What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-26 compared with 2025-03-13 · 128 added, 105 removed, 157 unchanged (60% of the section changed)

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You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements and related notes to those statements included in this Annual Report.

Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), reflect the operations of Quoin Pharmaceuticals Inc.

(“Quoin Inc.”) since inception and include the accounts of Quoin Ltd.

since the closing of the Merger (as defined below).

In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, beliefs and expectations that involve risks and uncertainties.

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“Risk Factors” and the section entitled “Cautionary Note Regarding Forward-Looking Statements and Summary of Risk Factors.”

We are a late-stage clinical specialty pharmaceutical company focused on the development and commercialization of therapeutic products that treat rare and orphan diseases for which there are currently no approved treatments or cures.

Our initial focus is on the development of products, using our proprietary owned and in-licensed drug delivery technologies, that could help address rare genetic diseases.

Our lead product, QRX003, is under clinical development as a potential treatment for Netherton Syndrome, a rare hereditary genetic disease.

QRX003 is currently being tested in three regulatory clinical studies under an open IND application with the FDA.

We have opened five clinical sites in the US and intend to open a sixth clinical site at Northwestern University.

We are expanding our trials internationally into the Middle East, the United Kingdom and additional countries in Western and Eastern Europe.

QRX003 is currently being tested in a pediatric NS patient at the Children’s Hospital in Dublin, Ireland and we intend to expand this study to include additional children with NS in Spain, the United Kingdom and potentially other countries.

QRX003 is entering pivotal registrational clinical testing under an open IND application with the FDA.

We have opened six clinical sites in the U.S.

along with international sites that are being opened in the UK, Spain, France and the Netherlands.

QRX003 is currently being tested in seven pediatric NS patients in investigator-initiated studies in Ireland, Austria, the Netherlands and New Zealand.

QRX003 is also being developed as a potential treatment for Peeling Skin Syndrome with the first subject being treated in New Zealand.

In addition, we entered into two separate Research Agreements with the Queensland University of Technology, under which we have obtained an option for global licenses to QRX007 for the potential treatment of NS and QRX008 for the potential treatment of scleroderma, as well as a Research Agreement with the University College Cork for the development of novel topical formulations of Rapamycin (sirolimus) as potential treatments for a number of rare and orphan diseases for which there are currently no approved therapies or cures.

Other development products in our pipeline include QRX004 as a potential treatment for Recessive Dystrophic Epidermolysis Bullosa.

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

We are in the process of expanding this study to include up to an additional five pediatric subjects.

We entered into a Research Agreement with QUT, under which we have obtained an option for a global license to QRX008 for the potential treatment of scleroderma, as well as a Research Agreement with UCC for the development of novel topical formulations of rapamycin (sirolimus) as potential treatments for a number of rare and orphan diseases for which there are either limited or no approved therapies or cures, including microcystic lymphatic malformations, venous malformations and angiofibromas among others.

We have also entered into 9 commercial partnerships for QRX003 spanning 61 countries outside of our core commercial territories of the U.S., Western Europe and Japan.

These partnership countries include Canada, Australia, New Zealand, the Middle East, China, Taiwan, Hong Kong Singapore, Israel, Central and Eastern Europe, Turkey as well as several countries in Latin America.

Our mission is to develop and commercialize proprietary therapeutic drug products that treat rare and orphan diseases, particularly for those diseases where no approved treatment currently exists.

To achieve this, we plan to:

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

● prepare to commercialize QRX003 by establishing our own sales infrastructure in the U.S.

and Europe and entering into distribution partnerships in other territories such as those currently established for Canada, Australia/New Zealand, the Middle East, China, Hong Kong, Taiwan, Latin America, Central and Eastern Europe, Turkey and Singapore;

● complete the late-stage clinical testing of QRX003 in NS and, if successful, file for marketing approval in the United States, Europe, Japan and the other territories for which we have commercial agreements in place;

● prepare to commercialize QRX003 by (i) establishing our own sales infrastructure in the U.S., Europe, and Japan and e(ii) work with our distribution partners to commercialize the product in Canada, Australia/New Zealand, the Middle East, China, Hong Kong, Taiwan, Latin America, Central and Eastern Europe, Turkey and Singapore;

● continue the development of QRX003 for Peeling Skin Syndrome and related rare, genetic skin diseases;

● commence clinical testing of one or more selected formulations of topical rapamycin;

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

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We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain marketing approval for one or more of our product candidates, which we expect will take a number of years and is subject to significant uncertainty.

Accordingly, we will need to raise additional capital prior to the commercialization of QRX003 or any other product candidate.

Until such time, if ever, as we can generate substantial revenue from product sales, we expect to finance our operating activities through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements.

We will need to obtain further funding through public or private offerings of our capital stock, debt financing, pursuant to the exercise of warrants issued to investors in our prior public and private offerings, collaboration, strategic and/or licensing arrangements or other sources in order to complete the research and development of our product candidates and to fund our other operating requirements.

However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all.

Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to continue our operations.

In addition, any exercise of our outstanding warrants is at the discretion of the warrant holders and is dependent, in part, upon the market price of our ADSs.

There can be no assurance that any of our outstanding warrants will ever be in-the-money prior to their expiration and, as such, our outstanding warrants may expire without being exercised.

Our failure to obtain additional funding or enter into such other arrangements as and when

needed would have a negative impact on our financial condition and our ability to continue our operations.

See “Liquidity and Capital Resources”.

Public Offerings

On February 24, 2023 (the “2023 Closing Date”), we completed an offering (the “2023 Offering”) of 412,500 ordinary shares represented by 412,500 ADSs at a purchase price of $12.00 per ADS and a pre-funded warrant (the “2023 Pre-Funded Warrant”) to purchase 170,833 ordinary shares represented by 170,833 ADSs at a per pre-funded warrant price of $11.9988, with each ADS and 2023 Pre-Funded Warrant accompanied by an ordinary warrant (the “2023 Ordinary Warrant”) for aggregate gross proceeds of $7.0 million, resulting in net proceeds of approximately $5.8 million, after deducting the placement agent’s fees and offering expenses paid by us, and excluding the proceeds, if any, from the subsequent exercise of the 2023 Ordinary Warrants.

Each 2023 Ordinary Warrant has an exercise price of $12.00 per ADS and expires on the fifth anniversary of the 2023 Closing Date.

On the 2023 Closing Date, the holder of the 2023 Pre-Funded Warrant exercised its Pre-Funded Warrant in full.

In connection with the 2023 Offering, we entered into an Amendment No.

1 to Warrant to Purchase Ordinary Shares Represented by American Depositary Shares, dated February 24, 2023 (collectively, the “2023 Warrant Amendments”), with each of the purchasers (the “2022 Purchasers”) who participated in both our August 2022 public offering (the “2022 Offering”) and the 2023 Offering.

The 2023 Warrant Amendments amended certain terms of the ordinary warrants issued to such 2022 Purchasers in the 2022 Offering.

Specifically, the 2023 Warrant Amendments reduced the exercise price of such warrants to $13.20 and extended the term during which those warrants could remain exercisable until February 24, 2028.

Recent Developments

ADS Ratio Change

Effective April 9, 2025, the ratio of ADSs evidencing our Ordinary Shares, changed from 1 ADS representing one (1) Ordinary Share to 1 ADS representing thirty-five (35) Ordinary Shares (the “Ratio Change”), which resulted in a 1-for-35 reverse split of the issued and outstanding ADSs (the “Reverse Split”).

Our Ordinary Shares were not affected by this adjustment.

Except as specifically provided, ADSs and related option, warrant, purchase price and exercise price information presented in this Annual Report, including our consolidated financial statements and the related notes, has been retroactively adjusted to reflect the Ratio Change and the Reverse Split.

Increase in Authorized Capital

On August 21, 2025, at our 2025 Annual General Meeting of Shareholders (the “2025 Annual Meeting”), our shareholders approved an amendment to our articles of association to increase our authorized Ordinary Share capital from 100,000,000 Ordinary Shares to 5,000,000,000 Ordinary Shares.

Public and Private Offerings

March 2024 Offering .

On March 7, 2024, we completed an offering (the “March 2024 Offering”) of the following securities (i) 811,250 ordinary shares represented by 23,179 ADSs, (ii) Series D warrants (the “Series D Warrants”) to purchase 4,062,500 ordinary shares represented by 116,071 ADSs, (iii) Series E warrants (the “Series E Warrants”) to purchase 4,062,500 ordinary shares represented by 116,071 ADSs, and (iv) Pre-funded warrants (the “March 2024 Pre-Funded Warrants”) to purchase 3,251,255 ordinary shares represented by 92,893 ADSs for aggregate gross proceeds of approximately $6.5 million, resulting in net proceeds of approximately $5.5 million, after deducting the placement agent’s fees and offering expenses paid by us.

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The ADSs and accompanying Series D Warrants and the Series E Warrants were sold at a combined public offering price of $56 and the March 2024 Pre-Funded Warrants and accompanying Series D Warrants and the Series E Warrants were sold at a combined public offering price of $55.9965, which is equal to the combined purchase price per ADS and accompanying Series D Warrants and the Series E Warrants, minus the exercise price of each March 2024 Pre-Funded Warrant of $0.0035.

As of December 31, 2024 all March 2024 Pre-Funded Warrants have been exercised and are included in issued and outstanding ADSs.

As of December 31, 2024, all March 2024 Pre-Funded Warrants had been exercised and were included in issued and outstanding ADSs.

The Series D Warrants and the Series E Warrants have an exercise price of $56 per share, were exercisable immediately following the closing of the March 2024 Offering and expire in two years and five years, respectively, from the closing of the March 2024 Offering.

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The incremental fair value of the modified warrants was approximately $209,000, which was accounted for as an offering expense in connection with the March 2024 Offering.

December 2024 Offering.

On December 23, 2024, we completed an offering (the “December 2024 Offering” and, together with the March 2024 Offering, the “2024 Offerings”) of the following securities (i) 3,137,778 ordinary shares represented by 89,651 ADSs, (ii) Series F warrants (the “Series F Warrants”) to purchase 15,111,110 ordinary shares represented by 431,746 ADSs, (iii) Series G warrants (the “Series G Warrants” and together with the Series F Warrants, the “December 2024 Warrants”) to purchase 15,111,110 ordinary shares represented by 431,746 ADSs, and (iv) Pre-funded warrants (the “December 2024 Pre-Funded Warrants”) to purchase 11,973,332 ordinary shares represented by 342,095 ADSs for aggregate gross proceeds of approximately $6.8 million, resulting in net proceeds of approximately $5.8 million, after deducting the placement agent’s fees and offering expenses paid by us.

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The ADSs and accompanying Series F Warrants and Series G Warrants were sold at a combined public offering price of $15.75 and the December 2024 Pre-Funded Warrants and accompanying Series F Warrants and Series G Warrants were sold at a combined public offering price of $15.7465, which is equal to the combined purchase price per ADS and accompanying Series F Warrants and Series G Warrants, minus the exercise price of each December 2024 Pre-Funded Warrant of $0.0035.

As of December 31, 2024, 760,666 December 2024 Pre-Funded Warrants, have been exercised and are included in issued and outstanding ADSs.

The December 2024 Pre-Funded Warrants were immediately exercisable upon issuance and may be exercised at any time until exercised in full.

The Series F Warrants and the Series G Warrants have an exercise price of $0.45 per share, were exercisable immediately upon issuance and expire in two years and five years, respectively, from the closing of the December 2024 Offering.

In January and February 2025, certain investors in the December 2024 Offering exercised (i) the remaining outstanding 11,212,666 December 2024 Pre-Funded Warrants, (ii) 320,000 Series F Warrants, and (iii) 105,000 Series G Warrants.

In connection with the 2024 Offerings, we entered into Securities Purchase Agreements (the “2024 Purchase Agreements”) dated March 7, 2024 and December 23, 2024, respectively, with certain institutional investors signatory thereto, pursuant to which we agreed to issue and sell to such investors, certain of the ADSs, pre-funded warrants and ordinary warrants sold in the 2024 Offerings.

Pursuant to the terms of each of the 2024 Purchase Agreements, we agreed, subject to certain exceptions, (i) to not enter into variable rate financings for a period of 180 days following the closing of such 2024 Offering, and (ii) to not enter into any equity financings for 90 days from closing of such 2024 Offering.

Certain of our officers and directors purchased an aggregate of 1,333,333 of our ADSs and accompanying December 2024 Warrants to purchase 2,666,666 of our ADSs, for a total purchase price of approximately $600,000, at the public offering price and on the same terms as the other purchasers in the December 2024 Offering.

The Series F Warrants and the Series G Warrants have an exercise price of $15.75 per share, were exercisable immediately

upon issuance and expire in two years and five years, respectively, from the closing of the December 2024 Offering.

Durin 2025, certain investors in our December 2024 Offering exercised (i) the remaining outstanding 320,362 December 2024 Pre-Funded Warrants, (ii) 199,619 Series F Warrants and 23,182 Series G Warrants, resulting in net proceeds of approximately $3.5 million.

As of December 31, 2025, all of the December 2024 Pre-Funded Warrants have been exercised and are included in issued and outstanding ADSs.

Certain of our officers and directors purchased an aggregate of 38,095 ADSs and accompanying December 2024 Warrants to purchase 76,190 ADSs, for a total purchase price of approximately $600,000, at the public offering price and on the same terms as the other purchasers in the December 2024 Offering.

On December 20, 2024, we also entered into privately negotiated agreements with the holders of certain existing outstanding warrants to purchase up to 200,071 ADSs to, among other things, reduce the exercise price of such warrants to $15.75 and to extend the expiration date of such warrants until December 23, 2029.

The incremental fair value of the modified warrants was approximately $1.5 million, which was accounted for as an offering expense in connection with the December 2024 Offering.

Alumni Equity Line and Purchase Agreement

On January 25, 2024, we entered into a Purchase Agreement (the “Alumni Purchase Agreement”) with Alumni Capital LP (“Alumni”).

Pursuant to the Alumni Purchase Agreement, we have the right to sell to Alumni up to $8,000,000 (the “Commitment Amount”) of newly issued ordinary shares that are represented by ADS (the “Purchase Notice Securities”), subject to certain conditions and limitations, from time to time during the term of the Alumni Purchase Agreement.

We do not have the right to commence any sales of ordinary shares represented by ADSs to Alumni under the Alumni Purchase Agreement until the date, which we refer to as the Commencement Date, that all of the conditions set forth in the Alumni Purchase Agreement have been satisfied, including that the registration statement we agreed to file with the SEC pursuant to the Alumni Purchase Agreement is declared effective by the SEC, and our shareholders have approved of the issuance of ADSs under the Alumni Purchase Agreement, which approval was obtained on April 5, 2024.

From and after the Commencement Date, we may, from time to time and at our sole discretion for a period of three months, which we at our sole discretion may increase by an additional three months (such period, including any extension, the “Commitment Period”), on any business day that we select, direct Alumni to purchase ordinary shares represented by ADSs.

The purchase price for the ordinary shares represented by ADSs we may sell to Alumni will be based upon formulas set forth in the Alumni Purchase Agreement based on the then current market price of the ADSs as computed under the Alumni Purchase Agreement and will depend on the type of purchase notice we submit to Alumni from time to time.

There is no upper limit on the price per share that Alumni could be obligated to pay for the ADSs under the Alumni Purchase Agreement;

provided, however at no time can the purchase price be below a floor price of $1.00

per share (subject to adjustment).

We agreed to issue purchase notices for an aggregate of at least $4,000,000 of the Commitment Amount prior to the end of the Commitment Period.

As consideration for Alumni’s irrevocable commitment to purchase ADSs under the Alumni Purchase Agreement, we agreed to issue to Alumni, at the times set forth in the Alumni Purchase Agreement beginning with the trading day after the Commencement Date, a number of ADSs with a value at the time of issuance not to exceed $240,000 in the aggregate (the “Commitment Securities”).

The ADSs to be issued will be valued at the average of the closing prices of the ADSs on Nasdaq for the five trading days immediately prior to the date such ADSs are issued.

We may pay cash in lieu of issuing all or any portion of the Commitment Securities.

Per mutual agreement between the parties, we have not filed the required registration statement or sold any ADSs to Alumni under the Alumni Purchase Agreement.

The Company is restricted from selling ADSs under the Alumni Purchase Agreement for 180 days from the closing of the December 2024 Offering, see above.

Nasdaq Listing

On April 29, 2024, we received a letter from the Listing Qualifications Department of Nasdaq (notifying us that the closing bid price per ADS of the Company was below the required minimum of $1.00 for a period of 31 consecutive business days and that we did not meet the minimum bid price requirements set forth in Nasdaq Rule 5550(a)(2).

Pursuant to Nasdaq Rule 5810(c)(3)(A), we had a period of one hundred eighty (180) calendar days, or until October 28, 2024, to regain compliance with Nasdaq’s minimum bid price requirement.

On October 16, 2024, the Company submitted a letter to Nasdaq requesting an additional 180-day grace period to regain compliance with the minimum bid price requirement.

On October 29, 2024, the Company received a letter from the Listing Qualifications Department of Nasdaq granting the Company an additional 180 calendar day grace period, or until April 28, 2025, to regain compliance.

The Staff’s determination in granting the Company the extension was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market with the exception of the minimum bid price requirement, and the Company’s written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse split, if necessary.

Accordingly, there is no immediate effect on the listing or trading of the Company’s ADSs on the Nasdaq Capital Market under the symbol “QNRX.”

Compliance may be achieved without further action if the closing bid price of the Company’s ADS is at or above $1.00 for a minimum of ten consecutive business days at any time during the second compliance period, in which case Nasdaq will notify the Company if it determines the Company is in compliance and the matter will be closed;

however Nasdaq could require the closing bid price to equal or to exceed the $1.00 minimum bid price requirement for more than 10 consecutive business days before determining that the Company complies.

If compliance cannot be demonstrated by April 28, 2025, the Staff will provide written notification that the Company’s securities will be delisted.

At that time, the Company may appeal the Staff’s determination to a Hearings Panel.

If the Company appeals it will be asked to provide a plan to regain compliance to the Panel.

Historically, Panels have generally viewed a near-term reverse split as the only definitive plan acceptable to resolve a minimum bid price deficiency.

The Company intends to actively monitor the bid price of its ADSs and will consider available options to regain compliance with Nasdaq’s listing requirements.

October 2025 Private Placement .

On October 10, 2025, we entered into the October 2025 Purchase Agreement with several institutional and accredited investors relating to the issuance and sale in a private placement transaction (the “October 2025 Private Placement”) of (i) 530,320 ordinary shares represented by 15,152 ADSs and (ii) Pre-funded warrants to purchase 69,787,865 ordinary shares represented by 1,993,939 ADSs (the “ October 2025 Pre-Funded Warrants”), together with (A) Series H Warrants to purchase 70,318,185 ordinary shares represented by up to 2,009,091 ADSs (“Series H Warrants”), (B) Series I Warrants to purchase 70,318,185 ordinary shares represented by up to 2,009,091 ADSs (“Series I Warrants”), (C) Series J Warrants to purchase 70,318,185 ordinary shares represented by up to 2,009,091 ADSs (“Series J Warrants”), and (D) Series K Warrants to purchase 70,318,185 ordinary shares represented by up to 2,009,091 ADSs (“Series K Warrants” and, together with the Series H Warrants, Series I Warrants, and Series J Warrants, the “October 2025 Ordinary Warrants”).

The combined purchase price was $8.25 per each ADS and accompanying October 2025 Ordinary Warrants and $8.2499 per each October 2025 Pre-Funded Warrant and accompanying October 2025 Ordinary Warrants, which pricing was designed to be in accordance with the “Minimum Price” requirement as defined in the Nasdaq rules.

The October 2025 Private Placement closed on October 14, 2025 (the “October 2025 Closing Date”).

We received upfront net proceeds of approximately $15 million from the October 2025 Private Placement, after deducting estimated offering expenses payable by us, including placement agent fees and expenses.

We intend to use the upfront net proceeds from the October 2025 Private Placement for general corporate purposes, which may include operating expenses, research and development, including completion of clinical development of QRX003 for Netherton Syndrome, working capital, future acquisitions and general capital expenditures.

We may also receive up to an aggregate of $88 million of additional gross proceeds if the October 2025 Ordinary Warrants are exercised in full for cash.

As of December 31, 2025, 684,348 of the October 2025 Pre-funded Warrants have been exercised and are included in issued and outstanding ADSs and all of the October 2025 Ordinary Warrants were outstanding.

Dennis Langer, one of our directors, participated in the October 2025 Private Placement.

Langer purchased 530,320 ordinary shares represented by 15,152 ADSs and accompanying October 2025 Ordinary Warrants for a total purchase price of approximately $128,641, at a combined purchase price of $8.49 per ADS and accompanying October 2025 Ordinary Warrants.

In accordance with Nasdaq Rules, Mr.

Langer’s purchase price was based upon the consolidated closing bid price from the trading day immediately preceding the date we entered into the October 2025 Purchase Agreement, plus $0.50.

Description of October 2025 Pre-Funded Warrants and October 2025 Ordinary Warrants

Beneficial ownership limitation .

A holder of the October 2025 Pre-Funded Warrants or October 2025 Ordinary Warrants may not exercise any portion of such holder’s October 2025 Pre-Funded Warrants or October 2025 Ordinary Warrants for ADSs to the extent that the holder, together with its affiliates, would beneficially own more than 4.99% of the number of ordinary shares outstanding immediately after giving effect to the issuance of the ordinary shares represented by the ADSs issuable upon exercise of the applicable warrant.

October 2025 Pre-Funded Warrants .

The October 2025 Pre-Funded Warrants have an exercise price of $0.0001 per ADS.

The October 2025 Pre-Funded Warrants are exercisable at any time after their original issuance, subject to the beneficial ownership limitation (as described above) and will not expire until exercised in full.

In addition, the October 2025 Pre-Funded Warrants may be exercised, in whole or in part, any time after issuance by means of a cashless exercise.

October 2025 Ordinary Warrants .

The October 2025 Ordinary Warrants are exercisable at any time after their original issuance, subject to the beneficial ownership limitation (as described above).

The Series H Warrants have an exercise price of $9.075 per ADS and, pursuant to the terms of the Series H Warrants, such warrants may be exercised until the earlier of (i) five (5) years from the October

2025 Closing Date or (ii) 30 days after the public announcement that we have received Type C meeting minutes from the FDA indicating openness to baseline-controlled pivotal studies for QRX003 for the treatment of Netherton Syndrome.

As a result of the March Type C Meeting Minutes, the Company has determined that the Series H Warrants will remain exercisable until five (5) years from the October 2025 Closing Date.

The Series I Warrants have an exercise price of $10.3125 per ADS and, pursuant to the terms of the Series I Warrants, such warrants may be exercised as follows:

(i) 50% of the Series I Warrants may be exercised until the earlier of (A) five (5) years from the October 2025 Closing Date or (B) 30 days after the public announcement that the primary endpoint has been met in the monotherapy pivotal trial of QRX003 for the treatment of Netherton Syndrome, and (ii) 50% of the Series I Warrants may be exercised until the earlier of (A) five (5) years from the October 2025 Closing Date or (B) 30 days after the public announcement that the primary endpoint has been met in the adjuvant pivotal trial of QRX003 for the treatment of Netherton Syndrome.

The Series J Warrants have an exercise price of $12.375 per ADS and, pursuant to the terms of the Series J Warrants, such warrants may be exercised until the earlier of (i) five (5) years from the October 2025 Closing Date or (ii) 30 days after the public announcement of the receipt of either accelerated or traditional approval by the FDA of QRX003 for the treatment of Netherton Syndrome.

The Series K Warrants have an exercise price of $12.375 per ADS and, pursuant to the terms of the Series K Warrants, such warrants may be exercised until the earlier of (i) five (5) years from the October 2025 Closing Date or (ii) 30 days after the public announcement of the sale of a Priority Review Voucher (PRV).

Series H Warrants Exercise

On January 8, 2026, the Company received $0.2 million from the exercise of 25,000 Series H warrants issued in the October 2025 Private Placement.

Components of Our Results of Operations

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Research and development costs are expensed as incurred.

Research and development expenses include personnel costs associated with research and development activities, including third-party contractors to perform research, conduct clinical trials and manufacture

drug supplies and materials.

We utilize outside consultants and third parties to conduct the majority of our research and development, under the supervision of our management team.

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● costs for sponsored research;

● costs for commercial launch preparation should one of our products receive regulatory approval.

Research and development activities will continue to be central to our business plan.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

We expect our research and development expenses to be significant over the next several years as personnel and compensation costs increase and we conduct late-stage clinical studies and prepare to seek regulatory approval for QRX003 and any other future product candidate.

We expect our research and development expenses to be significant over the next several

years as personnel and compensation costs increase and we conduct late-stage clinical studies and prepare to seek regulatory approval for QRX003 and any other future product candidate.

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

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● the number of sites included in the trials;

● the countries in which the trial is conducted;

● the countries in which the trials are conducted;

● the length of time required to enroll eligible patients;

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Other (income) and expenses

Unrealized gain (loss)

Unrealized gain

Realized and accrued interest income

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General and Administrative Expenses

General and administrative expenses were approximately $5,926,000 and $6,071,000, in the year ended December 31, 2024 and 2023, respectively, representing a decrease of $145,000, or 2.4%.

The decrease was primarily due to a decrease in travel allocated to general and administrative expenses of $168,000, a decrease in insurance of $124,000, offset with an increase in payroll and benefits of $105,000, an increase in legal fees and other public company expenses of $49,000, and an increase in non-cash stock-based compensation expense of $24,000.

General and administrative expenses were approximately $6,488,000 and $5,926,000, in the year ended December 31, 2025 and 2024, respectively, representing an increase of $562,000, or 9.5%.

The increase was primarily due to an increase in public company expenses of $215,000;

legal fees of $117,000;

marketing expenses of $114,000;

consulting expenses of $105,000 and other (primarily corporate taxes) of $163,000;

and increase in payroll and benefits of $63,000 offset by decreases in board cash fees expense of $142,000 and lower insurance costs by $77,000.

Research and Development Expenses

Our research and development expenses during the year ended December 31, 2024 and 2023 were approximately $3,603,000 and $3,308,000, respectively, representing an increase of $295,000, or approximately 8.9%.

Our research and development (R&D) expenses during the years ended December 31, 2025 and 2024 were approximately $9,803,000 and $3,603,000, respectively, representing an increase of $6,200,000, or approximately 172%.

The increase was primarily due to an increase of $6,094,000 worth of expenditures on our development programs, including work related to the clinical studies for the development of QRX003, manufacturing costs for material used in our clinical studies an increased allocation of internal compensation and travel costs to our research and development programs.

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We amortize licensed or acquired intellectual property over its expected useful life, included in research and development expenses set out above.

The license from Skinvisible was obtained in October 2019, see “Research and Development, Patents and Licenses.” Amortization of intangible assets was approximately $100,000 and $104,000 in each of the years ended December 31, 2024 and 2023.

As of December 31, 2023 we determined that the Polytherapeutics asset was no longer of use and reduced the carrying value to zero, incurring an impairment charge of approximately $18,000.

The license from Skinvisible was obtained in October 2019, see “Research and Development Commitments” below.

Amortization of intangible assets was approximately $100,000 and $100,000 in each of the years ended December 31, 2025 and 2024.

Other Expenses:

Interest and financing expense

We earned approximately $558,000 in interest income and approximately $7,500 in unrealized gain, and earned approximately $695,000 in interest income and incurred approximately $3,000 in unrealized loss, in the year ended December 31, 2024 and December 31 2023, respectively, from our cash and cash equivalents and investments in marketable debt securities.

We earned approximately $482,000 in interest income and approximately $4,000 in unrealized gain and earned approximately $558,000 in interest income and approximately $7,500 in unrealized gain, in the year ended December 31, 2025 and December 31, 2024, respectively, from our cash and cash equivalents and investments in marketable debt securities.

The decrease in interest income in the year ending December 31, 2025 is the result of lower average aggregate cash and investment balances and a decrease in interest rates.

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We have incurred net losses every year since inception.

We believe that we have sufficient resources to effect our business plan for at least one year from the issuance of the consolidated financial statements included in this report;

however, the Company is subject to risks common to development stage biopharmaceutical companies including, but not limited to, unanticipated clinical trial costs and the ability to estimate such occurrences, if any, on the Company’s cash, liquidity, additional financing requirements, and availability.

Accordingly, we may need to raise additional funds sooner than planned.

Additional financing will be required to complete the research and development of our therapeutic targets and our other operating requirements, which may not be available at acceptable terms, if at all.

If we are unable to obtain additional funding when it becomes necessary, the development of our product candidates will be impacted and we would likely be forced to delay, reduce, or terminate some or all of our development programs, all of which could have a material adverse effect on our business, results of operations and financial condition.

We have a limited operating history and have historically funded our operations through our founders’ funding expenditures and debt and equity financings.

At December 31, 2025, the Company had cash balances totaling $3.8 million and investments of $14.9 million.

Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of planned clinical trials and our expenditures on other research and development activities.

Based upon our current business plans and cash, cash equivalents and investments on hand, we have concluded that there is substantial doubt

about our ability to continue as a going concern for a period of at least one year from the issuance of the audited consolidated financial statements included in this report.

In order to address our capital needs, we intend to consider multiple alternatives, including, but not limited to, the sale of additional equity or debt securities or other debt instruments, collaborative, strategic and/or licensing relationships or grants to support our future operations.

However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all.

In addition, any exercise of our outstanding warrants is at the discretion of the warrant holders and is dependent, in part, upon the market price of our ADSs.

There can be no assurance that any of our outstanding warrants will ever be in-the-money prior to their expiration and, as such, our outstanding warrants may expire without being exercised.

If we are unable to improve our liquidity position, we may not be able to continue as a going concern.

We continue to seek sources of financing to fund our continued operations and research and development programs.

To raise additional capital, we may sell additional equity or debt securities, or enter into collaborative, strategic, and/or licensing transactions.

There can be no assurance that we will be able to complete any financing transaction in a timely manner or on acceptable terms or otherwise enter into a collaborative or strategic transaction.

If we are unable to obtain additional funding when it becomes necessary, the development of our product candidates will be impacted and we would likely be forced to delay, reduce, or terminate some or all of our development programs or cease operations altogether, all of which could have a material adverse effect on our business, results of operations and financial condition.

Future Funding Requirements

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

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

We will need to obtain further funding through public or private offerings of our capital stock, debt financing, pursuant to the exercise of warrants issued to investors in our prior public and private offerings, collaboration, strategic and/or licensing arrangements or other sources, the requirements for which will depend on many factors, including:

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

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

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● our implementation of operational, financial and management systems;

● the market price of our ADSs;

● the costs associated with being a public company.

Adequate additional funding may not be available to us on acceptable terms, or at all.

In addition, restrictions under the October 2025 Purchase Agreement may limit our ability to raise capital.

See “Risk Factors ─The terms of our October 2025 private placement may make it difficult for us to procure additional financing” for more information.

If we are unable to raise capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of QRX003, any future product candidate, or potentially discontinue operations.

To the extent that we raise additional capital through the sale of our equity or convertible debt securities, and pursuant to the exercise of the warrants issued to our investors in the 2022 Offering, the 2023 Offering and the 2024 Offerings, the ownership interest of our equity holders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our equity holders.

To the extent that we raise additional capital through the sale of our equity or convertible debt securities, and pursuant to the exercise of the warrants issued to the investors in our prior public and private offerings, the ownership interest of our equity holders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our equity holders.

Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or proposed products, or to grant licenses on terms that may not be favorable to us.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts or grant rights to develop and market any future product that we would otherwise prefer to develop and market ourselves.

If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts or grant rights to develop and market any future product that we would otherwise prefer to develop and market ourselves.

Summary Statement of Cash Flows – Year ended December 31, 2025 compared to Year ended December 31, 2024

As of December 31, 2025, we had approximately $18,745,000 in cash and investments in marketable securities.

The table below presents our cash flows for the year ended December 31, 2024 and 2023:

The table below presents our cash flows for the years ended December 31, 2025 and 2024:

Year ended December 31,

Net cash used in operating activities

Net cash provided (used) in investing activities

Net cash used in investing activities

Net cash provided by financing activities

Effect of foreign exchange rate on changes on cash

Net change in cash and cash equivalents

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Net cash used in operating activities was approximately $13,541,000 and $7,857,000 for the year ended December 31, 2025 and 2024, respectively.

The decrease for the year ended December 31, 2024 was primarily due to an increase in non-cash based stock compensation and an increase in accounts payable and accrued expenses, offset by an increase in operating expense and an increase in prepaid expenses and other assets.

The increase for the year ended December 31, 2025 was primarily due to a higher net operating loss driven by higher R&D expenditures offset by an increase in accounts payable and accrued expenses.

Investing Activities

Net cash used in investing activities in the year ended December 31, 2024 was approximately $1,888,000 and net cash provided by investing activities in the year ended December 31, 2023 was approximately $2,188,000 in each period consisting of net proceeds from maturity and purchases of short maturity US Treasury Bills and Notes.

Net cash used in investing activities was approximately $4,278,000 and $1,888,000 in the year ended December 31, 2025 and 2024, respectively, with the change in each period consisting of net proceeds from maturity and purchases of short maturity US Treasury Bills and Notes.

Financing Activities

Net cash provided by financing activities was approximately $10,968,000 for the year ended December 31, 2024, consisting of approximately $11,568,000 in net proceeds from the March 2024 and December 2024 Offerings, partially offset by repayments of amounts due to officers of $600,000.

Net cash provided by financing activities was approximately $5,217,000 for the year ended December 31, 2023, consisting of approximately $5,849,000 in net proceeds from the 2023 Offering partially offset by repayments of amounts due to officers of $600,000, and $33,000 in deferred financing costs.

Net cash provided by financing activities was approximately $18,014,000 for the year ended December 31, 2025, consisting of approximately $18,614,000 in net proceeds from the October 2025 Private Placement and warrant exercises, partially offset by repayments of amounts due to officers of $600,000.

Net cash provided by financing activities was approximately $10,968,000 for the year ended December 31, 2024, consisting of approximately $11,568,000 in net proceeds from the 2024 Offerings, partially offset by repayments of amounts due to officers of $600,000.

Research and Development Commitments

In October 2019, Quoin Inc.

entered into the Exclusive Licensing Agreement (as amended from time to time, the “License Agreement”) with Skinvisible Pharmaceuticals, Inc.

(“Skinvisible”), under which Skinvisible granted us an exclusive royalty-bearing license relating to the production and manufacture of prescription drug products related to certain patents held by Skinvisible, including those related to QRX003 and QRX004.

entered into the Licensing Agreement with Skinvisible, under which Skinvisible granted us an exclusive royalty-bearing license relating to the production and manufacture of prescription drug products related to certain patents held by Skinvisible, including those related to QRX003 and QRX004.

We made Skinvisible a one-time non-refundable, non-creditable license fee of $1 million (the “License Fee”).

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entered into a Master Service Agreement with Therapeutics Inc.

for the management of the preclinical and clinical development of QRX003 for Netherton Syndrome.

for the management of the pre-clinical and clinical development of QRX003 for Netherton Syndrome.

The initial term of the agreement was three years with automatic one-year extensions, and the agreement required the execution of individual work orders.

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In the years ended December 31, 2025 and 2024, we incurred research and development costs under these agreements of approximately $2.1 million and $1.1 million, respectively.

During the year ended December 31, 2024, the Company received a credit of approximately $83,000 applied to prior expenses incurred during the period of January 2024 to March 2024.

During the year ended December 31, 2023, the Company received a credit of approximately $278,000 applied to prior expenses incurred during the period of March 2023 to July 2023.

In November 2021, we entered into a research agreement with Queensland University of Technology (QUT) for a pre-clinical research program for the development of a product to treat Netherton Syndrome of approximately $250,000.

During the year ended December 31, 2024, we received a credit of approximately $83,000 applied to prior expenses incurred during the period of January 2024 to March 2024.

In November 2021, we entered into a research agreement with QUT for a pre-clinical research program for the development of a product to treat Netherton Syndrome of approximately $250,000.

In May 2022, we entered into a second research agreement with QUT for the development of a product to treat Scleroderma of approximately $610,000.

Each agreement remains in place until the completion of the research program, which in each case was initially anticipated to be 18 months from execution.

For the years December 31, 2024 and 2023, we incurred research and development costs related to these agreements of approximately $0 and $361,000 respectively.

Quoin is planning to schedule a meeting with QUT to discuss the future direction of both research programs.

On June 10, 2024, we entered into a research agreement with The School of Pharmacy at UCC.

The scope of the agreement encompasses the development of novel topical formulations of Rapamycin (sirolimus) as potential treatments for a number of rare and orphan diseases for which there are currently no approved therapies or cures.

For the years ended December 30, 2025 and 2024, we did not incur any costs related to these agreements.

In July 2025 we announced that, in light of the expected near-term completion of the QRX003 clinical program for Netherton Syndrome, we have discontinued Netherton Syndrome research program with QUT.

We are planning to schedule a meeting with QUT to discuss the future direction of the Scleroderma research program.

In June 2024, we entered into a research agreement with The School of Pharmacy at UCC.

Under the terms of the agreement, based on the achievement of certain milestones, we will fund up to approximately €567,000 ($664,000) plus VAT over an anticipated 2-1/2 year period to support the UCC research program to investigate the development of a number of topical rapamycin formulations for future development as potential treatments for several rare and orphan diseases.

Following completion of the research program, we will have the option to advance the clinical development of rapamycin formulations developed by UCC.

Work on this research project commenced in December 2024 and we accrued $10,000 in research and development costs for the year ended December 31, 2024.

Work on this research project commenced in December 2024.

For the years ended December 31, 2025 and December 31, 2024, we incurred a research and development expense under these agreements of approximately $0.3 million and de-minimis respectively.

On November 11, 2025 we announced that the target loading concentrations for two topical rapamycin delivery technologies have been successfully achieved.

Specifically, a rapamycin loading concentration of 4% w/w has been achieved for our proprietary topical formulation while an even higher rapamycin concentration of 5% w/w has been formulated in a proprietary dermal patch system.

Critical Accounting Estimates

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These estimates include the level of services performed by third parties, patient enrollment in clinical trials when applicable, administrative costs incurred by third parties, and other indicators of the services completed.

Based on the timing of amounts invoiced by service providers, we may also record payments made to those providers as prepaid expenses that will be recognized as expense in future periods as the related services are rendered.

Based on the timing of amounts invoiced by service providers, we may also record payments made to those providers as prepaid expenses that will be recognized as expenses in future periods as the related services are rendered.

Stock based compensation

We recognize compensation costs resulting from the issuance of stock-based awards to employees, non-employees and directors as an expense in the consolidated statements of operations over the requisite service period based on a measurement of fair value for each stock-based award.

The fair value of each option grant is estimated as of the date of grant using the Black-Scholes option-pricing model, net of actual forfeitures.

The fair value of each option grant is estimated as of the date of grant using the Black-Scholes option-pricing model.

We account for forfeitures as they occur.

The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period.

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Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award.

The expected dividend yield was assumed to be zero as we have not paid dividends since our inception and we do not anticipate paying dividends in the foreseeable future.

The expected dividend yield was assumed to be zero as we have not paid dividends since our inception and do not anticipate paying dividends in the foreseeable future.

Long-lived assets

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During the year ended December 31, 2025 there was no impairment indicator which required an impairment loss measurement.

During the year ended December 31, 2023, there was one impairment indicator which required an impairment loss measurement (see Note 10 to the Consolidated Financial Statements included in this Annual Report).

During the year ended December 31, 2024, there was no impairment indicator which required an impairment loss measurement.

Quantitative and Qualitative Disclosures About Market Risk

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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 7. Management’s Discussion and Analysis