Quoin Pharmaceuticals, Ltd. 10-K

Item 9A. Controls and Procedures Disclosure Controls and Procedures We maintain disclosure controls and procedures, which are designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation, as of the end of the period covered by this report, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15e under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level. Management’s Annual Report on Internal Control over Financial Reporting Our management, including our Chief Executive Officer and Chief Financial Officer, are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the 54 Table of Contents preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that: ● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions; ● provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles; ● provide reasonable assurance that receipts and expenditures are made only in accordance with authorizations of our management and board of directors (as appropriate); and ● provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements. Due to its inherent limitations, any system of internal control over financial reporting, no matter how well defined, may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2023, based on the framework set forth in Internal Control — Integrated Framework by The Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013). Based on this assessment using this framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2023. Attestation Report of the Registered Public Accounting Firm This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting because Quoin Ltd. is not an accelerated filer or a large accelerated filer, and it is not subject to the attestation requirement. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act), that occurred during the quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information During the fourth quarter of 2023, none of our directors or executive officers adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408(a) of Registration S-K). Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. ​ 55 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance. Set forth below is certain information regarding the members of our board of directors (the “Board” or the “Board of Directors”) and our executive officers. Each director is entitled to serve until the 2024 annual meeting of shareholders and until a successor is duly elected and qualified or until his or her earlier retirement, resignation or removal. ​ ​ ​ ​ ​ Name Age Position(s) Dr. Michael Myers 62 Chairman of the Board and Chief Executive Officer Denise Carter 55 Director and Chief Operating Officer Joseph Cooper (1)(3) 66 Director James Culverwell (1)(2) 67 Director Dr. Dennis H. Langer (2) 72 Director Natalie Leong (1)(3) 38 Director Michael Sember (2) ​ 74 ​ Director Gordon Dunn 59 Chief Financial Officer (1) Member of our Audit Committee. (2) Member of our Compensation Committee. (3) Member of our Nominating and Governance Committee. Set forth below is a summary of the business experience of each of our directors and executive officers. Dr. Michael Myers , Chief Executive Officer and Director . Dr. Myers is the co-founder of Quoin Inc. and has served as Chairman and Chief Executive Officer of Quoin Inc. since its inception in 2018. Dr. Myers has served as Chairman and Chief Executive Officer of Quoin Ltd. since October 28, 2021. Dr. Myers has over 36 years of industry experience in the drug delivery and specialty pharmaceutical sectors. From 2003 to October 2015, he served as Chief Executive Officer of Innocoll AG (n/k/a Innocoll Biotherapeutics N.A. Inc.), a biotherapeutics pharmaceutical company, and was responsible for taking that company public in 2014. From 2001 to 2002, he served as President of the drug delivery division of West Pharmaceutical Services, Inc., a publicly traded company and a designer and manufacturer of injectable pharmaceutical packaging and delivery systems. From 1996 to 1999, Dr. Myers served as the President of Pharmaceutical Operations for Fuisz Technologies (Biovail), a developer of food and drug delivery systems and technologies. From 2000 to 2001, Dr. Myers served as Executive Vice President and Chief Commercial Officer of Flamel Technologies (n/k/a Avadel Pharmaceuticals PLC, a publicly traded company and a specialty pharmaceutical company. From 1987 to 1995, Dr. Myers served as the Head of Pharmaceutical Development for Elan Corporation, a biotechnology drug company. Since 2023, Dr. Myers has served as a director of Cranial Devices, a clinical stage medical device company. Since 2019, Dr. Myers has served as a director of Sonoran Bioscience and Wellesley Pharmaceuticals, each a specialty pharmaceutical company. Dr. Myers earned his Ph.D. in Chemistry from University College Cork, Ireland. We believe Dr. Myers is qualified to serve on our Board due to his extensive knowledge as one of Quoin Inc.’s co-founders and Chief Executive Officer, and his extensive clinical development, commercial and management experience with both public and private life sciences companies. Denise Carter , Chief Operating Officer and Director . Ms. Carter is the co-founder of Quoin Inc. and has served as a director and Chief Operating Officer of Quoin Inc. since its inception in 2018. Ms. Carter has served as a director and Chief Operating Officer of Quoin Ltd. since October 28, 2021. Ms. Denise Carter has over 30 years of experience in the drug delivery and specialty pharmaceutical industries. From June 2003 to October 2015, Ms. Carter held various positions at Innocoll AG (n/k/ a Innocoll Biotherapeutics N.A. Inc.), including President of Innocoll Pharmaceuticals and Executive Vice President of Business Development and Corporate Affairs of Innocoll AG. From 2001 to 2003, Ms. Carter was the Vice President of Business Development of the drug delivery division of West Pharmaceuticals, Inc., a publicly traded company. From 2000 to 2001, she was the Senior Director of Business Development of Eurand, a specialty pharmaceutical company. From 1996 to 1999, Ms. Carter was the Director of Business Development and Alliance Management of Fuisz Technologies (Biovail). From 1999 to 2000, Ms. Carter was the Director of Business Development of Cardinal Health, Inc., a multi-national health care service company. Ms. Carter earned her MBA from Wharton School of Business, University of Pennsylvania and a B.S. in Chemistry from the College of William and Mary . We believe Ms. Carter is qualified to serve on our Board due to her extensive knowledge as one of Quoin Inc.’s co-founders and Chief Operating Officer, and her extensive business development, sales and marketing and fund raising experience in the life sciences industry. 56 Table of Contents Joseph Cooper , Director . Mr. Cooper has served as a director of Quoin Inc. since May 2021. Mr. Cooper has served as a director of Quoin Ltd. since October 28, 2021. Mr. Cooper has significant experience in finance, operation, corporate development and general management roles within the pharmaceutical and healthcare industry. Since July 2023, Mr. Cooper has served as Chief Financial Officer for Hydrinity Skin Sciences, a medical aesthetics company. From 2012 to 2023, Mr. Cooper served as the President of Boulder Cove LC, a pharmaceutical and healthcare consulting company. From September 2019 to December 2022, Mr. Cooper served as the Chief of Strategy and Corporate Development for Resonea, Inc., a digital health company. From August 2018 to December 2019, Mr. Cooper served as the Chief Business Officer of NuvOx Pharmaceuticals, a clinical stage pharmaceutical company. From January 2015 to August 2018, Mr. Cooper served as Chief Financial and Operating Officer for First Place, AZ, a non-profit healthcare services organization. From 1996 to 2010, Mr. Cooper served as the Executive Vice President of Corporate and Product Development of Medicis Pharmaceutical Corp., a publicly traded pharmaceutical and medical aesthetics company. Since January 2018, Mr. Cooper has served as a director of Sonoran Biosciences, a specialty pharmaceutical company. From 2006 to 2007, Mr. Cooper served as a director of Bioenvision, a publicly traded pharmaceutical company. Mr. Cooper holds an MBA from the WP Carey School of Business at Arizona State University and a BA from Northeastern Illinois University. We believe Mr. Cooper is qualified to serve on our Board due to his extensive executive and board experience with pharmaceutical and healthcare companies. James Culverwell , Director . Mr. Culverwell has served as a director of Quoin Inc. since April 2021. Mr. Culverwell has served as a director of Quoin Ltd. since October 28, 2021. Since May 2013, Mr. Culverwell has served as the Chief Executive Officer and is currently Chairman of the Board of Directors of HOX Therapeutics, a prostate cancer research company. In 2005, Mr. Culverwell founded Sudbrook Associates, which provided strategic advice and fund raising services for life science companies. From 1992 to 2004, Mr. Culverwell was Senior Vice President and Global Coordinator Healthcare Research at Merrill Lynch. From 1982 to 1992, Mr. Culverwell was Director of Healthcare Equity Research at ABN Amro Bank N.V., a private banking company. Since February 2022, Mr. Culverwell has served as a director and Audit Committee Chairman of TC BioPharm (Holdings) plc (Nasdaq: TCBP), a cancer treatment development company. Since January 2005, Mr. Culverwell has served as a director, Audit Committee Chairman, and member of the Compensation Committee of SafeGuard Biosystems, a high throughput molecular diagnostics company. From April 2016 to September 2019, Mr. Culverwell served as a director and Audit Committee Chairman of Amryt Pharma PLC, a publicly traded company and a commercial-stage biopharmaceutical company. From February 2013 to July 2017, Mr. Culverwell served as a director and Audit Committee Chairman of Innocoll AG. He received an MSc with honors from the University of Aberdeen. We believe Mr. Culverwell is qualified to serve on our Board due to his extensive experience serving on the audit and compensation committees for multiple public and private life sciences and healthcare companies. Dennis H. Langer , M.D., J.D., Director . Dr. Langer has served as a director of Quoin Inc. since 2019. Dr. Langer has served as a director of Quoin Ltd. Since October 28, 2021. From 2005 to 2010, Dr. Langer served as the Managing Partner at Phoenix IP Ventures, LLC, a private equity and venture capital fund specializing in life sciences companies. From 2004 to 2005, Dr. Langer was the President, North America for Dr. Reddy’s Laboratories, Inc., a multi-national pharmaceutical company. Dr. Langer was with GlaxoSmithKline, a multi-national pharmaceutical and biotechnology company, from 1994-2004, where he served as Senior Vice President, Project, Portfolio and Alliance Management, Senior Vice President, Product Development Strategy, and Senior Vice President, Healthcare Services R&D. From 1991 to 1994, he served as President and Chief Executive Officer at Neose Technologies, Inc., a clinical stage biopharmaceutical company. From 2004 to June 2022, Dr. Langer served as a director of Myriad Genetics, Inc., a publicly traded company and a genetic testing and precision medicine company. From 2021 to June 2022, Dr. Langer served as a director of Brooklyn ImmunoTherapeutics, Inc. (n/k/a Eterna Therapeutics Inc.), a publicly traded company and a biotechnology company. From 2007 to 2019, Dr. Langer served as a director of Dicerna Pharmaceuticals Inc., a publicly traded company and a biopharmaceutical company. Dr. Langer serves on the Dean’s Advisory Board of Harvard Law School. He received an M.D. from Georgetown University School of Medicine, a J.D. from Harvard Law School, and a B.A. in Biology from Columbia University. We believe Dr. Langer is qualified to serve on our Board due to his extensive experience as an executive and board member of public and private life sciences and healthcare companies. Natalie Leong , Director . Ms. Leong has served as a director of Quoin Inc. since April 2021. Ms. Leong has served as a director of Quoin Ltd. since October 28, 2021. Since January 2023, Ms. Leong has been the Senior Vice President of Product Management for B.S.D. Capital, Inc. (d/b/a Lendistry), a minority-led small business lender. Ms. Leong was the Head of Finance and Product Strategy (October 2019 – October 2020) and subsequently Head of Product Management (October 2020 – November 2022) for LoanStreet Inc., a financial SaaS company. From May 2016 to July 2019, Ms. Leong served as the Lead for the Asset Liability Committee for the US at RBC Capital Markets. In addition, from August 2018 to October 2019, she served as the Lead for Global Originations FP&A for RBC Capital Markets. From October 2011 to May 2016, Ms. Leong worked as the Vice President of Capital Insights at National Australia Bank. From February 2008 to October 2011, Ms. Leong served as a Senior Auditor at National Australia Bank. Ms. Leong earned her MBA at The Wharton School, University of Pennsylvania. She earned a B.Comm degree (Finance and Economics) and a B.A. degree 57 Table of Contents (French and Literature) from the University of Melbourne in 2007. We believe Ms. Leong is qualified to serve on our Board of directors due to her extensive financial and business management experience. Michael Sember , Director . Mr. Sember has served as a director of Quoin Inc. since May 2021. Mr. Sember has served as a director of Quoin Ltd. since October 28, 2021. Since 2007, he has served as a Principal of Accela Advisors, a biopharmaceutical consulting firm specializing in strategic planning, business development and coaching for startups. From January 2018 to October 2020, From 2022 until 2023, Mr. Sember served as the Chief Executive Officer of RaeSedo, Inc, a startup therapeutics company spin out of the University of Arizona. Mr. Sember served as the Chief Executive Officer of Regulonix Holding, Inc., a drug development company. From October 2015 to March 2019, he served as the Mentor in Residence to companies formed from inventions discovered at the University of Arizona. From 2013 to 2015, Mr. Sember was the Corporate Turnaround Specialist and Chief Executive Officer of Palyon Medical Corporation, a drug delivery system company. From 1991 to 2002, Mr. Sember was Executive Vice President of Corporate Business Development for Élan Corporation, responsible for strategic collaborations and mergers and acquisitions. From 1973 to 1991, Mr. Sember served as the Senior director of Global Program Management at Marion Laboratories (later Marion Merrell Dow). From 2013 to 2015, Mr. Sember was the Chairman of the Board of Paylon Medical Corporation, a drug delivery system company. From 2012 to 2013, Mr. Sember was the Chairman of the Board of BioIndustry Organization of Southern Arizona, a non-profit trade group. Mr. Sember earned a Bachelor of Science degree from the University of Pittsburgh and an MBA from Rockhurst University. We believe Mr. Sember is qualified to serve on our Board due to his broad executive and capital raising experience in the life sciences industry . Gordon Dunn, Chief Financial Officer . Mr. Dunn has served as Chief Financial Officer of Quoin Ltd. since November 1, 2021. Mr. Dunn has over 30 years of finance experience. He served as Chief Financial Officer of Health Technologies Ltd. (d/b/a Qured), a UK-based healthcare provider, from March 2020 to October 2021, and as Chief Financial Officer of U-Research, an online company information platform, from July 2017 to March 2020. Mr. Dunn also served as Chief Financial Officer of Anton Corporation, a film and media finance company, from September 2016 to July 2017, and as Chief Financial Officer of Innocoll AG from 2012 to 2016. Prior to these roles, he had deep experience in investment banking and private equity, serving as Portfolio Manager of NewSmith Asset Management, a private equity fund from 2004 to 2014, and as Director of Investment Banking and Co-Head of Private Equity at Merrill Lynch, in addition to other roles, from 1994 to 2003. Mr. Dunn was an associate at Morrison & Foerster LLP from 1991 to 1993. Mr. Dunn earned his JD from New York University School of Law and a BA from Stanford University. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act and the regulations promulgated thereunder require our executive officers, directors and persons who beneficially own more than 10% of our common stock to file forms with the SEC to report their ownership of the Company’s shares and any changes in ownership. We have reviewed all forms filed electronically with the SEC during, and with respect to, 2023. Based on that review and written information given to us by all of our directors and executive officers, we believe that all of our directors, executive officers and holders of more than 10% of our stock filed on a timely basis all reports that they were required to file under Section 16(a) during fiscal 2023, except for a late Form 3 filed on March 7, 2023 for Michael Sember. Code of Ethics We have adopted a Code of Ethics and Business Conduct (the “Code of Ethics”) that applies to all of our directors, officers and employees, including our principal executive officer and our principal financial and accounting officer. A copy of our Code of Ethics has been posted to the “Investors—Corporate Governance” section of our website www.quoinpharma.com, and it is attached as an exhibit to this Annual Report. If we make any amendment to the Code of Ethics or grant any waivers, including any implicit waiver, from a provision of the Code of Ethics, we will disclose the nature of such amendment or waiver on our website www.quoinpharma.com. to the extent required by the rules and regulations of the SEC. The information on the website is not and should not be considered part of this Form 10-K and is not incorporated by reference in this Form 10-K. Board of Directors The Board of Directors has established three standing committees: the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. Audit Committee The Audit Committee of the Board of Directors consists of Joseph Cooper, James Culverwell, and Natalie Leong, with Mr. Culverwell chairing the committee. 