CQENS Technologies Inc. Annual Report - How They Did This Year

I’ve put together a simple guide to help you understand how CQENS Technologies performed this year. Think of this as a plain-English breakdown—no confusing Wall Street jargon, just the facts you need to decide if this company belongs in your portfolio.

1. What does this company do?

CQENS is a technology company focused on the "inhalation market." They design devices that heat tobacco to a precise temperature. By heating rather than burning, they aim to avoid the harmful chemicals found in smoke. Their goal is to offer a safer alternative to traditional cigarettes. Their main assets are over 100 global patents for this "Heat-not-Burn" technology.

2. Financial performance: Still in the "Red"

To be blunt, the company is losing money. They have no products on the market and zero sales.

• The Losses: They lost about $13.02 million in 2025, up from a $10.94 million loss in 2024. These losses come from heavy spending on research and patent maintenance.
• The "Going Concern" Warning: Their auditors have noted that because the company loses money every year and has no sales, there is uncertainty regarding their ability to stay in business. Since they started, they have lost about $48.2 million.

3. Major wins and changes this year

• Team Growth: They now have 14 full-time employees. This includes a new engineering team in Shenzhen, China, working to turn laboratory prototypes into products that can be mass-produced.
• Relocation: In November 2025, they moved their headquarters from Minnesota to Nevada to benefit from better tax and business laws.
• Strategic Moves: They are negotiating a partnership with "Barker Group/Firebird Manufacturing" to handle factory production. This is currently a preliminary agreement; until a final contract is signed, they do not have a confirmed manufacturing path.

4. Financial health: The "Burn Rate"

At the end of 2025, the company had about $7.4 million in cash. They spend roughly $10 million to $11 million per year. Management believes they have enough money to last until the third quarter of 2026. After that, they must raise more money. If they issue more shares to raise cash, your ownership percentage will shrink.

5. Key risks

• Survival Risk: The company has no sales and relies entirely on outside funding. If they cannot raise more money in 2026, they will likely go out of business, and investors could lose everything.
• Regulatory Hurdles: They must pass a difficult, expensive, and multi-year review by the FDA. If the FDA denies their application, the company likely lacks the money to keep going.
• Dependency: CQENS does not own factories. They rely on partners like Barker Group. If these partners fail or negotiations break down, the company has no product to sell.
• Conflicts of Interest: Executives and board members have other business interests. There are no contracts requiring them to work exclusively for CQENS, so they might prioritize other projects.

6. Future outlook

The company does not expect to launch a product until 2027. Success is a long shot. They must finalize their manufacturing deal, win FDA approval, and raise more money without hurting current shareholders.

Bottom Line: This is a high-stakes, "all-or-nothing" bet. You are investing in a research project that hopes to become a business by 2027. Before investing, ask yourself if you are comfortable with the high risk of losing your entire investment if the FDA process or manufacturing deals fail.