Qualigen Therapeutics, Inc.

Previous wording

In addition, under a Co-Development Agreement dated April 11, 2024 with Marizyme, Inc. (“Marizyme”), we are entitled to receive quarterly a 33% payment in the nature of royalties (capped at double the amount of Funding Payment cash we provide to Marizyme) on any Net Sales (as defined with a meaning tantamount to gross profit on net sales) of Marizyme’s DuraGraft™ vascular conduit solution, which is indicated for adult patients undergoing coronary artery bypass grafting surgeries and is intended for the flushing and storage of the saphenous vein grafts used in coronary artery bypass grafting surgery. No such payments-in-the-nature-of-royalties would accrue until after DuraGraft has been launched in the United States and a cumulative total of $500,000 of DuraGraft Net Sales have been made in the United States. To date we have provided $1,750,000 of Funding Payments to Marizyme (inclusive of a $1,250,000 demand promissory note dated July 15, 2024 which bears interest at 18% per annum).

Current wording

In addition, under a Co-Development Agreement dated April 11, 2024 with Marizyme, Inc. (“Marizyme”), we are entitled to receive quarterly a 33% payment in the nature of royalties (capped at double the amount of Funding Payment cash we provide to Marizyme) on any Net Sales (as defined with a meaning tantamount to gross profit on net sales) of Marizyme’s DuraGraft™ vascular conduit solution, which is indicated for adult patients undergoing coronary artery bypass grafting surgeries and is intended for the flushing and storage of the saphenous vein grafts used in coronary artery bypass grafting surgery. No such payments-in-the-nature-of-royalties would accrue until after DuraGraft has been launched in the United States and a cumulative total of $500,000 of DuraGraft Net Sales have been made in the United States. To date we have provided $700,000 of Funding Payments to Marizyme.

Previous wording

In addition, as of March 31, 2025, the Company has advanced had $2,562,400 to Marizyme, Inc., a Nevada corporation (“Marizyme”), against which Marizyme had previously delivered its demand promissory notes to the Company of like principal amounts (the “Marizyme Note”). The Marizyme Note bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Note at any time and from time to time, in whole or in part, without premium or penalty.

Current wording

In addition, as of June 30, 2025, the Company has advanced $3,775,900 to Marizyme against which Marizyme had previously delivered its demand promissory notes to the Company of like principal amounts (the “Marizyme Note”). The Marizyme Note bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Note at any time and from time to time, in whole or in part, without premium or penalty.

Previous wording

As of March 31, 2025, the Company had advanced to Marizyme $2,562,400, against which Marizyme delivered demand promissory notes to the Company of like principal amounts (the “Marizyme Notes”). As of March 31, 2025, accrued interest related to the Marizyme Notes was $224,163. Interest income of $110,871 for the three months ended March 31, 2025 was recognized in other income in the condensed consolidated statement of operations. As of March 31, 2024 there were no amounts due to the Company under the Marizyme Notes.

Current wording

As of June 30, 2025, we had advanced to Marizyme $3,775,900, against which Marizyme delivered demand promissory notes to us of like principal amounts (the “Marizyme Notes”). As of June 30, 2025, accrued interest related to the Marizyme Notes was $364,596. Interest income of $140,433 and $251,303 for the three and six months ended June 30, 2025, respectively was recognized in other income in the condensed consolidated statement of operations. As of June 30, 2024 there were no amounts due to us under the Marizyme Notes.

Previous wording

Under ASC 326-20, known as the current expected credit loss (“CECL”) model, the Company was required to estimate credit losses expected over the life of an exposure (or pool of exposures) based on historical information, current information, and reasonable and supportable forecasts. The Company is unable to use its historical data to estimate losses as it has no relevant loss history to date. To determine the estimate of expected credit losses, the Company used a probability-weighted approach that incorporates multiple settlement scenarios, including recovery of amounts due upon an acquisition of the debtor, and recovery in different liquidation scenarios, and determines the expected recoverable amount of the loan in each scenario. This model requires management to make certain assumptions including the likelihood of each outcome, the estimated value of the debtor’s assets, and the Company’s expected claim and recovery rate on the debtor’s assets in the event of an insolvency or a liquidation proceeding. As of March 31, 2025, the estimate for expected credit losses on the Marizyme Notes is $557,000. Given the inherently uncertain nature of the debtor’s financial condition and future outcomes, actual credit losses may differ materially from this estimate. The Company will continue to monitor relevant events and conditions and update its assumptions and allowance as necessary.

Current wording

Under ASC 326-20, known as the current expected credit loss (“CECL”) model, we were required to estimate credit losses expected over the life of an exposure (or pool of exposures) based on historical information, current information, and reasonable and supportable forecasts. We are unable to use our historical data to estimate losses as it has no relevant loss history to date. To determine the estimate of expected credit losses, we used a probability-weighted approach that incorporates multiple settlement scenarios, including recovery of amounts due upon an acquisition of the debtor, and recovery in different liquidation scenarios, and determines the expected recoverable amount of the loan in each scenario. This model requires management to make certain assumptions including the likelihood of each outcome, the estimated value of the debtor’s assets, and our expected claim and recovery rate on the debtor’s assets in the event of an insolvency or a liquidation proceeding. As of June 30, 2025, the estimate for expected credit losses on the Marizyme Notes is $828,000. Given the inherently uncertain nature of the debtor’s financial condition and future outcomes, actual credit losses may differ materially from this estimate. We will continue to monitor relevant events and conditions and update its assumptions and allowance as necessary.

Previous wording

General and administrative expenses increased from $1.1 million for the three months ended March 31, 2024, to $2.5 million for the three months ended March 31, 2025, an increase of $1.4 million or 135%. This is primarily due to an increase in investor relations expense of $1.4 million as we raised funding, plus in professional fees of $0.5 million offset by a decrease in payroll expenses of $0.4 million.

Current wording

General and administrative expenses increased from $1.0 million for the three months ended June 30, 2024, to $1.4 million for the three months ended June 30, 2025, an increase of $0.4 million or 38%. This is primarily due to an increase in professional fees and license fees of $0.7 million as we needed more legal and accounting consultants to assist with our audit, offset by a decrease in payroll expenses of $0.3 million.

Previous wording

Research and development expenses decreased from $0.4 million for the three months ended March 31, 2024, to $33,000 for the three months ended March 31, 2025, a decrease of $0.3 million or 90%. This was primarily due all research and development being slowed down in 2025, resulting in decreases in QN-302 program expenses of $216,000, a decrease in RAS program expenses of $15,000, a decrease in payroll of $62,000 and a decrease in stock-based compensation of $25,000

Current wording

Research and development expenses decreased from $0.8 million for the three months ended June 30, 2024, to $18,000 for the three months ended June 30, 2025, a decrease of $0.7 million or 98%. This was primarily due to all research and development being slowed down in 2025, resulting in decreases in QN-302 program expenses of $40,000, a decrease in RAS program expenses of $30,000, a decrease in payroll of $36,000 and a decrease in Marizyme research expense of $700,000.

Previous wording

Credit loss expense – short-term note receivable increased from $0 for the three months ended March 31, 2024, to $0.2 million for the three months ended March 31, 2025, an increase of $0.2 million or 100%. This is due to Marizyme notes first being recorded in July 2024, therefore no reserve was required for the the three months ended March 31, 2024

Current wording

Credit loss expense – short-term note receivable increased from $0 for the three months ended June 30, 2024, to $0.3 million for the three months ended June 30, 2025, an increase of $0.3 million or 100%. This is due to Marizyme notes first being recorded in July 2024, therefore no reserve was required for the three months ended June 30, 2024.

Previous wording

During the three months ended March 31, 2025 and 2024, we experienced a gain of approximately $39,000 and a loss of approximately $0.1 million, respectively, on change in fair value of warrant liabilities, primarily due to changes in our stock price and expiration of warrants during the prior period, and changes in our stock price in the prior period. Typically, a decline in our stock price would result in a decline in the fair value of our warrant liabilities, generating a gain, while an increase in our stock price would result in an increase in the fair value of our warrant liabilities, generating a loss.

Current wording

During the three months ended June 30, 2025 and 2024, we experienced a gain of approximately $16,000 and a gain of approximately $0.5 million, respectively, on change in fair value of warrant liabilities, primarily due to changes in our stock price and expiration of warrants during the prior period, and changes in our stock price in the prior period. Typically, a decline in our stock price would result in a decline in the fair value of our warrant liabilities, generating a gain, while an increase in our stock price would result in an increase in the fair value of our warrant liabilities, generating a loss.

Previous wording

During the three months ended March 31, 2025 we experienced $0 on change in fair value of derivative liabilities, compared to a gain of $0.2 million for the three months ended March 31, 2024. The fair value of derivative liabilities declined during the current period due to derivative liabilities all being settled in 2024.

Current wording

During the three months ended June 31, 2025 we experienced no change in fair value of derivative liabilities, compared to a gain of $10,000 for the three months ended June 30, 2024. We did not hold any derivative liabilities in 2025.

Previous wording

Interest expense decreased from $0.1 million for the three months ended March 31, 2024 to $0.1 million for the three months ended March 31, 2025 due to a $0.1 million decrease for to the settlement of convertible notes in 2024, offset by an increase in $74,000 in amortization of accrued penalty for promissory notes issued in 2025.

Current wording

Interest expense decreased from $0.3 million for the three months ended June 30, 2024 to $0.1 million for the three months ended June 30, 2025 due to a $0.3 million decrease for to the settlement of convertible debt in 2024, offset by interest on the amortized penalty on the 2025 Convertible Note 2025 for $106,000.

Previous wording

Interest income increased from $2,000 for the three months ended March 31, 2024 to $0.1 million for the three months ended March 31, 2025 due to a $0.1 million increase from the recording of interest on Marizyme notes receivable issued in 2024 and 2025.

Current wording

Interest income increased from $1,000 for the three months ended June 30, 2024 to $0.1 million for the three months ended June 30, 2025 due to a $0.1 million increase from the recording of interest on Marizyme notes receivable issued in 2024 and 2025.

Previous wording

Our financial position is weak. As of March 31, 2025 we had approximately $30,000 in cash and net accounts payable of approximately $1.5 million. We are in arrears on accounts payable to important partners. We have incurred recurring losses from operations, and have an accumulated deficit of $125.7 million at March 31, 2025. We expect to continue to incur losses subsequent to the balance sheet date of March 31, 2025. For the three months ended March 31, 2025 and year ended December 31, 2024, we used cash of $1.6 million and $6.4 million, respectively, in operations.

Current wording

Our financial position is weak. As of June 30, 2025 we had approximately $332,000 in cash and net accounts payable of approximately $1.4 million. We are in arrears on accounts payable to important partners. We have incurred recurring losses from operations, and have an accumulated deficit of $127.2 million at June 30, 2025. We expect to continue to incur losses subsequent to the balance sheet date of June 30, 2025. For the six months ended June 30, 2025 and year ended December 31, 2024, we used cash of $2.7 million and $6.4 million, respectively, in operations.

Previous wording

Our current liabilities at March 31, 2025 include approximately $1.5 million of accounts payable, $0.8 million of short-term debt, $0.3 million of accrued expenses and other current liabilities, $0.2 million of warrant liabilities.

Current wording

Our current liabilities at June 30, 2025 include approximately $1.4 million of accounts payable, $3.4 million of short-term debt, $0.4 million of accrued expenses and other current liabilities, and $0.2 million of warrant liabilities.

Previous wording

From January to June 2025, the Company borrowed a total of $3,515,000 from nine investors as short-term borrowings, each due within six months after the date of borrowing. Additionally, in July 2025, the Company plans to close a private placement transaction to raise additional funding through the sale of equity. We expect these proceeds to provide liquidity for the company through calendar year end. We expect to continue to have net losses and negative cash flow from operations, which will challenge our liquidity. These factors raise substantial doubt regarding our ability to continue as a going concern for the one-year period following the date that the financial statements in this Quarterly Report were issued.

Current wording

From January to July 2025, the Company borrowed a total of $3,640,000 from nine investors as short-term borrowings, with some due six months from the date of issuance, some due nine months from the date of borrowing, and some with an indefinite term length. Additionally, in July 2025, the Company closed a private placement transaction to raise additional funding through the sale of equity, in the total of $4,258,000. We expect these proceeds to provide liquidity for the company through calendar year end.

Previous wording

On July 15, 2024, the Company advanced to Marizyme, Inc., a Nevada corporation (“Marizyme”) $1,250,000 against which Marizyme had previously delivered its demand promissory note to the Company of like principal amount dated July 12, 2024 (the “Marizyme Note”). During the three month periods ending March 31, 2025 and December 31, 2024, the Company advanced additional funds of $0.3 million and $1.0 million, respectively. The Marizyme Note bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Note at any time and from time to time, in whole or in part, without premium or penalty.

Current wording

On July 15, 2024, the Company advanced to Marizyme $1,250,000 against which Marizyme had previously delivered its demand promissory note to the Company of like principal amount dated July 12, 2024 (the “Marizyme Note”). During the six month periods ending June 30, 2025 and the year ended December 31, 2024, the Company advanced additional funds of $1.5 million and $2.3 million, respectively. The Marizyme Note bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Note at any time and from time to time, in whole or in part, without premium or penalty.

Previous wording

During the three months ended March 31, 2025, operating activities used $1.6 million of cash, primarily resulting from a loss from continuing operations of $2.7 million. Cash flows from operating activities for the three months ended March 31, 2025 were positively impacted by adjustments for $0.2 million change in provision for credit losses of short-term notes receivable, $0.1 million in amortization of premium on notes payable, , a decrease in prepaid expenses of $0.9 millon, and an increase in accrued expenses of $0.1 million. Cash flows from operating activities for the three months ended March 31, 2025 were negatively impacted by adjustments for a $39,000 gain on change in fair value of warrant liabilities, a $0.1 million increase in accrued interest on short-term notes receivable, and a $40,000 increase in accounts payable.

Current wording

During the six months ended June 30, 2025, operating activities used $2.7 million of cash, primarily resulting from a loss from continuing operations of $4.2 million. Cash flows from operating activities for the six months ended June 30, 2025 were positively impacted by adjustments for $0.5 million change in provision for credit losses of short-term notes receivable, $0.1 million in loss on issuance of convertible debt, a decrease in prepaid expenses of $1.2 million, and an increase in accrued expenses of $0.2 million. Cash flows from operating activities for the six months ended June 30, 2025 were negatively impacted by adjustments for a $55,000 gain on change in fair value of warrant liabilities, a $0.3 million increase in accrued interest on short-term notes receivable, a $38,000 gain on change in fair value of derivative liabilities, and a $0.2 million decrease in accounts payable.

Previous wording

During the three months ended March 31, 2024, operating activities used $0.8 million of cash, primarily resulting from a loss from continuing operations of $2.0 million. Cash flows from operating activities for the three months ended March 31, 2024 were positively impacted by adjustments for a $0.1 million loss on change in fair value of warrant liabilities, a $0.1 loss on monthly redemptions of convertible debt into common stock, $0.4 million non cash loss on voluntary conversion of convertible debt, accretion of discount of $0.1 million on convertible debt, $0.6 million in stock-based compensation expense, a $0.7 million decrease in prepaid expenses, and a $0.3 million increase in accrued expenses and other current liabilities. Cash flows from operating activities for the three months ended March 31, 2024 were negatively impacted by adjustments for a $0.2 million decrease in fair value of warrant liabilities and a $0.4 million decrease in accounts payable.

Current wording

During the six months ended June 30, 2024, operating activities used $2.3 million of cash, primarily resulting from a loss from continuing operations of $3.5 million. Cash flows from operating activities for the six months ended June 30, 2024 were positively impacted by adjustments for $0.1 million in stock based compensation, a $0.2 loss on monthly redemptions of convertible debt into common stock, accretion of discount of $0.3 million on convertible debt, a loss on issuance of convertible debt of $0.4 million, a $0.8 million decrease in prepaid expenses, and a $0.5 million increase in accrued expenses and other current liabilities. Cash flows from operating activities for the six months ended June 30, 2024 were negatively impacted by adjustments for a $0.4 million decrease in fair value of warrant liabilities, a $0.1 million gain on voluntary conversion of convertible debt, a $0.2 million gain on change in fair value of derivative liabilities, and a $0.4 million decrease in accounts payable.

Previous wording

During the three months ended March 31, 2025, net cash used in investing activities resulted from advances to Marizyme of $0.3 million.

Current wording

During the six months ended June 30, 2025, net cash used in investing activities resulted from advances to Marizyme of $1.5 million.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2025 was $0.8 million, all of which resulted from the issuance of short term debt.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2025 was $3.4 million, which resulted from the issuance of short-term debt in the amount of $3.3 million and the issuance of convertible debt in the amount of $0.2 million, offset by repayment of convertible debt of $0.1 million.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2024 was approximately $0.5 million, resulting from the issuance of convertible notes payable.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2024 was approximately $1.6 million, resulting from the issuance of convertible debt in the amount of $1.5 million and proceeds from warrant exercises of $0.2 million.