58 Table of Contents Under the Nasdaq listing standards, we are required to maintain an audit committee consisting of at least three independent directors, each of whom is financially literate and one of whom has accounting or related financial management expertise. Our Board has determined that each member of the Audit Committee satisfies the independence requirements under Nasdaq listing standards and Rule 10A-3(b)(1) of the Exchange Act, has the requisite financial sophistication as required by the Nasdaq listing standards and is an audit committee financial expert, as defined by the SEC rules. Our Board adopted the Amended and Restated Charter of the Audit Committee that sets forth the responsibilities of the Audit Committee under Nasdaq listing standards, as well as the requirements for such committee under the Companies Law, including the following: ● overseeing our independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of our independent registered public accounting firm to the board of directors in accordance with Israeli law; ● recommending the engagement or termination of the person filling the office of our internal auditor; ● recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our board of directors; ● determining whether there are deficiencies in the business management practices of our company, including in consultation with our internal auditor or the independent auditor, and making recommendations to the board of directors to improve such practices; ● determining the approval process for transactions that are ‘non-negligible’ (i.e., transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, which determination may be based on annually pre-determined criteria; ● determining whether to approve certain related party transactions (including transactions in which an office holder (as defined below) has a personal interest and whether such transaction is extraordinary or material under the Companies Law); ● examining the work plan of the internal auditor before its submission to our board of directors and proposing amendments thereto or, upon a decision of the board of directors, acting as the corporate body to approve such work plan; ● examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools at his disposal to fulfill his responsibilities; ● examining the scope of our independent auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors; and ● establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees. Compensation Committee The Compensation Committee of the Board consists of James Culverwell, Dennis Langer and Michael Sember, with Mr. Langer chairing the committee. The Board of Directors has determined that each member of the Compensation Committee is independent under Nasdaq listing standards. Our Board adopted the Amended and Restated Charter of the Compensation Committee that sets forth the responsibilities of such committee under Nasdaq listing standards, as well as the requirements for such committee under the Companies Law, including the following: ● recommending to our board of directors a policy regarding the terms of engagement of the company’s office holders, to which we refer as a “compensation policy”; 59 Table of Contents ● recommending whether the compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years); ● recommending to the board of directors updates to the compensation policy from time to time; ● assessing implementation of the compensation policy; ● resolving whether to approve arrangements with respect to the terms of office and employment of office holders, which require the approval of the compensation committee pursuant to the Companies Law; ● exempting, under certain circumstances, a transaction with our Chief Executive Officer from the approval of our shareholders.; ● making other determinations that the Companies Law assigns to a compensation committee; ● reviewing and recommending for approval by the board of directors the overall compensation policies with respect to our Chief Executive Officer and other executive officers; ● reviewing and recommending for approval by the board of directors the corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers; ● evaluating the performance of our Chief Executive Officer and other executive officers in light of such goals and objectives; ● reviewing and approving the granting of options and other incentive awards, including the exercise of authorities delegated by the board of directors regarding the grant of equity incentives under our equity compensation plans; ● reviewing, evaluating and making recommendations regarding the compensation and benefits for our non-employee directors; ● overseeing our compliance with SEC and Nasdaq rules related to shareholder approval of certain executive compensation matters and equity compensation plans; ● considering and implementing policies with respect to oversight, assessment and management of risks associated with our compensation polices; and ● reviewing and establishing appropriate insurance coverage for our office holders. Compensation Policy under the Companies Law In general, under the Companies Law, a public company must have a compensation policy approved by the board of directors after receiving and considering the recommendations of the compensation committee. In addition, our compensation policy must be approved at least once every three years, first, by our board of directors, upon the recommendation of our compensation committee, and second, by a simple majority of the ordinary shares present, in person or by proxy, and voting (excluding abstentions) at a general meeting of shareholders, provided that either: ​ ● such majority includes at least a majority of the shares held by shareholders who are not controlling shareholders and shareholders who do not have a personal interest in such compensation policy; or ● the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in the compensation policy and who vote against the policy does not exceed two percent (2%) of the aggregate voting rights in the Company. Under special circumstances, the board of directors may approve the compensation policy despite the objection of the shareholders on the condition that the compensation committee and then the board of directors decide, on the basis of detailed grounds and after 60 Table of Contents discussing again the compensation policy, that approval of the compensation policy, despite the objection of shareholders, is for the benefit of the company. If a company that initially offers its securities to the public, like us, adopts a compensation policy in advance of its initial public offering, and describes it in its prospectus for such offering, then such compensation policy shall be deemed a validly adopted policy in accordance with the Companies Law requirements described above. Furthermore, if the compensation policy is established in accordance with the aforementioned relief, then it will remain in effect for a term of five years from the date such company becomes a public company. The compensation policy must be based on certain considerations, include certain provisions and reference certain matters as set forth in the Companies Law. The compensation policy must serve as the basis for decisions concerning the financial terms of employment or engagement of office holders, including exculpation, insurance, indemnification or any monetary payment or obligation of payment in respect of employment or engagement. The compensation policy must be determined and later reevaluated according to certain factors, including: the advancement of the company’s objectives, business plan and long-term strategy; the creation of appropriate incentives for office holders, while considering, among other things, the company’s risk management policy; the size and the nature of the company’s operations; and with respect to variable compensation, the contribution of the office holder towards the achievement of the company’s long-term goals and the maximization of its profits, all with a long-term objective and according to the position of the office holder. The compensation policy must furthermore consider the following additional factors: ● the education, skills, experience, expertise and accomplishments of the relevant office holder; ● the office holder’s position and responsibilities; ● prior compensation agreements with the office holder; ● the ratio between the cost of the terms of employment of an office holder and the cost of the employment of other employees of the company, including employees employed through contractors who provide services to the company, in particular the ratio between such cost to the average and median salary of such employees of the company, as well as the impact of disparities between them on the work relationships in the company; ● if the terms of employment include variable components — the possibility of reducing variable components at the discretion of the board of directors and the possibility of setting a limit on the value of non-cash variable equity-based components; and ● if the terms of employment include severance compensation — the term of employment or office of the office holder, the terms of the office holder’s compensation during such period, the company’s performance during such period, the office holder’s individual contribution to the achievement of the company goals and the maximization of its profits and the circumstances under which he or she is leaving the company. The compensation policy must also include, among other things: ● with regards to variable components: ● with the exception of office holders who report to the chief executive officer, a means of determining the variable components on the basis of long-term performance and measurable criteria; provided that the company may determine that an immaterial part of the variable components of the compensation package of an office holder shall be awarded based on non-measurable criteria, or if such amount is not higher than three months’ salary per annum, taking into account such office holder’s contribution to the company; ● the ratio between variable and fixed components, as well as the limit of the values of variable components at the time of their payment, or in the case of equity-based compensation, at the time of grant; ● a condition under which the office holder will return to the company, according to conditions to be set forth in the compensation policy, any amounts paid as part of the office holder’s terms of employment, if such amounts were paid based on information later to be discovered to be wrong, and such information was restated in the company’s financial statements; 61 Table of Contents ● the minimum holding or vesting period of variable equity-based components to be set in the terms of office or employment, as applicable, while taking into consideration long-term incentives; and ● a limit to retirement grants. Our compensation policy is designed to promote retention and motivation of directors and executive officers, incentivize superior individual excellence, align the interests of our directors and executive officers with our long-term performance and provide a risk management tool. To that end, a portion of our executive officer compensation package is targeted to reflect our short and long-term goals, as well as the executive officer’s individual performance. On the other hand, our compensation policy includes measures designed to reduce the executive officer’s incentives to take excessive risks that may harm us in the long-term, such as limits on the value of cash bonuses and equity-based compensation, limitations on the ratio between the variable and the total compensation of an executive officer and minimum vesting periods for equity-based compensation. ​ Our compensation policy also addresses our executive officers’ individual characteristics (such as their respective position, education, scope of responsibilities and contribution to the attainment of our goals) as the basis for compensation variation among our executive officers and considers the internal ratios between compensation of our executive officers and directors and other employees. Pursuant to our compensation policy, the compensation that may be granted to an executive officer may include: base salary, annual bonuses and other cash bonuses (such as a signing bonus and special bonuses with respect to significant events, such as a significant partnership, collaboration agreement or the generation of positive clinical trial results or regulatory approval of one of the Company’s products), equity-based compensation and termination of service grants. ​ An annual cash bonus may be awarded to executive officers upon the attainment of pre-set periodic objectives and individual targets. The annual cash bonus that may be granted to our executive officers is based primarily on measurable short- and long-term criteria. A non-material part of variable compensation for executive officers may be based on qualitative or non-measurable criteria which focus on the executive officer’s contribution to the Company, subject to a maximum amount linked to the executive officer’s base salary. ​ The equity-based compensation under our compensation policy for our executive officers is designed in a manner consistent with the underlying objectives in determining the base salary and the annual cash bonus, with its main objectives being to enhance the alignment between the executive officers’ interests with our long-term interests and those of our shareholders and to strengthen the retention and the motivation of executive officers in the long term. Our compensation policy provides for equity compensation in any form permitted under our equity incentive plan then in place. The equity-based compensation shall be granted from time to time and be individually determined and awarded according to the performance, educational background, prior business experience, qualifications, role and the personal responsibilities of the executive officer. ​ In addition, our compensation policy contains compensation recovery provisions which allow us under certain conditions to recover bonuses paid in excess, enables our compensation committee and board of directors to approve an immaterial change in the terms of employment of an executive officer and allow us to exculpate, indemnify and insure our executive officers and directors to the maximum extent permitted by Israeli law subject to certain limitations set forth therein. ​ Our compensation policy also provides for compensation to the members of our board of directors in accordance with market compensation trends, provided however that in the case of an external director, such compensation will be paid in accordance with the amounts provided in the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director) of 2000, as amended by the Companies Regulations (Relief for Public Companies Traded in Stock Exchange Outside of Israel) of 2000, as such regulations may be amended from time to time. ​ Our compensation policy was approved by our compensation committee, our board of directors and shareholders and became effective on April 12, 2022. Nominating and Governance Committee Our Nominating and Governance Committee consists of Natalie Leong and Joseph Cooper, with Ms. Leong chairing the committee. The Board of Directors has determined that each member of the Nominating and Governance Committee is independent under Nasdaq listing standards. 62 Table of Contents Our Board adopted the Amended and Restated Charter of the Nominating and Governance Committee that sets forth the responsibilities of such committee under Nasdaq listing standards, as well as the requirements for such committee under the Companies Law, including the following: ● evaluating our corporate leadership structure, and reviewing important issues and developments in corporate governance, and developing appropriate recommendations for the Board; and ● overseeing and assisting our board in reviewing and recommending nominees for election as directors and members of committees of our board. Internal Auditor Under the Companies Law, the board of directors of a public company must appoint an internal auditor based on the recommendation of the audit committee. The role of the internal auditor is, among other things, to review the company’s compliance with applicable law and orderly business procedure. Under the Companies Law, the internal auditor cannot be an interested party, an office holder, or a relative of an interested party or an office holder. Nor may the internal auditor be the company’s independent auditor or its representative. An “interested party” is defined in the Companies Law as (i) a holder of 5% or more of the issued share capital or voting power in a company, (ii) any person or entity who has the right to designate one or more directors or to designate the chief executive officer of the company, or (iii) any person who serves as a director or as chief executive officer of the company. The role of the internal auditor is to examine, among other things, our compliance with applicable law and orderly business procedures. The audit committee is required to oversee the activities of the internal auditor and to assess his or her work plan and performance. Our internal auditor is Mr. Edo Pollack, a Certified Public Accountant and partner-in-charge of the Israel office of Eisner Advisory Group LLC. Fiduciary Duties of Directors, Executive Officers and Shareholders The Companies Law codifies the fiduciary duties that office holders owe to a company. An office holder is defined in the Companies Law as a general manager, chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of these positions regardless of such person’s title, a director, and any other manager directly subordinate to the general manager. Each person listed in the table under “Management” is an office holder under the Companies Law. An office holder’s fiduciary duties consist of a duty of care and a duty of loyalty. The duty of care requires an office holder to act with the level of care with which a reasonable office holder in the same position would act under the same circumstances. The duty of loyalty requires that an office holder act in good faith and in the best interests of the company. The duty of care includes a duty to use reasonable means to obtain: ● information on the advisability of a given action brought for the office holder’s approval or performed by virtue of his or her position; and ● all other important information pertaining to any such action. The duty of loyalty includes a duty to: ● refrain from any conflict of interest between the performance of the office holder’s duties to the company and his or her other duties or personal affairs; ● refrain from any activity that is competitive with the company; ● refrain from exploiting any business opportunity of the company to receive a personal gain for himself or herself or others; and ● disclose to the company any information or documents relating to the company’s affairs which the office holder received as a result of his or her position as an office holder. 63 Table of Contents Shareholder duties ​ Pursuant to the Companies Law, a shareholder has a duty to act in good faith and in a customary manner toward the company and other shareholders and to refrain from abusing his or her power with respect to the company, including, among other things, in voting at a general meeting and at shareholder class meetings with respect to the following matters: ​ ● an amendment to the company’s articles of association; ● an increase of the company’s authorized share capital; ● a merger; or ● interested party transactions that require shareholder approval. In addition, a shareholder has a general duty to refrain from discriminating against other shareholders. ​ Certain shareholders also have a duty of fairness toward the company. These shareholders include any controlling shareholder, any shareholder who knows that it has the power to determine the outcome of a shareholder vote, and any shareholder who has the power to appoint or to prevent the appointment of an office holder of the company or exercise any other rights available to it under the company’s articles of association with respect to the company. The Companies Law does not define the substance of this duty of fairness, except to state that the remedies generally available upon a breach of contract will also apply in the event of a breach of the duty of fairness. Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions The Companies Law requires that an office holder promptly disclose to the board of directors any personal interest and all related material information known to such office holder concerning any existing or proposed transaction with the company. A personal interest includes an interest of any person in an act or transaction of a company, including a personal interest of one’s relative or of a corporate body in which such person or a relative of such person is a 5% or greater shareholder, director, or general manager or in which such person has the right to appoint at least one director or the general manager, but excluding a personal interest stemming solely from one’s ownership of shares in the company. A personal interest includes the personal interest of a person for whom the office holder holds a voting proxy or the personal interest of the office holder with respect to the officer holder’s vote on behalf of a person for whom he or she holds a proxy even if such shareholder has no personal interest in the matter. If it is determined that an office holder has a personal interest in a non-extraordinary transaction (meaning any transaction that is in the ordinary course of business, on market terms or that is not likely to have a material impact on the company’s profitability, assets or liabilities), approval by the board of directors is required for the transaction unless the company’s articles of association provide for a different method of approval. Any such transaction that is adverse to the company’s interests may not be approved by the board of directors. Approval first by the company’s audit committee and subsequently by the board of directors is required for an extraordinary transaction (meaning any transaction that is not in the ordinary course of business, not on market terms or that is likely to have a material impact on the company’s profitability, assets or liabilities) in which an office holder has a personal interest. A director and any other office holder who has a personal interest in a transaction which is considered at a meeting of the board of directors or the audit committee may generally (unless it is with respect to a transaction which is not an extraordinary transaction) not be present at such a meeting or vote on that matter unless a majority of the directors or members of the audit committee, as applicable, have a personal interest in the matter. If a majority of the members of the audit committee or the board of directors have a personal interest in the matter, then all of the directors may participate in deliberations of the audit committee or board of directors, as applicable, with respect to such transaction and vote on the approval thereof and, in such case, shareholder approval is also required. Certain disclosure and approval requirements apply under Israeli law to certain transactions with controlling shareholders, certain transactions in which a controlling shareholder has a personal interest, and certain arrangements regarding the terms of service or employment of a controlling shareholder. For these purposes, a controlling shareholder is any shareholder that has the ability to direct the company’s actions, including any shareholder holding 25% or more of the voting rights if no other shareholder owns more than 50% 64 Table of Contents of the voting rights in the company. Two or more shareholders with a personal interest in the approval of the same transaction are deemed to be one shareholder. Exculpation, insurance and indemnification of office holders ​ Under the Companies Law, a company may not exculpate an office holder from liability for a breach of the duty of loyalty. An Israeli company may exculpate an office holder in advance from liability to the company, in whole or in part, for damages caused to the company as a result of a breach of duty of care, but only if a provision authorizing such exculpation is included in its articles of association. Our articles of association include such a provision. An Israeli company may not exculpate a director from liability arising out of a prohibited dividend or distribution to shareholders. ​ An Israeli company may indemnify an office holder from the following liabilities and expenses incurred for acts performed as an office holder, either in advance of an event or following an event, provided a provision authorizing such indemnification is contained in its articles of association: ● a financial liability imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the above mentioned events and amount or criteria; ● reasonable litigation expenses, including legal fees, incurred by the office holder (1) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (2) in connection with a monetary sanction; ● reasonable litigation expenses, including legal fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third-party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent; ● expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments made to an injured party imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law; and ● expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder pursuant to certain provisions of the Israeli Economic Competition Law, 5758-1988. An Israeli company may insure an office holder against the following liabilities incurred for acts performed as an office holder if and to the extent provided in the company’s articles of association: ● a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; ● a breach of the duty of care to the company or to a third-party, including a breach arising out of the negligent conduct of the office holder; ● a financial liability imposed on the office holder in favor of a third-party; ● a financial liability imposed on the office holder in favor of a third-party harmed by a breach in an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law; and 65 Table of Contents ● expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her, pursuant to certain provisions of the Israeli Securities Law. An Israeli company may not exempt, indemnify or insure an office holder against any of the following: ● a breach of the duty of loyalty, except with respect to insurance coverage or indemnification, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; ● a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; ● an act or omission committed with intent to derive illegal personal benefit; or ● a fine, monetary sanction, or forfeit levied against the office holder. Under the Companies Law, exculpation, indemnification, and insurance of office holders must be approved by the compensation committee and the board of directors (and, with respect to directors and the chief executive officer, by the shareholders). However, under regulations promulgated under the Companies Law, the insurance of office holders shall not require shareholder approval and may be approved by only the compensation committee if the engagement terms are determined in accordance with the company’s compensation policy, which was approved by the shareholders by the same special majority required to approve a compensation policy, provided that the insurance policy is on market terms and the insurance policy is not likely to materially impact the company’s profitability, assets, or obligations. Our articles of association allow us to exculpate, indemnify, and insure our office holders to the maximum extent permitted by law. Our office holders are currently covered by a directors and officers’ liability insurance policy. We have entered enter into agreements with each of our directors and executive officers exculpating them in advance, to the fullest extent permitted by law, from liability to us for damages caused to us as a result of a breach of duty of care, and undertaking to indemnify them to the fullest extent permitted by law. This indemnification is limited to events determined as foreseeable by the board of directors based on our activities and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances. In the opinion of the SEC, indemnification of directors and office holders for liabilities arising under the Securities Act, however, is against public policy and therefore unenforceable. Approvals Required for the Compensation of Directors and Executive Officers Directors ​ Under the Companies Law, the compensation of a public company’s directors requires the approval of (i) its compensation committee, (ii) its board of directors and, unless exempted under regulations promulgated under the Companies Law, (iii) the approval of its shareholders at a general meeting. In addition, if the compensation of a public company’s directors is inconsistent with the company’s compensation policy, then those inconsistent provisions must be separately considered by the compensation committee and board of directors, and approved by the shareholders by a special vote in one of the following two ways: ● at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such matter, present and voting at such meeting, vote in favor of the inconsistent provisions of the compensation package, excluding abstentions; or ● the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such matter voting against the inconsistent provisions of the compensation package does not exceed two percent (2%) of the aggregate voting rights in the Company. 66 Table of Contents Executive officers other than the chief executive officer ​ The Companies Law requires the compensation of a public company’s executive officers (other than the chief executive officer and who do not also serve as a director) be approved in the following order: (i) the compensation committee, (ii) the company’s board of directors, and (iii) if such compensation arrangement is inconsistent with the company’s stated compensation policy, the company’s shareholders (by a special vote as discussed above with respect to the approval of director compensation that is inconsistent with the compensation policy). ​ However, there are exceptions to the foregoing approval requirements with respect to such non-director executive officers. If the shareholders of the company do not approve the compensation of such a non-director executive officer, the compensation committee and board of directors may override the shareholders’ disapproval for such non-director executive officer provided that the compensation committee and the board of directors each document the basis for their decision to override the disapproval of the shareholders and approve the compensation. ​ An amendment to an existing compensation arrangement with a non-director executive officer requires only the approval of the compensation committee, if the compensation committee determines that the amendment is immaterial. However, if such non-director executive officer is subordinate to the chief executive officer, an immaterial amendment to an existing compensation arrangement shall not require the approval of the compensation committee if (i) such amendment is approved by the chief executive officer, (ii) the company’s compensation policy allows for such immaterial amendments to be approved by the chief executive officer and (iii) the engagement terms are consistent with the company’s compensation policy. ​ Chief Executive officer ​ Under the Companies Law, the compensation of a public company’s chief executive officer is required to be approved by: (i) the company’s compensation committee, (ii) the company’s board of directors and (iii) the company’s shareholders (by a special vote as discussed above with respect to the approval of director compensation that is inconsistent with the compensation policy). However, if the shareholders of the company do not approve the compensation arrangement with a chief executive officer who does not serve as a director, the compensation committee and board of directors may override the shareholders’ decision provided that they each document the basis for their decision and the compensation is in accordance with the company’s compensation policy. The approval of each of the compensation committee and board of directors should be in accordance with the company’s compensation policy; however, in special circumstances, they may approve compensation terms of a chief executive officer that are inconsistent with such policy provided that they have considered those provisions that must be included in the compensation policy according to the Companies Law and that shareholder approval was obtained (by a special majority vote as discussed above with respect to the approval of director compensation that is inconsistent with the compensation policy). ​ In the case of a new chief executive officer, the compensation committee may waive the shareholder approval requirement with regard to the compensation of a candidate for the chief executive officer position if the compensation committee determines that: (i) the compensation arrangement is consistent with the company’s compensation policy, (ii) the chief executive officer candidate did not have, on the date of his appointment or during the two-year period preceding his appointment, an “affiliation” (including an employment relationship, a business or professional relationship or control) with the company or a controlling shareholder of the company or a relative thereof and (iii) subjecting the approval of the engagement to a shareholder vote would impede the company’s ability to employ the chief executive officer candidate. However, if the chief executive officer candidate will serve as a member of the board of directors, such candidate’s compensation terms as chief executive officer must be approved in accordance with the rules applicable to approval of compensation of directors. 67 Table of Contents Item 11. Executive Compensation Summary Compensation Table The following table sets forth information concerning the compensation awarded to, earned by, or paid to our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer (collectively referred to as “named executive officers” or “Covered Office Holders”) during the years ended December 31, 2023 and 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Option All Other ​ ​ ​ ​ ​ Salary ​ Bonus (1) Awards (2) ​ Compensation (3) ​ Total (4) Name and Principal Position Year ($) ​ ($) ​ ($) ​ ($) ​ ($) Dr. Michael Myers ​ 2023 ​ 602,250 ​ — ​ 292,263 ​ 59,550 ​ 954,063 Chief Executive Officer ​ 2022 ​ 550,000 ​ 247,500 ​ 1,112,187 ​ 57,112 ​ 1,966,799 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denise Carter ​ 2023 ​ 481,800 ​ — ​ 292,266 ​ 56,000 ​ 830,066 Chief Operating Officer ​ 2022 ​ 440,000 ​ 198,000 ​ 1,112,187 ​ 55,215 ​ 1,805,402 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gordon Dunn (4) ​ 2023 ​ 394,200 ​ — ​ 184,635 ​ — ​ 578,835 Chief Financial Officer ​ 2022 ​ 360,000 ​ 162,000 ​ 926,822 ​ 1,385 ​ 1,450,207 (1) For bonuses earned during the year ended December 31, 2022, represents a discretionary cash bonus under the officer’s respective employment agreement granted in recognition of the applicable officer’s promotion of our long-term goals, strategy and operating plan, the need to have appropriate incentives for our officers, and contribution to the achievement of our objectives in accordance with the applicable officer’s respective corporate role during the year ended December 31, 2022. Dr. Myers’ and Ms. Carter’s bonuses were approved by shareholders at our Annual Meeting held October 26, 2023. The amount of bonuses earned during the year ended December 31, 2023 is not calculable through the date of this Annual Report, and such amount will be disclosed in a Current Report on Form 8-K after we obtain applicable approvals of our shareholders under the Companies Law at our 2024 Annual Meeting of Shareholders. (2) Represents the grant date fair value of option awards granted to each of our named executive officers on April 12, 2022 and October 26, 2023, respectively, calculated in accordance with FASB ASC Topic 718. The 2022 options have an exercise price of $210 per ADS and vest in four equal annual installments beginning on April 12, 2023. The 2023 options have an exercise price of $5.75 per ADS and vest in in three annual installments of 20% and a fourth annual installment of 40% beginning on October 26, 2024. The option values were calculated using a Black-Scholes Model for pricing options. See Note 7 to the Consolidated Financial Statements included in this Annual Report for all relevant valuation assumptions used to determine the grant date fair value of these options. ​ 68 Table of Contents (3) Represents amounts paid as office and automobile allowance to Mr. Myers and Ms. Carter under their respective employment agreements, as well as the employer matching contribution to the executive’s 401(k) plan contributions under our Section 401(k) retirement plan (the “Section 401(k) Plan”), broken down as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Office ​ Car ​ 401(k) ​ ​ ​ ​ ​ ​ Allowance ​ Allowance ​ Contributions ​ Total ​ ​ ($) ($) ($) ($) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Michael Myers ​ 2023 ​ 30,000 ​ 18,000 ​ 11,550 ​ 59,550 ​ ​ 2022 ​ 30,000 ​ 18,000 ​ 9,112 ​ 57,112 Denise Carter ​ 2023 ​ 30,000 ​ 18,000 ​ 8,000 ​ 56,000 ​ ​ 2022 ​ 30,000 ​ 18,000 ​ 7,215 ​ 55,215 Gordon Dunn ​ 2023 ​ — ​ — ​ — ​ — ​ ​ 2022 ​ — ​ — ​ 1,385 ​ 1,385 Employment Agreements We entered into written employment agreements with our Covered Office Holders that contain customary provisions, including non-compete and confidentiality provisions. Dr. Myers. Pursuant to his Executive Employment Agreement with Quoin Inc., dated March 9, 2018, which was amended as of November 9, 2021 (as amended, the “Myers Agreement”), Dr. Myers is entitled to an annual base salary of $550,000, which accrued monthly until paid by Quoin Inc. Dr. Myers may also receive, subject to employment by us on the applicable date of bonus payout, an annual target discretionary bonus of not less than 45% of his annual base salary, payable at the discretion of the board of directors after approval of our compensation committee, subject to shareholder approval by a Special Majority for Compensation Matters. Pursuant to the Myers Agreement, Dr. Myers is also eligible to receive healthcare benefits as may be provided from time to time by us to our employees generally, and to receive paid time off annually in accordance with our policies in effect from time to time. Additionally, the Myers Agreement provides Dr. Myers with a monthly office allowance of $2,500 and a monthly automobile allowance of $1,500. At the annual general meeting of shareholders held on October 26, 2023, shareholders approved an amendment to Dr. Myers’ employment agreement to increase to Dr. Meyer’s annual base salary by 9.5%, retroactive to January 1, 2023, to $602,250. Ms. Carter. Pursuant to her Executive Employment Agreement with Quoin Inc., dated March 9, 2018, which was amended as of November 9, 2021 (as amended, the “Carter Agreement”), Ms. Carter is entitled to an annual base salary of $440,000, which accrued monthly until paid by Quoin Inc. Ms. Carter may also receive, subject to employment by us on the applicable date of bonus payout, an annual target discretionary bonus of not less than 45% of her annual base salary, payable at the discretion of the board of directors after approval of our compensation committee, subject to shareholder approval by a Special Majority for Compensation Matters. Pursuant to the Carter Agreement, Ms. Carter is also eligible to receive healthcare benefits as may be provided from time to time by us to our employees generally, and to receive paid time off annually in accordance with Quoin’s policies in effect from time to time. Additionally, the Carter Agreement provides Ms. Carter with a monthly office allowance of $2,500 and a monthly automobile allowance of $1,500. At the annual general meeting of shareholders held on October 26, 2023, shareholders approved an amendment to Ms. Carter’s employment agreement to increase to Ms. Carter’s annual base salary by 9.5%, retroactive to January 1, 2023, to $481,800. Mr. Dunn. Pursuant to his Service Agreement with Quoin Inc., dated November 1, 2021 (as amended, the “Dunn Agreement”), Mr. Dunn is entitled to an annual base salary of $360,000. In addition, Mr. Dunn is entitled to receive (i) a signing bonus equal to one-twelfth of his annual base salary, and (ii) subject to employment by us on the applicable date of bonus payout, an annual target discretionary bonus of not less than 45% of his annual base salary, payable at the discretion of the Board, which will be prorated for 2021. Under the Dunn Agreement, upon our adoption of an option plan, we are obligated to grant an option to Mr. Dunn to purchase our ordinary shares, with $1.25 million grant date value, subject to the terms of such plan. Mr. Dunn is also eligible to receive healthcare benefits as may be provided from time to time by us to our employees generally and paid time off annually in accordance with our policies in effect from time to time. Effective October 26, 2023, Mr. Dunn’s annual base salary was amended to provide for an increase to his annual base salary by 9.5%, retroactive to January 1, 2023, to $394,200. Health and Welfare Benefits Our named executive officers are eligible to participate in the same employee benefit plans, and on the same terms and conditions, as all other full-time, salaried U.S. employees. These benefits include medical, dental, and vision insurance, an employee assistance 69 Table of Contents program, health and dependent care flexible spending accounts, basic life insurance, accidental death and dismemberment insurance, short-term and long-term disability insurance, and commuter benefits. We also maintain the “Section 401(k) Plan that provides eligible employees, including our named executive officers, with an opportunity to save for retirement on a tax-advantaged basis. Eligible employees are able to participate in the Section 401(k) Plan as of the first day of the month following the date they meet the plan’s eligibility requirements. Participants are able to defer up to 100% of their eligible compensation subject to applicable annual limits under the Internal Revenue Code (the “Code”). All participants’ interests in their deferrals are 100% vested when contributed. Currently, we match up to 100% of a participant’s first 1% of his or her eligible contributions to the Section 401(k) Plan, and we match up to 50% of the next 5% of his or her eligible contributions. Outstanding Equity Awards at December 31, 2023 The following table sets forth information with respect to outstanding equity awards for each named executive officer as of December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Number of ​ ​ Securities ​ Securities ​ ​ ​ ​ ​ ​ Underlying ​ Underlying ​ Option ​ ​ ​ ​ Unexercised ​ Unexercised ​ Exercise ​ Option ​ ​ Options (#) ​ Options (#) ​ Price (2) ​ Expiration Name ​ Exercisable ​ Unexercisable (1) ​ ($) ​ Date ​ ​ ​ ​ ​ ​ ​ ​ ​ Dr. Michael Myers 1,786 5,357 ​ 210.00 ​ 04/12/2032 ​ ​ — ​ 80,965 ​ 5.75 ​ 10/26/2033 Denise Carter 1,786 5,357 ​ 210.00 ​ 04/12/2032 ​ ​ — ​ 80,966 ​ 5.75 ​ 10/26/2033 Gordon Dunn ​ 1,488 ​ 4,465 ​ 210.00 ​ 04/12/2032 ​ — 51,149 ​ 5.75 ​ 10/26/2033 (1) Represents the number of ADSs issuable upon the exercise of options. The 2022 options vest in four equal annual installments beginning on April 12, 2023. The 2023 options vest in in three annual installments of 20% and a fourth annual installment of 40% beginning on October 26, 2024. (2) Represents the exercise price per ADS. Amended and Restated Equity Incentive Plan At our annual meeting of shareholders on April 12, 2022 (“April 2022 Annual Meeting”), our shareholders approved our Amended And Restated Equity Incentive Plan (the “Plan”), which amended and restated our 2014 Global Incentive Option Scheme. The number of shares reserved for issuance under the Plan is equal to 15% of our outstanding ordinary shares on a fully-diluted basis. The purpose of the Plan is to attract, retain and motivate our employees (including prospective employees), non-employee directors and consultants. The Board has the power to administer the Plan, either directly or upon the recommendation of the Compensation Committee of the Board, in accordance with applicable law and the Company’s Articles. Options granted under the Plan are subject to applicable vesting schedules and generally expire ten years from the grant date. Option Grants At our April 2022 Annual Meeting, our shareholders approved the grant an option to purchase 7,143 ADSs under the Plan to each of Dr. Myers and Ms. Carter. In addition, our Board approved the grant of an option to purchase 5,953 ADSs under the Plan to Mr. Dunn. The 2022 option grants were each at an exercise price of $210.00 per ADS, in four equal annual installments beginning on April 12, 2023. At our October 2023 Annual Meeting, our shareholders approved the grant an option to purchase 80,956 and 80,966 ADSs under the Plan to Dr. Myers and Ms. Carter, respectively. In addition, our Board approved the grant of an option to purchase 51,149 ADSs under the Plan to Mr. Dunn. The 2023 option grants were each at an exercise price of $5.75 per ADS, vesting in three annual installments of 20% and a fourth annual installment of 40% beginning on October 26, 2024. Under the Companies Law, shareholder approval was not required for the option grants to Mr. Dunn. 70 Table of Contents Potential Payments Upon Termination or in Connection With a Change of Control Employment Agreements Pursuant to each of the Myers Agreement and the Carter Agreement, Dr. Myers and Ms. Carter, respectively, are entitled to the following benefits upon termination of their employment: ● Termination for any reason: Upon the termination of such executive’s employment for any reason, such executive will receive (i) his or her Base Salary (as defined in the Myers Agreement or the Carter Agreement, as applicable) through the Exit Date (as defined in the Myers Agreement or the Carter Agreement, as applicable), (ii) any Bonuses (as defined in the Myers Agreement or the Carter Agreement, as applicable) to which he or she is entitled and has already earned for the prior fiscal year, and (iii) any other accrued or vested benefits or reimbursements through the Exit Date to which such executive is entitled to contractually or by operation of law. ● Termination upon death or Disability: In the event of the executive’s termination due to his or her death or Disability (as defined in the Myers Agreement or the Carter Agreement, as applicable), then, in addition to the payments set forth above, the executive will receive his or her pro rata portion of the Bonus such executive would have been entitled to receive for the fiscal year in which the Exit Date occurs, based upon the percentage of the fiscal year that elapsed through the Exit Date. Additionally, in the event of termination due to Disability, the executive will receive, for a period of 24 months following the Exit Date, such executive monthly COBRA premium. ● Termination without Cause or for Good Reason: In addition to the payments set forth in the first bullet above, if Dr. Myers or Ms. Carter is terminated by the Company without Cause (as defined in the Myers Agreement or the Carter Agreement, as applicable), or Dr. Myers or Ms. Carter terminates his or her employment for Good Reason (as defined in the Myers Agreement or the Carter Agreement, as applicable), he or she will be entitled to receive (i) his or her Base Salary for 2 years from the Exit Date and 2 times the current years’ Bonus, and (ii) continuation of such executive’s medical benefits for 2 years from the Exit Date (unless the executive becomes employed elsewhere during such 2 year period and is eligible to receive comparable medical benefits). As a condition precedent to receiving any of the foregoing benefits, Dr. Myers and/or Ms. Carter, as applicable, must first sign a Release (as defined in the Myers Agreement or the Carter Agreement, as applicable). Mr. Dunn, pursuant to the Dunn Agreement, is also entitled to the following benefits upon termination of his employment: ● Garden Leave : During any period of notice to terminate Mr. Dunn’s employment, Mr. Dunn will continue to be entitled to his basic salary and contractual benefits in the usual course. ● Payment in lieu of notice : Upon the termination of Mr. Dunn’s employment at any time, Mr. Dunn will receive payment equal to his basic salary as of the termination date which he would have been entitled to receive under the Dunn Agreement during the notice period referred to in the bullet below, less income tax and national insurance contributions. Payment in lieu of notice will not include (i) any bonus or commission payments that might otherwise have been paid to Mr. Dunn during the period for which such payment in lieu of notice is made, (ii) benefits Mr. Dunn would have been entitled to during such time, and (iii) holiday entitlement that would have accrued during such time. ● Termination : Subject to successful completion of the probationary employment period as set forth in the Dunn Agreement, and except in connection with certain “for cause” events, as set forth in Section 20.2 of the Dunn Agreement, the Company may terminate Mr. Dunn’s employment by giving at least 12 months’ prior written notice, and is obligated to continue paying Mr. Dunn his basic salary and other benefits during such notice period. The foregoing descriptions of the Myers Agreement, the Carter Agreement and the Dunn Agreement do not purport to be complete and are qualified in their entirety by reference to the complete text of the Myers Agreement, the Carter Agreement and the Dunn Agreement, copies of which are included as exhibits to this Annual Report. Option Awards Under the Plan, upon termination of employment for any reason, other than in the event of death or disability or for ”Cause” (as defined in the Plan), all unvested options will expire and all vested options at time of termination will generally be exercisable for 71 Table of Contents 90 days following termination, subject to the terms of the Plan and the governing option agreement. If we terminate a grantee for Cause, the grantee’s right to exercise all vested and unvested the options granted to the grantee will expire immediately. Upon termination of employment due to death or disability, all the vested options at the time of termination will be exercisable for 12 months after date of termination, subject to the terms of the Plan and the governing option agreement. Non-Employee Director Compensation Under our non-employee directors’ compensation program, non-employee directors are entitled to receive the following cash compensation for their services: ● each non-employee director receives an annual base retainer of $75,000; ● each committee chairperson receives an additional retainer of $15,000 for his or her service as a chairperson; and ● each member of a standing committee receives an additional retainer of $5,000 for such service on a standing committee. In addition to cash compensation, our non-employee directors are also entitled to equity awards under our director compensation policy. Each non-employee director is entitled to receive an annual award of options under the Plan valued at $44,000. In addition, each non-employee director who joins the Board is granted an inaugural award of options valued at $165,000. The following table sets forth information concerning the compensation awarded to, earned by or paid to non-employee directors for the year ended December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ Fees Earned or Option ​ ​ Paid in Cash ​ Awards (1) ​ Total Name ​ ($) ​ ($) ​ ($) Joseph Cooper 85,000 ​ 27,622 ​ 112,622 James Culverwell 95,000 ​ 27,622 ​ 122,622 Dr. Dennis H. Langer 90,000 ​ 27,622 ​ 117,622 Natalie Leong 95,000 ​ 27,622 ​ 122,622 Michael Sember 80,000 ​ 27,622 ​ 107,622 (1) Represents the grant date fair value of option awards granted to each of our non-employee directors on October 26, 2023, calculated in accordance with FASB ASC Topic 718. These options have an exercise price of $5.75 per ADS and vest in four equal annual installments beginning on October 26, 2024. The option values were calculated using a Black-Scholes Model for pricing options. See Note 7 to Consolidated Financial Statements included in this Annual Report for all relevant valuation assumptions used to determine the grant date fair value of these options. As of December 31, 2023 the aggregate number of outstanding options held by each of our non-employee directors was 8,724 ADSs . Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security Ownership of Certain Beneficial Owners and Management The following table sets forth information relating to the beneficial ownership of our ordinary shares as of March 13, 2024 by: ● each person, or group of affiliated persons, known by us to own beneficially 5% or more of our outstanding ordinary shares; ● each of our directors and named executive officers; and ● all of our directors and officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC and generally means sole or shared power to vote or direct the voting or to dispose or direct the disposition of any ordinary shares. Unless otherwise indicated in the footnotes to this table, we believe that each of the persons named in this table has sole voting and investment power with respect to the shares indicated as being beneficially owned. 72 Table of Contents Except as indicated by footnote, the beneficial ownership information is based upon 3,685,970 ordinary shares outstanding as of March 13, 2024. Ordinary shares that may be acquired by a person within 60 days of March 13, 2024, pursuant to the exercise of options are deemed to be outstanding for purpose of computing the percentage ownership of such person, but are not deemed to be outstanding for purposes of computing the percentage ownership of ordinary shares of any other person shown in the table. Each ADS represents one ordinary share. Unless indicated otherwise below, the address of our directors and executive officers is c/o Quoin Pharmaceuticals Ltd., 42127 Pleasant Forest Court, Ashburn, VA 20148-7349. ​ ​ ​ ​ ​ ​ Amount and Nature of Beneficial Percentage Name and Address of Beneficial Owner ​ Ownership ​ of Class Directors and Named Executive Officers: ​ ​ ​ ​ Dr. Michael Myers (1) ​ 12,930 ​ * Denise Carter (2) ​ 12,929 ​ * Joseph Cooper (3) ​ 715 ​ * James Culverwell (4) ​ 1,032 ​ * Dr. Dennis Langer (5) ​ 1,065 ​ * Natalie Leong (6) ​ 715 ​ * Michael Sember (7) ​ 715 ​ * Gordon Dunn (8) ​ 2,977 ​ * All directors and officers as a group (8 persons) (9) ​ 33,078 ​ * * Less than 1% ​ (1) Consists of (i) 9,358 ordinary shares held directly and (ii) 3,572 ordinary shares issuable upon the exercise of options. (2) Consists of (i) 9,357 ordinary shares held directly and (ii) 3,572 ordinary shares issuable upon exercise of options. (3) Represents 715 ordinary shares issuable upon exercise of options. (4) Consists of (i) 317 ordinary shares held directly and (ii) 715 ordinary shares issuable upon exercise of options. (5) Consists of (i) 350 ordinary shares held directly and (ii) 715 ordinary shares issuable upon exercise of options. (6) Represents 715 ordinary shares issuable upon exercise of options. (7) Represents 715 ordinary shares issuable upon exercise of options. (8) Represents 2,977 ordinary shares issuable upon exercise of options. (9) Consists of (i) 19,382 ordinary shares held directly and (ii) 13,696 ordinary shares issuable upon the exercise of options. ​ Equity Compensation Plan Table The following table summarizes our equity compensation plan information as of December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of securities ​ ​ ​ ​ ​ ​ ​ remaining available for ​ ​ Number of securities ​ Weighted-average ​ future issuance under equity ​ ​ to be issued upon exercise ​ exercise price of ​ compensation plans ​ ​ of outstanding options, ​ outstanding options, ​ (excluding securities reflected Plan category ​ warrants and rights (1) ​ warrants and rights (2) ​ in column (a) ​ (a) ​ (b) (c) Equity compensation plans approved by security holders 278,011 ​ $ 25.34 41,386 Equity compensation plans not approved by security holders — ​ — — Total 278,011 ​ $ 25.34 41,386 (1) Represents the number of ADSs issuable upon the exercise of options. (2) Represents the weighted-average exercise price of outstanding options exercisable into ADSs. ​ 73 Table of Contents Item 13. Certain Relationships and Related Transactions, and Director Independence Director Independence The Board determined that Joseph Cooper, James Culverwell, Dr. Dennis Langer, Natalie Leong, and Michael Sember, qualify as independent directors, as such term is defined under Nasdaq listing rules. Certain Relationships and Related Transactions In 2021, Quoin Inc. paid $100,000 of consulting expenses to a company controlled by Dennis Langer, our director, and approximately $8,000 and $48,000 and $12,000 were paid in 2021, 2022, and 2023, respectively, to Dr. Myers’ son, who was consulting Quoin Inc. on research and development matters from time to time. As of March 31, 2023, Dr. Myers’ son no longer provides consulting services to Quoin. Due to the limited funding of Quoin Inc. prior to the consummation of the Merger, the compensation, including salary, office and car allowances and other benefits, due to Dr. Myers and Ms. Carter under their respective employment agreements, as well as reimbursement of expenses and other amounts paid by Dr. Myers and Ms. Carter to third parties on behalf of Quoin Inc., were not paid by Quoin Inc. to Dr. Myers and Ms. Carter, and were accrued as indebtedness to Dr. Myers and Ms. Carter. Following the closing of the Merger, Quoin Inc. began making payments of $25,000 per month to each of Dr. Myers and Ms. Carter to repay the above-described non-interest-bearing indebtedness. We repaid $125,000,$300,000 and $300,000 of such indebtedness to Dr. Myers and $160,000, $300,000 and $300,000 to Ms. Carter in 2021, 2022 and 2023, respectively. As of December 31, 2023, approximately $1,959,000 and $1,565,000 of such indebtedness was outstanding to Dr. Myers and Ms. Carter, respectively. Commencing in October 2020, Quoin Inc. issued promissory notes (the “2020 Notes”) to five noteholders, including our directors, Messrs. Langer and Culverwell (collectively, “2020 Noteholders”). The 2020 Notes were issued at a 25% original issue discount with an aggregate face value of $1,213,313 with an interest at a rate of 20% per annum. The 2020 Noteholders also received warrants exercisable at any time after the issuance date. At the closing of the Merger in October 2021, 432 ADSs were issued to the 2020 Noteholders upon the conversion of the principal of the 2020 Notes, of which 52 ADSs were issued to Mr. Langer and 47 ADSs were issued to Mr. Culverwell. In December 2021, we concluded that the calculation of ADSs due to the 2020 Noteholders did not account for accrued interest due when the ADSs were issued. We reached cash settlements with two 2020 Noteholders, who are not our directors, to account for this. Based on the terms of these cash settlements, we estimate the liability to the remaining three 2020 Noteholders, including our directors, to be $1,146,000 as of December 31, 2023 and 2022. The exercise price of the warrants held by the 2020 Noteholders was reduced to $0.00 as of July 14, 2022 as a result of agreement with Quoin’s investor. The change in the exercise price of the Noteholder Warrants resulted in a deemed dividend of approximately $65,000. From July to September 2022, the 2020 Noteholders exercised all their warrants to purchase ADSs at $0.00 per ADS exercise price, and a total of 2,449 ADSs were issued to such noteholders, of which 298 ADSs were issued to Mr. Langer and 270 ADSs were issued to Mr. Culverwell. ​ 74 Table of Contents Item 14. Principal Accountant Fees and Services The Company’s shareholders appointed Friedman LLP (“Friedman”) as the Company’s independent registered public accounting firm for the year ended December 31, 2021. Based on information provided by Friedman, effective September 1, 2022, Friedman combined with Marcum LLP (“Marcum”). Marcum has served as the Company’s independent registered public accounting firm since September 1, 2022. The following table sets forth the aggregate accounting fees paid by us to Marcum and Friedman for all services, including audit services, for the years ended December 31, 2023 and 2022, as applicable. ​ ​ ​ ​ ​ ​ ​ ​ Year Ended Year Ended ​ ​ December 31, 2023 ​ December 31, 2022 Type of Fees (a) (in thousands) ​ ​ Audit Fees ​ $ 244 ​ $ 258 Audit-Related Fees ​ ​ — ​ — Tax Fees ​ ​ — ​ ​ — All Other Fees ​ ​ — ​ — Total ​ $ 244 ​ $ 258 (a) The aggregate fees included in Audit Fees are fees billed for the fiscal years. Audit fees relate to professional services rendered in connection with the annual financial statements, quarterly review of financial statements, and audit services provided in connection with other statutory and regulatory filings . ​ Audit Fees. Audit fees refer to the aggregate fees, including expenses, for the audit of our annual financial statements and review of financial statements included in our quarterly reports and other services that are normally provided in connection with statutory and regulatory filings or engagements. Audit-Related Fees. Audit-Related fee s refer to the aggregate fees, including expenses, for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements not reported under “Audit Fees” above. Tax Fees . Our independent registered public accounting firm did not provide any tax services during the periods. All Other Fees. Our independent registered public accounting firm did not provide any “other services” during the periods. Pre-Approval Policy Our audit committee has a pre-approval policy for the engagement of our independent registered public accounting firm to perform audit and non-audit services. Pursuant to this policy, which is designed to assure that such engagements do not impair the independence of our auditors, the audit committee pre-approves annually a catalog of specific audit and non-audit services in the categories of audit services, audit-related services and tax services, if any, that may be performed by our independent registered public accounting firm. If a type of service, that is to be provided by our auditors, has not received such general pre-approval, it will require specific pre-approval by our audit committee. ​ 75 Table of Contents PART IV ​ Item 15. Exhibit and Financial Statement Schedules ​ (a)(1) Financial Statements As part of this Annual Report, the consolidated financial statements are listed in the accompanying index to financial statements on page F-1. (a)(2) Financial Statement Schedules. All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto. (a)(3) Exhibits. The following is a list of exhibits filed as part of this Annual Report. Exhibit No. Exhibit Description 2.1 ​ Agreement and Plan of Merger and Reorganization, dated as of March 24, 2021, by and among Cellect Biotechnology Ltd., CellMSC, Inc. and Quoin Pharmaceuticals, Inc. (incorporated by reference to Exhibit 10.1 of the Form 6-K filed with the Securities and Exchange Commission on March 24, 2021). 2.2 ​ Amendment made as of September 24, 2021, to the Agreement and Plan of Merger and Reorganization, dated as of March 24, 2021, by and among Cellect Biotechnology Ltd., CellMSC, Inc., and Quoin Pharmaceuticals, Inc. (incorporated by reference to Exhibit 99.2 to Form 6-K filed with the SEC on September 27, 2021). 2.3 ​ Amended and Restated Share Transfer Agreement, dated May 27, 2021 by and between Cellect Biotechnology Ltd. and EnCellX Inc. (incorporated by reference to Exhibit 2.2 to Registration Statement on Form F-4 filed with the Securities and Exchange Commission on June 16, 2021). 2.4 ​ Amendment made as of September 26, 2021, to the Amended and Restated Share Transfer Agreement dated as of May 27, 2021, by and between EnCellX, Inc. and Cellect Biotechnology Ltd. (incorporated by reference to Exhibit 99.3 to Form 6-K filed with the SEC on September 27, 2021). 2.5 ​ Securities Purchase Agreement, dated as of March 24, 2021, by and among Cellect Biotechnology Ltd., Quoin Pharmaceuticals, Inc. and the investors named on the Schedule of Buyers attached thereto (incorporated by reference to Exhibit 10.4 of the Form 6-K filed with the Securities and Exchange Commission on March 24, 2021). 2.6 ​ Securities Purchase Agreement, dated as of March 24, 2021, by and among Quoin Pharmaceuticals, Inc. and the investors listed on the Schedule of Buyers attached thereto (incorporated by reference to Exhibit 10.6 of the Form 6-K filed with the Securities and Exchange Commission on March 24, 2021). 2.7 ​ Amendment Agreement, dated as of September 17, 2021, by and among Quoin Pharmaceuticals, Inc., Cellect Biotechnology, Ltd., and Altium Growth Fund, L.P. (incorporated by reference to Exhibit 99.1 of the Form 6-K filed with the Securities and Exchange Commission on September 17, 2021). 2.8 ​ Letter Agreement, dated September 17, 2021, between Quoin Pharmaceuticals, Inc. and Cellect Biotechnology, Ltd. (incorporated by reference to Exhibit 99.2 of the Form 6-K filed with the Securities and Exchange Commission on September 17, 2021). 2.9 ​ Second Amendment Agreement, dated as of March 13, 2022, by and among Quoin Pharmaceuticals, Inc., Quoin Pharmaceuticals Ltd., and Altium Growth Fund, L.P. (incorporated by reference to Exhibit 4.1 to Form 6–K filed with the SEC on March 28, 2022). 2.10 ​ Waiver Agreement, dated June 6, 2022, by and among Quoin Pharmaceuticals Ltd., Quoin Pharmaceuticals, Inc. and Altium Growth Fund, LP (incorporated by reference to Exhibit 10.2 to Form 6-K filed with the SEC on June 6, 2022). 2.11 ​ Agreement, dated July 14, 2022, by and among Quoin Pharmaceuticals, Inc., Quoin Pharmaceuticals Ltd. and Altium Growth Fund, LP (incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on July 15, 2022). 2.12 ​ Letter of Agreement among Cellect Biotechnology Ltd, Dr. Shai Yarkoni and EnCellX, Inc. (incorporated by reference to Exhibit 2.5 to Registration Statement on Form F-4 filed with the Securities and Exchange Commission on July 16, 2021). 2.13 ​ Form of Representative Agreement among Cellect Biotechnology Ltd, Eyal Leibovitz, as Representative, and EnCellX, Inc. (incorporated by reference to Exhibit 2.6 to Registration Statement on Form F-4 filed with the Securities and Exchange Commission on August 6, 2021). 3.1 ​ Amended and Restated Articles of Association of Quoin Pharmaceuticals Ltd., adopted on February 28, 2022 (incorporated by reference to Annex A included in Exhibit 99.1 to Form 6-K filed with the SEC on February 8, 2022). 76 Table of Contents 3.2 ​ Amendment to the Amended and Restated Articles of Association of Quoin Pharmaceuticals Ltd., adopted on April 12, 2022 (incorporated by reference to Annex A included in Exhibit 99.1 to Form 6-K filed with the SEC on March 8, 2022). 3.3 ​ Amendment to the Amended and Restated Articles of Association of Quoin Pharmaceuticals Ltd., adopted on November 3, 2022 (incorporated by reference to Annex A included in Exhibit 99.1 to Form 6-K filed with the SEC on September 21, 2022). 3.4 ​ Amendment to the Amended and Restated Articles of Association of Quoin Pharmaceuticals Ltd., adopted on October 26, 2023 (incorporated by reference to Annex A included in the proxy statement filed with the SEC on September 12, 2023). 4.1 ​ Form of Deposit Agreement between Cellect Biotechnology Ltd. (n/k/a Quoin Pharmaceuticals Ltd.), The Bank of New York Mellon as Depositary, and owners and holders from time to time of ADSs issued thereunder (incorporated by reference to Exhibit 4.1 to Registration Statement on Form F-1/A as filed with the SEC on July 26, 2016). 4.2 ​ Specimen American Depositary Receipt (included in Exhibit 2.1). 4.3 ​ Form of Contingent Value Rights Agreement, by and among Cellect Biotechnology, Ltd., Eyal Leibovitz in the capacity of Representative and Computershare, Inc. in the capacity of Rights Agent (incorporated by reference to Exhibit 4.14 to Registration Statement on Form F-4 filed with the SEC on August 6, 2021). 4.4 ​ Registration Rights Agreement, dated as of March 24, 2021, by and between Cellect Biotechnology Ltd. and the investors listed on the Schedule of Buyers attached thereto (incorporated by reference to Exhibit 10.5 of the Form 6-K filed with the Securities and Exchange Commission on March 24, 2021). 4.5 ​ Form of Primary Warrants for the Purchase Agreement (incorporated by reference to Exhibit B to Exhibit 10.4 to Form 6-K filed with the SEC on March 24, 2021). 4.6 ​ Form of Exchange Warrant (incorporated by reference to Exhibit 99.1 to Form 6-K filed with the SEC on September 17, 2021). 4.7 ​ Form of Series A Warrant (incorporated by reference to Exhibit 2.5 to Form 20-F filed with the SEC on April 13, 2022). 4.8 ​ Form of Series B Warrant (incorporated by reference to Exhibit 2.6 to Form 20-F filed with the SEC on April 13, 2022). 4.9 ​ Form of Series C Warrant (incorporated by reference to Exhibit 2.7 to Form 20-F filed with the SEC on April 13, 2022). 4.10 ​ Form of Warrant Agent Agreement between Cellect Biotechnology Ltd. and Computershare Inc., as warrant agent, including the form of Warrant (incorporated by reference to Exhibit 4.6 of the Registration Statement on Form F-1 filed with the SEC on February 7, 2019). 4.11 ​ Form of Securities Purchase Agreement, dated August 5, 2022 (incorporated by reference to Exhibit 4.11 of the Registration Statement on Form F-1/A filed with the SEC on August 4, 2022). 4.12 ​ Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.12 of the Registration Statement on Form F-1 filed with the SEC on August 3, 2022). 4.13 ​ Form of Common Warrant (incorporated by reference to Exhibit 4.13 of the Registration Statement on Form F-1 filed with the SEC on August 3, 2022). 4.14 ​ Form of Amendment No. 1 to Warrant to Purchase Ordinary Shares Represented by American Depositary Shares (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the SEC on February 28, 2023). 4.15 ​ Form of Securities Purchase Agreement, dated February 22, 2023 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on February 28, 2023). 4.16 ​ Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on February 28, 2023). 4.17 ​ Form of Common Warrant (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on February 28, 2023). 4.18 ​ Placement Agency Agreement by and between A.G.P. / Alliance Global Partners and Quoin Pharmaceuticals Ltd. (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on February 28, 2023 4.19 ​ Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934. 4.20 ​ Form of Pre-Funded Warrant issued in the 2024 Offering (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on March 8, 2024). 4.21 ​ Form of Series D Warrant (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on March 8, 2024). 4.22 ​ Form of Series E Warrant (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the SEC on March 8, 2024). 4.23 ​ Form of Amendment to Warrants to Purchase Ordinary Shares Represented by American Depositary Shares (incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K filed with the SEC on March 8, 2024). 10.1# ​ Compensation Policy for Executives and Directors of Quoin Pharmaceuticals Ltd, adopted on April 12, 2022 (incorporated by reference to Annex B included in Exhibit 99.1 to Form 6-K filed with the SEC on March 8, 2022). 10.2# ​ Amended and Restated Equity Incentive Plan of Quoin Pharmaceuticals Ltd., effective as of April 12, 2022 (incorporated by reference to Annex C included in Exhibit 99.1 to Form 6-K filed with the SEC on March 8, 2022). 77 Table of Contents 10.3# ​ Form of Indemnification and Release Agreement, entered into by and between Quoin Pharmaceuticals Ltd. and each of the officers and directors of Quoin Pharmaceuticals Ltd. as of April 12, 2022 (incorporated by reference to Annex D included in Exhibit 99.1 to Form 6-K filed with the SEC on March 8, 2022). 10.4# ​ Executive Employment Agreement, dated March 9, 2018, by and between Quoin Pharmaceuticals, Inc. and Dr. Michael Myers (incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on October 29, 2021). 10.5# ​ Executive Employment Agreement, dated March 9, 2018, by and between Quoin Pharmaceuticals, Inc. and Denise Carter (incorporated by reference to Exhibit 10.2 to Form 6-K filed with the SEC on October 29, 2021). 10.6# ​ Service Agreement, dated November 1, 2021, by and between Quoin Pharmaceuticals, Inc. and Gordon Dunn (incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on November 23, 2021). 10.7 ​ Research Agreement, dated November 1, 2021, by and between Quoin Pharmaceuticals, Inc. and Queensland University of Technology (incorporated by reference to Exhibit 10.2 to Form 6-K filed with the SEC on November 23, 2021). 10.8 ​ License and Distribution Agreement, dated November 5, 2021, by and between Quoin Pharmaceuticals, Inc. and AFT Pharmaceuticals Ltd. (incorporated by reference to Exhibit 10.3 to Form 6-K filed with the SEC on November 23, 2021). 10.9 ​ Supply Agreement, dated September 15, 2021, by and between Quoin Pharmaceuticals, Inc. and AFT Pharmaceuticals Ltd. (incorporated by reference to Exhibit 10.4 to Form 6-K filed with the SEC on November 23, 2021). 10.10 ​ License and Distribution Agreement, dated November 7, 2021, by and between Quoin Pharmaceuticals, Inc. and GenPharm Services FZ LLC (incorporated by reference to Exhibit 10.5 to Form 6-K filed with the SEC on November 23, 2021). 10.11 ​ Supply Agreement, dated November 7, 2021, by and between Quoin Pharmaceuticals, Inc. and GenPharm Services FZ LLC (incorporated by reference to Exhibit 10.6 to Form 6-K filed with the SEC on November 23, 2021). 10.12 ​ Distribution Agreement, dated December 15, 2021, by and between Quoin Pharmaceuticals, Inc. and Orpharm LLC (certain provisions of this exhibit have been omitted pursuant to Instruction No. 4 to Exhibits in Form 20-F) (incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on December 20, 2021). 10.13 ​ License and Distribution Agreement, dated as of January 24, 2022 between the Company and E-Log Logistica LTDA (certain provisions of this exhibit have been omitted pursuant to Instruction No. 4 to Exhibits in Form 20-F) (incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on January 31, 2022). 10.14 ​ License and Distribution Agreement, dated as of February 1, 2022, by and between Quoin Pharmaceuticals Ltd. and Er-Kim İlaç Sanayi ve Ticaret A.Ş, and the First Amendment to the License and Distribution Agreement, dated as of February 17, 2022, by and between Quoin Pharmaceuticals, Inc. and Er-Kim İlaç Sanayi ve Ticaret A.Ş (certain provisions of this exhibit have been omitted pursuant to Instruction No. 4 to Exhibits in Form 20-F) (incorporated by reference to Exhibit 10.4 to Form 6-K filed with the SEC on March 8, 2022). 10.15 ​ License and Distribution Agreement, dated as of February 11, 2022, by and between Quoin Pharmaceuticals Ltd. and Neopharm (Israel) 1996 Ltd. (certain provisions of this exhibit have been omitted pursuant to Instruction No. 4 to Exhibits in Form 20-F) (incorporated by reference to Exhibit 10.5 to Form 6-K filed with the SEC on March 8, 2022). 10.16 ​ Supply Agreement, dated as of February 11, 2022, by and between Quoin Pharmaceuticals Ltd. and Neopharm (Israel) 1996 Ltd. (incorporated by reference to Exhibit 10.6 to Form 6-K filed with the SEC on March 8, 2022). 10.17 ​ License Agreement, dated June 14, 2022, by and between Quoin Pharmaceuticals, Inc. and WinHealth Investment (HK) Limited (certain provisions of this exhibit have been omitted pursuant to Instruction No. 4 to Exhibits in Form 20-F) (incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on June 17, 2022). 10.18 ​ License and Distribution Agreement, dated July 14, 2022, by and between Quoin Pharmaceuticals, Inc. and Endo Ventures Limited (certain provisions of this exhibit have been omitted pursuant to Instruction No. 4 to Exhibits in Form 20-F) (incorporated by reference to Exhibit 10.2 to Form 6-K filed with the SEC on July 15, 2022). 10.19 ​ Supply Agreement, dated July 14, 2022, by and between Quoin Pharmaceuticals, Inc. and Endo Ventures Limited (certain provisions of this exhibit have been omitted pursuant to Instruction No. 4 to Exhibits in Form 20-F) (incorporated by reference to Exhibit 10.3 to Form 6-K filed with the SEC on July 15, 2022). 10.20 ​ Research Agreement, dated May 20, 2022, by and between Quoin Pharmaceuticals, Inc. and Queensland University of Technology, Australia (certain provisions of this exhibit have been omitted pursuant to Instruction No. 4 to Exhibits in Form 20-F) (incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on June 6, 2022). 10.21 ​ Exclusive License Agreement, dated October 17, 2019, by and between Quoin Pharmaceuticals, Inc. and Skinvisible Inc. (incorporated by reference to Exhibit 4.30 to Form 20-F filed with the SEC on April 13, 2022). 10.22 ​ Exclusive License Agreement Renewal, dated May 8, 2020, by and between Quoin Pharmaceuticals, Inc. and Skinvisible Inc. (incorporated by reference to Exhibit 4.31 to Form 20-F filed with the SEC on April 13, 2022). 10.23 ​ First Amendment to the Exclusive License Agreement, dated July 31, 2020, by and between Quoin Pharmaceuticals, Inc. and Skinvisible Inc. (incorporated by reference to Exhibit 4.32 to Form 20-F filed with the SEC on April 13, 2022). 78 Table of Contents 10.24 ​ Second Amendment to the Exclusive License Agreement, dated September 30, 2020, by and between Quoin Pharmaceuticals, Inc. and Skinvisible Inc. (incorporated by reference to Exhibit 4.33 to Form 20-F filed with the SEC on April 13, 2022). 10.25 ​ Third Amendment to the Exclusive License Agreement, dated January 27, 2021, by and between Quoin Pharmaceuticals, Inc. and Skinvisible Inc. (incorporated by reference to Exhibit 4.34 to Form 20-F filed with the SEC on April 13, 2022). 10.26 ​ Fourth Amendment to the Exclusive License Agreement, dated April 19, 2021, by and between Quoin Pharmaceuticals, Inc. and Skinvisible Inc. (incorporated by reference to Exhibit 4.35 to Form 20-F filed with the SEC on April 13, 2022). 10.27 ​ Fifth Amendment to the Exclusive License Agreement, dated June 14, 2021, by and between Quoin Pharmaceuticals, Inc. and Skinvisible Inc. (incorporated by reference to Exhibit 4.36 to Form 20-F filed with the SEC on April 13, 2022). 10.28 ​ Quotation – Tech Transfer and Clinical Manufacture for QRX003 Topical Lotion, dated April 8, 2021, by Ferndale Contract Manufacturing to Quoin Pharmaceuticals, Inc. (incorporated by reference to Exhibit 4.37 to Form 20-F filed with the SEC on April 13, 2022). 10.29 ​ Development and Supply Agreement, dated January 13, 2021, by and between TopChem Pharmaceuticals Limited and Quoin Pharmaceuticals Limited (incorporated by reference to Exhibit 4.38 to Form 20-F filed with the SEC on April 13, 2022). 10.30 ​ Master Services Agreement, dated November 2, 2020, by and between Therapeutics, Inc. and Quoin Pharmaceuticals, Inc. (incorporated by reference to Exhibit 4.39 to Form 20-F filed with the SEC on April 13, 2022). 10.31 ​ Term Sheet for Agreement, dated October 29, 2019, by and between Axella Research, LLC and Quoin Pharmaceuticals, Inc. (incorporated by reference to Exhibit 4.40 to Form 20-F filed with the SEC on April 13, 2022). 10.32 ​ Term Sheet for Agreement, dated January 11, 2020, by and between Axella Research, LLC and Quoin Pharmaceuticals, Inc. (re: QRX003) (incorporated by reference to Exhibit 4.41 to Form 20-F filed with the SEC on April 13, 2022). 10.33 ​ Term Sheet for Agreement, dated January 11, 2020, by and between Axella Research, LLC and Quoin Pharmaceuticals, Inc. (re: QRX004) (incorporated by reference to Exhibit 4.42 to Form 20-F filed with the SEC on April 13, 2022). 10.34# ​ Form of Non-Qualified Stock Option Award Agreement for directors (incorporated by reference to Exhibit 10.34 to Form F-1 filed with the SEC on August 3, 2022). 10.35# ​ Form of Non-Qualified Stock Option Award Agreement for officers (incorporated by reference to Exhibit 10.35 to Form F-1 filed with the SEC on August 3, 2022). 10.36 ​ License and Distribution Agreement, by and between Quoin Pharmaceuticals Inc. and Farma Mondo (incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on September 13, 2023). 10.37 ​ Purchase Agreement, dated January 25, 2024, by and between Quoin Pharmaceuticals Ltd. and Alumni Capital LP (incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on January 30, 2024). 10.38 ​ Securities Purchase Agreement dated March 4, 2024 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on March 8, 2024). 10.39 ​ Placement Agency Agreement dated March 4, 2024 (incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K filed with the SEC on March 8, 2024). 14.1 ​ Code of Ethics. (incorporated by reference to Exhibit 14.1 to Form 10-K filed with the SEC on March 15, 2023). 21.1 ​ Subsidiaries of Registrant (incorporated by reference to Exhibit 8.1 to Form 20-F filed with the SEC on April 13, 2022). 23.1* ​ Consent of Marcum LLP, Certified Public Accountants 31.1* ​ Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934. 31.2* ​ Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934. 32.1* ​ Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350. 32.2* ​ Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350. 97.1* ​ Clawback Policy 101* ​ Information formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Shareholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements. 104* ​ Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101) * Filed herewith # Indicates management contract or compensatory plan or arrangement. ​ Item 16. Form 10-K Summary ​ None. ​ 79 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ Date: March 14, 2024 QUOIN PHARMACEUTICALS LTD. ​ ​ ​ ​ By: /s/ Dr. Michael Myers ​ Name: Dr. Michael Myers ​ Title: Chief Executive Officer ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated. Signature Title Date ​ ​ ​ ​ ​ /s/ Dr. Michael Myers ​ Chairman and Chief Executive Officer ​ March 14, 2024 Dr. Michael Myers ​ (Principal Executive Officer) ​ ​ ​ ​ ​ ​ ​ /s/ Gordon Dunn ​ Chief Financial Officer ​ ​ Gordon Dunn ​ (Principal Financial Officer and Principal Accounting Officer) ​ March 14, 2024 ​ ​ ​ ​ ​ /s/ Denise Carter ​ ​ ​ ​ Denise Carter ​ Director and Chief Operating Officer ​ March 14, 2024 ​ ​ ​ ​ ​ /s/ Joseph Cooper ​ ​ ​ ​ Joseph Cooper ​ Director ​ March 14, 2024 ​ ​ ​ ​ ​ /s/ James Culverwell ​ ​ ​ ​ James Culverwell ​ Director ​ March 14, 2024 ​ ​ ​ ​ ​ /s/ Dennis Langer ​ ​ ​ ​ Dennis Langer ​ Director ​ March 14, 2024 ​ ​ ​ ​ ​ /s/ Natalie Leong ​ ​ ​ ​ Natalie Leong ​ Director ​ March 14, 2024 ​ ​ ​ ​ ​ /s/ Michael Sember ​ ​ ​ ​ Michael Sember ​ Director ​ March 14, 2024 ​ ​ ​ 80 Table of Contents QUOIN PHARMACEUTICALS LTD. Contents ​ Page Reports of Independent Registered Public Accounting Firm (PCAOB Firm ID: Marcum LLP # 688 ) F-2 Consolidated Financial Statements ​ Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022 F-4 Consolidated Statements of Operations for the years ended December 31, 2023 and 2022 F-5 Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2023 and 2022 F-6 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022 F-7 Notes to consolidated financial statements F-8 – F-22 ​ ​ ​ F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of Quoin Pharmaceuticals Ltd. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Quoin Pharmaceuticals Ltd. (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. F-2 ​ ​ Table of Contents Contracted Research & Development Cost Recognition: Critical Audit Matter Description As discussed in Note 3 to the financial statements, the Company records costs for clinical trial activities based upon estimates of costs incurred through the balance sheet date for services performed by contract research organizations, clinical study sites and other vendors. ​ ​ ​ ​ ​ Auditing the recognition of pre-clinical and clinical trial costs associated with contracted organizations is challenging due to the significant judgment required to determine the nature and level of services that have been received, including determining the progress to completion of specific tasks and activities conducted in relation to what has been invoiced and recorded. ​ ​ ​ How We Addressed the Matter in Our Audit ​ The primary procedures we performed to address this critical audit matter included: ​ ​ ​ ​ ​ ● Obtained an understanding of the design and operating effectiveness of internal controls for pre-clinical and clinical cost recognition. ​ ​ ● Tested the completeness and accuracy of the underlying data used in the estimates including, but not limited to, the estimated costs per project milestone and duration. ​ ​ ● Assessed the reasonableness of the significant assumptions, corroborated the progress of the pre-clinical and clinical trials with the Company’s operations personnel and to information obtained by the Company directly from third parties, and to information in contracts or statements of work including costs for those activities and project duration. ​ ​ ● Examined subsequent invoicing received from such third parties. ​ /s/ Marcum LLP We have served as the Company’s auditor since 2020 East Hanover, New Jersey March 14, 2024 ​ ​ F-3 ​ ​ Table of Contents QUOIN PHARMACEUTICALS LTD. ​ ​ Consolidated Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2023 2022 ASSETS ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 2,401,198 ​ $ 2,860,628 Investments ​ ​ 8,293,663 ​ ​ 9,992,900 Prepaid expenses and other current assets ​ 591,034 ​ 516,584 Total current assets ​ 11,285,895 ​ 13,370,112 ​ ​ ​ ​ ​ ​ ​ Prepaid expenses - long term ​ 300,000 ​ 383,390 Intangible assets, net ​ 583,334 ​ 704,561 Total assets ​ $ 12,169,229 ​ $ 14,458,063 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 526,523 ​ $ 605,600 Accrued expenses ​ 1,308,706 ​ 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 ​ ​ 3,581,480 ​ ​ 3,527,556 ​ ​ ​ ​ ​ ​ ​ Due to officers - long term ​ ​ 2,923,733 ​ ​ 3,523,733 Total liabilities ​ $ 6,505,213 ​ $ 7,051,289 ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies ​ ​ ​ ​ ​ ​ ​ ​ ​ Shareholders’ equity: ​ ​ Ordinary shares, no par value per share, 100,000,000 and 8,333,334 ordinary shares authorized at December 31, 2023 and 2022, respectively - 987,220 ( 987,220 ADS’s) ordinary shares issued and outstanding at December 31, 2023 and 403,887 ( 403,887 ADS’s ) at December 31, 2022 ​ $ — ​ $ — Treasury stock, - 0 - ordinary shares issued at December 31, 2023 and 45 ordinary shares issued at December 31, 2022 ​ ​ — ​ ​ ( 2,932,000 ) Additional paid in capital ​ 51,867,336 ​ 47,855,521 Accumulated deficit ​ ( 46,203,320 ) ​ ( 37,516,747 ) Total shareholders’ equity ​ 5,664,016 ​ 7,406,774 ​ ​ ​ ​ ​ ​ ​ Total liabilities and shareholders’ equity ​ $ 12,169,229 ​ $ 14,458,063 ​ The accompanying footnotes are an integral part of these consolidated financial statements ​ F-4 ​ ​ Table of Contents QUOIN PHARMACEUTICALS LTD. ​ ​ Consolidated Statements of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 2022 ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ General and administrative ​ $ 6,070,517 ​ $ 6,584,868 Research and development ​ 3,307,987 ​ 2,672,836 Total operating expenses ​ 9,378,504 ​ ​ 9,257,704 ​ ​ ​ ​ ​ Other (income) and expenses ​ ​ Forgiveness of accounts payable ​ — ​ ( 416,000 ) Warrant liability (income) expense ​ — ​ ( 77,237 ) Unrealized loss (gain) ​ ​ 2,683 ​ ​ ( 1,307 ) Realized and accrued interest income ​ ​ ( 694,614 ) ​ ​ ( 95,745 ) Interest and financing expense ​ — ​ 714,081 Total other (income) expense ​ ( 691,931 ) ​ 123,792 Net loss ​ $ ( 8,686,573 ) ​ $ ( 9,381,496 ) Deemed dividend on warrant modification ​ ​ — ​ ​ ( 65,266 ) Net loss attributable to shareholders ​ $ ( 8,686,573 ) ​ $ ( 9,446,762 ) ​ ​ ​ ​ ​ ​ ​ Loss per ADS ​ ​ Loss per ADS ​ ​ ​ ​ ​ ​ Basic ​ $ ( 9.64 ) ​ $ ( 46.81 ) Fully-diluted ​ $ ( 9.64 ) ​ $ ( 46.81 ) ​ ​ ​ ​ ​ ​ ​ Weighted average number of ADS’s outstanding ​ ​ Basic ​ 900,919 ​ 201,826 Fully-diluted ​ ​ 900,919 ​ ​ 201,826 ​ The accompanying footnotes are an integral part of these consolidated financial statements ​ ​ ​ F-5 ​ ​ Table of Contents QUOIN PHARMACEUTICALS LTD. ​ ​ Consolidated Statements of Shareholders’ Equity Years Ended December 31, 2023 and 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ Ordinary ​ ​ ​ No Par ​ Treasury ​ Paid in ​ Accumulated ​ ​ ​ ​ Shares ADS’s Value Stock Capital Deficit Total Balance at December 31, 2021 ​ 55,913 ​ 55,913 ​ $ — ​ $ ( 2,932,000 ) ​ $ 31,659,017 ​ $ ( 28,069,985 ) ​ $ 657,032 Net loss — ​ — ​ ​ — ​ — ​ — ​ ( 9,381,496 ) ​ ( 9,381,496 ) Stock based compensation — ​ — ​ ​ — ​ — ​ 764,007 ​ — ​ 764,007 Issuance of ADS and Pre-Funded Warrants, net 280,000 ​ 280,000 ​ ​ — ​ — ​ 14,877,332 ​ — ​ 14,877,332 Cashless exercise of warrants 64,292 ​ 64,292 ​ ​ — ​ — ​ — ​ — ​ — Settlement of accrued expenses 3,682 ​ 3,682 ​ ​ — ​ — ​ 193,537 ​ — ​ 193,537 Reclassification of warrant liability upon issuance of Exchange warrant ​ — ​ — ​ ​ — ​ ​ — ​ ​ 296,362 ​ ​ — ​ ​ 296,362 Deemed dividend on warrant modifcation — ​ — ​ ​ — ​ — ​ 65,266 ​ ( 65,266 ) ​ — Balance at December 31, 2022 ​ 403,887 ​ 403,887 ​ $ — ​ $ ( 2,932,000 ) ​ $ 47,855,521 ​ $ ( 37,516,747 ) ​ $ 7,406,774 Net loss ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 8,686,573 ) ​ ​ ( 8,686,573 ) Stock based compensation ​ — ​ — ​ ​ — ​ ​ — ​ ​ 1,094,549 ​ ​ — ​ ​ 1,094,549 Retirement of Treasury Stock ​ — ​ — ​ ​ — ​ ​ 2,932,000 ​ ​ ( 2,932,000 ) ​ ​ — ​ ​ — Issuance of ADS and Pre-Funded Warrants, net ​ 583,333 ​ 583,333 ​ ​ — ​ ​ — ​ ​ 5,849,266 ​ ​ — ​ ​ 5,849,266 Balance at December 31, 2023 ​ 987,220 ​ 987,220 ​ $ — ​ $ — ​ $ 51,867,336 ​ $ ( 46,203,320 ) ​ $ 5,664,016 ​ The accompanying footnotes are an integral part of these consolidated financial statements ​ ​ F-6 ​ ​ Table of Contents QUOIN PHARMACEUTICALS LTD. ​ ​ ​ Consolidated Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 2022 Cash flows used in operating activities: ​ ​ ​ ​ Net loss $ ( 8,686,573 ) ​ $ ( 9,381,496 ) Change in fair value of warrant liability ​ — ​ ( 77,237 ) Stock based compensation ​ 1,094,549 ​ 764,007 Forgiveness of trade payable ​ — ​ ( 416,000 ) Amortization of intangibles ​ ​ 103,706 ​ ​ 104,043 Asset impairment ​ ​ 17,521 ​ ​ — Increase in accrued interest and financing expense ​ ​ — ​ ​ 714,081 Unrealized gain and accrued interest on investments ​ ​ ( 489,079 ) ​ ​ ( 93,779 ) Changes in assets and liabilities: ​ ​ Increase in accounts payable and accrued expenses ​ 53,924 ​ ( 217,806 ) Decrease in prepaid expenses & other assets ​ 41,523 ​ 123,455 Net cash used in operating activities $ ( 7,864,429 ) ​ $ ( 8,480,732 ) ​ ​ ​ ​ ​ ​ ​ Cash flows provided by (used in) investing activities: ​ ​ Purchase of investments ​ $ ( 18,090,684 ) ​ $ ( 9,899,121 ) Proceeds from maturity of investments ​ ​ 20,279,000 ​ ​ — Payment for license acquisition ​ — ​ ( 250,000 ) Net cash provided by (used in) investing activities $ 2,188,316 ​ $ ( 10,149,121 ) ​ ​ ​ ​ ​ ​ ​ Cash flows provided by financing activities: ​ ​ Payments of deferred financing costs $ ( 32,583 ) ​ $ 42,045 Payment of amounts due to officers ​ ( 600,000 ) ​ ( 599,999 ) Payment of interest on “Bridge Notes” ​ ​ — ​ ​ ( 311,670 ) Proceeds from sale of equity securities, net ​ 5,849,266 ​ 14,877,332 Net cash provided by financing activities $ 5,216,683 ​ $ 14,007,708 ​ ​ ​ ​ ​ ​ ​ Net change in cash and cash equivalents: ​ ( 459,430 ) ​ ( 4,622,145 ) Cash and cash equivalents - beginning of year ​ 2,860,628 ​ 7,482,773 Cash and cash equivalents - end of year $ 2,401,198 ​ $ 2,860,628 ​ ​ ​ ​ ​ ​ ​ 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 consolidated financial statements ​ ​ F-7 ​ ​ Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 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.” 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, QRX003, is a 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 no revenue has been generated. ​ NOTE 2 - LIQUIDITY RISKS AND OTHER UNCERTAINTIES The Company has incurred net losses every year since inception and has an accumulated deficit of approximately $ 46.2 million at December 31, 2023. The Company has historically funded its operations through debt and equity financings. At December 31, 2023, the Company had cash balances totaling $ 2.4 million and investments of $ 8.3 million. On March 7, 2024, the Company completed an offering of ordinary shares represented by ADSs and pre-funded warrants to purchase ordinary shares represented by ADSs with each ADS and pre-funded warrant accompanied by warrants to purchase ordinary shares represented by ADSs, for aggregate gross proceeds of approximately $ 6.5 million, before offering costs (See Note 18). The Company believes that it has sufficient cash and liquidity to effect its business plan for at least one year from the issuance of these 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, results of operations and financial condition. 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. F-8 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 The Company is also dependent on several third party suppliers, in some cases a single source supplier including the contract research organization managing both of the Company’s current clinical studies, the supplier of the active pharmaceutical ingredient (API), as well as the contract manufacturer of the drug product for clinical development. 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. ​ NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation: The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), which have been consistently applied. All intercompany accounts and transactions have been eliminated in consolidation. 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. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could materially differ from those estimates. Management considers many factors in developing the estimates and assumptions that are used in the preparation of these financial statements including: expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: settlement of debt or other obligations, stock-based compensation, research and development expense recognition, intangible asset estimated useful lives and impairment assessments, allowances of deferred tax assets, and cash flow assumptions regarding going concern considerations. Cash and cash equivalents: The Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. The Company, from time to time during the periods presented, has had bank account balances in excess of federally insured limits where substantially all cash is held in the United States. The Company has not experienced losses in such accounts. The Company believes that it is not subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. F-9 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 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 consolidated balance sheets as of December 31, 2023 and December 31, 2022, respectively. Investments: Investments as of December 31, 2023 and 2022 consist of U.S. Treasury Bills, which are classified as trading securities, totaling $ 8.3 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. All of the Company’s U.S. Treasury Bills held on December 31, 2023 have maturities within four months from the balance sheet date. As of December 31, 2023, the carrying value of the Company’s U.S. Treasury Bills approximates their fair value due to their short-term maturities. Long-lived assets: Long-lived assets are comprised of acquired technology and licensed rights to use technology, which are considered platform technology with alternative future uses beyond the current products in development. Such intangible assets are being amortized on a straight-line basis over their expected useful life of 10 years . The Company assesses the impairment for long-lived assets whenever events or circumstances indicate the carrying value may not be recoverable. Factors we consider that could trigger an impairment review include the following: ● Significant changes in the manner of our use of the acquired assets or the strategy for our 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 year ended December 31, 2023 there was one impairment indicator which required an impairment loss measurement (see Note 11). During the year ended December 31, 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 F-10 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 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 December 31, 2023 and 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-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 shareholders by the weighted average 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 shares are excluded if their effect is anti-dilutive. F-11 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 For the year ended December 31, 2023, the number of shares excluded from the diluted net earnings (loss) per share included outstanding warrants to purchase 864,081 ADS and outstanding stock options to purchase 278,011 ADS. For the year ended December 31, 2022, the number of shares excluded from the diluted net earnings (loss) per share included outstanding warrants to purchase 280,735 ADS and outstanding stock options to purchase 25,595 ADS. The inclusion of these warrants and stock options for both 2023 and 2022 in the denominator would be anti-dilutive. Recent Accounting Pronouncements: In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard is intended to enhance the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. The new standard will be effective for the Company for the fiscal year beginning January 1, 2025. While the new standard does require further disaggregation of the income tax footnote, the Company currently does not expect the adoption of the new standard to have a material effect on its consolidated financial statements. ​ NOTE 4 – ACCRUED INTEREST AND FINANCING EXPENSE On October 2, 2020, Quoin Inc. issued promissory notes (the “2020 Notes”) to certain investors (“2020 Noteholders”). The 2020 Notes were mandatorily convertible into 432 ADSs, subject to adjustment and were converted in 2021. The ADSs issued to the 2020 Noteholders did not include accrued interest. Two of the five 2020 Noteholders received their amount due during the year ended December 31, 2022 and the Company’s estimate of the liability to the remaining three 2020 Noteholders was estimated to be $ 1,146,000 as of December 31, 2023 and December 31, 2022. There was no interest expense during the year ended December 31, 2023. The holders also received warrants exercisable at any time after the issuance date for 2,449 ADSs at an initial exercise price of $ 597 per ADS. At the time of grant, the Company determined that these warrants met the criteria to be recorded as a liability instrument. Effective March 13, 2022, each holder agreed to exchange these warrants for warrants on the substantially same terms as the Investor Exchange Warrants (See Note 5) with the same number of shares issuable upon the exercise of the original warrant and the same exercise price with a contractual term of 5 years (the “Noteholder Warrants”). The Noteholder Warrants have been determined to have equity classification. The change in the fair value of the warrants through the exchange date was included in other income (expense) in the accompanying statement of operations, and then reclassified from liability to additional paid in capital. On July 14, 2022, as a result of the Altium Agreement (see Note 5), the exercise price of the Noteholder Warrants was reduced to $ 0 and the 2020 Noteholders subsequently exercised all of their warrants. The change in the exercise price of the Noteholder Warrants resulted in a deemed dividend of approximately $ 65,000 recorded during the year ended December 31, 2022. From July to September 2022, the 2020 Noteholders exercised all their warrants to purchase ADSs at $ 0.00 per ADS exercise price, and the Company issued a total of 2,449 ADSs to such noteholders. NOTE 5 – FINANCING In connection with the Merger Agreement and the Securities Purchase Agreement with Altium Growth Fund LLP (the “Investor”) (described below), during March to May 2021 Quoin Inc. issued three tranches of bridge notes (the “Bridge Notes”) in the aggregate principal amount of $ 5.0 million. The Bridge notes had a maturity date of the earliest to occur of: (i) December 25, 2021, (ii) the date on which the Company’s equity was registered under the Exchange Act or is exchanged for equity so registered or (iii) immediately prior to the closing of the Merger. The Bridge Notes were offset against the purchase price under the Securities Purchase Agreement related to the Primary Financing and converted into 8,385 ADSs upon the closing of the Primary Financing in October 2021. The Bridge Notes were issued with warrants to purchase a number of shares of Quoin Inc.’s common stock equal to the aggregate principal amount of the Bridge Notes. Upon the closing of the financing in October 2021, the warrants were exchanged for warrants to purchase 8,256 ADSs at a fixed per share exercise price of $ 597 with a five year maturity (“Investor Exchange Warrants”). On July 14, 2022, the Company and the Investor entered into an agreement amending the terms of the Investor Exchange Warrants. See below, “Agreements with Altium Growth Fund, LP and Warrant Exercises”. F-12 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 On October 28, 2021, the Company completed the private placement transaction with the Investor for an aggregate purchase price of approximately $ 17.0 million (comprised of the set off from approximately $ 5.0 million of Bridge Notes, and approximately $ 12.0 million in cash) (the “Primary Financing”), which resulted in the net proceeds of approximately $ 10.1 million. The Company also issued to the Investor, effective as of March 13, 2022 (i) Series A Warrant to purchase 28,508 ADSs (the “Series A Warrant”) (ii) Series B Warrant to purchase 28,508 ADSs (the “Series B Warrant”) and (iii) Series C Warrant to purchase 15,931 ADSs (“Series C Warrant” and, together with the Series A Warrant and Series B Warrant, the “Investor Warrants”). The exercise price for the Investor Warrants was $ 597 per ADS, with Series A Warrant having a five-year maturity, and Series B Warrant and Series C Warrant having a two-year maturity. The Company had the right to require the mandatory exercise of the Series C Warrant, subject to an effective registration statement being in place for the resale of the shares underlying such warrants and the satisfaction of equity market conditions, as defined in the Series C Warrant. In the period from April 22, 2022 to June 30, 2022, the Investor exercised the Series B Warrant in full pursuant to the alternate cashless exercise rights of such warrant, resulting in the issuance of a total of 28,508 ADSs to the Investor. The market related conditions to require the mandatory exercise of the Series C Warrant were not met during the period up to July 14, 2022. Agreements with Altium Growth Fund, LP and Warrant Exercises On July 14, 2022, the Company, Quoin Inc. and Altium entered into an agreement (the “Altium Agreement”), pursuant to which the parties agreed to, among other things, (i) amend certain terms of the Series A Warrant and Investor Exchange Warrants previously issued to Altium to reduce the exercise price from $ 597 to $ 0.00 per ADS with respect to a total of 33,333 ADSs, (ii) cancel the Series C Warrant and the remaining portion of the Series A Warrant previously issued to Altium, and (iii) terminate the Purchase Agreements, pursuant to which the warrants were previously issued to Altium. The incremental fair value of the modified warrants was approximately $ 491,000 , which was accounted for as an offering expense as part of the 2022 Offering (see Note 14) as the modification was done in contemplation of such offering. As of August 2, 2022, Altium exercised all of its outstanding warrants to purchase ADSs at $ 0.00 per ADS exercise price and the Company issued a total of 33,333 ADSs to Altium. The exercise price of the Noteholder Warrants (See Note 4) was also reduced from $ 597 to $ 0.00 as of July 14, 2022 as a result of the Altium Agreement. ​ NOTE 6 - 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. F-13 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 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 December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 Level 1 Level 2 Level 3 Total US Treasury Bills $ 8,293,663 $ — ​ $ — ​ $ 8,293,663 Total US Treasury Bills Asset $ 8,293,663 $ — ​ $ — ​ $ 8,293,663 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ The following shows the movement of the warrant liability balance during the year ended December 31,2022, there was no movement in the year ended December 31, 2023. ​ ​ ​ ​ ​ ​ 2020 Note ​ ​ Warrants Beginning Balance January 1, 2022 ​ $ 373,599 Change in Fair value of warrants ​ ​ ( 77,237 ) Reclassification of warrant liability to an equity instrument ​ ​ ( 296,362 ) Ending Balance December 31, 2022 ​ $ — ​ Warrants issued to the 2020 Noteholders were classified as a liability on issuance. The original warrants were exchanged for the Noteholder Warrants effective as of March 13, 2022, which were determined to be an equity-classified instrument, and accordingly the warrant liability on such date of $ 296,362 was reclassified to additional paid in capital on that date. ​ NOTE 7 – 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 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 106,532 ordinary shares, represented by 106,532 ADSs as of December 31, 2022, and 319,397 ordinary shares represented by 319,397 ADSs as of December 31, 2023. Under the Amended Plan, the Company may grant options to its directors, officers, employees, consultants, advisers and service providers. The Amended Plan was approved by the shareholders at the Company’s Annual General Meeting of Shareholders held on April 12, 2022. As of the year ended December 31, 2023, 41,386 shares remained available for issuance. ​ F-14 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 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, 2021 479 ​ $ 7,640.88 0.33 Granted ​ 25,595 ​ ​ 210.00 ​ — Forfeited/Cancelled ​ ( 479 ) ​ ​ 7,640.00 ​ — Outstanding at December 31, 2022 ​ 25,595 ​ $ 210.00 ​ 9.28 Granted 252,416 ​ ​ 6.62 — Forfeited/Cancelled — ​ ​ — — Outstanding at December 31, 2023 278,011 ​ $ 25.34 9.68 ​ ​ ​ ​ ​ ​ ​ ​ Exercisable options at December 31, 2023 7,382 ​ $ 210.00 8.38 ​ The intrinsic value of outstanding options at December 31, 2023 was $ 0 . Stock options granted during the year ended December 31, 2023 were valued using the Black-Scholes option-pricing model with the following weighted average assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2023 2022 Expected volatility ​ 110.6 % ​ 106.0 % Risk-free interest rate ​ 4.8 % ​ 2.7 % Expected dividend yield ​ 0.0 % ​ 0.0 % Expected life of options in years ​ 6.4 ​ ​ 6.9 ​ Exercise Price ​ $ 6.62 ​ $ 210.00 ​ Fair value of common stock ​ $ 4.31 ​ $ 184.56 ​ Estimate fair value of option ​ $ 3.60 ​ $ 155.04 ​ ​ Stock based compensation expense was approximately $ 1.09 million ($ 152,000 included in research and development expense and $ 942,000 included in general and administrative expenses) in the year ended December 31, 2023. Stock based compensation expense was approximately $ 764,000 ($ 100,000 included in research and development expense and $ 664,000 included in general and administrative expenses) in the year ended December 31, 2022. At December 31, 2023, the total unrecognized compensation expense related to non-vested options was approximately $ 3.0 million and is expected to be recognized over the remaining weighted average service period of approximately 3.7 years. F-15 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 NOTE 8 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2023 2022 Prepaid R&D costs ​ $ 447,979 ​ $ 383,390 Prepaid insurance ​ 401,972 ​ 508,084 Prepaid expense ​ 8,500 ​ 8,500 Deferred offering costs (note 18) ​ ​ 32,583 ​ ​ — Total ​ $ 891,034 ​ $ 899,974 Less: Short-term portion ​ ​ ( 591,034 ) ​ ​ ( 516,584 ) Long-term portion ​ $ 300,000 ​ $ 383,390 ​ ​ NOTE 9 – ACCRUED EXPENSES Accrued expenses are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2023 2022 Research contract expenses (note 13) ​ $ 358,287 ​ $ 105,071 Payroll (note 12) ​ ​ 804,156 ​ ​ 788,169 Payroll taxes (note 12) ​ ​ 93,989 ​ ​ 159,593 Professional fees ​ ​ 50,534 ​ ​ 44,278 Other expenses ​ 1,740 ​ 78,594 Total ​ $ 1,308,706 ​ $ 1,175,705 ​ ​ NOTE 10 –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. There were no royalty obligations due at December 31, 2023 and December 31, 2022. As of December 31, 2023 the Company determined that the Polytherapeutics asset was no longer of use and reduced the carrying value to zero, see Note 11. 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 December 31, 2023 and December 31, 2022. ​ F-16 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 NOTE 11 - INTANGIBLE ASSETS Intangible assets are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2023 2022 Acquired technology – Polytherapeutics ​ $ — ​ $ 40,433 Technology license – Skinvisible ​ 1,000,000 ​ 1,000,000 Total cost ​ 1,000,000 ​ 1,040,433 Accumulated amortization ​ ( 416,666 ) ​ ( 335,872 ) Net book value ​ $ 583,334 ​ $ 704,561 ​ The Company recorded amortization expense of approximately $ 104,000 and $ 104,000 in the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023 the Company determined that the Polytherapeutics asset was no longer of use and reduced the carrying value to zero, which resulted in an impairment expense of approximately $ 18,000 recorded in research and development expenses in the year ended December 31, 2023. The annual amortization expense expected to be recorded for existing intangible assets for the years 2024 through 2027, and thereafter, is approximately $ 100,000 , $ 100,000 , $ 100,000 , 100,000 and $ 183,000 , respectively. NOTE 12 – 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 by Dr. Myers and Ms. Carter to third parties on behalf of Quoin Inc., were not paid by Quoin Inc. to Dr. Myers and Ms. Carter, and were accrued as indebtedness to Dr. Myers and Ms. Carter. Following the closing of the Merger, Quoin Inc. began making payments of $ 25,000 per month to each of Dr. Myers and Ms. Carter to repay the above-described non-interest-bearing indebtedness. The Company repaid $ 300,000 and $ 300,000 of such indebtedness to Dr. Myers and $ 300,000 and $ 300,000 to Ms. Carter in the year ending December 31, 2023 and 2022, respectively. As of December 31, 2023, approximately $ 1,959,000 and $ 1,565,000 of such indebtedness was outstanding to Dr. Myers and Ms. Carter, respectively. Amounts due to officers at December 31, 2023 and 2022 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2023 2022 Salaries and other compensation ​ $ 3,523,733 ​ $ 4,108,500 Invoices paid on behalf of the Company ​ — ​ 15,232 Total ​ $ 3,523,733 ​ $ 4,123,732 Less: Short-term portion ​ ​ ( 600,000 ) ​ ​ ( 600,000 ) Long-term portion ​ $ 2,923,733 ​ $ 3,523,733 ​ Expenses: ​ Research and development expense of $ 12,000 and $ 48,000 were paid during the years ended December 31, 2023 and 2022, respectively, to Dr. Myers’ son, who had been consulting for the Company on matters from time to time. As of March 31, 2023, Dr. Myers’ son no longer provided consulting services to the Company. ​ Interest Payable: See Note 4 for interest payable on the 2020 Notes. ​ F-17 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 NOTE 13 – RESEARCH, CONSULTING AGREEMENTS AND COMMITMENTS Research and consulting agreement In November 2020, Quoin Inc. entered into a Master Service Agreement with Therapeutics Inc. for the management of the preclinical and clinical development of QRX003 for Netherton Syndrome. The initial term of the agreement was three years with automatic one year extensions, and the agreement required the execution of individual work orders. Quoin Inc. may terminate any work order for any reason with 90 days written notice subject to costs incurred through termination and a defined termination fee, unless there is a material breach by Therapeutics Inc. A work order was entered into in June 2022 for the first QRX003 clinical study at an expected estimated cost of approximately $ 4.4 million. An additional work order was entered into in December 2022 for a second QRX003 clinical study at an expected estimated cost of approximately $ 830,000 . In the years ended December 31, 2023 and 2022, the Company incurred a research and development expense under these agreements of approximately $ 1.5 million and $ 1.2 million respectively. 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, the Company entered into a research agreement with Queensland University of Technology (QUT) for a pre-clinical research program for the development of a product to treat Netherton Syndrome of approximately $ 250,000 . In May 2022, the Company entered into a second research agreement with QUT for the development of a product to treat Scleroderma of approximately $ 610,000 . Each agreement remains in place until the completion of the research program, which in each case was initially anticipated to be 18 months from execution. For the years December 31, 2023 and 2022, the Company incurred research and development costs related to these agreements of approximately $ 361,000 and $ 353,000 respectively. Consulting agreement: Quoin Inc. entered into a consulting agreement with an Investor Relations (IR) firm, which provides for a monthly fee of $ 14,000 . The agreement had an automatic annual renewal clause and has been in effect since November 2017. The Company owed the IR firm $ 584,000 as of December 31, 2021, which was included in accrued expenses in the accompanying balance sheet. In March 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. For the years ended December 31, 2023 and 2022, the Company incurred expenses of $ 0 and $ 112,000 , respectively. As of December 31, 2023 and December 31, 2022 the Company has $- 0 - and $ 56,000 in accrued balances, respectively. Performance milestones and Royalties See Note 10 for asset and in-licensed technology commitments. ​ NOTE 14 – SHAREHOLDERS’ EQUITY Historical authorized shares amounts in this Note 14 were not retroactively adjusted to reflect the number of ordinary shares and ADSs resulting from the ordinary share reverse split and ADS ratio changes discussed herein. On April 12, 2022, the Company held a Special General Meeting, at which the Company’s shareholders approved, among other items, to increase the Company’s registered share capital from 12,500,000,000 ordinary shares (without any nominal value) to 50,000,000,000 ordinary shares (without any nominal value). Effective August 1, 2022, the ratio of ADSs evidencing ordinary shares changed from 1 ADS representing four hundred ( 400 ) ordinary shares to 1 ADS representing five thousand ( 5,000 ) ordinary shares, which resulted in a one for 12.5 reverse split of the issued and outstanding ADSs. Subsequent thereto, on November 3, 2022, the Company held its Annual General Meeting, at which the Company’s shareholders approved, among other items, an increase in the registered share capital of the Company from 50,000,000,000 ordinary shares without any nominal value each to 500,000,000,000 ordinary shares (without any nominal value). F-18 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 On or about July 18, 2023, the Company changed the ratio of ADSs evidencing ordinary shares from one ADS representing five thousand ( 5,000 ) ordinary shares to one ADS representing sixty thousand ( 60,000 ) ordinary shares (the “Ratio Change”). The Ratio Change resulted in a one for twelve split of issued and outstanding ADSs, however it had no effect on the Ordinary Shares. On October 26, 2023, the Company held its Annual General Meeting (“2023 Meeting”), at which the Company’s shareholders approved, among other items, an increase in the Company’s registered share capital from 500,000,000,000 ordinary shares, no par value, to 6,000,000,000,000 ordinary shares, no par value. Moreover, at the 2023 Meeting, the Company’s shareholders approved a reverse share split (“Reverse Split”) of the Company’s ordinary shares on a date to be determined by the Board, at a ratio of 1 -for- 60,000 . On November 5, 2023, the Board approved November 8, 2023 as the effective date of the Reverse Split. Effective as of November 8, 2023, the number of authorized ordinary shares through the Reverse Split was reduced to 100,000,000 ordinary shares, combining every 60,000 outstanding ordinary shares into one ordinary share, with each ADS representing one ordinary share. Each holder of a Company’s ordinary share has one vote for each ordinary share held on all matters submitted to a vote of shareholders at each 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. In November 2023 the company retired 45 ordinary shares of treasury stock. Under Israeli law, the Company may declare and pay dividends only if, upon the determination of our board of directors, there is no reasonable concern that the distribution will prevent the Company from being able to meet the terms of our 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 our 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 our 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. On August 9, 2022, the Company completed the 2022 Offering of 184,167 ordinary shares represented by 184,167 ADSs at a purchase price of $ 60.00 per ADS and pre-funded warrants (the “2022 Pre-Funded Warrants”) to purchase 93,833 ordinary shares represented by 93,833 ADSs at a per pre-funded warrant price of $ 59.998 , with each ADS and 2022 Pre-Funded Warrant accompanied by an ordinary warrant (the “2022 Common Warrant”), for aggregate gross proceeds of $ 16.8 million, resulting in net proceeds of approximately $ 14.9 million. Each 2022 Common Warrant had an exercise price of $ 60.00 per ADS and was to expire on the fifth anniversary of the Closing Date. On the Closing Date, the holder of 2022 Pre-Funded Warrants sold in the 2022 Offering exercised its Pre-Funded Warrants in full. The 2022 Common Warrant exercise price and expiration date were subsequently amended for investors who participated in both the 2022 Offering and 2023 Offering (Note 5). Quoin Inc. entered into three consulting agreements with Axella Research LLC (“Axella”) to provide regulatory and pre- clinical/clinical services to the Company with respect to QRX003 and QRX004. The combined fees of the three agreements are approximately $ 270,000 , payable as milestones were met. The Company incurred accrued expenses of approximately $ 194,000 in relation to Axella consulting agreements as of December 31, 2021. In August 2022 the Company issued 3,682 ADSs to one of Axella’s principals to settle the outstanding liability in full. The Company has no ongoing relationship with Axella Research and no further services will be provided. On February 24, 2023 (the “2023 Closing Date”), the Company 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 “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 Pre-Funded Warrant accompanied by an ordinary warrant (the “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 Common 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 F-19 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 holder of the Pre-Funded Warrant exercised its Pre-Funded Warrants in full. In connection with the 2023 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 2022 Offering and 2023 Offering. The Warrant Amendments amended certain terms of the Warrants issued in the 2022 Offering to such 2022 Purchasers. Specifically, the Warrant Amendments reduced the exercise price of Warrants to purchase 236,670 ADSs out of the total 280,000 issued in the 2022 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 2023 Offering. Warrants The following table summarizes warrant activities during the year ended December 31, 2022 and the year ended December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ADSs ​ Average ​ ​ ​ Underlying ​ Exercise Price ​ ​ ​ Warrants ​ Per ADS ​ Outstanding at December 31, 2021 ​ 11,440 ​ $ 664.68 * Granted Common Warrants ​ 448,779 ​ ​ 134.52 ** Terminated ​ ( 19,362 ) ​ ​ 597.00 * Exercised - Cashless and Pre Funded Warrants ​ ( 160,122 ) ​ ​ — ​ Outstanding at December 31, 2022 ​ 280,735 ​ $ 64.20 ** Granted Common Warrants ​ 583,346 ​ ​ 12.00 ​ Granted Pre-Funded Warrants ​ 170,833 ​ ​ — ​ Exercised Pre-Funded Warrants ​ ( 170,833 ) ​ ​ — ​ Outstanding and exercisable at December 31, 2023 ​ 864,081 ​ $ 16.13 ​ As of December 31, 2023, outstanding warrants expire in 2024 and 2027, and have an intrinsic value of $ 0 . * Note that the exercise price of certain warrants was reduced from $ 597 to $ 0 on July 14, 2022 and to refer to Note 5 ** Note that the exercise price of certain warrants were reduced from $ 60.00 to $ 13.20 per ADS for Common Warrants issued in the 2022 Offering to investors who participated in both the Company’s 2022 Offering and 2023 Offering, see above. ​ NOTE 15 – INCOME TAXES Significant components of the Company’s deferred tax assets and liabilities at December 31, 2023 and December 31, 2022 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ (table in thousands) 2023 2022 Net operating losses ​ $ 4,276 ​ $ 3,334 Accrued Expenses and Other ​ ​ 175 ​ ​ 189 R&D Credit Carryforward ​ ​ 321 ​ ​ 76 Stock Compensation ​ ​ 289 ​ ​ 178 R&D Capitalization ​ ​ 1,104 ​ ​ 581 Intangibles ​ ​ 51 ​ ​ 34 Total gross deferred tax assets/(liabilities) ​ $ 6,216 ​ $ 4,392 Less valuation allowance ​ ​ ( 6,216 ) ​ ​ ( 4,392 ) Net deferred tax assets/(liabilities) ​ $ — ​ $ — ​ F-20 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 The income tax benefit for the years ended December 31, 2023 and December 31, 2022 differed from the amounts computed by applying the U.S. federal income tax rate of 21 % to loss before tax benefit as a result of nondeductible expenses, tax credits generated, utilization of net operating loss carryforwards, and increases in the Company’s valuation allowance. ​ ​ ​ ​ ​ ​ ​ ​ (table in thousands) ​ 2023 ​ 2022 Federal Statutory Rate $ ( 1,824 ) $ ( 1,970 ) Permanent Differences ​ 167 ​ 153 Research and Development ​ ( 195 ) ​ ( 76 ) State Income Tax ​ 79 ​ 388 Change in Valuation Allowance ​ 1,824 ​ 347 Deferred True Up ​ ( 51 ) ​ 1,158 Effective Tax ​ $ — ​ $ — ​ A valuation allowance is required to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of the available evidence, both positive and negative, the Company determined that valuation allowances of $ 6,216,000 and $ 4,392,000 at December 31, 2023 and December 31, 2022 were necessary to reduce the deferred tax assets to the amount that will more likely than not be realized. At December 31, 2023 and 2022, the Company had gross U.S. Federal income tax net operating loss (“NOL”) carryforward of approximately $ 17,891,000 and $ 12,951,000 , respectively that may be used to offset future taxable income. The NOL was generated after 2017 and can be carried forward indefinitely under the Tax Cuts and Jobs Act. The company also had gross $ 17,892,000 of state net operating losses that will begin to expire in 2038. At December 31, 2023, the Company had approximately $ 321,000 of federal Research and Development (R&D) tax credit carry-forwards. If not utilized, the federal R&D credits will begin to expire in 2042. The Internal Revenue Code (the “IRC”) contains limitations on the use of net operating loss carryforwards after the occurrence of a substantial ownership change as defined by IRC Section 382. The Company has not performed a detailed analysis, however utilization of such net operating loss carryforwards will likely be significantly limited due to the shares issued in the Primary Financing and the Merger. The income tax benefit for the years ended December 31, 2023 and 2022 differed from the amounts computed by applying the US federal income tax rate of 21 % primarily because of the increase in the valuation allowance and the tax impact of other permanent items, which resulted in an effective tax rate of zero for both years. The Tax Cuts and Jobs Act of 2017 (TCJA) has modified the IRC 174 expenses related to research and development for the tax years beginning after December 31, 2021. Under the TCJA, the Company must now capitalize the expenditures related to research and development activities and amortize over five years for U.S. activities and 15 years for non-U.S. activities using a mid-year convention. Therefore, the capitalization of research and development costs in accordance with IRC 174 resulted in a gross deferred tax asset of $ 4,617,000 . ​ NOTE 16 - 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 17 – LICENSE AGREEMENTS As of December 31, 2023 and December 31, 2022, the Company had nine and eight commercial license and supply agreements outstanding, whereby the Company will receive a royalty or other proceeds from the specified product revenues from the licensor, if and when the underlying products are approved and commercialized or sold via compassionate use or early access programs. No revenues have been received through December 31, 2023 from any of these agreements. ​ F-21 Table of Contents QUOIN PHARMACEUTICALS LTD. Notes to Consolidated Financial Statements December 31, 2023 and 2022 NOTE 18 - SUBSEQUENT EVENTS Alumni Equity Line and Purchase Agreement On January 25, 2024, the Company entered into a purchase agreement (the “Alumni Purchase Agreement”) with Alumni Capital LP (“Alumni”). Pursuant to the Alumni Purchase Agreement, the Company has the right to sell to Alumni up to $ 8,000,000 (the “Commitment Amount”) of newly issued ordinary shares that are represented by ADS, subject to certain conditions and limitations, from time to time during the term of the Alumni Purchase Agreement. The Company has agreed to issue purchase notices for an aggregate of at least $ 4,000,000 of the Commitment Amount pursuant to the Alumni Purchase Agreement. If shareholder approval of the issuance of ADSs under the Purchase Agreement is not obtained by April 30, 2024, the Company may terminate the Alumni Purchase Agreement by written notice to Alumni and neither party shall have any obligation or liability to the other party. 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 as provided in the Alumni Purchase Agreement). As consideration for Alumni’s irrevocable commitment to purchase ADSs under the Alumni Purchase Agreement, the Company agreed to issue to Alumni, at the times set forth in the Alumni Purchase Agreement a number of ADSs with a value at the time of issuance not to exceed $ 240,000 in the aggregate (the “Commitment Securities”). The Company may pay cash in lieu of issuing all or any portion of the Commitment Securities. In connection with the 2024 Offering, the Company agreed not to sell any ADSs to Alumni under the Alumni Purchase Agreement for a period of 180 days from the closing date of the 2024 Offering. Public Offering On March 7, 2024, (the “2024 Closing Date”) the Company completed an offering (the “2024 Offering”) of the following securities (i) 811,250 ordinary shares represented by ADSs, (ii) 4,062,500 Series D warrants (the “Series D Warrants”) to purchase 4,062,500 ordinary shares represented by ADSs, (iii) 4,062,500 Series E warrants (the “Series E Warrants” and together with the Series D Warrants, the “2024 Warrants”) to purchase 4,062,500 ordinary shares represented by ADSs, and (iv) 3,251,250 pre-funded warrants (the “2024 Pre-Funded Warrants”) to purchase 3,251,250 ordinary shares represented by ADSs for aggregate gross proceeds of approximately $ 6.5 million, resulting in net proceeds of approximately $ 5.6 million, after deducting the placement agent’s fees and offering expenses paid by us. Each ADS (or 2024 Pre-Funded Warrant to purchase one ADS in lieu thereof) was sold together with a Series D Warrant to purchase one ADS and a Series E Warrant to purchase one ADS. The ADSs and accompanying 2024 Warrants were sold at a combined public offering price of $ 1.60 and the 2024 Pre-Funded Warrants and accompanying 2024 Warrants were sold at a combined public offering price of $ 1.5999 , which is equal to the combined purchase price per ADS and accompanying 2024 Warrants, minus the exercise price of each 2024 Pre-Funded Warrant of $ 0.0001 .The Series D and Series E warrants have an exercise price of $ 1.60 per share, are exercisable immediately following the 2024 Closing Date and expire in two years and five years , respectively, from the closing of the 2024 Offering. In connection with the 2024 Offering, the Company entered into a Securities Purchase Agreement (the “2024 Purchase Agreement”) dated March 4, 2024, with certain institutional investors signatory thereto, pursuant to which the Company agreed to issue and sell to such investors, certain of the ADSs, 2024 Pre-Funded Warrants and 2024 Warrants sold in the 2024 Offering. Pursuant to the terms of the 2024 Purchase Agreement, the Company agreed, subject to certain exceptions, (i) to not enter into variable rate financings for a period of 180 days following the closing of the 2024 Offering, and (ii) to not enter into any equity financings for 90 days from closing of the 2024 Offering. On March 7, 2024, the Company also entered into privately negotiated agreements with the holders of certain existing outstanding warrants to purchase up to 638,834 ADSs (the “Prior Warrants”) to, among other things, reduce the exercise price of such Prior Warrants to $ 1.60 and to extend the current expiration date of the Prior Warrants until March 7, 2029. ​ F-22