Quoin Pharmaceuticals, Ltd. 10-Q

Item 1. Financial Statements. QUOIN PHARMACEUTICALS LTD. Condensed Consolidated Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ 2023 2022 ​ (Unaudited) ​ ASSETS ​ ​ ​ ​ ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 3,163,426 ​ $ 2,860,628 Investments ​ ​ 10,818,051 ​ ​ 9,992,900 Prepaid expenses ​ 159,851 ​ 516,584 Total current assets ​ 14,141,328 ​ 13,370,112 ​ ​ ​ ​ ​ ​ ​ Prepaid expenses - long term ​ ​ 300,000 ​ ​ 383,390 Intangible assets, net ​ 626,529 ​ 704,561 Total assets ​ $ 15,067,857 ​ $ 14,458,063 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 239,978 ​ $ 605,600 Accrued expenses ​ 2,594,199 ​ 1,175,705 Accrued interest and financing expense ​ 1,146,251 ​ 1,146,251 Due to officers – short term ​ 600,000 ​ 600,000 Total current liabilities ​ 4,580,428 ​ 3,527,556 ​ ​ ​ ​ ​ ​ ​ Due to officers – long term ​ ​ 3,073,733 ​ ​ 3,523,733 Total liabilities ​ $ 7,654,161 ​ $ 7,051,289 ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies ​ ​ ​ ​ ​ ​ ​ ​ ​ Shareholders’ equity: ​ ​ Ordinary shares, no par value per share, 8,333,334 ordinary shares authorized - 987,220 ( 987,220 ADS’s) ordinary shares issued and outstanding at September 30, 2023 and 403,887 ( 403,887 ADS ’s) at December 31, 2022 ​ $ — ​ $ — Treasury stock, 45 ordinary shares ​ ( 2,932,000 ) ​ ( 2,932,000 ) Additional paid in capital ​ 54,499,138 ​ 47,855,521 Accumulated deficit ​ ( 44,153,442 ) ​ ( 37,516,747 ) Total shareholders’ equity ​ 7,413,696 ​ 7,406,774 ​ ​ ​ ​ ​ ​ ​ Total liabilities and shareholders’ equity ​ $ 15,067,857 ​ $ 14,458,063 ​ The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements ​ 2 Table of Contents QUOIN PHARMACEUTICALS LTD. Condensed Consolidated Statements of Operations (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended September 30, Three months ended September 30, ​ 2023 2022 2023 2022 Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ General and administrative ​ $ 4,685,241 ​ $ 5,112,002 ​ $ 1,366,464 ​ $ 1,582,059 Research and development ​ 2,475,596 ​ 2,059,769 ​ 758,759 ​ ​ 745,506 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses ​ 7,160,837 ​ 7,171,771 ​ 2,125,223 ​ ​ 2,327,565 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other (income) and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Forgiveness of accounts payable ​ — ​ ( 416,000 ) ​ — ​ — Warrant liability (income) expense ​ ​ — ​ ​ ( 77,237 ) ​ ​ — ​ ​ — Unrealized loss (gain) ​ ​ 11,926 ​ ​ 3,053 ​ ​ ( 2,119 ) ​ ​ 3,053 Interest income ​ ( 536,068 ) ​ ( 15,132 ) ​ ( 196,425 ) ​ ( 15,132 ) Interest and financing expense ​ ​ — ​ ​ 714,081 ​ ​ — ​ ​ 714,081 Total other (income) expense ​ ( 524,142 ) ​ 208,765 ​ ( 198,544 ) ​ 702,002 Net loss ​ $ ( 6,636,695 ) ​ $ ( 7,380,536 ) ​ $ ( 1,926,679 ) ​ $ ( 3,029,567 ) Deemed dividend on warrant modification ​ ​ — ​ ​ ( 65,266 ) ​ ​ — ​ ​ ( 65,266 ) Net loss attributable to shareholders ​ $ ( 6,636,695 ) ​ $ ( 7,445,802 ) ​ $ ( 1,926,679 ) ​ $ ( 3,094,833 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss per ADS ​ ​ ​ ​ ​ Loss per ADS ​ ​ ​ ​ Basic ​ $ ( 7.61 ) ​ $ ( 55.79 ) ​ $ ( 1.95 ) ​ $ ( 11.28 ) Fully-diluted ​ $ ( 7.61 ) ​ $ ( 55.79 ) ​ $ ( 1.95 ) ​ $ ( 11.28 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of ADS’s outstanding ​ ​ ​ ​ Basic ​ 871,835 ​ 133,450 ​ 987,220 ​ 274,317 Fully-diluted ​ 871,835 ​ 133,450 ​ 987,220 ​ 274,317 ​ The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements ​ 3 Table of Contents QUOIN PHARMACEUTICALS LTD. Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) Three and Nine months ended September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ No ​ ​ Additional ​ ​ ​ ​ ​ ​ Ordinary ​ ​ ​ Par ​ Treasury ​ Paid in ​ Accumulated ​ ​ ​ ​ Shares ADS’s Value Stock Capital Deficit Total Balance at January 1, 2022 55,913 55,913 — ​ $ ( 2,932,000 ) ​ $ 31,659,017 ​ $ ( 28,069,985 ) ​ $ 657,032 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss — — — ​ — ​ — ​ ( 1,682,802 ) ​ ( 1,682,802 ) Cashless exercise of warrants ​ 1 ​ 1 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Reclassification of warrant liability upon issuance of Exchange warrant ​ — ​ — ​ — ​ ​ — ​ ​ 296,362 ​ ​ — ​ ​ 296,362 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 31, 2022 ​ 55,914 ​ 55,914 ​ — ​ $ ( 2,932,000 ) ​ $ 31,955,379 ​ $ ( 29,752,787 ) ​ $ ( 729,408 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 2,668,167 ) ​ ​ ( 2,668,167 ) Stock based compensation ​ — ​ — ​ — ​ ​ — ​ ​ 229,441 ​ ​ — ​ ​ 229,441 Cashless exercise of warrants ​ 28,508 ​ 28,508 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at June 30, 2022 ​ 84,422 ​ 84,422 ​ — ​ $ ( 2,932,000 ) ​ $ 32,184,820 ​ $ ( 32,420,954 ) ​ $ ( 3,168,134 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 3,029,567 ) ​ ​ ( 3,029,567 ) Stock based compensation ​ — ​ — ​ — ​ ​ — ​ ​ 267,283 ​ ​ — ​ ​ 267,283 Issuance of ADS and Pre-Funded Warrants, net ​ 280,000 ​ 280,000 ​ — ​ ​ — ​ ​ 14,904,569 ​ ​ — ​ ​ 14,904,569 Cashless exercise of warrants ​ 35,783 ​ 35,783 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Settlement of accrued expenses ​ 3,682 ​ 3,682 ​ — ​ ​ — ​ ​ 193,537 ​ ​ — ​ ​ 193,537 Deemed dividend on warrant modifcation ​ — ​ — ​ — ​ ​ — ​ ​ 65,266 ​ ​ ( 65,266 ) ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at September 30, 2022 ​ 403,887 ​ 403,887 ​ — ​ $ ( 2,932,000 ) ​ $ 47,615,475 ​ $ ( 35,515,787 ) ​ $ 9,167,688 ​ Three and Nine months ended September 30, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ No ​ ​ Additional ​ ​ ​ ​ ​ Ordinary ​ ​ ​ Par ​ Treasury ​ Paid in ​ Accumulated ​ ​ ​ ​ Shares ADS’s Value Stock Capital Deficit Total Balance at January 1, 2023 ​ 403,887 ​ 403,887 ​ — ​ $ ( 2,932,000 ) ​ $ 47,855,521 ​ $ ( 