CQENS Losses Soar 135% Amid Heavy R&D, Professional Fees

TL;DR

**CQENS is burning cash at an alarming rate with no revenue, making it a highly speculative bet on future product commercialization and capital raises.**

AI Summary

CQENS Technologies Inc. reported a significant increase in net loss for the six months ended June 30, 2025, reaching $4,447,724, a 135% increase from the $1,890,941 loss in the same period of 2024. The company continues to operate without revenue, relying heavily on capital raises. Operating expenses surged by 144% to $4,610,988 for the first half of 2025, up from $1,887,771 in 2024, primarily driven by a substantial increase in professional fees to $3,160,153 from $598,940. Research and development expenses also rose to $823,577 from $722,396. Despite these losses, CQENS successfully raised $10,370,000 through the sale of 518,500 common shares in private transactions during the first half of 2025, significantly boosting cash and cash equivalents to $10,046,730 as of June 30, 2025, from $4,596,556 at December 31, 2024. The company's total assets increased to $14,109,228 from $7,432,268, while total liabilities decreased to $1,516,214 from $3,129,718. A key risk highlighted is the company's ability to continue as a going concern due to recurring losses and insufficient revenue.

Why It Matters

For investors, CQENS's escalating losses and lack of revenue signal high risk, despite successful capital raises. The company's dependence on future strategic partnerships and third-party marketing for its Heat-not-Burn Tobacco Product (HTP) system, coupled with potential FDA oversight, creates significant uncertainty. Employees face a company with a limited operating history and no products yet, making job security tied to future funding and product commercialization. Customers are still waiting for product development and market entry, with no immediate impact. The broader market for HTPs could see a new competitor if CQENS succeeds, but its current financial state suggests a long road ahead in a competitive landscape.

Risk Assessment

Risk Level: high — The company explicitly states it has 'recurring losses, with cash resources expected to be substantially depleted over the next 12 months, with renewed research and development efforts and with no source of revenue sufficient to cover its operations costs over the next 12 months.' This, combined with a 135% increase in net loss to $4,447,724 for the six months ended June 30, 2025, indicates significant financial instability.

Analyst Insight

Investors should exercise extreme caution and consider CQENS Technologies Inc. a highly speculative investment. Monitor future capital raises and progress on strategic partnerships closely, as the company's survival hinges on these. Avoid significant positions until a clear path to revenue generation and profitability is demonstrated.

Financial Highlights

debt To Equity

0.12

revenue

$0

operating Margin

N/A

total Assets

$14.11M

total Debt

$1.52M

net Income

-$4.45M

eps

-$0.16

gross Margin

N/A

cash Position

$10.05M

revenue Growth

N/A

Key Numbers

• $4.45M — Net Loss (Increased 135% for six months ended June 30, 2025, from $1.89M in 2024.)
• $4.61M — Total Operating Expenses (Increased 144% for six months ended June 30, 2025, from $1.89M in 2024.)
• $3.16M — Professional Fees (Increased significantly for six months ended June 30, 2025, from $0.60M in 2024.)
• $10.05M — Cash and Cash Equivalents (Increased from $4.60M at December 31, 2024, due to capital raises.)
• $10.37M — Proceeds from Common Stock Issuance (Raised in private transactions during the first half of 2025.)
• 27,408,052 — Shares Outstanding (As of August 13, 2025, indicating dilution from capital raises.)
• $14.11M — Total Assets (Increased from $7.43M at December 31, 2024.)
• $1.52M — Total Liabilities (Decreased from $3.13M at December 31, 2024.)
• $0.16 — Basic and Diluted Loss Per Share (For the six months ended June 30, 2025, up from $0.07 in 2024.)
• 518,500 — Common Shares Sold (In private transactions during the first half of 2025.)

Key Players & Entities

• CQENS Technologies Inc. (company) — registrant
• Asahi Corporation (company) — joint venture partner for CQENS Electronics (Hong Kong) Limited
• CQENS Electronics (Hong Kong) Limited (company) — subsidiary for design, development, and manufacture of heat-not-burn device
• Barker Group/Firebird Manufactures (company) — potential joint venture partner
• Anglo-Chinese Financial (company) — investment banker engaged in 2024
• Securities and Exchange Commission (regulator) — filing oversight
• FDA (regulator) — potential oversight for products
• $10,046,730 (dollar_amount) — cash and cash equivalents as of June 30, 2025
• $4,447,724 (dollar_amount) — net loss for the six months ended June 30, 2025
• $10,370,000 (dollar_amount) — proceeds from common stock issuance in first half of 2025

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company reported a net loss of $4,447,724 for the six months ended June 30, 2025, and has recurring losses and no revenue. This raises substantial doubt about its ability to continue as a going concern, as it relies heavily on capital raises to fund operations.
• Dependence on Capital Raises [high — operational]: CQENS Technologies Inc. has not generated any revenue and relies entirely on capital raises to fund its operations. The company raised $10,370,000 in the first half of 2025, but future funding is not guaranteed and is critical for continued operations.
• Significant Increase in Operating Expenses [medium — operational]: Total operating expenses increased by 144% to $4,610,988 for the six months ended June 30, 2025, from $1,887,771 in the prior year. This surge was primarily driven by a substantial increase in professional fees to $3,160,153 from $598,940.
• International Trade and Tariff Risks [medium — market]: The company's business opportunities are international, including potential partnerships in the UK, EU, and Asia. Recent US and international concerns regarding tariffs and trade disruptions could negatively affect its plans of operations.
• Reliance on Strategic Partnerships [medium — operational]: The business model is dependent on entering into additional strategic partnerships, alliances, or joint ventures with consumer product companies for development and commercialization. Dependence on third-party marketing and distribution companies also poses a risk.
• Dilution from Stock Issuances [medium — financial]: The company issued 518,500 common shares in private transactions to raise $10,370,000. As of August 13, 2025, shares outstanding were 27,408,052, indicating potential dilution for existing shareholders due to ongoing capital raises.

Industry Context

CQENS Technologies operates in the emerging heated-not-burn (HNB) product sector, a segment of the broader alternative nicotine and cannabis inhalation market. This industry is characterized by rapid innovation, patent-driven competition, and evolving regulatory landscapes globally. Companies in this space often rely on proprietary technology, such as CQENS's patent-pending heating method, and strategic partnerships for manufacturing and distribution.

Regulatory Implications

The company's focus on plant-based consumables for inhalation places it within a highly regulated industry, subject to evolving health and safety standards. Potential future regulations concerning HNB products, manufacturing standards, and international trade policies (like tariffs) could impact its product development, market access, and operational costs.

What Investors Should Do

1. Monitor future capital raises and dilution.
2. Assess the viability of the 'going concern' risk.
3. Evaluate the growth and cost drivers of operating expenses.
4. Track progress on strategic partnerships and commercialization.

Key Dates

• 2025-06-30: Six months ended June 30, 2025 financial results reported — Shows a significant increase in net loss and operating expenses, alongside successful capital raises and improved cash position.
• 2025-03-31: Form 10-K for year ended December 31, 2024 filed — Provides audited financial statements and a broader discussion of business risks.
• 2024-12-31: Year-end financial position — Represents the starting point for the current period's financial analysis, showing lower cash and higher liabilities compared to June 30, 2025.
• 2023-11-01: FASB issued ASU 2023-07 on Segment Reporting — This standard became effective for the Company as of January 1, 2024, impacting segment disclosure requirements.
• 2023-12-20: Shareholder Agreement with Asahi Corporation for CEL — Established CQENS Electronics (Hong Kong) Limited, a joint venture for device design and manufacturing, impacting the company's operational structure.

Glossary

Going Concern

An accounting assumption that a company will continue to operate for the foreseeable future. If there is substantial doubt about this, it must be disclosed. (The company's recurring losses and lack of revenue raise significant doubt about its ability to continue as a going concern, a critical risk for investors.)

Accumulated Deficit

The total net losses of a company since its inception, less any net income. It represents a negative balance in retained earnings. (CQENS has a substantial accumulated deficit of $39,195,793 as of June 30, 2025, highlighting its history of unprofitability.)

Additional Paid-in Capital

The amount of money a company receives from selling stock above its par value. (This account has grown significantly to $51,806,178, reflecting substantial capital raised through stock issuances.)

Non-controlling Interests

The portion of equity in a subsidiary that is not attributable to the parent company. It represents the ownership stake of outside shareholders in a consolidated subsidiary. (CQENS reports non-controlling interests, indicating it consolidates entities where it does not hold 100% ownership, such as CQENS Electronics (Hong Kong) Limited.)

Heat-not-Burn Tobacco Product (HTP)

A type of electronic device that heats tobacco or plant-based material to a temperature below combustion, releasing an aerosol for inhalation. (This is the core technology and product focus of CQENS Technologies, Inc., as described in its nature of business.)

CODM (Chief Operating Decision Maker)

The individual or group responsible for allocating resources to segments and assessing their performance. Their determination defines the company's reportable segments. (The CODM for CQENS has determined that the company has only one reportable segment, simplifying its operational and financial reporting structure.)

Year-Over-Year Comparison

Compared to the prior year's six-month period, CQENS Technologies Inc. has seen a dramatic increase in its net loss, up 135% to $4.45 million, and a 144% surge in operating expenses to $4.61 million. This escalation is largely due to a significant jump in professional fees. While total assets have more than doubled to $14.11 million, primarily driven by a substantial increase in cash from capital raises ($10.37 million), total liabilities have decreased to $1.52 million. The company's financial health remains precarious, with the going concern risk being a prominent factor, as it continues to operate without revenue.

Key Financial Figures

• $0.0001 — 2024 (Unaudited) Number of Shares $0.0001 Par Value Additional Paid in Capital

Filing Documents

• form10-q.htm (10-Q) — 560KB
• ex31-1.htm (EX-31.1) — 16KB
• ex31-2.htm (EX-31.2) — 16KB
• ex32-1.htm (EX-32.1) — 8KB
• form10-q_001.jpg (GRAPHIC) — 9KB
• 0001641172-25-023637.txt ( ) — 2815KB
• cqens-20250630.xsd (EX-101.SCH) — 21KB
• cqens-20250630_cal.xml (EX-101.CAL) — 37KB
• cqens-20250630_def.xml (EX-101.DEF) — 76KB
• cqens-20250630_lab.xml (EX-101.LAB) — 210KB
• cqens-20250630_pre.xml (EX-101.PRE) — 156KB
• form10-q_htm.xml (XML) — 292KB

Financial Statements (Unaudited)

Financial Statements (Unaudited). 2 Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations. 14 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk. 17 Item 4.

Controls and Procedures

Controls and Procedures. 17

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1. Legal Proceedings. 18 Item 1A. Risk Factors. 18 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 18 Item 3. Defaults upon Senior Securities. 18 Item 4. Mine Safety Disclosures. 18 Item 5. Other Information. 18 Item 6. Exhibits . 18 i CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION This report includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, "believe," "expect," "anticipate," "estimate," "intend," "plan," "targets," "likely," "aim," "will," "would," "could," and similar expressions or phrases identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs.

Forward-looking statements include, but are not limited to, statements about

Forward-looking statements include, but are not limited to, statements about: financial risks, including: our history of losses, lack of revenues and insufficient working capital; our ability to continue as a going concern; our ability to raise capital; business risks, including: our limited operating history and lack of products; the lack of operating history of Leap Technology LLC; the joint venture with the Barker Group/Firebird Manufactures remains to be finalized; potential conflicts of interest of our management; reliance on third parties; potential FDA oversight; lack of marketing and distributing experience; possible inability to establish and maintain strategic partnerships; possible dependence on licensing or collaboration agreements; risks relating to our common stock, including: the lack of a public market for our common stock; and possible impact of Delaware's anti-takeover statutes on our shareholders. You should read thoroughly this report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements, Part 1. Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed on March 31, 2025 (the "2024 10-K") and our other filings with the Securities and Exchange Commission. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking state

Consolidated Financial Statements

Item 1. Consolidated Financial Statements CQENS Technologies, Inc. Consolidated Balance Sheets (Unaudited) June 30, 2025 December 31, 2024 ASSETS Current Assets Cash and cash equivalents $ 10,046,730 $ 4,596,556 Prepaid expenses 128,436 109,137 Total Current Assets 10,175,166 4,705,693 Intellectual property, net 1,549,492 1,386,720 Right-of-use asset - lease, net 121,252 21,979 Leasehold improvement, net - 2,092 Prepaid expenses - noncurrent portion 2,263,318 1,315,784 TOTAL ASSETS $ 14,109,228 $ 7,432,268 LIABILITIES & STOCKHOLDERS' EQUITY LIABILITIES Current Liabilities Accounts payable $ 127,008 $ 961,887 Accrued expenses 241,316 279,138 Related party loan 1,026,638 1,016,714 Investor deposits - 850,000 Current portion of lease liability 64,005 21,979 Total Current Liabilities 1,458,967 3,129,718 Lease liability, net of current portion 57,247 - TOTAL LIABILITIES 1,516,214 3,129,718 STOCKHOLDERS' EQUITY Preferred Stock: $ 0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at June 30, 2025 and December 31, 2024. - - Common Stock: $ 0.0001 par value; 200,000,000 shares authorized; 27,407,052 shares issued and outstanding at June 30, 2025 and 26,828,383 shares issued and outstanding at December 31, 2024 2,741 2,683 Additional paid-in capital 51,806,178 39,068,448 Non-controlling interests ( 20,272 ) ( 4,747 ) Accumulated other comprehensive loss 160 ( 40 ) Accumulated deficit ( 39,195,793 ) ( 34,763,794 ) TOTAL STOCKHOLDERS' EQUITY 12,593,014 4,302,550 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 14,109,228 $ 7,432,268 See accompanying notes to unaudited consolidated

financial statements

financial statements 2 CQENS Technologies, Inc. Consolidated Statements of Operations and Comprehensive Loss (Unaudited) 2025 2024 2025 2024 Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Operating Expenses General and administrative $ 289,266 $ 277,606 $ 627,258 $ 566,435 Research and development 504,834 331,964 823,577 722,396 Professional fees 1,244,770 282,283 3,160,153 598,940 Total Operating Expenses 2,038,870 891,853 4,610,988 1,887,771 Total Operating Loss ( 2,038,870 ) ( 891,853 ) ( 4,610,988 ) ( 1,887,771 ) Other Income (Expense) 84,923 ( 3,323 ) 163,264 ( 3,170 ) Net Loss ( 1,953,947 ) ( 895,176 ) ( 4,447,724 ) ( 1,890,941 ) Net loss attributable to non-controlling interests ( 1,100 ) ( 522 ) ( 15,725 ) ( 1,654 ) Net Loss attributable to CQENS Technologies, Inc. $ ( 1,952,847 ) $ ( 894,654 ) $ ( 4,431,999 ) $ ( 1,889,287 ) Basic and diluted loss per common share $ ( 0.07 ) $ ( 0.03 ) $ ( 0.16 ) $ ( 0.07 ) Basic and diluted weighted average shares outstanding 27,389,972 26,244,159 27,225,508 26,214,414 Comprehensive Loss: Change in foreign currency translation adjustments 118 ( 4 ) 160 ( 38 ) Comprehensive Loss: ( 1,953,829 ) ( 895,180 ) ( 4,447,564 ) ( 1,890,979 ) Comprehensive loss attributable to non-controlling interests ( 1,041 ) ( 524 ) ( 15,645 ) ( 1,673 ) Comprehensive loss attributable to CQENS Technologies, Inc. $ ( 1,952,788 ) $ ( 894,656 ) $ ( 4,431,919 ) $ ( 1,889,306 ) See accompanying notes to unaudited consolidated financial 3 CQENS Technologies, Inc. Consolidated Statements of Changes in Stockholders' Equity For the six months ended June 30, 2025 and 2024 (Unaudited) Number of Shares $0.0001 Par Value Additional Paid in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Non-controlling Interest Total Common Stock Number of Shares $0.0001 Par Value

financial statements

financial statements 8 CQENS Technologies, Inc.

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements June 30, 2025 NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF BASIS OF PRESENTATION Nature of Business CQENS Technologies, Inc. ("we", "our", the "Company", "CQENS") is a technology company with a proprietary method of heating plant-based consumable formulations that produce an aerosol that lead to the effective and efficient inhalation of the plant's constituents. This is accomplished at a high temperature but without the accompanying constituents of combustion. Our system of heating is a high temperature, non-combustion system. Our Heat-not-Burn Tobacco Product (HTP) system is a patent-pending method of heating plant-based consumables for inhalation that is superior to other methods of ingestion, smoking, vaping, swallowing or via topical application. On December 20, 2023, we entered into a Shareholder Agreement with Asahi Corporation to establish CQENS Electronics (Hong Kong) Limited ("CEL"), a Hong Kong company, for design, development and manufacture of our heat-not-burn device ("Device"). CQENS acquired 50 % membership of CEL and holds majority of the board seats including the chair. Pursuant to the establishment of CEL, CQENS entered into an exclusive, worldwide License Agreement with CEL for designing and manufacturing a consumer device consistent with our IP. CEL activities are included in our unaudited consolidated

financial statements

financial statements. Our business model is further dependent upon our ability to enter into additional strategic partnerships in the future, including alliances or joint ventures with consumer product companies, to enhance and accelerate the development and commercialization of our proposed products. We will be dependent upon third party marketing and distribution companies. We believe that our business opportunities are international in nature and include potential partnerships in the UK, the EU and Asia, including the People's Republic of China. Recent US and international concerns with the possibility of international manufacturing and trade being disrupted by the threat or the imposition of tariffs could have a negative effect on our plans of operations. Basis of Presentation Basis of Presentation - The following unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, such interim consolidated financial statements do not include all the information and footnotes required by accounting principles generally accepted in the United States ("GAAP") for complete annual consolidated financial statements. The information furnished reflects all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the consolidated financial statements not misleading. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. The balance sheet as of June 30, 2025, has been derived from the Company's annual consolidated financial statements that were audited by our independent registered public accounting firm but does not include all of the information and footnotes required for complete annual consolidated financial statements. These consolidated financial statements should be read in conjunction with the audited consolidated fina

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