,917,500

outstanding options, respectively, under the

2020 Plan and there were 2,809,157

of Plan shares available, respectively, for future

The shares available for future grant at December 31, 2021 reflect a 2020 Plan amendment approved by the Company’s stockholders

on August 9, 2021 where the number of shares of common stock available for issuance under the 2020 Plan was increased by 3,500,000

April 2020, the Company adopted the 2020 Stock Incentive Plan (the “2020 Plan”) which provides for the grant of incentive

or non-statutory common stock options, restricted stock, stock bonus awards, stock appreciation rights, restricted stock units and performance

awards to qualified employees, officers, directors, consultants and other service providers.

At December 31, 2022 and December 31, 2021

there were 608,012 and 484,186 outstanding stock options, respectively, under the 2020 Plan and there were 147,690 and 280,916 of Plan

shares available, respectively, for future grant.

following represents a summary of the options granted to employees and non-employee service providers that were outstanding at December

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— $ 14,657.50

Legacy Ritter options

$ 5.75 — $ 1,465.75

$ 1.24 — $ 3.29

$ 3.52 — $ 4.97

Total outstanding – December 31, 2022

$ 1.24 — $ 1,465.75

Exercisable (vested)

$ 3.52 — $ 1,465.75

Non-Exercisable (non-vested)

$ 1.24 — $ 5.13

following represents a summary of the options granted (under the 2020 Plan and otherwise) to employees and non-employee service providers

that were outstanding at December 30, 2020, and changes during the nine-month period then ended:

Total outstanding – March 31, 2020

Legacy Ritter options

$ 5.75 — $ 1,465.75

$ 3.52 — $ 5.13

that were outstanding at December 31, 2021, and changes during the twelve months then ended:

Total outstanding – December 31, 2020

— $ 14,657.50

Total outstanding – December 31, 2021

— $ 14,657.50

Exercisable (vested)

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Non-Exercisable (non-vested)

$ 3.52 — $ 5.13

was approximately $ 5.4 million and $ 5.3 million of compensation costs related to outstanding options for the year ended December 31,

2021 and nine months ended December 31, 2020 , respectively.

As of December 31, 2021, there

was approximately $ 8.2 million of total unrecognized compensation cost related to unvested stock-based compensation arrangements.

cost is expected to be recognized over a weighted average period of 1.58 years.

stock options were exercised during the year ended December 31, 2021 or nine months ended December 31, 2020.

2022 and December 31, 2021, respectively.

As of December 31, 2022, there was approximately $ 3.3 million of total unrecognized compensation

cost related to unvested stock-based compensation arrangements.

This cost is expected to be recognized over a weighted average period

of 0.93 years.

stock options were exercised during the year ended December 31, 2022 or 2021.

exercise price for an option issued under the 2020 Plan is determined by the Board of Directors, but will be (i) in the case of an incentive

stock option (A) granted to an employee who, at the time of grant of such option, is a 10% stockholder, for no less than 110% of the

fair market value per share on the date of grant;

or (B) granted to any other employee, for no less than 100% of the fair market value

per share on the date of grant;

and (ii) in the case of a non-statutory stock option, for no less than 100% of the fair market value

per share on the date of grant .

The options awarded under the 2020 Plan will vest as determined by the Board of Directors but will not

exceed a 10-year period.

The weighted average grant date fair value per share of the shares underlying options granted during the year

ended December 31, 2021 was $ 1.10 and during the nine months ended December 31, 2020 was $ 4.97 .

stock option (A) granted to an employee who, at the time of grant of such option, is a 10% stockholder, no less than 110% of the fair

market value per share on the date of grant;

or (B) granted to any other employee, no less than 100% of the fair market value per share

on the date of grant;

and (ii) in the case of a non-statutory stock option, no less than 100% of the fair market value per share on the

date of grant.

The options awarded under the 2020 Plan will vest as determined by the Board of Directors but will not exceed a 10-year

The weighted average grant date fair value per share of the shares underlying options granted during the year ended December

31, 2022 was $ 3.96 and during the year ended December 31, 2021 was $ 11.00 .

Value of Equity Awards

20 unchanged sentences

were as follows:

SCHEDULE OF ASSUMPTIONS USED IN BLACK-SCHOLES OPTION-PRICING METHOD

December 31, 2021

OF ASSUMPTION USED IN BLACK-SCHOLES OPTION-PRICING METHOD

For the Years Ended

Expected dividend yield

1 unchanged sentence

Risk-free interest rate

0.84 % — 1.51 %

Expected average term of options (in years)

Company recorded stock-based compensation expense and classified it in the Consolidated Statements of Operations as follows:

SCHEDULE OF SHARE-BASED COMPENSATION EXPENSE

December 31, 2021

December 31, 2020

OF SHARE-BASED COMPENSATION EXPENSE

For the Years Ended

General and administrative

1 unchanged sentence

Classified Compensatory Warrants

the year ended December 31, 2021, the Company issued equity classified compensatory warrants to a service provider for the purchase of

shares of Company common stock at an exercise

price of $ 1.32

The fair value issuance cost of approximately

million using the Black-Scholes options pricing

model for these warrants was charged to general and administrative expenses in the Company’s Consolidated Statements of Operations.

the nine months ended December 31, 2020, in connection with the $ 4.0 million equity capital raise as part of the May 2020 reverse recapitalization

transaction, the Company issued common stock warrants to an advisor and its designees for the purchase of 811,431 shares of the Company’s

common stock at an exercise price of $ 1.11 per share.

The issuance cost of these warrants was charged to additional paid-in capital,

and did not result in expense on the Company’s Consolidated Statements of Operations.

connection with the $ 4.0 million

equity capital raise as part of the May 2020 reverse recapitalization transaction, the Company issued common stock warrants to an

advisor and its designees for the purchase of 81,143

reverse split adjusted shares of the

Company’s common stock at a reverse split adjusted exercise price of $ 11.1 0 per

The issuance cost of these warrants was charged to additional paid-in capital, and did not result in expense in the

Company’s consolidated statements of operations and comprehensive

addition, various service providers hold equity classified compensatory warrants issued in 2017 and earlier (originally exercisable to

purchase Series C convertible preferred stock, and now instead exercisable to purchase common stock) for the purchase of shares 514,451

purchase Series C convertible preferred stock, and now instead exercisable to purchase common stock) for the purchase of 66,802 reverse split adjusted s hares

of Company common stock at a weighted average exercise price of $ 23.40 per share.

These are to be differentiated from the Series C Warrants

described in Note 7 and there was no recognized or unrecognized compensation cost relating to these outstanding warrants for the year

ended December 31, 2021 and nine months ended December 31, 2020.

described in Note 10- Warrant Liabilities.

the year ended December 31, 2021, the Company issued equity classified compensatory warrants to a service provider for the purchase of

reverse split adjusted shares of Company common stock at a

reverse split adjusted exercise price of $ 13.20

The fair value issuance cost of approximately $ 0.3

using the Black-Scholes options pricing model for these warrants was charged to general and administrative expenses in the Company’s

consolidated statements of operations and comprehensive loss.

On April 25, 2022, 60,000

were repriced from $ 13.20

reverse split adjusted exercise price of $6.00 and

extended from June

3, 2023 to September 14, 2023 .

The increase in fair value of $ 67,370

a Monte Carlo pricing model for the modification of these warrants was charged to general and administrative expenses in the Company’s

consolidated statements of operations and comprehensive loss.

On April 25, 2022 and May 26, 2022 an additional 67,619 reverse split adjusted

were repriced from reverse split adjusted $11 .10

The increase in fair value of $ 31,010

a Monte Carlo pricing model for the modification of these warrants was charged to additional paid-in capital and did not result in expense

on the Company’s consolidated statements of operations and comprehensive loss.