37,516,747 ) ​ $ 7,406,774 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 2,603,069 ) ​ ​ ( 2,603,069 ) Issuance of ADS and Pre-Funded Warrants, net 583,333 583,333 — ​ — ​ 5,849,266 ​ — ​ 5,849,266 Stock based compensation — — — ​ — ​ 261,472 ​ — ​ 261,472 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 31, 2023 987,220 987,220 — ​ $ ( 2,932,000 ) ​ $ 53,966,259 ​ $ ( 40,119,816 ) ​ $ 10,914,443 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss — — — ​ — ​ — ​ ( 2,106,947 ) ​ ( 2,106,947 ) Stock based compensation — ​ — ​ — ​ — ​ 264,376 ​ — ​ 264,376 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at June 30, 2023 987,220 987,220 — ​ $ ( 2,932,000 ) ​ $ 54,230,635 ​ $ ( 42,226,763 ) ​ $ 9,071,872 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ — — — ​ — ​ ​ — ​ ​ ( 1,926,679 ) ​ ​ ( 1,926,679 ) Stock based compensation ​ — — — ​ — ​ ​ 268,503 ​ ​ — ​ ​ 268,503 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at September 30, 2023 987,220 987,220 — ​ $ ( 2,932,000 ) ​ $ 54,499,138 ​ $ ( 44,153,442 ) ​ $ 7,413,696 ​ The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements 4 Table of Contents QUOIN PHARMACEUTICALS LTD. Condensed Consolidated Statements of Cash Flows (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ 2023 2022 Cash flows used in operating activities: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 6,636,695 ) ​ $ ( 7,380,536 ) Change in fair value of warrant liability ​ — ​ ( 77,237 ) Stock based compensation ​ 794,351 ​ 496,724 Forgiveness of trade payable ​ — ​ ( 416,000 ) Amortization of intangibles ​ 78,032 ​ 78,032 Increase in accrued interest and financing expense ​ ​ — ​ ​ 402,411 Unrealized gain and accrued interest on investments ​ ​ ( 369,467 ) ​ ​ ( 12,079 ) Changes in assets and liabilities: ​ ​ ​ ​ Increase in accounts payable and accrued expenses ​ 1,052,872 ​ ( 148,493 ) Decrease in prepaid expenses & other assets ​ 440,123 ​ 518,788 Net cash used in operating activities ​ $ ( 4,640,784 ) ​ $ ( 6,538,390 ) ​ ​ ​ ​ ​ ​ ​ Cash flows used in investing activities: ​ ​ Purchase of investments ​ $ ( 18,090,684 ) ​ $ ( 9,899,121 ) Proceeds from maturity of investments ​ ​ 17,635,000 ​ ​ — Payment for license acquisition ​ — ​ ( 250,000 ) Net cash used in investing activities ​ $ ( 455,684 ) ​ $ ( 10,149,121 ) ​ ​ ​ ​ ​ ​ ​ Cash flows provided by financing activities: ​ ​ Payment of amounts due to officers ​ $ ( 450,000 ) ​ $ ( 449,999 ) Proceeds from sale of equity securities, net ​ ​ 5,849,266 ​ ​ 14,904,569 Net cash provided by financing activities ​ $ 5,399,266 ​ $ 14,454,570 ​ ​ ​ ​ ​ ​ ​ Net change in cash and cash equivalents: ​ 302,798 ​ ( 2,232,941 ) Cash and cash equivalents - beginning of period ​ 2,860,628 ​ 7,482,773 Cash and cash equivalents - end of period ​ $ 3,163,426 ​ $ 5,249,832 ​ ​ ​ ​ ​ ​ ​ Supplemental information - Non cash items: ​ ​ Reclassification of warrant liability to equity upon issuance of “Exchange warrants” ​ $ — ​ $ 296,362 Deemed dividend on warrant modification ​ $ — ​ $ 65,266 Offering expenses associated with warrant modification ​ $ 238,231 ​ $ 491,601 Settlement of accrued expenses ​ $ — ​ $ 193,537 ​ The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements ​ ​ 5 Table of Contents QUOIN PHARMACEUTICALS LTD. ​ Notes to Consolidated Financial Statements September 30, 2023 and 2022 ​ NOTE 1 – ORGANIZATION AND BUSINESS Quoin Pharmaceuticals Ltd. (“Quoin Ltd.,” or the “Company”), formerly known as Cellect Biotechnology Ltd. (“Cellect”), is the holding company for Quoin Pharmaceuticals, Inc., a Delaware corporation (“Quoin Inc.”). Quoin Inc. was incorporated in Delaware on March 5, 2018. On October 28, 2021, Cellect completed the business combination with Quoin Inc., with Quoin Inc. surviving as a wholly-owned subsidiary of Cellect (the “Merger”). Immediately after completion of the Merger, Cellect changed its name to “Quoin Pharmaceuticals Ltd.” Effective July 18, 2023, the ratio of American Depositary Shares (“ADSs”) evidencing ordinary shares changed from 1 ADS representing five thousand ( 5,000 ) ordinary shares to 1 ADS representing sixty thousand ( 60,000 ) ordinary shares, which resulted in a 1 for 12 reverse split of the issued and outstanding ADSs. Effective November 8, 2023, the Company completed a 1 for 60,000 reverse split of the ordinary shares which resulted in the ratio of ADSs evidencing ordinary shares to be changed from 1 ADS representing sixty thousand ( 60,000 ) ordinary shares to 1 ADS representing one ( 1 ) ordinary share. All ordinary share, ADSs and related option and warrant information presented in these financial statements and accompanying footnotes has been retroactively adjusted to reflect the number of ordinary shares and ADSs resulting from the aforementioned ordinary share reverse split and ADS ratio changes. The Company is a clinical stage specialty pharmaceutical company dedicated to the development and commercialization of therapeutic products that treat rare and orphan diseases for which there are currently no approved treatments or cures. The Company’s initial focus is on the development of products, using proprietary owned and in-licensed drug delivery technologies, that could help address rare skin diseases. The Company’s first lead product is QRX003, a once daily, topical lotion comprised of a broad-spectrum serine protease inhibitor, formulated with the proprietary in-licensed Invisicare® technology, is under development as a potential treatment for Netherton Syndrome (“NS”), a rare hereditary genetic disease. QRX003 is currently being tested in two clinical studies in the United States (“U.S.”) under an open Investigational New Drug (“IND”) application with the Food and Drug Administration (“FDA”). Dosing of patients commenced in December 2022 for the first study and in March 2023 for the second study. The Company is also developing QRX004 as a potential treatment for Recessive Dystrophic Epidermolysis Bullosa (“RDEB”). In addition, the Company has entered into Research Agreements with the Queensland University of Technology (“QUT”), which include an option for global licenses to QRX007 for the potential treatment of NS and QRX008 for the potential treatment of scleroderma. To date, no products have been commercialized and revenue has not been generated. NOTE 2 - LIQUIDITY RISKS AND OTHER UNCERTAINTIES The unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”), which contemplates continuation of the Company as a going concern. The Company has incurred net losses every year since inception and has an accumulated deficit of approximately $ 44.2 million at September 30, 2023. The Company has limited operating history and has historically funded its operations through debt and equity financings. The Company incurred net losses of approximately $ 6.6 million, and negative cash flows from operations of $ 4.6 million for the nine months ended September 30, 2023. At September 30, 2023, the Company had cash balances totaling $ 3.2 million and investments of $ 10.8 million. The Company has determined that it has sufficient cash and liquidity to effect its business plan for at least one year from the issuance of these unaudited condensed consolidated financial statements. Additional financing will still be required to complete the research and development of the Company’s therapeutic targets and its other operating requirements until it achieves commercial profitability, if ever. Such financing may not be available at acceptable terms, if at all. If the Company is unable to obtain additional funding when it becomes necessary, the development of its product candidates will be impacted and the Company would likely be forced to delay, reduce, or terminate some or all of its development programs, all of which could have a material adverse effect on the Company’s business and financial condition. 6 Table of Contents QUOIN PHARMACEUTICALS LTD. ​ Notes to Consolidated Financial Statements September 30, 2023 and 2022 ​ Other risks and uncertainties: The Company is subject to risks common to development stage biopharmaceutical companies including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, product liability, pre-clinical and clinical trial outcome risks, regulatory approval risks, uncertainty of market acceptance and additional financing requirements. The Company’s products require approval or clearance from the FDA prior to commencing commercial sales in the United States. There can be no assurance that the Company’s products will receive all of the required approvals or clearances. Approvals or clearances are also required in foreign jurisdictions in which the Company may license or sell its products. There can be no assurance that the Company’s products, if approved, will be accepted in the marketplace, nor can there be any assurance that any future products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed. The Company is also dependent on several third party suppliers, in some cases a single source supplier including the contract research organization managing both of the Company’s current clinical studies, the supplier of the active pharmaceutical ingredient (API), as well as the contract manufacturer of the drug substance for the expected clinical development. Nasdaq Listing On April 5, 2023, the Company received a letter from the Listing Qualifications staff of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying the Company that the closing bid price per ADS was below the required minimum of $ 1.00 for a period of 30 consecutive business days and that the Company did not meet the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Rule 5810(c)(3)(A), the Company had a period of one hundred eighty (180) calendar days, or until October 2, 2023 (the “Compliance Period”), to regain compliance with Nasdaq’s minimum bid price requirement. On August 1, 2023, the Company received a letter from Nasdaq stating that the Company’s closing bid price per ADS was at $ 1.00 or greater for the last 10 consecutive business days. Accordingly, the Company regained compliance with Listing Rule 5550(a)(2) and the matter was closed. There can be no assurance that the Company will be able to maintain compliance with Nasdaq’s minimum bid-price requirement for continued listing. If the Company’s ADSs are delisted from Nasdaq, it will have a material negative impact on the actual and potential liquidity of the Company’s securities, as well as a material negative impact on the Company’s ability to raise future capital. NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of September 30, 2023 and for the three and nine months then ended. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the operating results for the year or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related disclosures as of December 31, 2022 and for the year then ended which are included in the Company’s Annual Report on Form 10- K, filed with the SEC on March 15, 2023. The Company operates in one segment. 7 Table of Contents QUOIN PHARMACEUTICALS LTD. ​ Notes to Consolidated Financial Statements September 30, 2023 and 2022 ​ Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could materially differ from those estimates. Management considers many factors in developing the estimates and assumptions that are used in the preparation of these financial statements including: expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: stock-based compensation research and development expense recognition, intangible asset estimated useful lives and impairment assessments, allowances of deferred tax assets, and cash flow assumptions regarding going concern considerations. Cash and cash equivalents: The Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. The Company, from time to time during the periods presented, has had bank account balances in excess of federally insured limits where substantially all cash is held in the United States. The Company has not experienced losses in such accounts. The Company believes that it is not subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Warrants: The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement) provided that such contracts are indexed to the Company’s own stock. The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control) or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets, liabilities and equity is required. The Company evaluated the warrants to assess their proper classification using the applicable criteria enumerated under U.S. GAAP and determined that such warrants meet the criteria for equity classification in the accompanying unaudited condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. Investments: Investments as of September 30, 2023 and December 31, 2022 consist of U.S. Treasury Bills, which are classified as trading securities, totaling $ 10.8 million and $ 10.0 million, respectively. The Company determines the appropriate balance sheet classification of its investments at the time of purchase and evaluates the classification at each balance sheet date. Long-lived assets: Long-lived assets are comprised of acquired technology and licensed rights to use technology, which are considered platform technology with alternative future uses beyond the current products in development. Such intangible assets are being amortized on a straight-line basis over their expected useful life of 10 years . 8 Table of Contents QUOIN PHARMACEUTICALS LTD. ​ Notes to Consolidated Financial Statements September 30, 2023 and 2022 ​ The Company assesses the impairment for long-lived assets whenever events or circumstances indicate the carrying value may not be recoverable. Factors we consider that could trigger an impairment review include the following: ● Significant changes in the manner of the Company’s use of the acquired assets or the strategy for its overall business, ● Significant underperformance relative to expected historical or projected development milestones, ● Significant negative regulatory or economic trends, and ● Significant technological changes which could render the platform technology obsolete. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. During the three and nine months ended September 30, 2023 and 2022, there were no impairment indicators which required an impairment loss measurement. Research and development: Research and development costs are expensed as incurred. Research and development expenses include personnel costs associated with research and development activities, including third-party contractors to perform research, conduct clinical trials and manufacture drug supplies and materials. The Company accrues for costs incurred by external service providers, including contract research organizations and clinical investigators, based on its estimates of service performed and costs incurred. These estimates include the level of services performed by third parties, patient enrollment in clinical trials when applicable, administrative costs incurred by third parties, and other indicators of the services completed. Based on the timing of amounts invoiced by service providers, the Company may also record payments made to those providers as prepaid expenses that will be recognized as expenses in future periods as the related services are rendered. Income taxes: The Company accounts for its income taxes using the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company maintains a full valuation allowance on its existing deferred tax assets. The Company also accounts for uncertain tax positions using the more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken in the Company’s income tax returns. As of September 30, 2023 and December 31, 2022, the Company had no uncertain tax positions which affected its financial position and its results of operations or its cash flows and will continue to evaluate for uncertain tax positions in the future. If at any time the Company should record interest and penalties in connection with income taxes, the interest and the penalties will be expensed within the interest and general and administrative expenses, respectively. Stock based compensation: The Company recognizes compensation costs resulting from the issuance of stock-based awards to employees, non-employees and directors as an expense in the consolidated statements of operations over the requisite service period based on a measurement of fair value for each stock-based award. The fair value of each option grant is estimated as of the date of grant using the Black-Scholes option- 9 Table of Contents QUOIN PHARMACEUTICALS LTD. ​ Notes to Consolidated Financial Statements September 30, 2023 and 2022 ​ pricing model, net of actual forfeitures. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. Since the Company has a limited history of trading as a public company, the Company’s expected stock volatility is based on a weighting of its historical volatility along with a group of a publicly traded set of peer companies. The Company utilizes the simplified method to estimate the expected term. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield was assumed to be zero as the Company has not paid and dividends since its inception and does not anticipate paying dividends in the foreseeable future. Fair value of financial instruments: The Company considers its cash and cash equivalents, investments, accounts payable, accrued expenses to meet the definition of financial instruments. The carrying amounts of these financial instruments approximated their fair values due to the short maturities. The Company measures fair value as required by ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Earnings (loss) per share: The Company reports loss per share in accordance with ASC 260-10, Earnings Per Share , which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. The calculation of diluted net earnings (loss) per share gives effect to ordinary shares equivalents; however, potential common shares are excluded if their effect is anti-dilutive. For the three and nine months ended September 30, 2023, the number of shares excluded from the diluted net earnings (loss) per share included outstanding warrants to purchase 864,068 ADS and outstanding stock options to purchase 26,667 ADS. For the three and nine months ended September 30, 2022, the number of shares excluded from the diluted net earnings (loss) per share included warrants to purchase 280,735 ADSs and outstanding options to purchase 25,760 ADSs, respectively. The inclusion of these stock options and warrants from both periods in 2023 and 2022 in the denominator would be anti-dilutive. NOTE 4 – ACCRUED INTEREST AND FINANCING EXPENSE On October 2, 2020, Quoin Inc. issued promissory notes (the “2020 Notes”) and warrants to certain investors (“2020 Noteholders”). The 2020 Notes were mandatorily convertible into 432 ADSs in 2021. The ADSs issued to the 2020 Noteholders did not include the accrued interest estimated to be approximately $ 744,000 at December 31, 2021. A total of $ 312,000 was paid to two of the five 2020 Noteholders during the year ended December 31, 2022 and based on the terms of this cash settlement , the Company’s estimate of the liability to the remaining three 2020 Noteholders increased to $ 1,146,000 as of September 30, 2023 and December 31, 2022. There was no interest expense in the three and nine month periods ended September 30, 2023. ​ 10 Table of Contents QUOIN PHARMACEUTICALS LTD. ​ Notes to Consolidated Financial Statements September 30, 2023 and 2022 ​ NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS The Company applies fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. For certain instruments, including cash and cash equivalents, accounts payable, and accrued expenses, it was estimated that the carrying amount approximated fair value because of the short maturities of these instruments. Fair value is estimated using various valuation models, which utilize certain inputs and assumptions that market participants would use in pricing the asset or liability. The inputs and assumptions used in valuation models are classified in the fair value hierarchy as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Quoted market prices for similar instruments in an active market; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations inputs of which are observable and can be corroborated by market data. Level 3: Unobservable inputs and assumptions that are supported by little or no market activity and that are significant to the fair value of the asset and liability. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining the appropriate hierarchy levels, the Company analyzes the assets and liabilities that are subject to fair value disclosure. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. ​ The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis by fair value hierarchy at September 30, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2023 ​ Level 1 ​ Level 2 Level 3 Total US Treasury Bills $ 10,818,051 $ — ​ $ — ​ $ 10,818,051 Total US Treasury Bills Asset $ 10,818,051 $ — ​ $ — ​ $ 10,818,051 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 Level 1 Level 2 Level 3 Total US Treasury Bills ​ $ 9,992,900 ​ $ — ​ $ — ​ $ 9,992,900 Total US Treasury Bills Asset ​ $ 9,992,900 ​ $ — ​ $ — ​ $ 9,992,900 ​ ​ 11 Table of Contents QUOIN PHARMACEUTICALS LTD. ​ Notes to Consolidated Financial Statements September 30, 2023 and 2022 ​ NOTE 6 – STOCK BASED COMPENSATION In March 2022, the Board of Directors of the Company approved the Amended and Restated Equity Incentive Plan (the “Amended Plan”), which was approved by the shareholders at the Company’s Annual General Meeting of Shareholders held on April 12, 2022. The Amended Plan increased the number of ordinary shares reserved for issuance under such equity incentive plan to 15 % of the Company’s outstanding ordinary shares on a fully-diluted basis, or 281,532 ordinary shares represented by 281,532 ADSs as of September 30, 2023. Under the Amended Plan, the Company may grant options to its directors, officers, employees, consultants, advisers and service providers. As of September 30, 2023, 254,865 ADSs remained available for grant under the Amended Plan. The following table summarizes stock-based activities under the Amended Plan: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Weighted ​ ​ ​ ​ Average ​ Average ​ ​ ADS Underlying ​ Exercise ​ Contractual ​ ​ Options ​ Price ​ Terms Outstanding at December 31, 2022 25,595 ​ $ 210.00 9.28 Granted 1,071 ​ $ 210.00 ​ Forfeited/Cancelled — ​ $ — ​ Outstanding at September 30, 2023 26,666 ​ $ 210.00 8.64 ​ ​ ​ ​ ​ ​ ​ ​ Exercisable options at September 30, 2023 7,381 ​ $ 210.00 8.57 ​ The intrinsic value of outstanding options at September 30, 2023 was $ 0 . Stock based compensation expense was approximately $ 269,000 ($ 34,000 included in research and development expense and $ 235,000 included in general and administrative expenses) in the three months ended September 30, 2023 and approximately $ 794,000 ($ 103,000 included in research and development expense and $ 691,000 included in general and administrative expenses) in the nine months ended September 30, 2023. Stock based compensation expense was approximately $ 267,000 ($ 35,000 included in research and development expense and $ 232,000 included in general and administrative expenses) in the three months ended September 30, 2022 and approximately $ 497,000 ($ 65,000 included in research and development expense and $ 432,000 included in general and administrative expenses) in the nine months ended September 30, 2022. At September 30, 2023, the total unrecognized compensation expense related to non-vested options was approximately $ 2,413,000 and is expected to be recognized over the remaining weighted average service period of approximately 2.33 years. NOTE 7 – PREPAID EXPENSES Prepaid expenses are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2023 ​ 2022 Prepaid R&D costs ​ $ 383,390 ​ $ 383,390 Prepaid insurance ​ 56,211 ​ 508,084 Prepaid expense ​ 20,250 ​ 8,500 Total ​ $ 459,851 ​ $ 899,974 Less: Short-term portion ​ ​ ( 159,851 ) ​ ​ ( 516,584 ) Long-term portion ​ $ 300,000 ​ $ 383,390 ​ ​ 12 Table of Contents QUOIN PHARMACEUTICALS LTD. ​ Notes to Consolidated Financial Statements September 30, 2023 and 2022 ​ NOTE 8 - ACCRUED EXPENSES Accrued expenses are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2023 ​ 2022 Research contract expenses (note 12) ​ $ 684,899 ​ $ 105,071 Payroll ​ 1,426,435 ​ 788,169 Payroll taxes (note 11) ​ 165,610 ​ 159,593 Professional fees ​ 206,254 ​ 44,278 Other Expenses ​ 111,001 ​ 78,594 Total ​ $ 2,594,199 ​ $ 1,175,705 ​ ​ ​ NOTE 9 – IN-LICENSED TECHNOLOGY Polytherapeutics: On March 24, 2018, Quoin Inc. entered into a securities purchase agreement (the “Acquisition Agreement”), in which it agreed to acquire all of the equity interests in Polytherapeutics, Inc. (the “Seller” or “Polytherapeutics”) for $ 40,833 and future royalties provided Quoin Inc. commercializes products using the technology developed by the Seller. The terms of any royalty payments to the Seller are 4.0 % of the net revenue of royalty products, as defined in the Acquisition Agreement during the ten ( 10 ) year period commencing from the date of first sale of a royalty product. If a generic product is introduced by a third party to the market, during the royalty period, the royalty fees shall be reduced from 4 % to 2 %. If, during the royalty period, two or more generic products are introduced, the royalty fees shall be reduced from 2 % to 0 %. There were no royalty obligations due at September 30, 2023 and December 31, 2022. Skinvisible: In October 2019, Quoin Inc. entered into the Exclusive Licensing Agreement (as amended from time to time, the “License Agreement”) with Skinvisible Pharmaceuticals, Inc. (“Skinvisible”), under which Skinvisible granted the Company an exclusive royalty-bearing license relating to the production and manufacture of prescription drug products related to certain patents held by Skinvisible, including those related to QRX003 and QRX004. The Company made Skinvisible a one-time non-refundable, non-creditable license fee of $ 1 million (the “License Fee”). In addition, the Company agreed to pay Skinvisible a single digit royalty percentage of the Company’s net sales revenues for any licensed product covered by the patent rights licensed under the License Agreement. The Company also agreed to pay Skinvisible 25 % of any revenues the Company receives as royalties in the event that the Company sublicense any licensed products to a third party. The License Agreement also requires that the Company make a $ 5 million payment to Skinvisible upon receiving approval in the U.S. or European Union, whichever occurs first, for the first drug product developed using intellectual property licensed thereunder. There were no milestone or royalty obligations due at September 30, 2023 and December 31, 2022. ​ 13 Table of Contents QUOIN PHARMACEUTICALS LTD. ​ Notes to Consolidated Financial Statements September 30, 2023 and 2022 ​ NOTE 10 - INTANGIBLE ASSETS Intangible assets are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2023 ​ 2022 Acquired technology – Polytherapeutics ​ $ 40,433 ​ $ 40,433 Technology license – Skinvisible ​ 1,000,000 ​ 1,000,000 Total cost ​ 1,040,433 ​ 1,040,433 Accumulated amortization ​ ( 413,904 ) ​ ( 335,872 ) Net book value ​ $ 626,529 ​ $ 704,561 ​ The Company recorded amortization expense of approximately $ 78,000 for the nine months ended September 30, 2023 and 2022 and approximately $ 26,000 for the three months ended September 30, 2023 and 2022. The annual amortization expense expected to be recorded for existing intangible assets for the years 2023 through 2026, and thereafter, is approximately $ 26,000 , $ 104,000 , $ 104,000 , $ 104,000 and $ 288,000 , respectively. NOTE 11 - RELATED PARTY TRANSACTIONS Due to Officers/Founders: Due to the limited funding of Quoin Inc. prior to the consummation of the Merger, the compensation, including salary, office and car allowances and other benefits, due to Dr. Myers and Ms. Carter under their respective employment agreements, as well as reimbursement of expenses and other amounts paid to third parties on behalf of Quoin Inc., were accrued as indebtedness to Dr. Myers and Ms. Carter. Following the closing of the Merger, Quoin Inc. began making payments of $ 25,000 per month to each of Dr. Myers and Ms. Carter to repay the above-described non-interest-bearing indebtedness. The Company repaid $ 75,000 and $ 75,000 of such indebtedness to Dr. Myers and $ 200,000 and $ 75,000 to Ms. Carter in the three months ended September 30, 2023 and 2022, respectively. The Company repaid $ 225,000 and $ 225,000 of such indebtedness to Dr. Myers and $ 225,000 and $ 225,000 to Ms. Carter in the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, approximately $ 2,034,000 and $ 1,640,000 of such indebtedness was outstanding to Dr. Myers and Ms. Carter, respectively. Amounts due to officers at September 30, 2023 and December 31, 2022 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2023 ​ 2022 Salaries and other compensation ​ $ 3,673,733 $ 4,108,500 Invoices paid on behalf of the Company ​ — ​ 15,232 Total ​ $ 3,673,733 $ 4,123,732 Less: Short-term portion ​ ( 600,000 ) ​ ( 600,000 ) Long-term portion ​ $ 3,073,733 ​ $ 3,523,733 ​ Expenses: Research and development expense, incurred in the three months ended September 30, 2023 and 2022, was $ 0 and $ 12,000 and $ 12,000 and $ 36,000 in the nine months ended September 30, 2023 and 2022, respectively, for payments to the CEO Dr. Myers’ son, who had been consulting for the Company on research and development matters from time to time. As of March 31, 2023, Dr. Myers’ son no longer provided consulting services to the Company. 14 Table of Contents QUOIN PHARMACEUTICALS LTD. ​ Notes to Consolidated Financial Statements September 30, 2023 and 2022 ​ Interest Payable: See Note 4 for interest payable on the 2020 Notes. ​ ​ NOTE 12 – RESEARCH, CONSULTING AGREEMENTS AND COMMITMENTS Research agreements In November 2020, Quoin Inc. entered into a Master Service Agreement for an initial term of three years with Therapeutics Inc. for managing preclinical and clinical development for new products in the field of dermatology. The agreement required the execution of individual work orders. Quoin Inc. may terminate any work order for any reason with 90 days written notice subject to costs incurred through termination and a defined termination fee, unless there is a material breach by Therapeutics Inc. A work order was entered into in June 2022 for the first QRX003 clinical study at an expected estimated cost of approximately $ 4.4 million through 2024. A further work order was entered into in December 2022 for the second QRX003 clinical study at an expected estimated cost of approximately $ 830,000 through 2024. For the three and nine months ended September 30, 2023 and 2022, the Company incurred a research and development expense under these agreements of approximately $ 155,000 and $ 1,113,000 , and $ 423,000 and $ 904,000 respectively. During the three months ended September 30, 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, the Company entered into a commitment with Queensland University of Technology for research related services associated with Netherton Syndrome of approximately $ 250,000 for an expected period of eighteen months. In May 2022, the Company entered into a commitment with Queensland University of Technology for research related services associated with Scleroderma of approximately $ 610,000 for an expected period of eighteen months. For the three and nine months ended September 30, 2023 and 2022, the Company incurred research and development costs related to these agreements of approximately $ 85,000 and $ 361,000 , and $ 173,000 and $ 250,000 respectively. Consulting agreement: Quoin Inc. entered into a consulting agreement with an Investor Relations (IR) firm, which provided for a monthly fee of $ 14,000 . The agreement had an automatic annual renewal clause and was in effect in November 2017. The Company owed the IR firm $ 584,000 as of December 31, 2021. Effective March 31, 2022, the Company entered into a settlement agreement with the IR firm reducing the liability to $ 168,000 and recognized $ 416,000 as other income in the accompanying consolidated statement of operations. The liability was fully repaid as of April 1, 2023. No expenses were incurred in both the three and nine months ended September 30, 2023 and 2022, respectively. Performance milestones and Royalties See Note 9 for asset and in-licensed technology commitments. NOTE 13 – SHAREHOLDERS’ EQUITY The Company held its Annual General Meeting on April 12, 2022, at which the Company’s shareholders approved an increase to the authorized share capital to 833,334 ordinary shares, no par value. The Company held another Annual General Meeting on November 3, 2022, at which the Company’s shareholders approved an increase to the authorized share capital to 8,333,334 ordinary shares from 833,334 , no par value. The Company held its 2023 Annual General Meeting on October 26, 2023, at which the Company’s shareholders approved an increase to the authorized share capital to 100,000,000 ordinary shares from 8,333,334, no par value. These ordinary shares are not redeemable and do not have any preemptive rights. 15 Table of Contents QUOIN PHARMACEUTICALS LTD. ​ Notes to Consolidated Financial Statements September 30, 2023 and 2022 ​ Holders of the Company’s ordinary shares have one vote for each ordinary share held on all matters submitted to a vote of shareholders at a shareholders meeting. The board of directors shall determine and provide a record date for each shareholders meeting and all shareholders at such record date may vote. Unless stipulated differently in the Companies Law or in the articles of association, all shareholders’ resolutions shall be approved by a simple majority vote. Under Israeli law, the Company may declare and pay dividends only if, upon the determination of its board of directors, there is no reasonable concern that the distribution will prevent the Company from being able to meet the terms of its existing and foreseeable obligations as they become due. Under the Companies Law, the distribution amount is further limited to the greater of retained earnings or earnings generated over the two most recent years legally available for distribution according to the Company’s then last reviewed or audited financial statements, provided that the date of the financial statements is not more than six months prior to the date of distribution. In the event that the Company does not have retained earnings or earnings generated over the two most recent years legally available for distribution, the Company may seek the approval of the court in order to distribute a dividend. The court may approve the Company’s request if it determines that there is no reasonable concern that the payment of a dividend will prevent the Company from satisfying existing and foreseeable obligations as they become due. Each ADS will also represent any other securities, cash or other property which may be held by the depositary. ADSs may be held either (a) directly (1) by having an American Depositary Receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs or (2) by having uncertificated ADSs, or (b) indirectly by holding a security entitlement in ADSs through a broker or other financial institution that is a direct or indirect participant in The Depository Trust Company, also called DTC. February 2023 Offering On February 24, 2023 (the “February Closing Date”), the Company completed an offering (the “February 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 “February 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 February Pre-Funded Warrant accompanied by an ordinary warrant (the “February Common 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. Each February Common Warrant has an exercise price of $ 12.00 per ADS and expires on the fifth anniversary of the February Closing Date. On the February Closing Date, the holder of the February Pre-Funded Warrant exercised its Pre-Funded Warrant in full. In connection with the February Offering, the Company entered into a Securities Purchase Agreement (the “February Purchase Agreement”) with certain institutional investors. Under the February Purchase Agreement, subject to certain exemptions, the Company agreed not to: (i) for a period of ninety ( 90 ) days after the closing date of the February Offering, issue, enter into any agreement to issue or announce the issuance or proposed issuance of any ADSs, ordinary shares or ordinary share equivalents or (ii) file any registration statement or amendment or supplement thereto, other than a registration statement on Form S-8 in connection with any employee benefit plan or any post-effective amendment to a registration statement declared effective by the Securities and Exchange Commission (the “SEC”) and (ii) for a period of 180 days after the closing date of the February Offering, enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreement. 16 Table of Contents QUOIN PHARMACEUTICALS LTD. ​ Notes to Consolidated Financial Statements September 30, 2023 and 2022 ​ In connection with the February Offering, the Company entered into an Amendment No. 1 to Warrant to Purchase Ordinary Shares Represented by American Depositary Shares, dated February 24, 2023 (collectively, the “Warrant Amendments”), with each of the purchasers (the “2022 Purchasers”) who participated in both the Company’s public offering completed in August 2022 (the “August Offering”) and February Offering. The Warrant Amendments amended certain terms of the Common Warrants issued in the August Offering to such 2022 Purchasers. Specifically, the Warrant Amendments reduced the exercise price of Common Warrants to purchase 236,670 ADSs out of the total 280,000 issued in the August Offering from $ 60.00 to $ 13.20 and extended the term during which those warrants could remain exercisable until February 24, 2028. The incremental fair value of the modified warrants was approximately $ 238,000 , which was accounted for as an offering expense in connection with the February Offering. Warrants The following table summarizes warrant activities during the nine months ended September 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ADSs ​ Average ​ ​ Underlying ​ Exercise Price ​ ​ Warrants ​ Per ADS ​ Outstanding at December 31, 2022 280,735 $ 24.71 * Granted Common Warrants 583,333 ​ ​ 12.00 ​ Granted Pre-Funded Warrants ​ 170,833 ​ ​ — ​ Exercised Pre-Funded Warrants ( 170,833 ) ​ — ​ Outstanding and exercisable at September 30, 2023 864,068 ​ $ 16.13 ​ * Includes the reduction of the exercise price from $ 60.00 per ADS to $ 13.20 per ADS for Common Warrants issued in the August Offering to investors who participated in both the Company’s August Offering and February Offering, see above. NOTE 14 – CONTINGENCIES From time to time, the Company may become involved in various legal matters arising in the ordinary course of business. Management is unaware of any matters requiring accrual for related losses in the financial statements. NOTE 15 – LICENSE AGREEMENTS As of September 30, 2023, the Company has entered into nine license and supply agreements, whereby the Company will receive a royalty or other proceeds from the specified product revenues in select non-US markets from the licensor, if and when the underlying products are approved and commercialized. No royalty revenues have been received through September 30, 2023 under any of these agreements. NOTE 16 - SUBSEQUENT EVENTS On October 26, 2023, the Company held an Annual General Meeting of Shareholders, at which the shareholders approved, among other items, the following: ● The reverse split of the Company’s ordinary shares at a ratio of 1 for 60,000 , which resulted in one ADS representing one ordinary share. The reverse split became effective on November 8, 2023. ● The increase of authorized share capital to 100,000,000 ordinary shares from 8,333,334 ordinary shares. ​ ​ 17 Table of Contents