"It was a freak injury," a source told ESPN. "It didn't look that bad."
Qualls went up in the air to contest a shot, and appeared to land awkwardly, the source told ESPN. He flew from Phoenix to Los Angeles for a workout with the Lakers and wasn't able to participate, and then had an MRI in Denver on Sunday which confirmed the extent of the injury.
The injury was first reported by DraftExpress.
Qualls is considered one of the top athletes in the draft, and had 91 dunks in his college career with the Razorbacks. He averaged 15.9 points and decided to bypass his senior season in Arkansas.
Qualls suffered a quad injury at the NBA Combine in Chicago last month and had been unable to work out for teams. His first workout was the one in Phoenix in which he suffered the knee injury -- which will likely keep him out for next season.
Multiple NBA executives told ESPN that Qualls would have been drafted in the second round or gone undrafted. He could still be taken late in the second round.