On December 22, 2022 67,620

were repriced from $ 5.136

The increase in fair value of $ 8,548

a Monte Carlo pricing model for the modification of these warrants was charged to additional paid-in capital and did not result in expense

on the Company’s consolidated statements of operations and comprehensive loss.

new compensatory warrants were issued during the year ended December 31, 2022.

following table summarizes the equity classified compensatory warrant activity for the year ended December 31, 2022:

SCHEDULE OF WARRANT ACTIVITY

OF WARRANT ACTIVITY

Weighted– Average

1 unchanged sentence

Total outstanding – December 31, 2021

Series C preferred stock compensatory warrants exchanged for common stock warrants upon reverse recapitalization

Legacy Ritter warrants

Granted to advisor and its designees

1 unchanged sentence

Non-Exercisable

following table summarizes the compensatory warrant activity for nine months ended December 31,

following table summarizes the equity classified compensatory warrant activity for the year ended December 31, 2021:

Weighted– Average

Exercise Price

Total outstanding – March 31, 2020

Series C preferred stock compensatory warrants exchanged for common stock warrants upon reverse recapitalization

Total outstanding – December 31, 2020

Granted to advisor and its designees

1 unchanged sentence

Non-Exercisable

was a total of approximately $ 0.3

million of compensation costs related to

outstanding warrants for the year ended December 31, 2021 and $ 0

for the nine months ended December

As of December 31, 2021 and December 31, 2020 , there was no

unrecognized compensation cost related to nonvested

were $ 67,370 in compensation costs related to outstanding warrants for the year ended December 31, 2022 and $ 0.3 million for the year

ended December 31, 2021.

As of December 31, 2022 and December 31, 2021, there was no unrecognized compensation cost related to nonvested

Noncompensatory

Equity Classified Warrants

new noncompensatory equity classified warrants were issued during the twelve months ended December 31, 2021.

the nine months ended December 31, 2020, as a commitment fee, the Company issued noncompensatory equity classified warrants to an investor

for the purchase of 270,478 shares of Company common stock at an exercise price of $ 1.11 per share.

In addition, in July 2020 the Company

issued noncompensatory equity classified warrants to an investor for the purchase of 2,700,966 shares of Company common stock at an exercise

price of $ 5.25 per share, and in August 2020 the Company issued noncompensatory equity classified warrants to such investor for the purchase

of 1,287,829 shares of Company common stock at an exercise price of $ 6.00 per share.

Lastly, in December 2020, the Company issued noncompensatory

equity classified warrants to such investor for the purchase of 1,000,000 shares of Company common stock at an exercise price of $ 0.01

per share and 2,191,000 shares of Company common stock at an exercise price of $ 4.07 per share.

Warrants to purchase 1,000,000 shares

of Company common stock at an exercise price of $ 0.01 per share were exercised in February 2021.

the year ended December 31, 2021, with the exception of the warrants to purchase 270,478 shares of the Company’s common stock at

an exercise price of $ 1.11 per share, the exercise prices of all outstanding warrants to purchase a total of 5,399,517 shares of the

Company’s common stock were all modified to an exercise price of $ 2.00 per share on November 29, 2021 and each of their remaining

terms extended by six months.

The fair value of the modification cost of these warrant modifications of approximately $ 2.3 million was

charged to additional paid-in capital and did not result in expense on the Company’s Consolidated Statements of Operations.

May 2020, as a commitment fee, the Company issued noncompensatory equity classified warrants to Alpha Capital (a related party) for the purchase of 27,048

reverse split adjusted shares of Company common stock at a reverse split adjusted exercise price of $ 11.10 per

share (of which warrants for 20,000 shares

were subsequently exercised in December 2020).

In July 2020 the Company issued noncompensatory equity classified warrants to Alpha Capital for the purchase of 78,019

reverse split adjusted shares

of Company common stock at a reverse split adjusted exercise price of $ 0.01 per

share (which were subsequently exercised in July 2020), and 192,068 reverse split adjusted shares of Company common stock at a

reverse split adjusted exercise price of $ 52.50 per

In August 2020, the Company issued noncompensatory equity classified warrants to Alpha Capital for the purchase of 128,783

reverse split adjusted shares of Company common stock at a reverse split adjusted exercise price of $ 60.00 per

In December 2020, the Company issued noncompensatory equity classified warrants to Alpha Capital for the purchase of 100,000 reverse

split adjusted shares of Company common stock at a reverse split adjusted exercise price of $ 0.10 per

share (which were exercised in February 2021) and 219,101

reverse split adjusted shares

of Company common stock at a reverse split adjusted exercise price of $ 40.70 per

In May 2022, the Company issued noncompensatory equity classified warrants to Alpha Capital for the purchase of 331,464

reverse split adjusted shares

of Company common stock at a reverse split adjusted exercise price of $ 0.01 per

share (See Note 3 -Acquisition).

November 29, 2021, with the exception of the warrants to purchase 27,048

reverse split adjusted shares of the Company’s common stock at a reverse split adjusted exercise price of $ 11.10

per share, the exercise prices of all outstanding warrants to purchase a total of 539,951

reverse split adjusted shares of the Company’s common stock were modified to a reverse split adjusted exercise price of

per share and each of their remaining terms extended by six months.

The fair value of the modification cost of these warrant

modifications of approximately $ 2.3

million was charged to additional paid-in capital and did not result in expense on the Company’s consolidated statements of

operations and comprehensive loss.

In May 2022, pre-funded warrants to purchase 331,464

reverse split adjusted shares of the Company’s common stock at a reverse split adjusted exercise price of $ 0.01

per share with no expiration date were issued.

These warrants were subsequently exercised during the period ended September 30,

conjunction with the NanoSynex Acquisition (See Note 3-Acquisition), on April 25, 2022 the exercise price of 7,048

reverse split adjusted outstanding warrants at $ 11.10

was modified to a reverse split adjusted exercise price of $ 6.00 .

The increase in fair value of $ 2,533 ,

using a Monte Carlo pricing model for the modification of these warrants, was charged to additional paid-in capital and did not

result in expense on the Company’s consolidated statements of operations and comprehensive loss.

On May 26, 2022, the

reverse split adjusted exercise price of these warrants was modified again to $ 5.136 ,

and the increase in fair value of $ 696 ,

using a Monte Carlo pricing model for the modification of these warrants, was included in consideration transferred in the NanoSynex

On December 22, 2022 the exercise price of these warrants was modified again to $ 1.32 .

The increase in fair value of $ 891 ,

using a Monte Carlo pricing model for the modification of those warrants, was charged to additional paid-in capital and did not

result in expense on the Company’s consolidated statements of operations and comprehensive loss.

following table summarizes the noncompensatory equity classified warrant activity for the year ended December 31, 2022:

SCHEDULE OF WARRANT ACTIVITY

OF WARRANT ACTIVITY

Exercise Price

Total outstanding – December 31, 2021

Legacy Ritter warrants

( 1,000,000 )

Total outstanding – December 31, 2022

Non-Exercisable

following table summarizes the noncompensatory equity classified warrant activity for the nine months ended December 31, 2020:

following table summarizes the noncompensatory equity classified warrant activity for the year ended December 31, 2021:

Exercise Price

Total outstanding – March 31, 2020

Legacy Ritter warrants

Total outstanding – December 31, 2020

0.01 — $ 2,325.00

Total outstanding – December 31, 2021

Non-Exercisable

NOTE 16 — RELATED PARTY TRANSACTIONS

Convertible Debt

On December 22, 2022, the Company issued to Alpha

Capital, an 8 % Senior Convertible Debenture in the aggregate principal amount of $ 3,300,000 for a purchase price of $ 3,000,000 pursuant

to the terms of a Securities Purchase Agreement, dated December 21, 2022 (the “Alpha Purchase Agreement”).

The Debenture is

convertible, at any time, and from time to time, at Alpha’s option, into shares of common stock of the Company (the “Conversion

Shares”), at a price equal to $ 1.32 per share, subject to adjustment as described in the Debenture (the “Conversion Price”)

and other terms and conditions described in the Debenture, including the Company’s receipt of the requisite stockholder approvals

(See Note 11 -Convertible Debt - Related Party).

Short-Term Debt

NanoSynex has four separate notes payable (the “Notes”) outstanding to Alpha Capital, dated between March

26, 2020 and September 2, 2021, aggregating to a total principal outstanding balance of $ 905,000 , and aggregate accrued interest of $ 45,722

for a total outstanding balance of $ 950,722 as of December 31, 2022.

The Notes all accrue interest at 2.62 % per annum, accrued daily,

and provide that the full amount of principal and interest under each Note shall be due immediately prior to a Liquidation Event (the

Maturity Date) unless due earlier in accordance with the terms of the Notes.

“Liquidation Event” means either i) the merger

or consolidation of NanoSynex into any other entity, other than one in control or under control of NanoSynex or NanoSynex’s majority shareholder;

ii) a transaction or series of transactions resulting in the transfer of all or substantially all of NanoSynex’s assets or issued and

outstanding share capital (other than to a company under the control of NanoSynex or NanoSynex’s majority shareholders;

or iii) an underwritten

public offering by NanoSynex of its ordinary shares.

Notwithstanding the above, if NanoSynex receives subsequent debt, convertible debt,

or equity funding with gross proceeds of USD $ 3,000,000 or more, then these Notes shall be due and payable upon the actual receipt of

such funding (See Note 9 -Short-term Debt - Related Party).

Nanosynex Acquisition

The Company acquired a 52.8 % voting equity interest

in NanoSynex on May 26, 2022 (the “NanoSynex Acquisition Date”) through:

(1) the purchase of 2,232,861 shares Preferred A-1

Stock of NanoSynex from Alpha Capital (a related party) for 350,000 reverse split adjusted shares of the Company’s common stock and a

prefunded warrant to purchase 331,464 reverse split adjusted shares of the Company’s common stock at a purchase price of $ 0.001 per share

( these warrants were subsequently exercised on September 13, 2022) , and (2) the purchase of 381,786 shares of Series B preferred stock

of NanoSynex from NanoSynex in exchange for $ 600,000 (See Note 3 - Acquisition).

17 — INCOME TAXES

following table presents domestic and foreign components of consolidated loss before income taxes for the periods presented:

OF DOMESTIC AND FOREIGN COMPONENTS

December 31, 2022

December 31, 2021

$ ( 15,954,750 )

$ ( 17,891,710 )

( 5,344,967 )

Loss before provision for income taxes

$ ( 21,299,717 )

$ ( 17,891,710 )

reconciliation of the statutory income tax rates and the Company’s effective tax rate is as follows:

OF RECONCILIATION OF STATUTORY INCOME TAX RATE

OF RECONCILIATIONS OF STATUTORY INCOME TAX RATE

December 31, 2022

4 unchanged sentences

NOL expiration

Change in fair value of warrant liability

Goodwill impairment

Foreign rate differential

Change in FV of warrant liability

Change in valuation allowance

Income taxes provision

tax expense for the year ended December 31, 2021 and nine months ended December 31, 2020

consisted of the following:

Income taxes provision (benefit)

tax expense for the year ended December 31, 2022 and 2021 consisted of the following:

OF PROVISION FOR INCOME TAXES

1 unchanged sentence

December 31, 2021

For the Years Ended

December 31, 2022

December 31, 2021

Total current provision

6 unchanged sentences

Change in valuation allowance

Total provision for income taxes

Total provision (benefit) for income taxes

$ ( 265,000 )

components of deferred tax assets and liabilities are as follows:

6 unchanged sentences

Accrued expenses

Impairment loss

Stock compensation

Research and development expenses

Total deferred income tax assets

1 unchanged sentence

Intangible assets

( 1,324,000 )

Right-of-use asset

Total deferred income tax liabilities

( 1,706,000 )

Net deferred income tax assets

3 unchanged sentences

Deferred tax asset, net of allowance

$ ( 358,000 )

on the available objective evidence, including the Company’s history of cumulative losses, management believes it is likely that

the net deferred tax assets will not be realizable.

Accordingly, the Company provided for a full valuation allowance against its net

deferred tax assets at December 31, 2021 and December 31, 2020 .

December 31, 2021, the Company has federal and state net operating loss carryforwards of approximately $ 126,225,000

and $ 100,290,000 ,

respectively, which are available to offset future

taxable income.

Federal and State carryovers began to expire in 2020.

As a result of the May 2020 reverse recapitalization an ownership

change has occurred.

The Company has not completed an Internal Revenue Code Section 382 analysis.

As a result, there could be substantial

limitations on the Company’s ability to utilize its pre-ownership change net operating loss and tax credit carryforwards.

substantial limitations may result in both a permanent loss of certain tax benefits related to net operating loss carryforwards and federal

research and development credits, and an annual utilization limitation.

Due to the full valuation allowance already in place, the Company

does not anticipate any change in the Company’s effective tax rate.

the Company’s U.S.

federal and state net deferred tax assets will not be realizable.

Accordingly, the Company provided for a full

valuation allowance against its U.S.

federal and state net deferred tax assets at December 31, 2022 and December 31, 2021.

to the full valuation allowance already in place on the Company’s U.S.

federal and state net deferred tax assets, the Company does

not anticipate significant changes in the Company’s effective tax rate.

However, there is no valuation allowance recorded against

the Company’s foreign net operating loss deferred tax assets, as the Company’s foreign IPR&D deferred tax liabilities

and foreign net operating loss deferred tax assets are both indefinite-lived and thus they may be netted to arrive at a net foreign deferred

tax liability.

This results in $ 272,000 of foreign deferred tax benefit recorded to the income statement in 2022.

Tax Cuts and Jobs Act resulted in significant changes to the treatment of research or experimental (“R&E”) expenditures

under Section 174.

For tax years beginning after December 31, 2021, taxpayers are required to capitalize and amortize all R&E expenditures

that are paid or incurred in connection with their trade or business which represent costs in the experimental or laboratory sense.

Specifically,

costs for U.S.

based R&E activities must be amortized over five years and costs for foreign R&E activities must be amortized

over 15 years;

both using a midyear convention.

The Company has incorporated the impact of this new tax legislation into its 2022 consolidated

financial statements, noting that the impact on the Company’s consolidated financial statements was immaterial.

December 31, 2022, the Company has U.S.

federal and state net operating loss carryforwards of approximately $ 119,254,000 and $ 110,227,000 ,

respectively, which are available to offset future taxable income.

federal and state net operating loss carryovers began to expire

As a result of the May 2020 reverse recapitalization, an ownership change has occurred.

The Company has not completed an Internal

Revenue Code Section 382 analysis.

As a result, there could be substantial limitations on the Company’s ability to utilize its

pre-ownership change net operating loss and tax credit carryforwards.

These substantial limitations may result in both a permanent loss

of certain tax benefits related to net operating loss carryforwards and federal research and development credits, and an annual utilization

At December 31, 2022, the Company has foreign net operating loss carryforwards of approximately $ 953,000 , which are available

to offset future taxable income.

Foreign net operating loss carryovers are indefinite lived and do not expire.

Company also has research and development credit carryforwards for federal and state tax purposes of approximately $ 5,484,000 and $ 2,373,000 ,

2 unchanged sentences

life for state tax purposes .

income tax has not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries

that is indefinitely reinvested outside the United States.

This amount becomes taxable upon a repatriation of assets from the subsidiary

or a sale or liquidation of the subsidiary.

Determination of the amount of any unrecognized deferred income tax liability on this temporary

difference is not practicable because of the complexities of the hypothetical calculation.

Company files income tax returns in the U.S.

federal jurisdiction and in various states.

The Company’s federal income tax returns

for the years 2016 and beyond remain subject to examination by the Internal Revenue Service.

The Company’s California income tax

returns for the years 2015 and beyond remain subject to examination by the California Franchise Tax Board.

In addition, all of the net

operating losses, research and development credit and other tax credit carryforwards that may be used in future years are still subject

to adjustment.

The Company’s U.S.

federal income tax

returns remain subject to examination by the Internal Revenue Service.

The Company’s California income tax returns remain subject

to examination by the California Franchise Tax Board.

Due to net operating losses, research and development credits and other tax credit

carryforwards that may be utilized in future years, all U.S.

federal and state tax years are open to examination.

accepted accounting principles clarify the accounting for uncertainty in income taxes recognized in the Company’s financial statements

2 unchanged sentences

The Company adopted these provisions effective April 1, 2009.

Company did no t have any unrecognized tax benefits as of December 31, 2021 and December 31, 2020

and does not expect this to change significantly over the next 12 months.

In accordance with generally accepted accounting principles,

the Company will recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

December 31, 2021, the Company has no t accrued any interest or penalties related to uncertain tax positions.

13 — TRANSITION PERIOD COMPARATIVE DATA

following table presents certain comparative transition period financial information for the year ended December 31, 2021 and the twelve

months ended December 31, 2020, respectively .

PERIOD COMPARATIVE DATA

For the Twelve Months

December 31, 2021

For the Twelve Months

December 31, 2020 (unaudited)

Gross profit on product sales

Net loss before income taxes

$ ( 17,891,710 )

$ ( 20,419,561 )

$ ( 17,897,137 )

$ ( 20,421,979 )

Net loss per share – basic and fully diluted

Weighted average shares used in computing basic and diluted net loss per share

14 - QUARTERLY FINANCIAL DATA (UNAUDITED)

connection with our year-end financial close process and related preparation of our 2021 Annual Report on Form 10-K, our management

identified an error in the previously issued March 31, 2021, June 30, 2021, and September 30, 2021 unaudited interim

condensed consolidated financial statements in which the fair value of its exercised liability classified warrants had been inadvertently excluded from reclassification

into shareholders’ equity.

This error resulted in a $ 1.9 million overstatement of the gain on change in fair value of warrant

liabilities included on the condensed Consolidated Statement of Operations.

We assessed the materiality of this error in accordance

with SEC Staff Accounting Bulletin:

108 – Financial Statement Misstatement and concluded to correct the misstatement in the accompanying condensed Consolidated Statement of Operations

as of December 31, 2021.

All financial information contained in the accompanying notes to these condensed consolidated financial

statements has been revised to reflect the correction of this error.

SCHEDULE OF ERROR CORRECTIONS AND PRIOR PERIOD ADJUSTMENTS

For the Quarter

Gain on change in fair value of warrant liabilities

$ ( 2,122,900 )

$ ( 552,808 )

$ ( 3,672,627 )

$ ( 5,242,719 )

Net loss per common share

For the Quarter

For the Six Months

June 30, 2021

Gain on change in fair value of warrant liabilities

$ ( 2,075,100 )

$ ( 1,982,256 )

$ ( 4,198,000 )

$ ( 2,535,064 )

$ ( 5,305,233 )

$ ( 5,398,077 )

$ ( 8,977,860 )

$ ( 10,640,796 )

Net loss per common share

For the Quarter

For the Nine Months

September 30, 2021

Gain on change in fair value of warrant liabilities

$ ( 1,942,900 )

$ ( 1,763,936 )

$ ( 6,140,900 )

$ ( 4,299,000 )

$ ( 2,858,518 )

$ ( 3,037,482 )

$ ( 11,836,378 )

$ ( 13,678,278 )

Net loss per common share

15 — SUBSEQUENT

January 13, 2022, we entered into a License Agreement with UCL Business Limited to obtain an exclusive worldwide in-license of a genomic

quadruplex (G4)-selective transcription inhibitor drug development program which had been developed at University College London, including

lead and back-up compounds, preclinical data and a patent estate.

(UCL Business Limited is the commercialization company for University

College London.) The program’s lead compound will be further developed at Qualigen under the name QN-302 as a candidate for treatment

for pancreatic ductal adenocarcinoma (PDAC), which represents the vast majority of pancreatic cancers.

The Agreement requires a $ 150,000

upfront payment, reimbursement of past patent

prosecution expenses (approximately $ 160,000 ),

and (if and when applicable) tiered royalty payments in the low to mid-single digits, clinical/regulatory/sales milestone

payments and a percentage of any non-royalty sublicensing consideration paid to Qualigen.

March 4, 2022, the Company received a letter (the “Notice”) from The Nasdaq Stock Market notifying the Company that, because

the closing bid price for its common stock has been below $ 1.00 per share for 30 consecutive business days, it no longer complies with

the minimum bid price requirement for continued listing on The Nasdaq Capital Market.

Nasdaq Listing Rule 5550(a)(2) requires listed

securities to maintain a minimum bid price of $ 1.00 per share (the “Minimum Bid Price Requirement”), and Listing Rule 5810(c)(3)(A)

provides that a failure to meet the Minimum Bid Price Requirement exists if the deficiency continues for a period of 30 consecutive business

Notice has no immediate effect on the listing of the Company’s common stock on The Nasdaq Capital Market.

Pursuant to Nasdaq Marketplace

Rule 5810(c)(3)(A), the Company has been provided an initial compliance period of 180 calendar days, or until August 31, 2022 to regain

compliance with the Minimum Bid Price Requirement.

During the compliance period, the Company’s shares of common stock will continue

to be listed and traded on The Nasdaq Capital Market.

To regain compliance, the closing bid price of the Company’s common stock

must meet or exceed $ 1.00 per share for a minimum of 10 consecutive business days during the 180 calendar day grace period.

the event the Company is not in compliance with the Minimum Bid Price Requirement by August 31, 2022, the Company may be afforded a second

180 calendar day grace period.

To qualify, the Company would be required to meet the continued listing requirements for market value

of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the Minimum Bid

Price Requirement.

In addition, the Company would be required to provide written notice of its intention to cure the minimum bid price

deficiency during this second 180-day compliance period by effecting a reverse stock split, if necessary.

Company intends to actively monitor the bid price for its common stock between now and August 31, 2022 and will consider available options

to regain compliance with the Minimum Bid Price Requirement.

March 7, 2022, the Company extended an amendment to its sponsored research agreement with ULRF for development of several small-molecule

RAS interaction inhibitor drug candidates and increased the amount that the Company will reimburse ULRF for sponsored research expenses

from $ 1.8 million to approximately $ 2.7 million (see Note 10).

Company did no t have any unrecognized tax benefits as of December 31, 2022 and December 31, 2021 and does not expect this to change significantly

over the next 12 months.

In accordance with generally accepted accounting principles, the Company will recognize interest and penalties

accrued on any unrecognized tax benefits as a component of income tax expense.

As of December 31, 2022, the Company has not accrued any

interest or penalties related to uncertain tax positions.

18 — SUBSEQUENT EVENTS

January 9 and 12, 2023 Alpha Capital voluntarily converted $ 1,111,078

of its outstanding Senior Convertible Debenture principal into 841,726

shares of common stock at a conversion price of $ 1.32

January 13, 2023, the Company’s board of directors, as part of certain cost-cutting measures, approved a temporary 20 % reduction

to the base salaries of all executive officers of the Company and a 20 % reduction to the non-employee directors’ annual cash compensation.

The Company also terminated the employment of certain employees, including its Senior Vice President/Chief Operating Officer and Vice President/Chief Scientific

Company filed a Notification of Late Filing on Form 12b-25 on March 31, 2023, indicating that the filing of this Annual Report would

be delayed on account of the Company and its registered public accounting firm requiring additional time to complete the

accounting and disclosures related to the Company’s acquisition of a majority interest in NanoSynex, Ltd., which accounting and disclosures have been included in this

Annual Report.

On April 20, 2023, the Company received a notification

letter from the Listing Qualifications Department of Nasdaq indicating that, as a result of the Company’s delay in filing this

Annual Report, the Company was not in compliance with the timely filing requirements for continued listing under Nasdaq Listing Rule

The notification letter has no immediate effect on the listing or trading of the Company’s common stock on the

Nasdaq Capital Market.

The notification letter stated that, under Nasdaq rules, the Company has 60 calendar days, or until June 20,

2023, to submit a plan to regain compliance with Nasdaq’s continued listing requirements.

The Company may also regain

compliance with Nasdaq’s continued listing requirements at any time before June 20, 2023, by filing this Annual Report with

the SEC, as well as any subsequent periodic financial reports that may become due, and continuing to comply with Nasdaq’s

other continued listing requirements.

The filing of this Annual Report was the Company’s action to regain

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk