UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period
Ended: June 30, 2023
or
☐ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period
from:
Commission File Number:
001-38803
Hoth Therapeutics, Inc.
(Exact name of registrant
as specified in its charter)
| Nevada | | 82-1553794 |
| (State or other jurisdiction of | | (I.R.S. Employer |
| incorporation or organization) | | Identification No.) |
| 1 Rockefeller Plaza, Suite 1039 | | |
| New York, NY | | 10020 |
| (Address of principal executive offices) | | (Zip Code) |
(646) 756-2997
(Registrant’s telephone number, including area
code)
Not applicable
(Former name, former address and former fiscal
year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | | Trading symbol(s) | | Name of each exchange on which registered |
| Common Stock, $0.0001 par value | | HOTH | | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| | | Emerging growth company | ☒ |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
No ☒
The number of shares of the issuer’s common
stock, $0.0001 par value per share, outstanding at August 9, 2023 was 3,302,113.
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
AND INDUSTRY DATA
This Quarterly Report on Form 10-Q contains certain
forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended
(the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Any statements in this Quarterly Report on Form 10-Q about our expectations, beliefs, plans, objectives, assumptions or future events
or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through
the use of words or phrases such as “may,” “should,” “believes,” “will,” “expects,”
“anticipates,” “estimates,” “predicts,” “potential,” “continues” “intends,”
“plans” and “would” or the negative of these terms or other comparable terminology. For example, statements concerning
financial condition, possible or assumed future results of operations, growth opportunities, and plans are all forward-looking statements.
Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not
guarantees of future results or performance and involve substantial risks and uncertainty. They involve known and unknown risks, uncertainties
and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results,
levels of activity, performance or achievements expressed or implied by any forward-looking statement. We may not actually achieve the
plans, intentions or expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve
substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:
| ● | our
business strategies; |
| ● | the
timing of regulatory submissions; |
| ● | our
ability to obtain and maintain regulatory approval of our existing product candidates and
any other product candidates we may develop, and the labeling under any approval we may obtain; |
| ● | risks relating to the timing and costs of clinical trials and
the timing and costs of other expenses; |
| ● | risks related to market acceptance of products; |
| ● | the
ultimate impact of any health epidemics on our business, our clinical trials, our research
programs, healthcare systems or the global economy as a whole; |
| ● | intellectual
property risks; |
| ● | risks
associated with our reliance on third-party organizations; |
| ● | our
competitive position; |
| ● | our
industry environment; |
| ● | our
anticipated financial and operating results, including anticipated sources of revenues; |
| ● | assumptions
regarding the size of the available market, benefits of our products, product pricing and
timing of product launches; |
| ● | management’s
expectation with respect to future acquisitions; |
| ● | statements
regarding our goals, intentions, plans and expectations, including the introduction of new
products and markets; and |
| ● | our
cash needs and financing plans. |
All of our forward-looking statements are as
of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking
information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of,
or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on
Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished
to the U.S. Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects,
financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking
statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking
statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear
that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report
on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed
to modify or supersede such statements in this Quarterly Report on Form 10-Q.
This Quarterly Report on Form 10-Q may include
market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys,
publicly available information, reports of governmental agencies and industry publications, articles and surveys. Industry surveys, publications,
consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be
reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications
are reliable, we have not independently verified market and industry data from third-party sources.
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
HOTH THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| | |
June 30,
2023 | | |
December 31,
2022 | |
| ASSETS | |
(Unaudited) | | |
| |
| Current assets: | |
| | |
| |
| Cash | |
$ | 11,544,802 | | |
$ | 6,428,611 | |
| Marketable equity securities, at fair value | |
| 24,567 | | |
| 209,320 | |
| Prepaid expenses | |
| 314,881 | | |
| 88,450 | |
| Total current assets | |
| 11,884,250 | | |
| 6,726,381 | |
| | |
| | | |
| | |
| Investment in joint ventures at fair value | |
| 33,000 | | |
| 33,000 | |
| Total assets | |
$ | 11,917,250 | | |
$ | 6,759,381 | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Accounts payable | |
$ | 520,658 | | |
$ | 694,989 | |
| Accrued expenses | |
| 1,161,680 | | |
| 667,742 | |
| Accrued license fee - current portion | |
| 33,750 | | |
| 25,000 | |
| Total current liabilities | |
| 1,716,088 | | |
| 1,387,731 | |
| | |
| | | |
| | |
| Accrued license fee - less current portion | |
| 250,000 | | |
| 250,000 | |
| Total liabilities | |
| 1,966,088 | | |
| 1,637,731 | |
| | |
| | | |
| | |
| Commitments and contingencies (Note 6) | |
| | | |
| | |
| | |
| | | |
| | |
| Stockholders' equity: | |
| | | |
| | |
| Preferred stock, $0.0001 par value, 10,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2023 and December 31, 2022 | |
| — | | |
| — | |
| Common stock, $0.0001 par value, 50,000,000 shares authorized, 3,302,113 and 1,302,113 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | |
| 330 | | |
| 130 | |
| Additional paid-in capital | |
| 59,130,198 | | |
| 50,198,630 | |
| Accumulated deficit | |
| (49,155,654 | ) | |
| (45,099,116 | ) |
| Accumulated other comprehensive income (loss) | |
| (23,712 | ) | |
| 22,006 | |
| Total stockholders' equity | |
| 9,951,162 | | |
| 5,121,650 | |
| Total liabilities and stockholders' equity | |
$ | 11,917,250 | | |
$ | 6,759,381 | |
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
HOTH THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(UNAUDITED)
| | |
For the Three Months Ended June 30, | | |
For the Six Months Ended June 30, | |
| | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| Operating costs and expenses | |
| | | |
| | | |
| | | |
| | |
| Research and development | |
$ | 640,959 | | |
$ | 971,182 | | |
$ | 1,531,804 | | |
$ | 1,919,561 | |
| Research and development - licenses acquired (including stock-based compensation) | |
| 11,243 | | |
| 36,453 | | |
| 59,276 | | |
| 77,725 | |
| Compensation and related expenses (including stock-based compensation) | |
| 518,476 | | |
| 515,090 | | |
| 814,040 | | |
| 1,472,859 | |
| Professional fees (including stock-based compensation) | |
| 483,883 | | |
| 523,595 | | |
| 1,100,258 | | |
| 1,010,296 | |
| Rent | |
| 7,897 | | |
| 15,591 | | |
| 23,017 | | |
| 29,487 | |
| Other general and administrative expenses | |
| 46,171 | | |
| 237,636 | | |
| 373,051 | | |
| 450,313 | |
| Total operating expenses | |
| 1,708,629 | | |
| 2,299,547 | | |
| 3,901,446 | | |
| 4,960,241 | |
| Loss from operations | |
| (1,708,629 | ) | |
| (2,299,547 | ) | |
| (3,901,446 | ) | |
| (4,960,241 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Other expense, net | |
| | | |
| | | |
| | | |
| | |
| Unrealized loss on marketable securities | |
| (165,950 | ) | |
| (216,127 | ) | |
| (184,753 | ) | |
| (194,179 | ) |
| Realized loss on marketable securities | |
| — | | |
| (158,636 | ) | |
| — | | |
| (158,635 | ) |
| Change in fair value of investments in joint ventures | |
| — | | |
| (22,600 | ) | |
| — | | |
| (22,600 | ) |
| Dividend income | |
| 1,548 | | |
| 19,579 | | |
| 29,661 | | |
| 45,132 | |
| Other income, net | |
| — | | |
| (262 | ) | |
| — | | |
| 41,423 | |
| Total other expense, net | |
| (164,402 | ) | |
| (378,046 | ) | |
| (155,092 | ) | |
| (288,859 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net loss | |
$ | (1,873,031 | ) | |
$ | (2,677,593 | ) | |
| (4,056,538 | ) | |
| (5,249,100 | ) |
| Other comprehensive income | |
| | | |
| | | |
| | | |
| | |
| Foreign currency translation adjustment | |
| (51,088 | ) | |
| 14,230 | | |
| (45,718 | ) | |
| 10,500 | |
| Total comprehensive loss | |
$ | (1,924,119 | ) | |
$ | (2,663,363 | ) | |
$ | (4,102,256 | ) | |
$ | (5,238,600 | ) |
| | |
| | | |
| | | |
| | | |
| | |
Net loss per share - basic and diluted | |
$ | (0.57 | ) | |
$ | (2.16 | ) | |
$ | (1.40 | ) | |
$ | (4.77 | ) |
Weighted average number of common shares outstanding, basic and diluted | |
| 3,302,113 | | |
| 1,241,398 | | |
| 2,894,732 | | |
| 1,100,990 | |
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
HOTH THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
For the Three Months
Ended June 30, 2023
| | |
Common Stock | | |
Additional Paid-in | | |
Accumulated | | |
Accumulated Other Comprehensive | | |
Total Stockholders’ | |
| | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Income (Loss) | | |
Equity | |
| Balance as of March 31, 2023 | |
| 3,302,113 | | |
$ | 330 | | |
$ | 59,120,450 | | |
$ | (47,282,623 | ) | |
$ | 27,376 | | |
$ | 11,865,533 | |
| Stock-based compensation | |
| — | | |
| — | | |
| 9,748 | | |
| — | | |
| — | | |
| 9,748 | |
| Cumulative translation adjustment | |
| — | | |
| — | | |
| — | | |
| — | | |
| (51,088 | ) | |
| (51,088 | ) |
| Net loss | |
| — | | |
| — | | |
| — | | |
| (1,873,031 | ) | |
| — | | |
| (1,873,031 | ) |
| Balance as of June 30, 2023 | |
| 3,302,113 | | |
$ | 330 | | |
$ | 59,130,198 | | |
$ | (49,155,654 | ) | |
$ | (23,712 | ) | |
$ | 9,951,162 | |
For the Three Months Ended June 30, 2022
| | |
Common Stock | | |
Additional Paid-in | | |
Accumulated | | |
Accumulated Other Comprehensive | | |
Total Stockholders’ | |
| | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Income | | |
Equity | |
| Balance as of March 31, 2022 | |
| 959,033 | | |
$ | 2,398 | | |
$ | 44,166,909 | | |
$ | (36,298,670 | ) | |
$ | 13,856 | | |
$ | 7,884,493 | |
| Stock-based compensation | |
| 24 | | |
| — | | |
| 15,538 | | |
| — | | |
| — | | |
| 15,538 | |
| Issuance of common stock (net of offering costs of $1,014,896) | |
| 329,412 | | |
| 823 | | |
| 5,984,280 | | |
| — | | |
| — | | |
| 5,985,103 | |
| Cumulative translation adjustment | |
| — | | |
| — | | |
| — | | |
| — | | |
| 14,230 | | |
| 14,230 | |
| Net loss | |
| — | | |
| — | | |
| — | | |
| (2,677,593 | ) | |
| — | | |
| (2,677,593 | ) |
| Balance as of June 30, 2022 | |
| 1,288,469 | | |
$ | 3,221 | | |
$ | 50,166,727 | | |
$ | (38,976,263 | ) | |
$ | 28,086 | | |
$ | 11,221,771 | |
For the Six Months Ended June 30,
2023
| | |
Common Stock | | |
Additional Paid-in | | |
Accumulated | | |
Accumulated Other Comprehensive | | |
Total Stockholders’ | |
| | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Income (Loss) | | |
Equity | |
| Balance as of December 31, 2022 | |
| 1,302,113 | | |
$ | 130 | | |
$ | 50,198,630 | | |
$ | (45,099,116 | ) | |
$ | 22,006 | | |
$ | 5,121,650 | |
| Exercise of warrants | |
| 1,860,000 | | |
| 186 | | |
| 1,674 | | |
| — | | |
| — | | |
| 1,860 | |
| Stock-based compensation | |
| — | | |
| — | | |
| 20,378 | | |
| — | | |
| — | | |
| 20,378 | |
| Common stock and warrants issued in private placement, net of offering costs | |
| 140,000 | | |
| 14 | | |
| 8,909,516 | | |
| — | | |
| — | | |
| 8,909,530 | |
| Cumulative translation adjustment | |
| — | | |
| — | | |
| — | | |
| — | | |
| (45,718 | ) | |
| (45,718 | ) |
| Net loss | |
| — | | |
| — | | |
| — | | |
| (4,056,538 | ) | |
| — | | |
| (4,056,538 | ) |
| Balance as of June 30, 2023 | |
| 3,302,113 | | |
$ | 330 | | |
$ | 59,130,198 | | |
$ | (49,155,654 | ) | |
$ | (23,712 | ) | |
$ | 9,951,162 | |
For the Six Months Ended
June 30, 2022
| | |
Common Stock | | |
Additional Paid-in | | |
Accumulated | | |
Accumulated Other Comprehensive | | |
Total Stockholders’ | |
| | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Income | | |
Equity | |
| Balance as of December 31, 2021 | |
| 959,009 | | |
$ | 2,398 | | |
$ | 43,589,471 | | |
$ | (33,727,163 | ) | |
$ | 17,586 | | |
$ | 9,882,292 | |
| Stock-based compensation | |
| 48 | | |
| — | | |
| 592,976 | | |
| — | | |
| — | | |
| 592,976 | |
| Issuance of common stock (net of offering costs of $1,014,896) | |
| 329,412 | | |
| 823 | | |
| 5,984,280 | | |
| — | | |
| — | | |
| 5,985,103 | |
| Cumulative translation adjustment | |
| — | | |
| — | | |
| — | | |
| — | | |
| 10,500 | | |
| 10,500 | |
| Net loss | |
| — | | |
| — | | |
| — | | |
| (5,249,100 | ) | |
| — | | |
| (5,249,100 | ) |
| Balance as of June 30, 2022 | |
| 1,288,469 | | |
$ | 3,221 | | |
$ | 50,166,727 | | |
$ | (38,976,263 | ) | |
$ | 28,086 | | |
$ | 11,221,771 | |
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
HOTH THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| | |
Six Months Ended
June 30, | |
| | |
2023 | | |
2022 | |
| Cash flows from operating activities | |
| | |
| |
| Net loss | |
$ | (4,056,538 | ) | |
$ | (5,249,100 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Research and development-acquired license, expensed | |
| 8,750 | | |
| 61,453 | |
| Change in fair value of investments in joint ventures | |
| — | | |
| 22,600 | |
| Stock-based compensation | |
| 20,378 | | |
| 592,976 | |
| Realized loss on marketable securities | |
| — | | |
| 194,179 | |
| Unrealized loss on marketable securities | |
| 184,753 | | |
| 158,635 | |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Prepaid expenses | |
| (227,391 | ) | |
| (101,090 | ) |
| Accounts payable and accrued expenses | |
| 330,933 | | |
| (38,762 | ) |
| Net cash used in operating activities | |
| (3,739,115 | ) | |
| (4,359,109 | ) |
| | |
| | | |
| | |
| Cash flows from investing activities | |
| | | |
| | |
| Purchase of research and development licenses | |
| — | | |
| (76,453 | ) |
| Sale of marketable securities | |
| — | | |
| 1,235,696 | |
| Net cash provided by investing activities | |
| — | | |
| 1,159,243 | |
| | |
| | | |
| | |
| Cash flows from financing activities | |
| | | |
| | |
| Proceeds from issuance common stock, common stock warrants and prefunded warrants, net of offering costs | |
| 8,909,530 | | |
| — | |
| Proceeds from issuance common stock, net of offering costs | |
| — | | |
| 5,985,103 | |
| Proceeds from exercise of warrants | |
| 1,860 | | |
| — | |
| Net cash provided by financing activities | |
| 8,911,390 | | |
| 5,985,103 | |
| | |
| | | |
| | |
| Effect of exchange rate changes on cash and cash equivalents | |
| (56,084 | ) | |
| (5,972 | ) |
| | |
| | | |
| | |
| Net change in cash | |
| 5,172,275 | | |
| 2,785,237 | |
| Cash, beginning of period | |
| 6,428,611 | | |
| 8,538,270 | |
| | |
| | | |
| | |
| Cash, end of period | |
$ | 11,544,802 | | |
$ | 11,317,535 | |
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
HOTH THERAPEUTICS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
NOTE 1 – Organization and Description
of Business Operations
Hoth Therapeutics, Inc. (together with its wholly-owned
subsidiary, Hoth Therapeutics Australia Pty Ltd, the “Company”) was incorporated under the laws of the State of Nevada on
May 16, 2017. The Company is a clinical-stage biopharmaceutical company focused on developing new generation therapies for unmet medical
needs. The Company is focused on developing (i) a topical formulation for treating side effects from drugs used for the treatment of
cancer (HT-001); (ii) a treatment for mast-cell derived cancers and anaphylaxis (HT-KIT); (iii) a treatment for traumatic brain injury
and ischemic stroke (HT-TBI); and (iv) a treatment and/or prevention for Alzheimer’s or other neuroinflammatory diseases (HT-ALZ).
The Company also has assets being developed for (i) atopic dermatitis (also known as eczema) (BioLexa); (ii) a treatment for asthma and
allergies using inhalational administration (HT-004); and (iii) a treatment for acne as well as inflammatory bowel diseases (HT-003).
In addition, the Company is developing a diagnostic device via a mobile device. The Company also has interests in certain other assets
being developed by third parties (see Note 4 for a discussion of the Company’s agreement with Zylö Therapeutics, Inc.).
Liquidity and capital resources
Accounting Standards Update (“ASU”)
No. 2014-15, Presentation of Financial Statements - Going Concern, requires management to evaluate the Company’s ability
to continue as a going concern one year beyond the filing date of the given financial statements. This evaluation requires management
to perform two steps. First, management must evaluate whether there are conditions and events that raise substantial doubt about the
entity’s ability to continue as a going concern. Second, if management concludes that substantial doubt is raised, management is
required to consider whether it has plans in place to alleviate that doubt. Disclosures in the notes to the consolidated financial statements
are required if management concludes that substantial doubt exists or that its plans alleviate the substantial doubt that was raised.
The Company has funded its operations from proceeds
from the sale of equity and debt securities. The Company will require significant additional capital to make the investments it needs
to execute its longer-term business plan. The Company’s ability to successfully raise sufficient funds through the sale of debt
or equity securities when needed is subject to many risks and uncertainties and, even if it were successful, future equity issuances
may result in dilution to its existing shareholders and future debt securities may contain covenants that limit the Company’s operations
or ability to enter into certain transactions.
On December 29, 2022, the Company entered into
a securities purchase agreement with an accredited investor pursuant to which it sold (i) 140,000 shares of common stock, (ii) warrants
(the “December Pre-Funded Warrants”) to purchase up to 1,860,000 shares of common stock and (iii) warrants (the “December
Common Stock Warrants”) to purchase up to 2,500,000 shares of common stock at a purchase price of $5.00 per share and accompanying
warrant (less $0.001 for each December Pre-Funded Warrant) in a private placement for aggregate gross proceeds of approximately $10 million,
exclusive of placement agent commission and fees and other offering expenses. The closing of the offering occurred on January 3, 2023.
Each December Common Stock Warrant is exercisable for a period of five and one-half years from the issuance date at an exercise price
of $5.00 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis. Each December Pre-Funded
Warrant is exercisable until exercised in full at an exercise price of $0.001 per share and may be exercised on a cashless basis. In
addition, pursuant to the terms of the offering, the Company issued to designees of H.C. Wainwright & Co., LLC warrants (“December
Wainwright Warrants”) to purchase up to 100,000 shares of the Company’s common stock. The December Wainwright Warrants are
exercisable for a period of five and one-half years from the issuance date at an exercise price of $6.25 per share, subject to adjustment,
and may, under certain circumstances, be exercised on a cashless basis.
The Company believes current cash is sufficient
to fund operations for at least the next 12 months from the date of issuance of these financial statements. However, the Company will
need to raise additional funding, through strategic relationships, public or private equity or debt financings, grants or other arrangements,
to develop and seek regulatory approvals for the Company’s current and future product candidates. If such funding is not available,
or not available on terms acceptable to the Company, the Company’s current development plan and plans for expansion of its general
and administrative infrastructure may be curtailed.
HOTH THERAPEUTICS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
NOTE 2 – Significant Accounting Policies
Basis of Presentation and Principles of
Consolidation
The accompanying unaudited interim condensed
consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States
of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion
of management, the unaudited interim condensed consolidated financial statements reflect all adjustments, which include only normal recurring
adjustments necessary for the fair statement of the balances and results for the periods presented. Certain information and footnote
disclosures normally included in the Company’s annual consolidated financial statements prepared in accordance with GAAP have been
condensed or omitted. These unaudited interim condensed consolidated financial statement results are not necessarily indicative of results
to be expected for the full fiscal year or any future period. The accompanying unaudited interim condensed consolidated financial statements
should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual
Report on Form 10-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 31, 2023.
The accompanying unaudited interim condensed
consolidated financial statements include the accounts of the Company’s wholly-owned subsidiary, Hoth Therapeutics Australia Pty
Ltd, which was incorporated under the laws of the State of Victoria in Australia on June 5, 2019. All significant intercompany balances
and transactions have been eliminated in consolidation.
Reclassifications
Certain reclassifications have been made to prior
year financial statements to conform to classifications used in the current year. These reclassifications had no impact on net income
(loss), stockholder’s equity or cash flows as previously reported. The reclassification included separating dividend income from
gain on marketable securities within the condensed consolidated statements of operations and comprehensive loss.
Use of estimates
The preparation of condensed consolidated financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported
amounts of expenses during the reporting periods. The most significant estimates in the Company’s condensed consolidated financial
statements relate to stock-based compensation and the valuation allowance of deferred tax assets resulting from net operating losses.
These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable
under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities
and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from
these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results
of operations may be affected.
Significant Accounting Policies
There have been no material changes to the Company’s
significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2022 as filed with the SEC on March 31, 2023.
Cash
Cash consists of bank accounts and total $11,544,802
and $6,428,611 as of June 30, 2023 and December 31, 2022, respectively. Financial instruments that potentially subject the Company to
concentration of credit risk consist principally of cash deposits at the two financial institutions the Company utilizes for its banking
requirements. Accounts at each financial institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up
to $250,000. The Company’s cash deposits above the FDIC insured amounts totaled $10,726,329 and $5,542,838 as of June 30, 2023 and December
31, 2022, respectively. The Company’s foreign bank accounts are not subject to FDIC insurance. Cash held in the Company’s Australian
bank accounts as of June 30, 2023 and December 31, 2022 was $318,473 and $385,771 in U.S. dollars, respectively.
HOTH THERAPEUTICS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
Concentrations of credit risk and off-balance
sheet risk
The Company has significant cash balances at financial institutions
which, throughout the period, regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such
funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.
Fair Value of Financial Instruments
The fair value of the Company’s assets
and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) 820, Fair Value Measurements, approximates the carrying amounts represented in the
balance sheet, primarily due to their short-term nature.
Fair Value Measurement
FASB ASC 820, Fair Value Measurements,
provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined
as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based
on assumptions that market participants would use in pricing an asset or a liability.
The accounting guidance classifies fair value
measurements in one of the following three categories for disclosure purposes:
| Level 1: | Quoted prices in active markets for identical assets or liabilities. |
| Level 2: | Inputs other than Level 1 prices for similar
assets or liabilities that are directly or indirectly observable in the marketplace. |
| Level 3: | Unobservable inputs which are supported by little or no market
activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments
for which the determination of fair value requires significant judgment or estimation. |
In some circumstances, the inputs used to measure
fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is
categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Investment in joint ventures
Ownership interests in entities for which the
Company has significant influence that are not consolidated are accounted for as equity method investments. SEC Staff Announcement: Accounting
for Limited Partnership Investments (codified in ASC 323-30-S99-1) guidance requires the use of the equity method unless the investor’s
interest “is so minor that the limited partner may have virtually no influence over partnership operating and financial policies.”
The SEC staff’s position is that investments in limited partnerships of greater than 3% to 5% are considered more than minor and,
therefore, should be accounted for using the equity method or fair value option. Investments accounted for using the equity method may
be reported on a lag up to three months if financial statements of the investee are not available in sufficient time for the investor
to apply the equity method as of the current reporting date. The determination of whether an investee’s results are recorded on
a lag is made on an investment-by-investment basis. This investment in joint ventures is further described in Note of 4 these consolidated
financial statements.
Accounts Payable
As of June 30, 2023, our subsidiary Hoth Therapeutics
Australia Pty Ltd, recorded approximately a $260,000 gain due to a settlement agreement on a payable balance with Novotech, a clinical
trial management vendor.
HOTH THERAPEUTICS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
Income taxes
Income taxes are recorded in accordance with ASC
740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes
deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated
financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial
statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected
to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or
all of the deferred tax assets will not be realized.
The Company accounts for uncertain tax positions
in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions
to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination
as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as
consideration of the available facts and circumstances.
Net loss per share
Net loss per share is computed by dividing net
loss by the weighted average number of shares of common stock outstanding during the period. Since the Company had a net loss in each
of the periods presented, basic and diluted net loss per common share are the same. The following were excluded from the computation of
diluted shares outstanding due to the losses for each period presented, as they would have had an anti-dilutive impact on the Company’s
net loss:
| | |
Three months ended,
June 30, | | |
Six months ended,
June 30, | |
| Potentially dilutive securities | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| Warrants | |
| 3,002,840 | | |
| 402,840 | | |
| 3,002,840 | | |
| 402,840 | |
| Options | |
| 104,651 | | |
| 104,651 | | |
| 104,651 | | |
| 104,651 | |
| Non-vested restricted stock awards | |
| 3,384 | | |
| 76 | | |
| 3,384 | | |
| 76 | |
| Total | |
| 3,110,875 | | |
| 507,567 | | |
| 3,110,875 | | |
| 507,567 | |
Recent accounting pronouncements
Currently, management does not believe that any
other recently issued, but not yet effective accounting pronouncements, if currently adopted, would have a material impact on the Company’s
condensed consolidated financial statements.
NOTE 3 - License Agreements
The following summarizes the Company’s research
and development expenses for licenses acquired (including stock-based compensation) during three and six months ended June 30, 2023 and
2022:
| | |
For the Three Months Ended
June
30, | | |
For the Six Months Ended
June
30, | |
| | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| The George Washington University | |
$ | 10,618 | | |
$ | 23,953 | | |
$ | 51,776 | | |
$ | 40,225 | |
| North Carolina State University | |
| — | | |
| — | | |
| — | | |
| 20,000 | |
| Virginia Commonwealth University | |
| — | | |
| 10,000 | | |
| 6,250 | | |
| 10,000 | |
| University of Cincinnati | |
| 625 | | |
| 2,500 | | |
| 1,250 | | |
| 7,500 | |
| | |
$ | 11,243 | | |
$ | 36,453 | | |
$ | 59,276 | | |
$ | 77,725 | |
HOTH THERAPEUTICS, INC.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The George Washington University
During the three and six months ended June 30,
2023, the Company recorded an expense of $30,000 related to the initiation of a clinical trial. In addition, during the three and six
months ended June 30, 2023, the Company recorded expenses of $10,618 and $51,776, respectively, for license fees. The Company also recorded
an expense of $16,412 for the three months ended June 30, 2023 related to warrants granted to The George Washington University (“GW”)
pursuant to the patent license agreement with GW dated February 1, 2020 and the patent license agreement with GW dated August 7, 2020.
North Carolina State University
During the three and six months ended June 30,
2023, the Company did not recognize any expenses for license fees associated with the license agreement by and between the Company and
North Carolina State University dated February 25, 2021.
Virginia Commonwealth University
On May 11, 2023, the Company provided notice to
the Virginia Commonwealth University Intellectual Property Foundation (“VCU”) of its intent to terminate the exclusive license
agreement (the “VCU Agreement”) by and between the Company and VCU dated May 18, 2020. The VCU Agreement terminated on August
9, 2023.
During the three and six months ended June 30,
2023, the Company recognized expenses of $0 and $6,250, respectively, for license fees associated with the VCU License Agreement.
Chelexa Biosciences, Inc. and the University of Cincinnati
During the three and six months ended June 30,
2023, the Company recognized expenses of $625 and $1,250, respectively, for license fees associated with the Assignment and Assumption
Agreement by and between the Company and Chelexa Biosciences, Inc. dated May 14, 2020.
NOTE 4 – Fair Value of Financial Assets
and Liabilities
The following table presents the Company’s
assets and liabilities that are measured at fair value at June 30, 2023 and December 31, 2022:
| | |
Fair value measured at June 30, 2023 | |
| | |
Total at
June 30,
2023 | | |
Quoted prices
in active
markets
(Level 1) | | |
Significant
other
observable
inputs
(Level 2) | | |
Significant
unobservable
inputs
(Level 3) | |
| Assets | |
| | |
| | |
| | |
| |
| Marketable securities - mutual funds | |
$ | 24,567 | | |
$ | 24,567 | | |
$ | — | | |
$ | — | |
| Investment in joint ventures | |
$ | 33,000 | | |
$ | — | | |
$ | — | | |
$ | 33,000 | |
| | |
Fair value measured at December 31, 2022 | |
| | |
Total at
December 31,
2022 | | |
Quoted prices
in active
markets
(Level 1) | | |
Significant
other
observable
inputs
(Level 2) | | |
Significant
unobservable
inputs
(Level 3) | |
| Assets | |
| | |
| | |
| | |
| |
| Marketable securities - mutual funds | |
$ | 209,320 | | |
$ | 209,320 | | |
$ | — | | |
$ | — | |
| Investment in joint ventures | |
$ | 33,000 | | |
$ | — | | |
$ | — | | |
$ | 33,000 | |
HOTH THERAPEUTICS, INC.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Level 3 Measurement
The following table sets forth a summary of the
changes in the fair value of the Company’s Level 3 financial assets that are measured at fair value on a recurring basis as of June
30, 2023 and 2022:
| Investment in joint venture for the three months ended June 30, 2023 |
| Investment in joint ventures at fair value at March 31, 2023 | |
$ | 33,000 | |
| Change in fair value of investments in joint ventures | |
| — | |
| Investment in joint ventures at fair value at June 30, 2023 | |
$ | 33,000 | |
| Investment in joint venture for the six months ended June 30, 2023 |
| Investment in joint ventures at fair value at December 31, 2022 | |
$ | 33,000 | |
| Change in fair value of investments in joint ventures | |
| — | |
| Investment in joint ventures at fair value at June 30, 2023 | |
$ | 33,000 | |
| Investment in joint venture for the three months ended June 30, 2022 |
| Investment in joint ventures at fair value at March 31, 2022 | |
$ | 410,000 | |
| Change in fair value of investments in joint ventures | |
| (22,600 | ) |
| Investment in joint ventures at fair value at June 30, 2022 | |
$ | 387,400 | |
| Investment in joint venture for the six months ended June 30, 2022 |
| Investment in joint ventures at fair value at December 31, 2021 | |
$ | 410,000 | |
| Change in fair value of investments in joint ventures | |
| (22,600 | ) |
| Investment in joint ventures at fair value at June 30, 2022 | |
$ | 387,400 | |
Investment in joint ventures
The Company has elected to measure the investment
in joint ventures using the fair value option at each reporting date. Under the fair value option, bifurcation of an embedded derivative is not necessary, and all related gains
and losses on the host contract and derivative due to change in the fair value will be reflected in interest income and other, net in
the consolidated statements of operations and comprehensive loss.
The value at which the Company’s investment
in joint ventures is carried on its books is adjusted to estimated fair value at the end of each quarter, taking into account general
economic and stock market conditions and those characteristics specific to the underlying investments.
Investment in Zylö
In connection with the Company’s March 2020
underwritten public offering of shares of its common stock, on May 4, 2020, the Company purchased 120,000 shares of Zylö’s
Class B common stock for $60,000. On December 8, 2021, the Company entered into a third amendment (the “Zylö Amendment”)
to the Exclusive Sublicense Agreement with Zylö originally dated August 19, 2019, pursuant to which the Company licensed its novel
cannabinoid therapeutic, HT-005 for lupus patients, back to Zylö. Pursuant to the Zylö Amendment, on December 6, 2021, Zylö
issued the Company 100,000 shares of its Class B common stock. In addition, pursuant to the Zylö Amendment, within 90 days following
a sale by Zylö of all of its assets and rights related to HT-005 to a third-party (a “Sale”), Zylö shall pay the
Company a low single digit percent of the net proceeds received by it attributable to HT-005 in the United States and Canada and their
respective territories (collectively, the “Territory”) for the purposes of therapeutic uses related to lupus in humans (the
“Field”). After the Sale, any and all rights of the Company pursuant to the Exclusive Sublicense Agreement, including all
amendments thereto, shall terminate. Furthermore, pursuant to the Zylö Amendment, following the date of the first commercial sale
of HT-005 in the Territory, in the Field, Zylö shall pay the Company (i) a low single digit percent of the Net Sales (as defined
in the Exclusive Sublicense Agreement) of HT-005 in the event HT-005 is sold in the Territory and (ii) a low double digit percent of any
royalty that Zylö receives through the sublicense to a third-party based on Net Sales of HT-005 in the Territory which payments shall
continue in each country in the Territory until expiration of the last-to-expire Valid Claim (as defined in the Exclusive Sublicense Agreement). The Company recorded approximately $27,000 in unrealized loss on
this investment during the fourth quarter of 2022. The investment in Zylö was valued at $33,000 as of June 30, 2023 and December
31, 2022.
HOTH THERAPEUTICS, INC.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - Stockholders Equity
Securities Purchase Agreement
On December 29, 2022, the Company entered into
a securities purchase agreement with an accredited investor pursuant to which it sold (i) 140,000 shares of common stock, (ii) December
Pre-Funded Warrants to purchase up to 1,860,000 shares of common stock and (iii) December Common Stock Warrants to purchase up to 2,500,000
shares of common stock at a purchase price of $5.00 per share and accompanying warrant (less $0.001 for each December Pre-Funded Warrant)
in a private placement for aggregate gross proceeds of approximately $10 million, exclusive of placement agent commission and fees and
other offering expenses, and approximately $8.9 million in net proceeds. The closing of the offering occurred on January 3, 2023.
2018 Equity Incentive Plan
The compensation committee of the board of directors
increased the number of shares reserved pursuant to the Company’s 2018 Equity Incentive Plan (“2018 Plan”) by 26,878
shares effective as of January 1, 2021, such that as of January 1, 2021, the Company had an aggregate of 66,878 shares of common stock
reserved for issuance pursuant to the 2018 Plan. On June 24, 2021, at the annual meeting of shareholders, shareholders of the Company
approved an amendment to the 2018 Plan to further increase the number of shares reserved for issuance thereunder from 66,878 shares to
146,878 shares. On February 2, 2022, the compensation committee of the board of directors further increased the number of shares reserved
for issuance under the 2018 Plan from 146,878 shares to 156,878 shares. On January 11, 2023, the compensation committee of the board of
directors further increased the number of shares reserved for issuance under the 2018 Plan from 156,878 shares to 166,878 shares.
2022 Equity Incentive Plan
On March 24, 2022, the Company’s board of
directors adopted the Hoth Therapeutics, Inc. 2022 Omnibus Equity Incentive Plan (the “2022 Plan”) initially reserving 96,000
shares of the Company’s common stock for issuance thereunder. The 2022 Plan became effective on June 23, 2022 upon approval of the
2022 Plan by the Company’s shareholders at the Company’s annual meeting of shareholders.
Restricted Stock Awards
A summary of the Company’s restricted stock
awards granted under the equity incentive plans during the six months ended June 30, 2023 is as follows:
| | |
Number of
Restricted Stock
Awards | | |
Weighted
Average Grant
Day Fair Value | |
| Nonvested at December 31, 2022 | |
| 3,384 | | |
$ | 3.16 | |
| Nonvested at June 30, 2023 | |
| 3,384 | | |
$ | 3.16 | |
As of June
30, 2023, approximately $6,000 of unrecognized stock-based compensation expense was related to restricted stock awards. The weighted average
remaining contractual terms of unvested restricted stock awards was approximately 1.0 year at June 30, 2023.
HOTH THERAPEUTICS, INC.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Stock Options
A summary of option activity under the Company’s
stock option plan for the six months ended June 30, 2023 is presented below:
| | |
Number of Shares | | |
Weighted
Average
Exercise
Price | | |
Total
Intrinsic
Value | | |
Weighted
Average
Remaining
Contractual
Life
(in years) | |
| Outstanding as of December 31, 2022 | |
| 104,651 | | |
$ | 49.80 | | |
$ | — | | |
| 8.3 | |
| Outstanding as of June 30, 2023 | |
| 104,651 | | |
$ | 49.80 | | |
$ | — | | |
| 7.8 | |
| Options vested and exercisable as of June 30, 2023 | |
| 104,651 | | |
$ | 49.80 | | |
$ | — | | |
| 7.8 | |
All stock compensation associated with the amortization
of employee stock option expense was recorded as a component of compensation and related expense in the condensed consolidated statements
of operations and comprehensive loss. All stock compensation associated with the amortization of nonemployee stock option expense was
recorded as a component of professional fees in the condensed consolidated statements of operations and comprehensive loss.
Estimated future stock-based compensation expense relating to unvested
stock options is $0.
Stock Based Compensation
Stock-based compensation expense for the three
and six months ended June 30, 2023 and 2022 was as follows:
| | |
Three
Months Ended
June 30, | | |
Six
Months Ended
June 30, | |
| | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| Employee stock option awards | |
$ | — | | |
$ | — | | |
| — | | |
| 560,376 | |
| Non-employee restricted stock awards | |
| 1,994 | | |
| 585 | | |
| 3,966 | | |
| 1,375 | |
| Non-employee stock warrant awards | |
| 7,754 | | |
| 14,953 | | |
| 16,412 | | |
| 31,225 | |
| | |
$ | 9,748 | | |
$ | 15,538 | | |
$ | 20,378 | | |
$ | 592,976 | |
Employee and director related stock-based compensation
was included in compensation and related expenses, and non-employee related stock-based compensation was included in professional fees
and research and development related with licenses acquisition in the consolidated statements of operations and comprehensive loss.
Warrants
On December 29, 2022, the Company entered into
a securities purchase agreement with an accredited investor pursuant to which it sold (i) 140,000 shares of common stock, (ii) December
Pre-Funded Warrants to purchase up to 1,860,000 shares of common stock and (iii) December Common Stock Warrants to purchase up to 2,500,000
shares of common stock at a purchase price of $5.00 per share and accompanying warrant (less $0.001 for each December Pre-Funded Warrant),
in a private placement, for aggregate gross proceeds of approximately $10 million, exclusive of placement agent commission and fees and
other offering expenses. The closing of the offering occurred on January 3, 2023. Each December Common Stock Warrant is exercisable for
a period of five and one-half years from the issuance date at an exercise price of $5.00 per share, subject to adjustment, and may, under
certain circumstances, be exercised on a cashless basis. Each December Pre-Funded Warrant is exercisable until exercised in full at an
exercise price of $0.001 per share and may be exercised on a cashless basis.
HOTH THERAPEUTICS, INC.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The measurement of fair value of the December
Pre-Funded Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at January 3, 2023, the
date of issuance (i.e., share price of $6.56, exercise price of $0.001, term of 30 years beginning January 3, 2023 (as these do
not have an expiration date), volatility of 135.07%, risk-free rate of 3.88%, and expected dividend rate of 0%). The
grant date fair value of the December Pre-Funded Warrants was estimated to be $12.2 million on January 3, 2023 and is reflected
within additional paid-in capital as of March 31, 2023 as the Pre-Funded Warrants were determined to be equity classified.
The measurement of fair value of the December
Common Stock Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at January 3, 2023,
the date of issuance (i.e., share price of $6.56, exercise price of $5.00, term of five and a half years beginning January
3, 2023, volatility of 135.07%, risk-free rate of 3.94%, and expected dividend rate of 0%). The grant date fair value
of these December Common Stock Warrants was estimated to be $15.0 million on January 3, 2023 and is reflected within additional
paid-in capital as of March 31, 2023 as the December Common Stock Warrants were determined to be equity classified.
On various dates in February 2023, the investor
exercised all the December Pre-Funded Warrants for 1,860,000 shares of the Company’s common stock for proceeds to the Company of $1,860.
In addition, pursuant to the terms of the offering,
the Company issued the designees of the placement agent, H.C. Wainwright & Co., LLC, the December Wainwright Warrants to purchase
up to 100,000 shares of the Company’s common stock. The December Wainwright Warrants had a determined fair value of $591,090 as
of the date of issuance. The December Wainwright Warrants are exercisable for a period of five and one-half years from the issuance date
at an exercise price of $6.25 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis.
As these December Wainwright Warrants were issued for services provided in facilitating the private placement, the Company recorded the
fair value of such December Wainwright Warrants as a cost of capital on the issuance date. The measurement of fair value was determined
utilizing a Black-Scholes model considering all relevant assumptions current at January 3, 2023, the date of issuance (i.e., share price
of $6.56, exercise price of $6.25, term of five and a half years beginning January 3, 2023, volatility of 135.07%, risk-free
rate of 3.94%, and expected dividend rate of 0%).
A summary of warrant activity for the six months
ended June 30, 2023 is as follows:
| | |
Number of
Warrants | | |
Weighted
Average Exercise
Price | | |
Total Intrinsic
Value | | |
Weighted
Average
Remaining
Contractual
Life
(in years) | |
| Outstanding as of December 31, 2022 | |
| 402,840 | | |
$ | 49.73 | | |
$ | — | | |
| 1.4 | |
| Issued | |
| 4,460,000 | | |
| 2.94 | | |
| — | | |
| — | |
| Exercised | |
| (1,860,000 | ) | |
| 0.001 | | |
| — | | |
| — | |
| Outstanding as of June 30, 2023 | |
| 3,002,840 | | |
| 11.04 | | |
| — | | |
| 4.58 | |
| Warrants exercisable as of June 30, 2023 | |
| 3,002,840 | | |
$ | 11.04 | | |
$ | — | | |
| 4.58 | |
The Company has determined that the warrants should
be accounted as a component of stockholders’ equity.
HOTH THERAPEUTICS, INC.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - Commitments and Contingencies
Office lease
The Company leases office space for approximately
$2,500 per month. Rent expense for the three months ended June 30, 2023 and 2022 was approximately $7,897 and $15,591, respectively. Rent
expense for the six months ended June 30, 2023 and 2022 was approximately $23,017 and $29,487, respectively. The Company is not a party
to a lease that is in excess of 12 months.
Litigation
The Company is not a party to any material legal
proceedings and is not aware of any pending or threatened claims. From time to time, the Company may be subject to various legal proceedings
and claims that arise in the ordinary course of its business activities.
NOTE 7 – Subsequent Events
The Company
evaluates events that have occurred after the balance sheet date through the date for which the condensed consolidated financial statements
are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have
required adjustment or disclosure in the condensed consolidated financial statements except as set forth herein.
On July 17, 2023, the Company
issued 90,000 Common stock options under the 2022 Equity Incentive Plan.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and
analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere
in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements
that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could
cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled
“Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as may be amended, supplemented
or superseded from time to time by other reports we file with the SEC. All amounts in this report are in U.S. dollars, unless otherwise
noted.
Overview
We are a clinical-stage biopharmaceutical company
focused on developing new generation therapies for unmet medical needs. We are focused on developing (i) a topical formulation for treating
side effects from drugs used for the treatment of cancer (HT-001); (ii) a treatment for mast-cell derived cancers and anaphylaxis (HT-KIT);
(iii) a treatment for traumatic brain injury and ischemic stroke (HT-TBI); and (iv) a treatment and/or prevention for Alzheimer’s
or other neuroinflammatory diseases (HT-ALZ). We also have assets being developed for (i) atopic dermatitis (also known as eczema) (BioLexa);
(ii) a treatment for asthma and allergies using inhalational administration (HT-004); and (iii) a treatment for acne as well as inflammatory
bowel diseases (HT-003). We are also developing a diagnostic device via a mobile device. Furthermore, we have interests in certain other
assets being developed by third parties including a treatment for patients with lupus that is being developed by Zylö Therapeutics,
Inc.
Results of Operations
Comparison of the Three Months Ended June
30, 2023 and 2022
Operating Costs and Expenses
Research and Development Expenses
For the three months ended June 30, 2023, research
and development expenses were approximately $0.7 million, of which approximately $11,000 was related to licenses acquired and approximately
$0.6 million was related to other research and development expenses. Specifically, during the quarter ended June 30, 2023, our research
and development costs consisted primarily of the following costs for each of our key research and development projects: (i) BioLexa,
approximately $13,000 related to manufacturing costs; (ii) HT-001, approximately $0.6 million related to manufacturing, preclinical and
clinical activities; and (iii) HT-KIT, approximately $0.2 million related to manufacturing and preclinical activities. In addition to
the foregoing, we also incurred fees of approximately $57,000 payable to members of our scientific advisory board for services.
For the three months ended June 30, 2022, research
and development expenses were approximately $1.0 million, of which approximately $36,000 was related to licenses acquired and approximately
$1.0 million was related to other research and development expenses. Specifically, during the quarter ended June 30, 2022, our research
and development costs consisted primarily of the following costs for each of our key research and development projects: (i) HT-001, approximately
$0.7 million related to manufacturing, preclinical and clinical activities; (ii) HT-004, approximately $49,000 related to sponsored research;
(iii) HT-006, approximately $51,000 related to research and development; and (iv) HT-TBI approximately $49,000 related to manufacturing.
In addition to the foregoing, we also incurred fees of approximately $60,000 payable to members of our scientific advisory board for services.
We expect our research and development activities
to increase as we develop our existing product candidates and potentially acquire new product candidates, reflecting increasing costs
associated with the following:
| ● | employee-related expenses,
which include salaries and benefits, and rent expenses; |
| ● | fees related to in-licensed
products and technology; |
| ● | expenses incurred under agreements
with contract research organizations, investigative sites and consultants that conduct our clinical trials and a substantial portion
of our pre-clinical activities; |
| ● | the cost of acquiring and manufacturing
clinical trial materials; and |
| ● | costs associated with non-clinical
activities and regulatory approvals. |
Compensation, Professional Fees, Rent and
Other (“General and Administrative Expenses”)
During the three months ended June 30, 2023, we
incurred General and Administrative Expenses of approximately $1.1 million as compared to approximately $1.3 million during the three
months ended June 30, 2022. The approximately $0.2 million decrease was primarily attributed to a decrease in compensation and related
expenses including stock based compensation, and other general and administrative expenses.
We anticipate that our General and Administrative
Expenses will increase in future periods, reflecting continued and increasing costs associated with:
| ● | support of our research and
development activities; |
| ● | stock compensation granted
to key employees and non-employees; |
| ● | support of business development
activities; and |
| ● | increased professional fees
and other costs associated with regulatory requirements that we are subject to. |
Comparison of the Six Months Ended June
30, 2023 and 2022
Operating Costs and Expenses
Research and Development Expenses
For the six months ended June 30, 2023, research
and development expenses were approximately $1.6 million, of which approximately $0.1 million was related to licenses acquired and approximately
$1.5 million was related to other research and development expenses. Specifically, during the six months ended June 30, 2023, our research
and development costs consisted primarily of the following costs for each of our key research and development projects: (i) BioLexa, approximately
$40,000 related to manufacturing costs; (ii) HT-001, approximately $1.0 million related to manufacturing, preclinical and clinical activities;
and (iii) HT-KIT, approximately $0.2 million related to manufacturing and preclinical activities. In addition to the foregoing, we also
incurred fees of approximately $0.1 million payable to members of our scientific advisory board for services. Additionally, our subsidiary
Hoth Therapeutics Australia Pty Ltd, recorded approximately a $260,000 gain due to a settlement agreement on a payable balance with Novotech,
a clinical trial management vendor.
For the six months ended June 30, 2022, research
and development expenses were approximately $2.0 million, of which approximately $78,000 was related to licenses acquired and approximately
$1.9 million was related to other research and development expenses. Specifically, during the six months ended June 30, 2022, our research
and development costs consisted primarily of the following costs for each of our key research and development projects: (i) BioLexa, approximately
$71,000 related to manufacturing; (ii) HT-001, approximately $1 million related to manufacturing, preclinical and clinical activities;
(iii) HT-003, approximately $41,000 related to preclinical studies; (iv) HT-004, approximately $87,000 related to sponsored research;
(v) GW breath based diagnostic device, approximately $76,000 related to research and development with respect to the design of device;
(vi) HT-ALZ approximately $0.1 million related to sponsored research; and (vii) HT-TBI approximately $49,000 related to manufacturing.
In addition to the foregoing, we also incurred fees of approximately $0.1 million payable to members of our scientific advisory board
for services.
Compensation, Professional Fees, Rent and
Other (“General and Administrative Expenses”)
During the six months ended June 30, 2023, we
incurred General and Administrative Expenses of approximately $2.3 million as compared to approximately $3.0 million during the six months
ended June 30, 2022. The approximately $0.7 million decrease was primarily attributed to a decrease in compensation and related expenses,
including stock-based compensation, and other general administrative expenses. Specifically, the fair value of options granted to our
officers and directors during the six months ended June 30, 2023 decreased by approximately $0.5 million as compared June 30, 2022. We
anticipate that our General and Administrative Expenses will increase in future periods, reflecting continued and increasing costs associated
with:
| ● | support of our research and
development activities; |
| ● | stock compensation granted
to key employees and non-employees; |
| ● | support of business development
activities; and |
| ● | increased professional fees
and other costs associated with regulatory requirements that we are subject to. |
Liquidity and Capital Resources
To date we have funded our operations primarily
through the sale of equity and debt securities. As of June 30, 2023, we had approximately $11.5 million in cash, marketable securities
of approximately $24.6 thousand, working capital of approximately $10.2 million and an accumulated deficit of approximately $49.2 million.
Net cash used in operating activities was $3.7 million and $4.4 million for the six months ended June 30, 2023 and 20222, respectively.
We incurred losses of approximately $4.1 million and $5.2 million for the six months ended June 30, 2023 and 2022, respectively. We have
incurred substantial operating losses since inception and expect to continue to incur significant operating losses for the foreseeable
future as we continue our pre-clinical and clinical development of our product candidates. We have not yet commercialized any products
and have never generated any revenue from product sales. We believe that our existing cash as of June 30, 2023 will enable us to fund
our operating expenses and capital expenditure requirements for at least 12 months from the date of this Quarterly Report on Form 10-Q.
We have entered into certain license, sublicense,
sponsored research and option agreements with third parties. Pursuant to such agreements, we may be required to make certain: (i) license
maintenance fee payments; (ii) out-of-pocket expense payments, including, but not limited to, payments related to intellectual property
and research related expenses; (iii) development and commercialization expense payments; (iv) annual and quarterly minimum payments; (v)
diligence expense payments; and (vi) revenue interest payments. In addition, subject to the achievement of certain development and/or
commercialization events, we may also be required to make certain: (i) minimum royalty payments, ranging from middle to high five figures,
(ii) sales-based royalties and running royalties, ranging from low single digits to low double digits; and (iii) milestone payments, of
up to approximately $14.2 million (if all milestones in all of our current agreements are achieved).
Additional funding will be necessary to fund our
future clinical and pre-clinical activities. We may obtain additional financing through sales of our equity and debt securities or entering
into strategic partnership arrangements, or a combination of the foregoing. There are no assurances that we will be successful in obtaining
an adequate level of financing as and when needed to finance our operations on terms acceptable to us or at all, particularly in light
of the economic downturn. If we are unable to secure adequate additional funding as and when needed, we may have to significantly delay,
scale back or discontinue the development and commercialization of one or more of our product candidates.
Cash Flows from Operating Activities
For the six months ended June 30, 2023, net cash
used in operations was approximately $3.7 million, which primarily resulted from a net loss of approximately $4.1 million.
For the six months ended June 30, 2022, net cash
used in operations was approximately $4.4 million, which primarily resulted from a net loss of approximately $5.2 million and changes
in operating assets and liabilities of approximately $0.1 million, partially offset by approximately $0.6 million stock-based compensation.
Cash Flows from Investing Activities
For the six months ended June 30, 2023, there
was no net cash provided by investing activities.
For the six months ended June 30, 2022, net cash
provided by investing activities was approximately $1.2 million which was primarily related to the sale of marketable securities.
Cash Flows from Financing Activities
For the six months ended June 30, 2023, net cash
provided by financing activities was approximately $8.9 million, which primarily resulted from net proceeds from the issuance of common
stock and warrants.
For the six months ended June 30, 2022, net cash provided by financing
activities was approximately $6.0 million which resulted from net proceeds from the issuance of common stock.
Critical Accounting Estimates
The preparation of financial statements in accordance
with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that
affect the reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical
if:
| ● | it requires assumptions to
be made that were uncertain at the time the estimate was made; and |
| ● | changes in the estimate or
different estimates that could have been selected could have material impact in our results of operations or financial condition. |
While we base our estimates and judgments on our
experience and on various other factors that we believe to be reasonable under the circumstances, actual results could differ from those
estimates and the differences could be material.
See Note 2 to our condensed consolidated financial
statements included elsewhere in this Quarterly Report on Form 10-Q for a discussion of our significant accounting policies.
Recently Issued Accounting Standards Not Yet
Effective or Adopted
Management does not believe that any recently
issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying condensed consolidated
financial statements.
JOBS Act
On April 5, 2012, the Jumpstart Our Business Startups
Act of 2012 (the “JOBS Act”) was enacted. Section 107 of the JOBS Act provides that an “emerging growth company”
can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised
accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards
until those standards would otherwise apply to private companies.
We have chosen to take advantage of the extended
transition periods available to emerging growth companies under the JOBS Act for complying with new or revised accounting standards until
those standards would otherwise apply to private companies provided under the JOBS Act. As a result, our financial statements may not
be comparable to those of companies that comply with public company effective dates for complying with new or revised accounting standards.
Subject to certain conditions set forth in the
JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions, including, without limitation,
(i) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b)
of the Sarbanes-Oxley Act of 2002, as amended, and (ii) complying with any requirement that may be adopted by the Public Company Accounting
Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information
about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an “emerging growth company”
until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii)
the last day of our fiscal year following the fifth anniversary of the date of our initial public offering; (iii) the date on which we
have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be
a large accelerated filer under the rules of the SEC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is not required to provide the information
required by this Item as it is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our principal executive officer and principal
financial officer evaluated the effectiveness of our “disclosure controls and procedures” as of June 30, 2023, the end of
the period covered by this Quarterly Report on Form 10-Q. The term “disclosure controls and procedures,” as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information
required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files under
the Exchange Act is accumulated and communicated to a company’s management, including its principal executive officer and principal
financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure
controls and procedures as of June 30, 2023, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date,
our disclosure controls and procedures were not effective because of the material weakness in our internal control over financial reporting,
as described below.
Status of Remediation of Material Weaknesses
in Internal Control over Financial Reporting
As previously disclosed, as of December 31, 2022,
under the supervision and with the participation of our management, including our principal executive officer and principal financial
officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control-Integrated Framework - 2013. Based on this assessment, our management concluded
that, as of December 31, 2022, our internal control over financial reporting was not effective because management identified a material
weakness. A material weakness is a significant deficiency or a combination of significant deficiencies in internal control over financial
reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will
not be prevented or detected on a timely basis.
Specifically, our management concluded that we
lack sufficient resources necessary to provide adequate segregation of duties related to the preparation and review of our financial
information used in financial reporting and review of controls over the financial reporting process, including cutoff related to accruals
and prepaids.
To address the material weakness described above,
we are expanding our controls related to the preparation and review of our financial information used in financial reporting, the controls
over the financial reporting process and the controls over the accuracy and completeness of accruals and prepaid account balances. The
full implementation of these enhanced controls remains in process as of June 30, 2023, and we will continue to monitor the effectiveness
of these controls and will make any further changes management determines necessary.
In addition, management is continuing to develop
the design and implementation of internal controls to require appropriate reviews as well as proper documentation of those controls. We
continuously evaluate the effectiveness of our internal control over financial reporting and may implement additional changes or remediation
efforts as we implement the above actions. The weakness will be determined to be remediated when revised controls have been operating
for a reasonable period of time and have been tested to determine they are operating effectively. The remediation actions are being monitored
by our audit committee of our board of directors.
Changes in Internal Control
There have been no significant changes in our
internal control over financial reporting during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting other than the changes to address the remediation of the material
weakness as discussed above.
Limitations on Effectiveness of Controls and
Procedures
In designing and evaluating the disclosure controls
and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute
assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within a company have been detected. In addition, the design of disclosure controls and procedures
must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits
of possible controls and procedures relative to their costs.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be subject to litigation
and claims arising in the ordinary course of business. We are not currently a party to any material legal proceedings and we are not aware
of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating
results, cash flows or financial condition.
ITEM 1A. RISK FACTORS
Risk factors that affect our business and financial
results are discussed in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31,
2022 as filed with the SEC on March 31, 2023 (“Annual Report”). There have been no material changes in our risk factors from
those previously disclosed in our Annual Report. You should carefully consider the risks described in our Annual Report, which could materially
affect our business, financial condition or future results. The risks described in our Annual Report are not the only risks we face. Additional
risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our
business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or
results of operations could be negatively affected.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 5. OTHER
None.
ITEM 6. EXHIBITS
| + |
Indicates a management contract or any compensatory plan, contract or arrangement. |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
HOTH THERAPEUTICS, INC. |
| |
|
| Date: August 11, 2023 |
By: |
/s/ Robb Knie |
| |
|
Robb Knie, |
| |
|
Chief Executive Officer |
| |
|
(Principal Executive Officer) |
| |
|
|
| Date: August 11, 2023 |
By: |
/s/ David Briones |
| |
|
David Briones, |
| |
|
Chief Financial Officer |
| |
|
(Principal Financial and Accounting Officer) |
22
0.57
1.40
2.16
4.77
1100990
1241398
2894732
3302113
false
--12-31
Q2
0001711786
0001711786
2023-01-01
2023-06-30
0001711786
2023-08-09
0001711786
2023-06-30
0001711786
2022-12-31
0001711786
2023-04-01
2023-06-30
0001711786
2022-04-01
2022-06-30
0001711786
2022-01-01
2022-06-30
0001711786
us-gaap:PreferredStockMember
2023-03-31
0001711786
us-gaap:AdditionalPaidInCapitalMember
2023-03-31
0001711786
us-gaap:RetainedEarningsMember
2023-03-31
0001711786
us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember
2023-03-31
0001711786
2023-03-31
0001711786
us-gaap:PreferredStockMember
2023-04-01
2023-06-30
0001711786
us-gaap:AdditionalPaidInCapitalMember
2023-04-01
2023-06-30
0001711786
us-gaap:RetainedEarningsMember
2023-04-01
2023-06-30
0001711786
us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember
2023-04-01
2023-06-30
0001711786
us-gaap:PreferredStockMember
2023-06-30
0001711786
us-gaap:AdditionalPaidInCapitalMember
2023-06-30
0001711786
us-gaap:RetainedEarningsMember
2023-06-30
0001711786
us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember
2023-06-30
0001711786
us-gaap:PreferredStockMember
2022-03-31
0001711786
us-gaap:AdditionalPaidInCapitalMember
2022-03-31
0001711786
us-gaap:RetainedEarningsMember
2022-03-31
0001711786
us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember
2022-03-31
0001711786
2022-03-31
0001711786
us-gaap:PreferredStockMember
2022-04-01
2022-06-30
0001711786
us-gaap:AdditionalPaidInCapitalMember
2022-04-01
2022-06-30
0001711786
us-gaap:RetainedEarningsMember
2022-04-01
2022-06-30
0001711786
us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember
2022-04-01
2022-06-30
0001711786
us-gaap:PreferredStockMember
2022-06-30
0001711786
us-gaap:AdditionalPaidInCapitalMember
2022-06-30
0001711786
us-gaap:RetainedEarningsMember
2022-06-30
0001711786
us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember
2022-06-30
0001711786
2022-06-30
0001711786
us-gaap:PreferredStockMember
2022-12-31
0001711786
us-gaap:AdditionalPaidInCapitalMember
2022-12-31
0001711786
us-gaap:RetainedEarningsMember
2022-12-31
0001711786
us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember
2022-12-31
0001711786
us-gaap:PreferredStockMember
2023-01-01
2023-06-30
0001711786
us-gaap:AdditionalPaidInCapitalMember
2023-01-01
2023-06-30
0001711786
us-gaap:RetainedEarningsMember
2023-01-01
2023-06-30
0001711786
us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember
2023-01-01
2023-06-30
0001711786
us-gaap:PreferredStockMember
2021-12-31
0001711786
us-gaap:AdditionalPaidInCapitalMember
2021-12-31
0001711786
us-gaap:RetainedEarningsMember
2021-12-31
0001711786
us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember
2021-12-31
0001711786
2021-12-31
0001711786
us-gaap:PreferredStockMember
2022-01-01
2022-06-30
0001711786
us-gaap:AdditionalPaidInCapitalMember
2022-01-01
2022-06-30
0001711786
us-gaap:RetainedEarningsMember
2022-01-01
2022-06-30
0001711786
us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember
2022-01-01
2022-06-30
0001711786
2022-12-29
0001711786
2022-12-01
2022-12-29
0001711786
hoth:PreFundedWarrantMember
2022-12-01
2022-12-29
0001711786
hoth:WainwrightWarrantsMember
2022-12-01
2022-12-29
0001711786
2022-01-01
2022-12-31
0001711786
hoth:LimitedPartnershipMember
srt:MinimumMember
2023-01-01
2023-06-30
0001711786
hoth:LimitedPartnershipMember
srt:MaximumMember
2023-01-01
2023-06-30
0001711786
us-gaap:WarrantMember
2023-04-01
2023-06-30
0001711786
us-gaap:WarrantMember
2022-04-01
2022-06-30
0001711786
us-gaap:WarrantMember
2023-01-01
2023-06-30
0001711786
us-gaap:WarrantMember
2022-01-01
2022-06-30
0001711786
hoth:OptionsMember
2023-04-01
2023-06-30
0001711786
hoth:OptionsMember
2022-04-01
2022-06-30
0001711786
hoth:OptionsMember
2023-01-01
2023-06-30
0001711786
hoth:OptionsMember
2022-01-01
2022-06-30
0001711786
hoth:NonvestedRestrictedStockUnitsMember
2023-04-01
2023-06-30
0001711786
hoth:NonvestedRestrictedStockUnitsMember
2022-04-01
2022-06-30
0001711786
hoth:NonvestedRestrictedStockUnitsMember
2023-01-01
2023-06-30
0001711786
hoth:NonvestedRestrictedStockUnitsMember
2022-01-01
2022-06-30
0001711786
us-gaap:WarrantMember
2023-04-01
2023-06-30
0001711786
hoth:VirginiaCommonwealthUniversityMember
2023-04-01
2023-06-30
0001711786
hoth:VirginiaCommonwealthUniversityMember
2023-01-01
2023-06-30
0001711786
hoth:ChelexaBiosciencesIncAndTheUniversityOfCincinnatiMember
2023-04-01
2023-06-30
0001711786
hoth:ChelexaBiosciencesIncAndTheUniversityOfCincinnatiMember
2023-01-01
2023-06-30
0001711786
hoth:TheGeorgeWashingtonUniversityMember
2023-04-01
2023-06-30
0001711786
hoth:TheGeorgeWashingtonUniversityMember
2022-04-01
2022-06-30
0001711786
hoth:TheGeorgeWashingtonUniversityMember
2023-01-01
2023-06-30
0001711786
hoth:TheGeorgeWashingtonUniversityMember
2022-01-01
2022-06-30
0001711786
hoth:NorthCarolinaStateUniversityMember
2023-04-01
2023-06-30
0001711786
hoth:NorthCarolinaStateUniversityMember
2022-04-01
2022-06-30
0001711786
hoth:NorthCarolinaStateUniversityMember
2023-01-01
2023-06-30
0001711786
hoth:NorthCarolinaStateUniversityMember
2022-01-01
2022-06-30
0001711786
hoth:VirginiaCommonwealthUniversityMember
2022-04-01
2022-06-30
0001711786
hoth:VirginiaCommonwealthUniversityMember
2023-01-01
2023-06-30
0001711786
hoth:VirginiaCommonwealthUniversityMember
2022-01-01
2022-06-30
0001711786
hoth:ChelexaBiosciencesIncAndTheUniversityOfCincinnatiMember
2023-04-01
2023-06-30
0001711786
hoth:ChelexaBiosciencesIncAndTheUniversityOfCincinnatiMember
2022-04-01
2022-06-30
0001711786
hoth:ChelexaBiosciencesIncAndTheUniversityOfCincinnatiMember
2023-01-01
2023-06-30
0001711786
hoth:ChelexaBiosciencesIncAndTheUniversityOfCincinnatiMember
2022-01-01
2022-06-30
0001711786
us-gaap:CommonClassBMember
2020-05-04
0001711786
us-gaap:CommonClassBMember
2021-12-06
0001711786
us-gaap:FairValueInputsLevel1Member
2023-06-30
0001711786
us-gaap:FairValueInputsLevel2Member
2023-06-30
0001711786
us-gaap:FairValueInputsLevel3Member
2023-06-30
0001711786
us-gaap:FairValueInputsLevel1Member
2022-12-31
0001711786
us-gaap:FairValueInputsLevel2Member
2022-12-31
0001711786
us-gaap:FairValueInputsLevel3Member
2022-12-31
0001711786
hoth:TwoZeroOneEightEquityIncentivePlanMember
2020-12-25
2021-01-01
0001711786
2020-12-25
2021-01-01
0001711786
srt:MinimumMember
hoth:TwoZeroOneEightEquityIncentivePlanMember
2021-06-24
2021-06-24
0001711786
srt:MaximumMember
hoth:TwoZeroOneEightEquityIncentivePlanMember
2021-06-24
2021-06-24
0001711786
srt:MinimumMember
hoth:TwoZeroOneEightEquityIncentivePlanMember
2022-02-01
2022-02-02
0001711786
srt:MaximumMember
hoth:TwoZeroOneEightEquityIncentivePlanMember
2022-02-01
2022-02-02
0001711786
srt:MinimumMember
hoth:TwoZeroOneEightEquityIncentivePlanMember
2023-01-11
2023-01-11
0001711786
srt:MaximumMember
hoth:TwoZeroOneEightEquityIncentivePlanMember
2023-01-11
2023-01-11
0001711786
hoth:EquityIncentivePlanMember
2022-03-24
2022-03-24
0001711786
us-gaap:WarrantMember
hoth:PlacementAgentWarrantMember
2022-12-29
0001711786
2023-01-03
0001711786
us-gaap:CommonStockMember
2023-01-01
2023-01-03
0001711786
us-gaap:InvestorMember
us-gaap:CommonStockMember
2023-01-01
2023-01-03
0001711786
us-gaap:SeriesBPreferredStockMember
2023-01-03
0001711786
2023-01-01
2023-01-03
0001711786
us-gaap:SeriesBPreferredStockMember
2023-02-28
0001711786
us-gaap:SeriesBPreferredStockMember
2023-02-01
2023-02-28
0001711786
srt:MinimumMember
us-gaap:SeriesBPreferredStockMember
2023-06-30
0001711786
hoth:PublicOfferingOfSecuritiesMember
2023-01-01
2023-06-30
0001711786
us-gaap:WarrantMember
2023-01-03
0001711786
us-gaap:WarrantMember
2023-01-01
2023-01-03
0001711786
2022-12-30
0001711786
us-gaap:EmployeeStockMember
2023-04-01
2023-06-30
0001711786
us-gaap:EmployeeStockMember
2022-04-01
2022-06-30
0001711786
us-gaap:EmployeeStockMember
2023-01-01
2023-06-30
0001711786
us-gaap:EmployeeStockMember
2022-01-01
2022-06-30
0001711786
hoth:NonemployeeRestrictedStockAwardsMember
2023-04-01
2023-06-30
0001711786
hoth:NonemployeeRestrictedStockAwardsMember
2022-04-01
2022-06-30
0001711786
hoth:NonemployeeRestrictedStockAwardsMember
2023-01-01
2023-06-30
0001711786
hoth:NonemployeeRestrictedStockAwardsMember
2022-01-01
2022-06-30
0001711786
hoth:NonemployeeStockWarrantAwardsMember
2023-04-01
2023-06-30
0001711786
hoth:NonemployeeStockWarrantAwardsMember
2022-04-01
2022-06-30
0001711786
hoth:NonemployeeStockWarrantAwardsMember
2023-01-01
2023-06-30
0001711786
hoth:NonemployeeStockWarrantAwardsMember
2022-01-01
2022-06-30
0001711786
us-gaap:WarrantMember
2022-12-31
0001711786
us-gaap:WarrantMember
2023-01-01
2023-06-30
0001711786
us-gaap:WarrantMember
2023-06-30
0001711786
us-gaap:SubsequentEventMember
2023-07-17
xbrli:shares
iso4217:USD
iso4217:USD
xbrli:shares
xbrli:pure
Pursuant to Section 1350 of Title 18 of the United
States Code as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Robb Knie, Chief Executive Officer
of Hoth Therapeutics, Inc. (the “Company”), hereby certifies that based on the undersigned’s knowledge:
Pursuant to Section 1350 of Title 18 of the United
States Code as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, David Briones, Chief Financial Officer
of Hoth Therapeutics, Inc. (the “Company”), hereby certifies that based on the undersigned’s knowledge: