What changed in this filing

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Item 9A. Controls and Procedures

2025-03-13 compared with 2024-03-14 · 405 added, 412 removed, 1136 unchanged (42% of the section changed)

6 unchanged sentences

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

preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting includes policies and procedures that:

8 unchanged sentences

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.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting because Quoin Pharmaceuticals Ltd.

is not an accelerated filer or a large accelerated filer, and it is not subject to the attestation requirement.

20 unchanged sentences

(3) Member of our Nominating and Governance Committee.

(4) Chairperson of our Audit Committee

(5) Chairperson of our Compensation Committee

(6) Chairperson of our Nominating and Governance Committee

Set forth below is a summary of the business experience of each of our directors and executive officers.

16 unchanged sentences

Since 2019, 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.

Myers has served as a director of Cranial Devices, a clinical stage medical device company since 2023.

Myers earned his Ph.D.

22 unchanged sentences

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.

Joseph Cooper , Director .

36 unchanged sentences

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.

Culverwell has served as a director and Audit Committee Chairman of TC BioPharm (Holdings) plc, a publicly traded company and a cancer treatment development company.

Since January 2005, Mr.

25 unchanged sentences

Langer served as a director of Dicerna Pharmaceuticals Inc., a publicly traded company and a biopharmaceutical company.

Langer serves on the Dean’s Advisory Board of Harvard Law School.

Langer has served on the Dean’s Advisory Board of Harvard Law School since 2010, and as a Director of the Whitehead Institute for Biomedical Research since 2020.

He received an M.D.

18 unchanged sentences

From October 2011 to May 2016, Ms.

Leong worked as the Vice President of Capital Insights at National Australia Bank.

Leong worked as the Vice President of Capital Insights at National Australia

From February 2008 to October 2011, Ms.

2 unchanged sentences

She earned a B.Comm degree (Finance and Economics) and a B.A.

(French and Literature) from the University of Melbourne in 2007.

degree (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.

Leong is qualified to serve on our Board due to her extensive financial and business management experience.

Michael Sember , Director .

4 unchanged sentences

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.

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.

From January 2018 to October 2020, Mr.

Sember served as the Chief Executive Officer of Regulonix Holding, Inc., a drug development company.

21 unchanged sentences

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.

Dunn also serves as a director of Oddonos Gelati Italiani Ltd.

Dunn was an associate at Morrison & Foerster LLP from 1991 to 1993.

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

19 unchanged sentences

● 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);

● review and discuss the Company’s policies regarding information technology security and protection from cyber risks;

● 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;

3 unchanged sentences

Compensation Committee

The Compensation Committee of the Board consists of James Culverwell, Dennis Langer and Michael Sember, with Mr.

The Compensation Committee of the Board consists of James Culverwell, Dennis Langer and Michael Sember, with Dr.

Langer chairing the committee.

16 unchanged sentences

● 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;

● 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.

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;

● 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;

● 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;

● 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

9 unchanged sentences

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.

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.

3 unchanged sentences

Edo Pollack, a Certified Public Accountant and partner-in-charge of the Israel office of Eisner Advisory Group LLC.

Insider Trading Policy

The Company maintains an Insider Trading Policy governing the purchase, sale and other disposition of its securities by its officers, directors and employees.

The Company believes its Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, as well as the Nasdaq listing standards applicable to the Company.

The Insider Trading Policy prohibits trading while in possession of material, non-public information and during blackout periods.

While the Company’s executive officers and directors are not required to enter into trading plans in advance of any transactions in Company securities, executive officers and directors are permitted to enter into trading plans that are intended to comply with the requirements of Rule 10b5-1 of the Exchange Act.

The Insider Trading Policy requires all directors, officers and certain other specified employees who have regular access to material, non-public information about the Company in the normal course of their duties to comply with pre-clearance procedures prior to engaging in any transaction in Company securities.

The Insider Trading Policy also requires the Company to comply with all insider trading laws, rules and regulations, and any applicable listing standards when engaging in transactions in its own securities.

A copy of our Insider Trading Policy is attached as an exhibit to this Annual Report.

Fiduciary Duties of Directors, Executive Officers and Shareholders

64 unchanged sentences

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.

We have entered 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

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;

● 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.

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.

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.

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”) during the years ended December 31, 2024 and 2023.

Compensation (3)

4 unchanged sentences

Chief Operating Officer

Gordon Dunn (4)

Chief Financial Officer

(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.

(1) For bonuses earned during the year ended December 31, 2023, represents a discretionary cash bonus 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, 2023.

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.

Carter’s bonuses were approved and/or ratified by the Board and the Compensation Committee, consistent with the Company’s Compensation Policy and within the limitations of the CEO Compensation Program (as described below) and the COO Compensation Program (as described below).

The CEO Compensation Program and the COO Compensation Program were approved at our 2024 Annual Meeting held on December 5, 2024 (the “2024 Annual Meeting”).

The amount of bonuses earned during the year ended December 31, 2024 is not calculable through the date of this Annual Report, and such amounts will be disclosed in a Current Report on Form 8-K after we obtain applicable approvals of our Board and the Compensation Committee.

(2) Represents the grant date fair value of option awards granted to each of our named executive officers on October 26, 2023 and December 9, 2024, respectively, calculated in accordance with FASB ASC Topic 718.

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 2024 options have an exercise price of $0.78 per ADS and vest in in three annual installments of 20% and a fourth annual installment of 40% beginning on December 9, 2025.

The option values were calculated using a Black-Scholes Model for pricing options.

See Note 6 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.

(3) Represents amounts paid as office and automobile allowance to Mr.

(3) Represents amounts paid as office and automobile allowance to Dr.

Myers and Ms.

4 unchanged sentences

Employment Agreements

We entered into written employment agreements with our Covered Office Holders that contain customary provisions, including non-compete and confidentiality provisions.

We entered into written employment agreements with our named executive officers that contain customary provisions, including non-compete and confidentiality provisions.

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.

6 unchanged sentences

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.

Myers’ employment agreement to increase Dr.

Myer’s annual base salary by 9.5%, retroactive to January 1, 2023, to $602,250.

After the 2024 Annual Meeting, on December 9, 2024, the Compensation Committee and the Board took the following actions which were consistent with the Company’s Compensation Policy and within the limitations of the CEO Compensation Program:

(i) approved and ratified Dr.

Myers’ 2024 annual base salary at $662,475 (retroactive to January 1, 2024), (ii) approved and ratified a discretionary cash bonus for Dr.

Myers for fiscal 2023 services of $301,125;

and (iii) granted Dr.

Myers an option to purchase 536,603 ADSs under Quoin’s Amended and Restated Equity Incentive Plan, with an exercise price equal to $0.78 per ADS, the fair market value on the date of grant.

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.

8 unchanged sentences

Carter’s annual base salary by 9.5%, retroactive to January 1, 2023, to $481,800.

(i) approved and ratified Ms.

Carter’s 2024 annual base salary at $529,980 (retroactive to January 1, 2024), (ii) approved and ratified a discretionary cash bonus for Ms.

Carter for fiscal 2023 services of $240,900;

and (iii) granted Ms.

Carter an option to purchase 536,609 ADSs under Quoin’s Amended and Restated Equity Incentive Plan, with an exercise price equal to $0.78 per ADS, the fair market value on the date of grant.

Pursuant to his Service Agreement with Quoin Inc., dated November 1, 2021 (as amended, the “Dunn Agreement”), Mr.

1 unchanged sentence

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.

Dunn received a signing bonus equal to one-twelfth of his annual base salary, and is entitled to 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, which was prorated for 2021.

Under the Dunn Agreement, we granted an option to Mr.

Dunn to purchase our ordinary shares, with a $1.25 million grant date value.

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.

1 unchanged sentence

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.

On December 9, 2024, the Compensation Committee and the Board took the following actions which were consistent with the Company’s Compensation Policy:

(i) approved and ratified the setting of the 2024 annual base salary for Gordon Dunn, our Chief Financial Officer, at $433,620 (retroactive to January 1, 2024), (ii) approved and ratified a discretionary cash bonus for Mr.

Dunn for fiscal 2023 services of $197,100;

and (iii) granted Mr.

Dunn an option to purchase 338,994 ADSs under Quoin’s Amended and Restated Equity Incentive Plan, with an exercise price equal to $0.78 per ADS, the fair market value on the date of grant.

Compensation Program for Dr.

Michael Myers

At the 2024 Annual Meeting, the Company’s shareholders approved a compensation program for the Company’s Chief Executive Officer and Chairman of the Board, Dr.

Michael Myers.

The program sets forth the following compensation limitations applicable to Dr.

Myers which the Compensation Committee and the Board can utilize in setting Dr.

Myers’ compensation, beginning with the compensation to be paid in fiscal 2024, without the need to obtain further shareholder approval:

(i) an annual increase of base salary of up to 15% of Dr.

Myers’ then effective base salary;

(ii) an annual cash bonus of up to 50% of Dr.

Myers’ annual base salary during the fiscal year for which the annual cash bonus is paid (for example, Dr.

Myers’ bonus to be paid in fiscal 2025 for fiscal 2024 services would be based upon a percentage, up to 50%, of Dr.

Myers’ annual base salary in fiscal 2024);

(iii) an annual equity grant in any form permitted under the Company’s equity incentive plan in effect from time to time with an annual value (determined in accordance with the Black-Scholes formula or another widely accepted and suitable formula for calculating the value of equity awards) of up to 500% of the maximum total fixed component (base salary and benefits) to which Dr.

Myers is entitled in the grant year.

(together the “CEO Compensation Program”).

In setting future compensation for Dr.

Myers consistent with the terms of the CEO Compensation Program, the Compensation Committee and the Board will continue to annually review market competitive compensation as a reference, individual performance, the need to have appropriate incentives for our officers, and Dr.

Myers’ experience and expected contributions.

Compensation Program for Denise Carter

Also at the 2024 Annual Meeting, the Company’s shareholders approved a compensation program for the Company’s Chief Operating Officer and a member of the Board, Denise Carter.

The program sets forth the following compensation limitations applicable to Ms.

Carter which the Compensation Committee and the Board can utilize in setting Ms.

Carter’s compensation, beginning with the compensation to be paid in fiscal 2024, without the need to obtain further shareholder approval:

(i) an annual increase of base salary of up to 15% of Ms.

Carter’s then effective base salary;

(ii) an annual cash bonus of up to 50% of Ms.

Carter’s annual base salary during the fiscal year for which the annual cash bonus is paid (for example, Ms.

Carter’s bonus to be paid in fiscal 2025 for fiscal 2024 services would be based upon a percentage, up to 50%, of Ms.

Carter’s annual base salary in fiscal 2024);

Carter is entitled in the grant year.

(together the “COO Compensation Program”).

In setting future compensation for Ms.

Carter consistent with the terms of the CEO Compensation Program, the Compensation Committee and the Board will continue to annually review market competitive compensation as a reference, individual performance, the need to have appropriate incentives for our officers, and Ms.

Carter’s experience and expected contributions.

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.

These benefits include medical, dental, and vision insurance, an employee assistance

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.

These benefits include medical, dental, and vision insurance, an employee assistance 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.

10 unchanged sentences

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.

The 2023 options vest in three annual installments of 20% and a fourth annual installment of 40% beginning on October 26, 2024.

The 2024 options vest in three annual installments of 20% and a fourth annual installment of 40% beginning on December 9, 2025.

(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.

At our Annual General Meeting held on April 12, 2022, 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.

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 our Articles of Association.

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.

In addition, our Board approved the grant of an option to purchase 5,953 ADSs under the Plan to Mr.

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.

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.

Company Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information

The Company does not have a formal policy on the timing of awards of options in relation to the disclosure of material nonpublic information by the Company.

The Board and the Compensation Committee does not seek to time equity grants to take advantage of information, either positive or negative, about our company that has not been publicly disclosed.

Option grants are effective on the date the award determination is made by the Board and/or the Compensation Committee, and the exercise price of options is the closing market price of our ADSs on the date of the grant or, if the grant is made on a weekend or holiday, on the prior business day.

Clawback Policy

The Board adopted a clawback policy which requires the clawback of erroneously awarded incentive-based compensation of past or current executive officers awarded during the three full fiscal years preceding the date on which the issuer is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the federal securities laws.

There is no fault or misconduct required to trigger a clawback.

The Compensation Committee shall determine, in its sole discretion, the timing and method for promptly recouping such erroneously awarded compensation, which may include without limitation:

(a) seeking reimbursement of all or part of any cash or equity-based award, (b) cancelling prior cash or equity-based awards, whether vested or unvested or paid or unpaid, (c) cancelling or

offsetting against any planned future cash or equity-based awards, (d) forfeiture of deferred compensation, subject to compliance with Section 409A of the Internal Revenue Code and the regulations promulgated thereunder, and (e) any other method authorized by applicable law or contract.

Subject to compliance with any applicable law, the Compensation Committee may affect recovery under this policy from any amount otherwise payable to the executive officer, including amounts payable to such individual under any otherwise applicable Company plan or program, including base salary, bonuses or commissions and compensation previously deferred by the executive officer.

Potential Payments Upon Termination or in Connection With a Change of Control

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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

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.

Compensation Policy under the Companies Law

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 discussing again the compensation policy, that approval of the compensation policy, despite the objection of shareholders, is for the benefit of the 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 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;

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 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;

● 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;

● a limit to retirement grants.

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.

Pursuant to our compensation policy, the compensation that may be granted to an executive officer may include:

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.

Our compensation policy provides for equity compensation in any form permitted under our equity incentive plan then in place.

Our compensation policy was approved by our compensation committee, our board of directors and shareholders and became effective on April 12, 2022.

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:

Under our non-employee directors’ compensation program, as amended, non-employee directors are entitled to receive the following cash compensation for their services:

● each non-employee director receives an annual base retainer of $82,500;

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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.

Each non-employee director is entitled to receive an annual award of options with a value of no less than $20,000 and no more than $60,000, with such value being determined annually at the discretion of the Compensation Committee and the Board.

In addition, each non-employee director who joins the Board is granted an inaugural award of options valued at $165,000.

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Michael Sember

(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.

(1) Represents the grant date fair value of option awards granted to each of our non-employee directors on December 9, 2024, calculated in accordance with FASB ASC Topic 718.

These options have an exercise price of $0.78 per ADS and vests in four annual installments with 20% vesting on each of December 9, 2025, 2026 and 2027 and 40% vesting on December 9, 2028.

The option values were calculated using a Black-Scholes Model for pricing options.

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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:

The following table sets forth information relating to the beneficial ownership of our ordinary shares (including ordinary shares represented by ADSs) as of March 10, 2025 by:

● each person, or group of affiliated persons, known by us to own beneficially 5% or more of our outstanding ordinary shares;

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● 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.

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 securities indicated as being beneficially owned.

Except as indicated by footnote, the beneficial ownership information is based upon 20,585,830 ordinary shares outstanding as of March 10, 2025.

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.

A security that may be acquired by a person within 60 days of March 10, 2025, pursuant to the exercise of options or warrants 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 beneficially owned by any other person shown in the table.

Each ADS represents one ordinary share.

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* 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.

(1) Consists of (i) 602,808 ADSs held directly, (ii) 21,550 ADSs issuable the upon the exercise of options which may be exercised within 60 days of March 10, 2025, (iii) 425,165 ADSs issuable upon the exercise of 425,165 December 2024 Warrants acquired in the December 2024 Offering which may be exercised within 60 days of March 10, 2025 (does not include 685,947 ADSs issuable upon the exercise of 685,947 December 2024 Warrants due to the 4.99% beneficial ownership limitation in such Warrants).

(2) Consists of (i) 602,648 ADSs held directly, (ii) 21,550 ADSs issuable upon the exercise of options which may be exercised within 60 days of March 10, 2025, and (iii) 425,334 ADSs issuable upon the exercise of 425,334 December 2024 Warrants acquired in the December 2024 Offering which may be exercised within 60 days of March 10, 2025 (does not include 685,778 ADSs issuable upon the exercise of 685,778 December 2024 Warrants due to the 4.99% beneficial ownership limitation in such Warrants).

(3) Represents 2,602 ADSs issuable the upon exercise of options which may be exercised within 60 days of March 10, 2025.

(4) Consists of (i) 100,317 ADSs held directly, (ii) 2,602 ADSs issuable upon the exercise of options which may be exercised within 60 days of March 10, 2025, and (iii) 200,000 ADSs issuable upon the exercise of 200,000 December 2024 Warrants acquired in the December 2024 Offering which may be exercised within 60 days of March 10, 2025.

(5) Consists of (i) 53 ADSs held directly and (ii) 2,602 ADSs issuable upon the exercise of options which may be exercised within 60 days of March 10, 2025.

(6) Represents 2,602 ADSs issuable upon the exercise of options which may be exercised within 60 days of March 10, 2025.

(7) Represents 2,602 ADSs issuable upon the exercise of options which may be exercised within 60 days of March 10, 2025.

(8) Represents (i) 151,077 ADSs held directly, (ii) 14,695 ADSs issuable upon the exercise of options which may be exercised within 60 days of March 10, 2025, and (iii) 244,442 ADSs issuable upon the exercise of 244,442 December 2024 Warrants acquired in the December 2024 Offering.

(9) Consists of (i) 1,456,903 ADSs held directly, (ii) 70,807 ADSs issuable upon the exercise of options which may be exercised within 60 days of March 10, 2025, and (iii) 1,294,941 ADSs issuable upon the exercise of 1,294,941 December 2024 acquired in the December 2024 Offering (such number does not include 1,371,725 ADSs issuable upon the exercise of 1,371,725 December 2024 Warrants due to the 4.99% beneficial ownership limitation in such Warrants).

Equity Compensation Plan Table

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(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.

(2) Represents the exercise price per ADS.

Certain Relationships and Related Transactions, and Director Independence

Director Independence

Under the corporate governance standards of Nasdaq, a majority of our directors must meet the independence requirements specified in those rules.

The Board determined that Joseph Cooper, James Culverwell, Dr.

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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.

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Myers, and $300,000 and $300,000 to Ms.

Carter in 2021, 2022 and 2023, respectively.

Carter, during the years ended December 31, 2023 and 2024, respectively.

As of December 31, 2024, approximately $1,659,000 and $1,265,000 of such indebtedness was outstanding to Dr.

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Carter, respectively.

Commencing in October 2020, Quoin Inc.

On October 2 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.

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.

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 (including Messrs Langer and Culverwell) was estimated to be $1,146,000 as of December 31, 2024 and December 31, 2023.

On December 23, 2024, we completed the December 2024 Offering of our ordinary shares represented by ADSs, Series F Warrants to purchase ordinary shares represented by ADSs, Series G Warrants to purchase ordinary shares represented by ADSs and pre-funded warrants to purchase ordinary shares represented by ADSs.

The Company received aggregate gross proceeds from the December 2024 Offering of approximately $6.8 million, before deducting placement agent fees and other offering expenses.

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

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.

Marcum LLP (“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 for all services, including audit services, for the years ended December 31, 2024 and 2023, as applicable.

December 31, 2024

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(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 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.

Audit-Related fees 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.

Our independent registered public accounting firm did not provide any tax services during the periods.

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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.

Unless the specific service has been previously pre-approved with respect to that year, the audit committee must approve the permitted service before the independent registered public accounting firm is engaged to perform it.

Exhibit and Financial Statement Schedules

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and Altium Growth Fund, LP (incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on July 15, 2022).

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).

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).

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).

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).

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).

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).

Amended and Restated Articles of Association of Quoin Pharmaceuticals Ltd., as amended

Form of Deposit Agreement between Cellect Biotechnology Ltd.

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Specimen American Depositary Receipt (included in Exhibit 2.1).

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).

Registration Rights Agreement, dated as of March 24, 2021, by and between Cellect Biotechnology Ltd.

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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).

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).

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).

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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).

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).

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).

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).

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

Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.

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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).

Form of Pre-Funded Warrant issued in the December 2024 Offering (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on December 26, 2024).

Form of Series F Warrant (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on December 26, 2024).

Form of Series G Warrant (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the SEC on December 26, 2024).

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).

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and Farma Mondo (incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on September 13, 2023).

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).

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

Purchase Agreement, dated January 25, 2024, by and between Quoin Pharmaceuticals Ltd.

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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).

Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on December 26, 2024).

Placement Agency Agreement dated December 20, 2024 (incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K filed with the SEC on December 26, 2024).

Non-Employee Directors’ Compensation Program, as amended

CEO Compensation Program

COO Compensation Program

Code of Ethics.

(incorporated by reference to Exhibit 14.1 to Form 10-K filed with the SEC on March 15, 2023).

Quoin Pharmaceuticals Ltd.

Insider Trading Policy

Subsidiaries of Registrant (incorporated by reference to Exhibit 8.1 to Form 20-F filed with the SEC on April 13, 2022).

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Certification of Chief Financial Officer pursuant to 18 U.S.C.

Clawback Policy

Information formatted in Extensible Business Reporting Language (XBRL):

Clawback Policy (incorporated by reference to Exhibit 10.1 to the Annual Report on Form 10-K filed with the SEC on March 14, 2024).

Information formatted in Inline 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.

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QUOIN PHARMACEUTICALS LTD.

Reports of Independent Registered Public Accounting Firm (PCAOB Firm ID:

Report of Independent Registered Public Accounting Firm (PCAOB Firm ID:

Marcum LLP # 688 )

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Quoin Pharmaceuticals Ltd.

To the Shareholders and Board of Directors of

Quoin Pharmaceuticals Ltd.

Opinion on the Financial Statements

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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.

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

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

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.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

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.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our 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.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Critical Audit 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:

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(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.

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.

We determined that there are no critical audit matters.

/s/ Marcum LLP

We have served as the Company’s auditor since 2020

East Hanover, New Jersey

Morristown, New Jersey

March 13, 2025

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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 )

Ordinary shares, no par value per share, 100,000,000 ordinary shares authorized at December 31, 2024 and December 31, 2023, respectively - 8,948,164 ( 8,948,164 ADS’s) ordinary shares issued and outstanding at December 31, 2024 and 987,220 ( 987,220 ADS’s) at December 31, 2023

Additional paid in capital

13 unchanged sentences

Other (income) and expenses

Forgiveness of accounts payable

Warrant liability (income) expense

Unrealized loss (gain)

Unrealized (gain) loss

Realized and accrued interest income

Interest and financing expense

Total other (income) expense

( 8,686,573 )

( 9,381,496 )

Deemed dividend on warrant modification

Net loss attributable to shareholders

Total other income

( 8,962,472 )

13 unchanged sentences

Stock based compensation

Retirement of Treasury Stock

( 2,932,000 )

Issuance of ADS and Pre-Funded Warrants, net

Cashless exercise of warrants

Settlement of accrued expenses

Reclassification of warrant liability upon issuance of Exchange warrant

Deemed dividend on warrant modifcation

Balance at December 31, 2023

2 unchanged sentences

( 8,962,472 )

( 8,686,573 )

Stock based compensation

Retirement of Treasury Stock

( 2,932,000 )

Issuance of ADS and Pre-Funded Warrants, net

Issuance of ADS and Pre-Funded Warrants - March 7, 2024, net

Issuance of ADS and Pre-Funded Warrants - December 23, 2024, net

Balance at December 31, 2024

7 unchanged sentences

( 8,686,573 )

Change in fair value of warrant liability

Stock based compensation

Forgiveness of trade payable

Amortization of intangibles

Asset impairment

Increase in accrued interest and financing expense

Unrealized gain and accrued interest on investments

Changes in assets and liabilities:

Increase in accounts payable and accrued expenses

Decrease in prepaid expenses & other assets

Decrease in accounts payable and accrued expenses

(Increase) decrease in prepaid expenses and other assets

Net cash used in operating activities

1 unchanged sentence

( 7,864,429 )

Cash flows provided by (used in) investing activities:

Cash flows provided (used in) investing activities:

Purchase of investments

2 unchanged sentences

Proceeds from maturity of investments

Payment for license acquisition

Net cash provided by (used in) investing activities

Net cash provided (used in) investing activities

( 1,888,282 )

2 unchanged sentences

Payment of amounts due to officers

Payment of interest on “Bridge Notes”

Proceeds from sale of equity securities, net

1 unchanged sentence

Net change in cash and cash equivalents:

( 4,622,145 )

Cash and cash equivalents - beginning of year

1 unchanged sentence

Supplemental information - Non cash items:

Reclassification of warrant liability to equity upon issuance of “Exchange warrants”

Deemed dividend on warrant modification

Offering expenses associated with warrant modification

Settlement of accrued expenses

Accrued offering expenses included in additional paid in capital

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

10 unchanged sentences

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.

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

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

The Company’s lead product, QRX003, is under clinical development as a potential treatment for Netherton Syndrome (“NS”), a rare hereditary genetic disease.

QRX003 is currently being tested in three regulatory clinical studies under an open Investigational New Drug (“IND”) application with the Food and Drug Administration (“FDA”).

The Company has opened five clinical sites in the United States (“US”) and intend to open a sixth clinical site at Northwestern University.

The Company is expanding its trials internationally into the Middle East, the United Kingdom and additional countries in Europe, including Spain and Germany.

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

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

In addition, the Company entered into two separate Research Agreements with the Queensland University of Technology (“QUT”), under which the Company has obtained an option for global licenses to QRX007 for the potential treatment of NS and QRX008 for the potential treatment of scleroderma, as well as a Research Agreement with the University College Cork (“UCC”) for the development of novel topical formulations of rapamycin (sirolimus) as potential treatments for a number of rare and orphan diseases.

The Company is initiating the development of novel topical formulations of rapamycin using its in-licensed technology as potential treatments for microcystic lymphatic malformations, venous malformations and angifibromas.

Other development products in the Company’s pipeline include QRX004 as a potential treatment for Recessive Dystrophic Epidermolysis Bullosa (“RDEB”).

To date, no products have been commercialized and no revenue has been generated.

3 unchanged sentences

At December 31, 2024, the Company had cash balances totaling $ 3.6 million and investments of $ 10.4 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.

7 unchanged sentences

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.

QUOIN PHARMACEUTICALS LTD.

1 unchanged sentence

December 31, 2024 and 2023

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.

On April 29, 2024, the Company received a deficiency letter from the Listing Qualifications Department of Nasdaq notifying the Company that for the preceding 31 consecutive business days (March 14, 2024 through April 26, 2024), the Company’s ADSs did not maintain a minimum closing bid price of $1.00 (“Minimum Bid Price Requirement”) per ADS as required by Nasdaq Listing Rule 5550(a)(2).

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company had a compliance period of 180 calendar days, or until October 28, 2024, to regain compliance with Nasdaq Listing Rule 5550(a)(2).

On October 16, 2024, the Company submitted a letter to Nasdaq requesting an additional 180-day grace period to regain compliance with the Minimum Bid Price Requirement.

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

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

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

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

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

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

If the Company cannot regain compliance with the Minimum Bid Price Requirement or if the Company otherwise fails to meet any of Nasdaq’s listing standards, the Company’s ADSs will be subject to delisting.

If that were to occur, the Company’s ADSs would be subject to rules that impose additional sales practice requirements on broker-dealers who sell the Company’s securities.

The additional burdens imposed upon broker-dealers by these requirements could discourage broker-dealers from effecting transactions in the Company’s ADSs.

This would adversely affect the ability of investors to trade the Company’s ADSs and would adversely affect the value of the Company’s ADSs.

Delisting from Nasdaq would cause the Company to pursue eligibility for trading of the Company’s ADSs on other markets or exchanges, or on an over-the-counter market.

In such case, the Company’s stockholders’ ability to trade or obtain quotations of the market value of the Company’s ADSs would be severely limited because of lower trading volumes and transaction delays.

These factors could contribute to lower prices and larger spreads in the bid and ask prices of these securities.

There can be no assurance that the Company’s ADSs, if delisted from the Nasdaq, would be listed on a national securities exchange, a national quotation service or the over-the-counter markets.

Delisting from the Nasdaq could also result in negative publicity, adversely affect the market liquidity of the Company’s ADSs, decrease securities analysts’ coverage of the Company or diminish investor, supplier and employee confidence.

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 unchanged sentences

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:

12 unchanged sentences

The Company believes that it is not subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

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.

4 unchanged sentences

Investments as of December 31, 2024 and 2023 consist of U.S.

Treasury Bills, which are classified as trading securities, totaling $ 8.3 million and $ 10.0 million, respectively.

Treasury Bills and Notes, which are classified as trading securities, totaling $ 10.4 million and $ 8.3 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.

Treasury Bills and Notes held on December 31, 2024 have maturities within fifteen months from the balance sheet date.

As of December 31, 2024, the carrying value of the Company’s U.S.

Treasury Bills approximates their fair value due to their short-term maturities.

Treasury Bills and Notes approximates their fair value due to their short-term maturities.

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

Long-lived assets:

2 unchanged sentences

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,

Factors the Company considers that could trigger an impairment review include the following:

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

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

3 unchanged sentences

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, 2024, there were no impairment indicators which required an impairment loss measurement.

During the year ended December 31, 2023 there was one impairment indicator which required an impairment loss measurement (see Note 10).

Operating Segment:

The Company operates in one business segment, which includes the business of research and development activities related to the development of therapeutic products that treat rare and orphan diseases for which there are currently very limited or no approved treatments or cures.

The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (“CODM”).

The Company’s CODM is its Chief Executive Officer, who reviews and evaluates consolidated net loss for purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods.

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

Year Ended December 31,

External clinical development expenses

Personnel related and stock-based compensation

Other research and development expenses

Total research and development expenses

Research and development:

3 unchanged sentences

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

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

QUOIN PHARMACEUTICALS LTD.

1 unchanged sentence

December 31, 2024 and 2023

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:

15 unchanged sentences

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.

The expected dividend yield was assumed to be zero as the Company has not paid dividends since its inception and does not anticipate paying dividends in the foreseeable future.

Fair value of financial instruments:

10 unchanged sentences

however, potential shares are excluded if their effect is anti-dilutive.

For the year ended December 31, 2024, the number of shares excluded from the diluted net earnings (loss) per share included outstanding warrants to purchase 39,210,562 ADS and outstanding stock options to purchase 1,943,787 ADS.

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.

The inclusion of these warrants and stock options for both 2024 and 2023

QUOIN PHARMACEUTICALS LTD.

1 unchanged sentence

December 31, 2024 and 2023

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.

in the denominator would be anti-dilutive.

For the year ended December 31, 2024 basic and diluted net earnings (loss) per share included 11,212,666 ADS issuable with respect to unexercised prefunded warrants (See Note 13).

Recent Accounting Pronouncements:

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , requiring public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

The Company adopted ASU 2023-07 during the year ended December 31, 2024.

Refer to segment reporting above in (Note 2).

In December 2023, the FASB issued ASU No.

2 unchanged sentences

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.

The Company adopted ASU No.

2023-09 effective 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.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2024-03.

NOTE 4 – ACCRUED INTEREST AND FINANCING EXPENSE

4 unchanged sentences

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, 2024 and December 31, 2023.

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”.

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.

There was no interest expense recognized in both the years ended December 31, 2024 and 2023.

NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS

10 unchanged sentences

and model-derived valuations inputs of which are observable and can be corroborated by market data.

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.

QUOIN PHARMACEUTICALS LTD.

1 unchanged sentence

December 31, 2024 and 2023

Unobservable inputs and assumptions that are supported by little or no market activity and that are significant to the fair value of the asset and liability.

The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining the appropriate hierarchy levels, the Company analyzes the assets and liabilities that are subject to fair value disclosure.

2 unchanged sentences

December 31, 2024

US Treasury Bills

Total US Treasury Bills Asset

US Treasury Bills and Notes

Total US Treasury Bills and Notes Asset

December 31, 2023

US Treasury Bills

Total US Treasury Bills Asset

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.

Beginning Balance January 1, 2022

Change in Fair value of warrants

Reclassification of warrant liability to an equity instrument

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.

US Treasury Bills and Notes

Total US Treasury Bills and Notes Asset

NOTE 6 – STOCK BASED COMPENSATION

In March 2022, the Board of Directors of the Company approved the Amended and Restated Equity Incentive Plan (the “Amended Plan”) which 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.

In March 2022, the Board of Directors of the Company approved the Amended and Restated Equity Incentive Plan which was approved by the shareholders at the Company’s Annual General Meeting of Shareholders held on April 12, 2022 (the “Amended Plan”).

The Amended Plan increased the number of ordinary shares reserved for issuance under such equity incentive plan to 15 % of the Company’s outstanding ordinary shares on a fully-diluted basis, or 319,397 ordinary shares represented by 319,397 ADSs as of December 31, 2023, and 9,197,277 ordinary shares represented by 9,197,277 ADSs as of December 31, 2024.

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, 2024 7,253,490 shares remained available for issuance.

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

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

1 unchanged sentence

Outstanding at December 31, 2022

Forfeited/Cancelled

Outstanding at December 31, 2023

Forfeited/Cancelled

Outstanding at December 31, 2024

1 unchanged sentence

The intrinsic value of outstanding options at December 31, 2024 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:

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

Stock options granted during the years ended December 31, 2024 and 2023 were valued using the Black-Scholes option-pricing model with the following weighted average assumptions:

Expected volatility

6 unchanged sentences

Stock based compensation expense was approximately $ 1.26 million ($ 293,000 included in research and development expense and $ 967,000 included in general and administrative expenses) in the year ended December 31, 2024.

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.

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.

At December 31, 2024, the total unrecognized compensation expense related to non-vested options was approximately $ 2.9 million and is expected to be recognized over the remaining weighted average service period of approximately 3.8 years.

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

NOTE 7 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

13 unchanged sentences

Other expenses

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

NOTE 9 –IN-LICENSED TECHNOLOGY

Polytherapeutics:

On March 24, 2018, Quoin Inc.

In March 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.

1 unchanged sentence

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 10.

There were no royalty obligations due at December 31, 2024 and December 31, 2023.

In October 2019, Quoin Inc.

7 unchanged sentences

There were no milestone or royalty obligations due at December 31, 2024 and December 31, 2023.

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

NOTE 10 - INTANGIBLE ASSETS

Intangible assets are as follows:

Acquired technology – Polytherapeutics

Technology license – Skinvisible

3 unchanged sentences

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.

The annual amortization expense expected to be recorded for existing intangible assets for the years 2025 through 2029, is approximately $ 100,000 , $ 100,000 , $ 100,000 , 100,000 and $ 83,000 , respectively.

NOTE 11 – RELATED PARTY TRANSACTIONS

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The Company repaid $ 300,000 and $ 300,000 of such indebtedness to Dr.

Myers and $ 300,000 and $ 300,000 to Ms.

Myers and $ 300,000 and $ 300,000 to

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

Carter in the year ending December 31, 2024 and 2023, respectively.

4 unchanged sentences

Salaries and other compensation

Invoices paid on behalf of the Company

Short-term portion

Long-term portion

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.

Insider Participation in December 2024 Offering:

Interest Payable:

See Note 4 for interest payable on the 2020 Notes.

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

NOTE 12 – RESEARCH, CONSULTING AGREEMENTS AND COMMITMENTS

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A work order was entered into in June 2022 for the first QRX003 clinical study at an expected estimated cost of approximately $ 4.4 million.

An additional work order was entered into in December 2022 for a second QRX003 clinical study at an expected estimated cost of approximately $ 830,000 .

An additional change order was entered into in December 2022 for a second QRX003 clinical study at an expected estimated cost of approximately $ 830,000 .

An amended and restated change order for the two studies was entered into in December 2024 at an estimated total remaining cost from August 2024 of approximately $ 3.6 million for the two studies combined.

In the years ended December 31, 2024 and 2023, the Company incurred a research and development expense under these agreements of approximately $ 1.1 million and $ 1.5 million respectively.

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

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

3 unchanged sentences

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

Consulting agreement:

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).

On June 10, 2024, the Company signed a research agreement with The School of Pharmacy at University College Cork, Ireland (UCC).

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

Under the terms of the agreement, based on the achievement of certain milestones, the Company will fund up to approximately € 567,000 ( $ 608,000 ) plus VAT over an anticipated 2-1/2 year period to support the UCC research program to investigate the development of a number of topical rapamycin formulations for future development as potential treatments for several rare and orphan diseases.

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

QUOIN PHARMACEUTICALS LTD.

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December 31, 2024 and 2023

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.

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

Performance milestones and Royalties

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

NOTE 13 – SHAREHOLDERS’ EQUITY

As of December 31, 2024, the authorized share capital of the Company was 100,000,000 ordinary shares, no par value, with each ADS representing one ordinary share.

Each holder of an ordinary share is entitled to one vote per 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 on 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.

Under Israeli law, the Company may declare and pay dividends only if, upon the determination of its board of directors, there is no reasonable concern that the distribution will prevent the Company from being able to meet the terms of its existing and foreseeable obligations as they become due.

Under the Companies Law, the distribution amount is further limited to the greater of retained earnings or earnings generated over the two most recent years legally available for distribution according to the Company’s then last reviewed or audited financial statements, provided that the date of the financial statements is not more than six months prior to the date of distribution.

In the event that the Company does not have retained earnings or earnings generated over the two most recent years legally available for distribution, the Company may seek the approval of the court in order to distribute a dividend.

The court may approve 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).

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

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.

The court may approve the Company’s request if it determines that there is no reasonable concern that the payment of a dividend will prevent the Company from satisfying existing and foreseeable obligations as they become due.

2023 Public Offering

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

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

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

In connection with the 2023 Offering, 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.

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

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

Specifically, the 2023 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.

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

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

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

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

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

provided, however at no time can the purchase price be below a floor price of $ 1.00 per share (subject to adjustment).

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

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

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

In connection with each of the March 2024 Offering and the December 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 such Offering, see below.

Per mutual agreement between the parties, the Company has not filed the required registration statement or sold any ADS to Alumni under the Alumni Purchase Agreement.

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

The Company expensed approximately $ 112,000 in deferred offering costs incurred during the year ended December 31, 2024 of which approximately $ 34,000 was recorded in year ended December 31, 2023.

2024 Public Offerings

On March 7, 2024, (the “March 2024 Closing Date”) the Company completed an offering (the “March 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”) to purchase 4,062,500 ordinary shares represented by ADSs, and (iv) 3,251,250 pre-funded warrants (the “March 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 $ 5.5 million, after deducting the placement agent’s fees and offering expenses paid by us.

Each ADS (or March 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 Series D Warrants and Series E Warrants were sold at a combined public offering price of $ 1.60 and the March 2024 Pre-Funded Warrants and accompanying Series D Warrants and Series E Warrants were sold at a combined public offering price of $ 1.5999 , which is equal to the combined purchase price per ADS and accompanying Series D Warrants and Series E Warrants, minus the exercise price of each March 2024 Pre-Funded Warrant of $ 0.0001 .

The Series D Warrants

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

and Series E Warrants have an exercise price of $ 1.60 per share, were exercisable immediately following the closing of the March 2024 Offering and expire in two years and five years , respectively, from the closing of the March 2024 Offering.

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 to, among other things, reduce the exercise price of such warrants to $ 1.60 and to extend the expiration date of such warrants until March 7, 2029.

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

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

Each ADS (or December 2024 Pre-Funded Warrant to purchase one ADS in lieu thereof) was sold together with a Series F Warrant to purchase one ADS and a Series G Warrant to purchase one ADS.

The ADSs and accompanying December 2024 Warrants were sold at a combined public offering price of $ 0.45 and the December 2024 Pre-Funded Warrants and accompanying December 2024 Warrants were sold at a combined public offering price of $ 0.4499 , which is equal to the combined purchase price per ADS and accompanying December 2024 Warrants, minus the exercise price of each December 2024 Pre-Funded Warrant of $ 0.0001 .

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

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

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

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

Pursuant to the terms of each of the 2024 Purchase Agreements, 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 such 2024 Offering, and (ii) to not enter into any equity financings for 90 days from closing of such 2024 Offering.

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

On December 20, 2024, the Company also entered into privately negotiated agreements with the holders of certain existing outstanding warrants to purchase up to 7,002,500 ADSs to, among other things, reduce the exercise price of such warrants to $ 0.45 and to extend the expiration date of such warrants until December 23, 2029.

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

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

The following table summarizes warrant activities during the year ended December 31, 2023 and the year ended December 31, 2024:

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Granted Common Warrants

Exercised - Cashless and Pre Funded Warrants

Outstanding at December 31, 2022

Granted Pre-Funded Warrants

Exercised Pre-Funded Warrants

Outstanding and exercisable at December 31, 2023

Granted Common Warrants

1 unchanged sentence

Exercised Pre-Funded Warrants

( 4,011,916 )

Outstanding and exercisable at December 31, 2024

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 that the exercise price of certain Ordinary Warrants issued in the Company’s 2022 Offering were reduced from $ 60.00 to $ 13.20 per ADS for investors who participated in the 2023 Offering, see above.

** Note that the exercise price of certain Ordinary Warrants issued in the Company’s 2022 Offering and 2023 Offering were reduced from $ 13.20 to $ 1.60 per ADS for investors who participated in the March 2024 Offering, and the exercise price of certain Ordinary Warrants issued in the 2022 Offering, 2023 Offering and March 2024 Offering were reduced from $ 1.60 to $ 0.45 per ADS for certain investors who participated in the December 2024 Offering, see above.

As of December 31, 2024, outstanding Ordinary Warrants expire in 2026, 2027, 2028 and 2029 and have an intrinsic value of approximately $ 7.5 million, and outstanding Pre-Funded Warrants have an intrinsic value of approximately $ 7.3 million.

NOTE 14 – INCOME TAXES

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State Income Tax

State rate change

Change in Valuation Allowance

6 unchanged sentences

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.

The company also had gross $ 22,891,000 of state net operating losses that will carry forward indefinitely.

At December 31, 2024, the Company had approximately $ 353,000 of federal Research and Development (R&D) tax credit carry-forwards.

8 unchanged sentences

Therefore, the capitalization of research and development costs in accordance with IRC 174 resulted in a gross deferred tax asset of $ 6,717,000 .

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

NOTE 15 - CONTINGENCIES

2 unchanged sentences

NOTE 16 – 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.

As of both December 31, 2024 and December 31, 2023, the Company had nine commercial license and supply agreements outstanding, whereby the Company will receive a royalty or other proceeds from the specified product revenues from the licensor, if and when the underlying products are approved and commercialized or sold via compassionate use or early access programs.

No revenues have been received through December 31, 2024 from any of these agreements.

QUOIN PHARMACEUTICALS LTD.

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

NOTE 17 - 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”).

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.

Exercise of Warrants :

In January and February 2025, certain investors in the December 2024 Offering exercised (i) the remaining outstanding 11,212,666 December 2024 Pre-Funded Warrants, (ii) 320,000 Series F Warrants and 105,000 Series G Warrants, resulting in gross proceeds to the Company of approximately $ 192,000 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures