[10-Q] Hoth Therapeutics, Inc. Quarterly Earnings Report

Rhea-AI Filing Summary

Hoth Therapeutics, Inc. reported $9.0 million in cash and cash equivalents at June 30, 2025, up from $7.0 million at year-end 2024, and total assets of $10.1 million. The company recorded a six-month net loss of $5.68 million versus $3.86 million in the prior-year period, driven in part by a $1.25 million immediate expensing of acquired patent applications and higher research and development spending. Weighted average shares increased materially, lowering six-month loss per share to $0.44 from $0.68 a year earlier despite a larger absolute loss.

Operating cash used was $5.16 million for the six months, while financing activities provided $7.13 million, including $5.625 million from warrant exercises. Management states current cash is sufficient to fund operations for at least 12 months from issuance, but additional capital will be required for longer-term development and regulatory plans. The company continues clinical and preclinical programs across multiple candidates and maintains an ATM facility with selling capacity expanded to $7.7 million.

Positive

• Cash position strengthened to $9.01M at June 30, 2025, up from $7.04M at December 31, 2024.
• Financing proceeds of $7.13M during the six months, including $5.625M from warrant exercises, bolstered liquidity.
• Management states sufficient cash for at least 12 months from issuance of these financial statements.
• Completed patent acquisition (issued 450,000 shares plus $400,000 cash), expanding the company’s IP portfolio.

Negative

• Net loss increased to $5.68M for the six months ended June 30, 2025, versus $3.86M a year earlier.
• Operating cash burn of $5.16M for the six months increases near-term funding needs.
• Accumulated deficit of $66.1M highlights multi-year losses since inception.
• Company will require significant additional capital to execute longer-term development and regulatory plans.

Insights

Financial Analyst

TL;DR Cash improved to $9.0M and financing covered near-term needs, but operating losses and cash burn require further funding beyond 12 months.

The filing shows a strengthened cash position after financings, including $5.625M from warrant exercises and $1.51M net from equity issuance in the period, producing $7.13M of financing proceeds versus $5.16M used in operations. The six-month net loss grew to $5.68M, partly from a $1.25M IPRD charge for acquired patent applications, and R&D spending increased materially. Management asserts runway of at least 12 months, which appears supported by reported balances and recent ATM activity, but the company will need additional capital to advance multiple clinical programs and avoid dilution. This report is material to investors focused on liquidity and financing strategy.

Biotech R&D Specialist

TL;DR R&D investment rose, including a $1.25M patent acquisition expense, reflecting active program development but increasing near-term cash requirements.

R&D expense rose to approximately $3.0M for the six months ended June 30, 2025, compared with $1.22M a year earlier, with project-level details showing HT-001 and HT-KIT as primary cost drivers. The immediate expensing of acquired patent applications ($1.25M) contributed significantly to the increase. These expenditures indicate continued progression of development activities but also elevate near-term funding needs to support clinical, manufacturing, and regulatory milestones. No clinical trial outcomes or regulatory approvals are disclosed; the changes are operational and financing-focused rather than efficacy results.

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, 2025

☐ 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.)

1177 Avenue of the Americas, 5th Floor, Suite 5066, New York, NY		10036
(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 11, 2025 was 13,259,027.

Table of Contents

		Page
PART I - FINANCIAL INFORMATION		1
ITEM 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (Unaudited)	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	29
ITEM 4.	Controls and Procedures	29
PART II - OTHER INFORMATION		30
ITEM 1.	Legal Proceedings	30
ITEM 1A.	Risk Factors	30
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
ITEM 3.	Defaults Upon Senior Securities	30
ITEM 5.	Other Information	30
ITEM 6.	Exhibits	31
SIGNATURES		32

i

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, industry ranking, plans and objectives of management, markets for our common stock and future management and organizational structure 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. Any forward-looking statements are qualified in their entirety by reference to the risk factors discussed in this Quarterly Report on Form 10-Q. 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 our products;

● the ultimate impact of any public health crisis 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;

● risks related to the restatement of our financial statements including risks of increased costs and the increased possibility of legal proceedings and regulatory inquiries, sanctions, or investigation;

ii

● 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;

● general business and economic conditions, such as inflationary pressures, geopolitical conditions and tariffs and other trade barriers; 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.

iii

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30,				December 31,
		2025				2024
		(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	9,014,108			$	7,038,923
Prepaid expenses and other current assets			1,038,794				605,948
Total Current Assets			10,052,902				7,644,871
NON-CURRENT ASSETS:
Operating lease right-of-use asset, net			18,081				31,075
Investment in joint ventures at fair value			36,819				36,819
Total Non-Current Assets			54,900				67,894
Total Assets		$	10,107,802			$	7,712,765
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	75,510			$	412,071
Accrued expenses			267,794				390,760
Operating lease liability, current portion			21,326				28,366
Total Current Liabilities			364,630				831,197
LONG-TERM LIABILITIES:
Operating lease liability, less current portion			-				2,709
Total Long-Term Liabilities			-				2,709
Total Liabilities			364,630				833,906
Commitments and Contingencies (Note 6)
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; 3,000,000 shares undesignated; 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024			-				-
Series A Convertible Preferred Stock, $0.0001 par value; 5,000,000 shares designated; 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024			-				-
Series B Preferred Stock, $0.0001 par value; 2,000,000 shares designated; 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024			-				-
Common stock, $0.0001 par value; 50,000,000 shares authorized; 13,234,027 and 8,042,747 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively			1,323				804
Additional paid-in capital			75,815,158				67,279,033
Accumulated deficit			(66,085,353	)			(60,410,041	)
Accumulated other comprehensive income			12,044				9,063
Total Stockholders’ Equity			9,743,172				6,878,859
Total Liabilities and Stockholders’ Equity		$	10,107,802			$	7,712,765

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2025				2024				2025				2024
NET REVENUES		$	-			$	-			$	-			$	-
OPERATING COSTS AND EXPENSES:
Research and development expenses			1,039,713				644,025				2,998,315				1,215,667
General and administrative expenses			1,159,936				1,079,504				2,677,351				2,667,766
Total operating expenses			2,199,649				1,723,529				5,675,666				3,883,433
LOSS FROM OPERATIONS			(2,199,649	)			(1,723,529	)			(5,675,666	)			(3,883,433	)
OTHER INCOME (EXPENSES), NET:
Change in fair value of investment in joint ventures			-				-				-				(581	)
Dividend and interest income			173				13,365				354				27,321
Total other income, net			173				13,365				354				26,740
NET LOSS		$	(2,199,476	)		$	(1,710,164	)		$	(5,675,312	)		$	(3,856,693	)
NET LOSS PER COMMON SHARE:
Basic and diluted		$	(0.17	)		$	(0.25	)		$	(0.44	)		$	(0.68	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic and diluted			13,180,243				6,876,331				12,959,901				5,637,621
COMPREHENSIVE LOSS:
Net loss		$	(2,199,476	)		$	(1,710,164	)		$	(5,675,312	)		$	(3,856,693	)
Other comprehensive income(loss):
Foreign currency translation adjustment			3,478				1,634				2,981				(4,134	)
Total comprehensive loss		$	(2,195,998	)		$	(1,708,530	)		$	(5,672,331	)		$	(3,860,827	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

		For the Three and Six Months Ended June 30, 2025
										Additional								Accumulated other				Total
		Common Stock								Paid-in				Accumulated				Comprehensive				Stockholders’
		Shares				Amount				Capital				Deficit				Income (Loss)				Equity
Balance, December 31, 2024			8,042,747			$	804			$	67,279,033			$	(60,410,041	)		$	9,063			$	6,878,859
Common shares issued for exercise of warrants			3,750,000				375				5,624,625				-				-				5,625,000
Stock-based compensation			-				-				219,929				-				-				219,929
Common stock issued for cash, net			927,968				93				1,441,871				-				-				1,441,964
Common stock issued for patent			450,000				45				850,455				-				-				850,500
Cumulative translation adjustment			-				-				-				-				(497	)			(497	)
Net loss			-				-				-				(3,475,836	)			-				(3,475,836	)
Balance, March 31, 2025 (unaudited)			13,170,715				1,317				75,415,913				(63,885,877	)			8,566				11,539,919
Issuance of warrants for professional fees			-				-				333,150				-				-				333,150
Common stock issued for cash, net			63,312				6				66,095				-				-				66,101
Cumulative translation adjustment			-				-				-				-				3,478				3,478
Net loss			-				-				-				(2,199,476	)			-				(2,199,476	)
Balance, June 30, 2025 (unaudited)			13,234,027			$	1,323			$	75,815,158			$	(66,085,353	)		$	12,044			$	9,743,172

		For the Three and Six Months Ended June 30, 2024
										Additional								Accumulated other				Total
		Common Stock								Paid-in				Accumulated				Comprehensive				Stockholders’
		Shares				Amount				Capital				Deficit				Income (Loss)				Equity
Balance, December 31, 2023			4,348,129			$	435			$	61,732,106			$	(52,221,741	)		$	27,260			$	9,538,060
Exercise of pre-funded warrants			55,675				5				(5	)			-				-				-
Stock-based compensation			-				-				513,350				-				-				513,350
Deferred offering cost related to warrant inducement			-				-				550,500				-				-				550,500
Cumulative translation adjustment			-				-				-				-				(5,768	)			(5,768	)
Net loss			-				-				-				(2,146,529	)			-				(2,146,529	)
Balance, March 31, 2024 (unaudited)			4,403,804				440				62,795,951				(54,368,270	)			21,492				8,449,613
Stock-based compensation			-				-				7,054				-				-				7,054
Common shares issued and issuable for exercise of warrants (1)			955,000				96				3,682,204				-				-				3,682,300
Deferred offering cost related to warrant inducement			-				-				(550,500	)			-				-				(550,500	)
Cumulative translation adjustment			-				-				-				-				1,634				1,634
Net loss			-				-				-				(1,710,164	)			-				(1,710,164	)
Balance, June 30, 2024 (unaudited)			5,358,804			$	536			$	65,934,709			$	(56,078,434	)		$	23,126			$	9,879,937

(1) Represents the aggregate fair value of 2,500,000 shares of common stock, which includes 955,000 shares that have been issued and 1,545,000 shares held in abeyance as of June 30, 2024.See Note 5 – Stockholders’ Equity – Warrants for additional information.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		For the Six Months Ended
		June 30,
		2025				2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(5,675,312	)		$	(3,856,693	)
Adjustments to reconcile net loss to net cash used in operating activities:
Research and development-acquired patent, expensed			850,500				-
Stock-based compensation			219,929				520,404
Stock-based professional fees			55,525				-
Change in fair value of investment in joint ventures			-				581
Lease costs			3,245				-
Changes in operating assets and liabilities:
Prepaid expenses and other current assets			(155,221	)			19,089
Accounts payable and accrued expenses			(459,527	)			938
NET CASH USED IN OPERATING ACTIVITIES			(5,160,861	)			(3,315,681	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance common stock, net of offering costs			1,508,065				-
Proceeds from exercise of warrants			5,625,000				3,682,300
NET CASH PROVIDED BY FINANCING ACTIVITIES			7,133,065				3,682,300
NET INCREASE IN CASH AND CASH EQUIVALENTS			1,972,204				366,619
Effect of exchange rate changes on cash and cash equivalents			2,981				(4,134	)
CASH AND CASH EQUIVALENTS  - beginning of period			7,038,923				9,292,352
CASH AND CASH EQUIVALENTS  - end of period		$	9,014,108			$	9,654,837
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Increase in deferred offering cost and additional paid-in capital		$	-			$	550,500
Increase in prepaid expenses and additional paid-in capital		$	333,150			$	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

NOTE 1 – Organization and Description of Business Operations

Hoth Therapeutics, Inc. (together with its wholly-owned subsidiaries, merveille.ai and 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); and (iii) 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 obesity, and obesity-related diseases and conditions (HT-VA).

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 unaudited condensed 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 incurred losses and generated negative cash flows from operations since its inception. At June 30, 2025, the Company had an accumulated deficit of $66.1 million and cash and cash equivalents of $9.0 million. The Company has funded its operations from proceeds from the sale of equity 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.

The Company believes its current cash is sufficient to fund operations for at least the next 12 months from the issuance date of these unaudited condensed consolidated 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.

On November 8, 2024, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) under which the Company could offer and sell shares of its common stock having an aggregate sales price of up to $2,700,000 through Wainwright as the sales agent pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-272620), including an accompanying base prospectus, and a prospectus supplement dated November 8, 2024. Sales of shares of the Company’s common stock through Wainwright, if any, will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. Wainwright will use commercially reasonable efforts to sell shares of the Company’s common stock from time to time, based on instructions from the Company (including any price, time or size limits or other parameters or conditions the Company may impose). The Company will pay Wainwright a commission equal to 3.0% of the aggregate gross proceeds from the sales of shares of the Company’s common stock sold through Wainwright under the ATM Agreement and will also reimburse Wainwright for certain specified expenses in connection with the ATM Agreement. On February 7, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $5,000,000 pursuant to a prospectus supplement dated February 7, 2025. The offering of shares pursuant to the ATM Agreement will terminate on the earlier of (1) the sale, pursuant to the ATM Agreement, of shares having an aggregate offering price of $7,700,000 and (2) the termination of the ATM Agreement by either the Company or Wainwright, as set forth therein. As of August 12, 2025, the Company has sold shares of its common stock having a total aggregate sales price of approximately $2.8 million.

5

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

NOTE 2 – Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited 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 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 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 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 28, 2025.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company’s wholly-owned subsidiaries, merveille.ai, which was incorporated under the laws of Nevada on October 4, 2023, and 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.

Use of Estimates

The preparation of unaudited 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 unaudited condensed consolidated financial statements relate to stock-based compensation, the valuation of modified warrants, the valuation of common stock issued for research and development-acquired patent, 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, 2024 as filed with the SEC on March 28, 2025.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents consist of bank accounts and highly liquid money funds and totaled $9,014,108 and $7,038,923 as of June 30, 2025 and December 31, 2024, respectively. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits at the three financial institutions the Company utilizes for its banking requirements. The Company’s foreign bank account is not subject to Federal Deposit Insurance Corporation insurance. Cash held in foreign bank accounts totaled approximately $0.1 million and $0.1 million as of June 30, 2025 and December 31, 2024, respectively.

6

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

Concentrations of Credit Risk and Off-Balance Sheet Risk

The Company has significant cash balances at financial institutions which, throughout the year, 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

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements (“ASC-820”), 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 fair value of the Company’s assets and liabilities, which would qualify as financial instruments under ASC-820, approximates the carrying amounts represented in the Company’s condensed consolidated balance sheets, primarily due to their short-term nature.

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. During the six months ended June 30, 2025 and 2024, there were no changes in valuation techniques or transfers between Level 1, Level 2, and Level 3.

Leases

The Company determines if an arrangement is a lease at inception and classifies its leases at commencement. Operating leases are presented as right-of-use (“ROU”) assets and the corresponding lease liabilities are included in operating lease liability, current and lease liability, on the Company’s condensed consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset, and lease liabilities represent the Company’s obligation to make lease payments in exchange for the ability to use the asset for the duration of the lease term.

The Company has lease agreements which contain both lease and non-lease components, which it has elected to account for as a single lease component. As such, minimum lease payments include fixed payments for non-lease components within a lease agreement but exclude variable lease payments not dependent on an index or rate, such as common area maintenance, operating expenses, utilities, or other costs that are subject to fluctuation from period to period. Certain of the leases contain an option to extend the term of the lease. The option to extend a lease is included in the lease term only when it is reasonably certain that the Company will elect that option. Additionally, the Company does not record ROU assets or lease liabilities for short-term leases that have a term of twelve months or less at lease commencement.

ROU assets and lease liabilities are recognized at the commencement date and determined using the present value of the future minimum lease payments over the lease term. The Company uses an incremental borrowing rate based on an estimated rate of interest for collateralized borrowing since the Company’s leases do not include an implicit interest rate. The estimated incremental borrowing rate considers market data, actual lease economic environment, and the lease term at commencement date.

7

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

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 4 of these unaudited condensed consolidated financial statements.

Prepaid Expenses and Other Current Assets

As of June 30, 2025 and December 31, 2024, prepaid expenses and other current assets consisted of the following:

		As of June 30, 2025				As of December 31, 2024
Prepaid clinical trial expenses		$	402,747			$	476,235
Prepaid insurance			123,094				28,479
Prepaid stock-based professional fees			277,625				-
R&D credit receivable			46,769				46,769
Other prepaid expenses			188,559				54,465
		$	1,038,794			$	605,948

Research and Development Costs

Research and development costs, including acquired in-process research and development expenses for which there is no alternative future use, are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are accrued and then expensed when the activity has been performed or when the goods have been received rather than when the payment is made. 

Stock-Based Compensation

The Company accounts for stock-based payment awards exchanged for services at the estimated grant date fair value of the award. Stock options issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and expire up to ten years from the date of grant. Options are generally issued fully vested. The Company accounts for forfeited awards as they occur.

The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment.

Expected Term - The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding based on the simplified method, which is the half-life from vesting to the end of its contractual term.

Expected Volatility - The Company computes stock price volatility over expected terms based on its historical common stock trading prices.

Risk-Free Interest Rate - The Company bases the risk-free interest rate on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term.

Expected Dividend - The Company has never declared or paid any cash dividends on its common shares and does not plan to pay cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models. 

The Company grants restricted stock awards under its equity incentive plan. Restricted stock awards are granted to employees and non-employees. The restricted stock awards are measured based on the grant-date fair value. In general, the restricted stock awards vest over a service period of zero to three years. Stock-based compensation expense is generally recognized based on the straight-line basis over the requisite service period and forfeitures are accounted for as they occur.

The Company has issued warrants to non-employees. The warrants are measured based on the grant-date fair value. In general, the warrants vest over a term of zero to ten years. Stock-based compensation expense is generally recognized based on the straight-line basis over the vesting term.

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HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

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 unaudited 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. 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 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:

		As of June 30,
Potentially dilutive securities		2025				2024
Warrants			1,740,752				5,211,848
Options			1,260,362				617,362
Non-vested restricted stock awards			-				1,693
Total			3,001,114				5,830,903

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance. For issued warrants that do not meet all the criteria for equity classification, the warrants are classified as liability and are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.

Comprehensive Loss

Comprehensive loss is composed of net loss and other comprehensive income (loss). During the three and six months ended June 30, 2025 and 2024, other comprehensive (loss) income was attributable to foreign currency translation adjustment.

9

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

Foreign Currency

The reporting currency of the Company is the U.S. dollar. For the Company’s subsidiary with non-U.S. dollar functional currencies, assets and liabilities are translated into U.S. dollars at period-end exchange rates. Revenue and expenses are translated at the average exchange rates during the period. Equity transactions are translated using historical exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive income as a component of stockholders’ equity. Foreign currency translation adjustments arising from differences in exchange rates from period to period are recorded within “accumulated other comprehensive income” in the condensed consolidated balance sheets.

Segment Reporting

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses among other disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 on January 1, 2024. The Company operates as a single operating segment as a clinical-stage biopharmaceutical company focused on developing new generation therapies for unmet medical needs. In accordance with ASC 280, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company and decides how to allocate resources based on loss from operations, managing cash flows and evaluating research and development and general and administrative expenses. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similarities in economic characteristics such as nature of services and procurement processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying notes to unaudited condensed consolidated financial statements.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including, but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on its unaudited  condensed consolidated financial statements.

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 unaudited condensed consolidated financial statements.

10

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

NOTE 3 – License Agreements and Acquired Patent Applications

The following summarizes the Company’s research and development expenses for licenses and patent applications acquired during the three and six months ended June 30, 2025 and 2024:

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2025				2024				2025				2024
The George Washington University		$	1,250			$	8,597			$	2,500			$	9,847
North Carolina State University			938				1,563				1,875				3,125
University of Cincinnati			2,708				417				3,333				417
Patent applications acquired			—				—				1,250,500				—
		$	4,896			$	10,577			$	1,258,208			$	13,389

The George Washington University

During the three and six months ended June 30, 2025, the Company recorded expenses of $1,250 and $2,500, respectively, related to license fees pursuant to the patent license agreement with The George Washington University (“GW”) dated February 1, 2020 (“GW Patent License Agreement”) and the patent license agreement with GW dated August 7, 2020 (“Second GW Patent License Agreement”). During the three and six months ended June 30, 2024, the Company recorded expenses of $8,597 and $9,847, respectively, for license fees, including an expense of $6,389 and $6,389 for the three and six months ended June 30, 2024, respectively, related to warrants granted to GW pursuant to the GW Patent License Agreement and the Second GW Patent License Agreement.

North Carolina State University

During the three months ended June 30, 2025 and 2024, the Company recorded expenses of $938 and $1,563, respectively, for license fees associated with the license agreement by and between the Company and North Carolina State University dated February 25, 2021. During the six months ended June 30, 2025 and 2024, the Company recorded expenses of $1,875 and $3,125, respectively, for license fees associated with the license agreement by and between the Company and North Carolina State University dated February 25, 2021.

Chelexa Biosciences, Inc. and the University of Cincinnati

During the three months ended June 30, 2025 and 2024, the Company recognized expenses of $2,708 and $417, respectively, for license fees associated with the Assignment and Assumption Agreement by and between the Company and Chelexa Biosciences, Inc. dated May 14, 2020. During the six months ended June 30, 2025 and 2024, the Company recognized expenses of $3,333 and $417, respectively, for license fees associated with the Assignment and Assumption Agreement by and between the Company and Chelexa Biosciences, Inc. dated May 14, 2020.

Patent Application Acquisition Agreement

On January 13, 2025, the Company entered into a Patent Application Acquisition Agreement with Med30, LLC (the “Seller”), whereby the Seller sold, conveyed, assigned and transferred to the Company all of Seller’s right, title, and interest in and to certain patent applications and associated rights, subject to the terms and conditions set forth in such agreement for a cash payment of $400,000 and the issuance of 450,000 shares of the Company’s common stock with a fair value of $850,500 for an aggregate purchase price of $1,250,500. These common shares were valued at $850,500, or $1.89 per share, on the measurement date based on quoted closing price of the Company’s common stock. For asset acquisitions, in-process research and development (“IPRD”) is expensed immediately unless there is an alternative future use. The patent applications acquired do not constitute a business, as defined under ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business (such when there is no substantive process in the acquired entity). The acquired IPRD intangible asset will be used in research and development projects which have been determined to not have alternative future use at the acquisition date and was expensed immediately. Accordingly, during the three and six months ended June 30, 2025, the Company recorded $0 and $1,250,500 in research and development expenses, respectively.

11

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

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 on June 30, 2025 and December 31, 2024:

		Fair value measured on June 30, 2025
		Total at June 30, 2025				Quoted prices in active markets (Level 1)				Significant other observable inputs (Level 2)				Significant unobservable inputs (Level 3)
Assets
Investment in joint ventures		$	36,819			$	—			$	—			$	36,819

		Fair value measured on December 31, 2024
		Total at December 31, 2024				Quoted prices in active markets (Level 1)				Significant other observable inputs (Level 2)				Significant unobservable inputs (Level 3)
Assets
Investment in joint ventures		$	36,819			$	—			$	—			$	36,819

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 for the three months ended June 30, 2025 and 2024:

Investment in joint ventures for the three months ended June 30, 2025 and 2024
		For the Three Months Ended June 30,
		2025				2024
Investment in joint ventures at fair value – beginning of period		$	36,819			$	36,819
Change in fair value of investment in joint ventures			-				-
Investment in joint ventures at fair value – end of period		$	36,819			$	36,819

Investment in joint ventures for the six months ended June 30, 2025 and 2024
		For the Six Months Ended June 30,
		2025				2024
Investment in joint ventures at fair value – beginning of period		$	36,819			$	37,400
Change in fair value of investments in joint ventures			-				(581	)
Investment in joint ventures at fair value – end of period		$	36,819			$	36,819

12

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

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 other income (expenses), net in the unaudited condensed 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 Therapeutics 

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 Therapeutics (“Zylö”) 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 (as amended, the “Exclusive Sublicense Agreement”), 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). Zylö conducted a 409A valuation of their Class B common stock in February 2024, and as of June 30, 2025 and December 31, 2024, valued its share price at $0.167 and $0.167 per share, respectively. This value was ratified by Zylö’s board of directors in February 2024 and December 2023, respectively.

On February 23, 2024, the Company acquired 22,000 shares of Class B Common stock of Atticus Pharma, a subsidiary of Zylö Therapeutics, based upon a 1-for-10 ratio of current shares and was instructed, on July 3, 2024, that the 409A valuation of the shares was $79, or $0.0036 per share, pursuant to the February 2024 valuation ratified by Zylö’s board of directors.

The valuations reflect a probability-weighted present value of expected future investment returns considering certain possible outcomes and the rights of each class of Zylö’s and Atticus Pharma’s equity. The future values of the common stock under the various outcomes are discounted back to the valuation date at a risk-adjusted discount rate and probability weighted to determine the value for the Class B common stock. Significant unobservable inputs in the valuation include (i) probabilities of each scenario, (ii) timing of occurrence, (iii) future valuation; (iv) and the risk-adjusted discount rate.

The consolidated investment in Zylö was valued at $36,819 and $36,819 as of June 30, 2025 and December 31, 2024, respectively.

13

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

NOTE 5 – Stockholders’ Equity

Preferred Stock

The Company is authorized to issue up to 10,000,000 shares of preferred stock. This preferred stock may be issued in one or more series, and shall have such designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof as shall be determined at the time of issuance by the Company’s board of directors without further action by the Company’s shareholders. As of June 30, 2025 and December 31, 2024, 5,000,000 shares of the Company’s preferred stock have been designated as Series A Convertible Preferred Stock, 2,000,000 shares of the Company’s preferred stock have been designated as Series B Preferred Stock, and 3,000,000 shares of the Company’s preferred stock remain undesignated.

Series A Convertible Preferred Stock

The shares of Series A Convertible Preferred Stock, par value $0.0001 per share, are not mandatorily redeemable and do not embody an unconditional obligation to settle in a variable number of equity shares. As such, the shares of Series A Convertible Preferred Stock are classified as permanent equity on the condensed consolidated balance sheets. The holders’ contingent redemption right in the event of certain deemed liquidation events does not preclude permanent equity classification. Further, the shares of Series A Convertible Preferred Stock are considered an equity-like host for purposes of assessing embedded derivative features for potential bifurcation. The embedded conversion feature is considered to be clearly and closely related to the associated convertible preferred stock host instrument and therefore was not bifurcated from the equity host. As of June 30, 2025 and December 31, 2024, no shares of Series A Convertible Preferred Stock were issued and outstanding.

Series B Preferred Stock

On November 2, 2022, the Company filed a Certificate of Designation of the Series B Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada to create a new class of Series B Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”). The Certificate of Designation designated 2,000,000 shares of authorized preferred stock as Series B Preferred Stock. The Series B Preferred Stock was not entitled to receive dividends or any other distributions. The Series B Preferred Stock was entitled to ten votes per share and voted together with the Company’s issued and outstanding shares of common stock as a single class exclusively with respect to a proposal to increase the number of shares of common stock that the Company was authorized to issue, together with any ancillary or administrative matters necessary or advisable in connection with the implementation of such increase. The Series B Preferred Stock had no rights as to any distribution or assets of the Company upon liquidation, bankruptcy, reorganization, merger, acquisition, sale, dissolution or winding up of the Company. As of June 30, 2025 and December 31, 2024, no shares of Series B Preferred Stock were issued and outstanding.

Warrants

2024

On March 27, 2024, the Company entered into an inducement offer agreement with a holder (the “Holder”) of certain of the Company’s existing warrants (the “January 2023 Existing Warrants”) to immediately exercise for cash an aggregate 2,500,000 of the January 2023 Existing Warrants to purchase shares of the Company’s common stock at a reduced exercise price of $1.6775 per share for gross proceeds to the Company of approximately $4.2 million before deducting placement agent fees and other offering expenses payable by the Company. The exercised January 2023 Existing Warrants were issued pursuant to a securities purchase agreement dated December 29, 2022 by and between the Company and the Holder. Each January 2023 Existing Warrant was exercisable for a period of five and one-half years from the issuance date at an original exercise price of $5.00 per share.

14

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

As an inducement to such exercise, the Company agreed to issue new unregistered warrants to purchase up to 3,750,000 shares of the Company’s common stock at an exercise price of $1.50 per share (the “April 2024 Inducement Warrants”). The April 2024 Inducement Warrants are exercisable immediately upon issuance and will expire on July 3, 2028. On April 1, 2024, the Holder exercised the January 2023 Existing Warrants, and the Company issued the Holder 3,750,000 April 2024 Inducement Warrants. Additionally, in connection with the exercise of the January 2023 Existing Warrants, the Company issued 125,000 placement agent warrants to the designees of the placement agent, Wainwright, which are immediately exercisable and expire on July 3, 2028 at an exercise price of $2.0969 per share. 

The amendment to the January 2023 Existing Warrants on March 27, 2024 to lower the exercise price thereof was considered a modification of the January 2023 Existing Warrants under the guidance of ASU 2021-04. This was modification of an equity classified financial instrument under that guidance and the exercise was treated as an equity issuance as the reason for the modification was to induce the holders to cash exercise their warrants, resulting in the exercise of the January 2023 Existing Warrants on April 1, 2024.

On March 27, 2024, the Company calculated the total fair value of the consideration for the modification of the January 2023 Existing Warrants, which includes the incremental fair value of the January 2023 Existing Warrants (determined by comparing the fair values immediately prior to and immediately after the modification). The fair values were calculated using the Black-Scholes option-pricing model, and the Company determined that the total fair value of the consideration related to the modification of the January 2023 Existing Warrants amounted to $550,500, which is reflected as a deferred offering cost on the unaudited condensed consolidated balance sheet as of June 30, 2024. The deferred offering cost were netted against the net proceeds received on April 1, 2024.

On April 1, 2024, in connection with the March 27, 2024 inducement offer agreement with the Holder of the January 2023 Existing Warrants, the Holder exercised the January 2023 Existing Warrants for cash at a reduced exercise price of $1.6775 per share resulting in gross proceeds to the Company of approximately $4.2 million (net proceeds of approximately $3.7 million, after deducting placement agent fees and other offering expenses of approximately $0.5 million). In connection with such exercise, the Company was to issue up to 2,500,000 shares of common stock (the “Warrant Shares”) upon exercise of the January 2023 Existing Warrants. As of June 30, 2024, 1,545,000 Warrant Shares were held in abeyance and were not reflected as issued and outstanding common shares on the accompanying condensed consolidated balance sheet, in accordance with the terms of the inducement offer agreement. Pursuant to the inducement offer agreement, the Company only issued such number of Warrant Shares to the Holder that would not cause the Holder to exceed the maximum number of Warrant Shares permitted thereunder, as directed by the Holder, with the balance of the Warrant Shares held in abeyance until notice from the Holder that the balance (or portion thereof) could be issued in compliance with the limitations set forth in the inducement offer agreement. The abeyance was evidenced through the January 2023 Existing Warrants which were deemed prepaid thereafter (including the cash payment in full of the exercise price), and exercised pursuant to a Notice of Exercise in the January 2023 Existing Warrants (provided no additional exercise price was due and payable). As of June 30, 2024, the Company issued 955,000 Warrant Shares to the Holder, and 1,545,000 Warrant Shares were held in abeyance for future issuance. On July 24, 2024, the remaining 1,545,000 Warrant Shares held in abeyance were issued.

On April 1, 2024, in connection with the issuance of the April 2024 Inducement Warrants and the placement agent warrants, the Company calculated the fair value of such warrants using the Black-Scholes option-pricing model, and the Company determined that the aggregate total fair value of the April 2024 Inducement Warrants and placement agent warrants amounted to approximately $4.2 million, which are considered offering costs and were netted against the net proceeds received by the warrant exercise under the guidance of ASU 2021-04.

The fair value of the January 2023 Existing Warrants on the modification date was estimated using the Black-Scholes option-pricing model with the following assumptions:

		March 27, 2024 to April 1, 2024
Exercise price		$	1.50 to $5.00
Term (years)			4.25
Expected stock price volatility			109.8	%
Risk-free rate of interest			4.18% to 4.34%

15

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

2025

On January 7, 2025, the Company issued 3,750,000 common shares in connection with the exercise of the 3,750,000 April 2024 Inducement Warrants for cash proceeds of $5,625,000.

On June 4, 2025, pursuant to a six-month marketing service agreement, the Company issued warrants to purchase up to 300,000 shares of the Company’s common stock at an exercise price of $1.00 per share to a consultant of the Company for investor relations services. The warrants expire on June 4, 2027. The grant date fair value of these warrants was $333,150, which was recorded as a prepaid expense and will be expensed as stock-based professional fees over the term of the marketing service agreement. The Company will have the option, but not obligation, to renew/extend this agreement for an additional six months by issuing an additional two-year warrant to purchase up to 200,000 shares of the Company’s common stock at an exercise price of $1.00 per share. In connection with this warrant, during the three and six months ended June 30, 2025, the Company recorded stock-based professional fees of $55,525 and $55,525, respectively, and as of June 30, 2025, the Company has reflected $277,625 of prepaid stock-based professional fees, which is included in prepaid expenses and other current assets on the accompanying unaudited condensed consolidated balance sheet.

The fair value of option grants was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

		June 4, 2025
Exercise price		$	1.00
Term (years)			2.0
Expected stock price volatility			129.68	%
Risk-free rate of interest			3.87	%

A summary of warrant activity for the six months ended June 30, 2025 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, 2024			5,203,243			$	2.62				—				3.52
Granted			300,000				1.00				—				—
Expired			(12,491	)			55.96				—				—
Exercised			(3,750,000	)			1.50				—				—
Outstanding as of June 30, 2025			1,740,752				4.38				51,000				2.88
Warrants exercisable as of June 30, 2025			1,740,752			$	4.38			$	51,000				2.88

The Company has determined that the warrants are equity classified instruments and should be accounted for as a component of stockholders’ equity.

Common Shares

2024

On January 8, 2024, the Company issued 55,675 common shares in connection with the exercise of 55,675 pre-funded warrants that were issued in connection with a securities purchase agreement dated September 13, 2023.

During the three months ended June 30, 2024, the Company issued 955,000 shares of its common stock that were held in abeyance in connection with the exercise of 2,500,000 of the January 2023 Existing Warrants (See Warrants section above).

16

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

2025

On January 7, 2025, the Company issued 3,750,000 common shares in connection with the exercise of the 3,750,000 April 2024 Inducement Warrants for cash proceeds of $5,625,000. See Warrants section above.

On January 13, 2025, the Company entered into a Patent Application Acquisition Agreement with the Seller, whereby the Seller sold, conveyed, assigned and transferred to the Company all of Seller’s right, title, and interest in and to certain patent applications and associated rights, subject to the terms and conditions set forth in such agreement for a cash payment of $400,000 and the issuance of 450,000 shares of the Company’s common stock. These common shares were valued at $850,500, or $1.89 per share, on the measurement date based on quoted closing price of the Company’s common stock (see Note 3).

On November 8, 2024, the Company entered into the ATM Agreement with Wainwright under which the Company could offer and sell shares of its common stock having an aggregate sales price of up to $2,700,000 through Wainwright as the sales agent pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-272620), including an accompanying base prospectus and a prospectus supplement dated November 8, 2024. Sales of shares of the Company’s common stock through Wainwright, if any, will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. Wainwright will use commercially reasonable efforts to sell shares of the Company’s common stock from time to time, based on instructions from the Company (including any price, time or size limits or other parameters or conditions the Company may impose). The Company will pay Wainwright a commission equal to 3.0% of the aggregate gross proceeds from the sales of shares of the Company’s common stock sold through Wainwright under the ATM Agreement and will also reimburse Wainwright for certain specified expenses in connection with the ATM Agreement. On February 7, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $5,000,000 pursuant to a prospectus supplement dated February 7, 2025. The offering of shares pursuant to the ATM Agreement will terminate on the earlier of (1) the sale, pursuant to the ATM Agreement, of shares having an aggregate offering price of $7,700,000 and (2) the termination of the ATM Agreement by either the Company or Wainwright, as set forth therein. During the three months ended March 31, 2025, pursuant to the ATM Agreement, the Company issued an aggregate of 927,968 shares of its common stock for net proceeds of $1,441,964. During the three months ended June 30, 2025, pursuant to the ATM Agreement, the Company issued an aggregate of 88,312 shares of its common stock for net proceeds of $96,641.

2018 Equity Incentive Plan

On May 4, 2018, the Company’s board of directors adopted the Hoth Therapeutics, Inc. 2018 Equity Incentive Plan (the “2018 Plan”) initially reserving 40,000 shares of the Company’s common stock for issuance thereunder. The 2018 Plan became effective on May 14, 2018 upon written approval of the 2018 Plan by shareholders holding a majority of the Company’s voting capital.

The compensation committee of the board of directors increased the number of shares reserved pursuant to the 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. On January 4, 2024, the compensation committee of the board of directors further increased the number of shares reserved for issuance under the 2018 Plan from 166,878 shares to 176,878 shares. On January 6, 2025, the compensation committee of the board of directors further increased the number of shares reserved for issuance under the 2018 plan from 176,878 shares to 186,878 shares. As of June 30, 2025, there were 738 shares of Company common stock available for grant under the 2018 Plan.

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.

17

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

On June 2, 2023, the Company’s board of directors approved the Hoth Therapeutics, Inc. Amended and Restated 2022 Omnibus Equity Incentive Plan (the “Amended and Restated 2022 Plan”) which, among other things, increased the number of shares reserved under the plan by 495,317 shares, which Amended and Restated 2022 Plan was approved by stockholders on August 18, 2023.

On May 15, 2024, the Company’s compensation committee recommended, and the board of directors approved an increase to the number of shares of common stock reserved for issuance under the Amended and Restated 2022 Plan by 500,000 shares from 591,317 shares to 1,091,317 shares (“2024 Increase”). The 2024 Increase was approved by shareholders of the Company on August 7, 2024.

On May 9, 2025, the Company’s compensation committee recommended, and the board of directors approved an increase to the number of shares of common stock reserved for issuance under the Amended and Restated 2022 Plan by 2,000,000 shares from 1,091,317 shares to 3,091,317 shares (“2025 Increase”). The 2025 Increase was approved by shareholders of the Company on August 5, 2025.

As of June 30, 2025, there were 1,317 shares of Company common stock available for grant under the Amended and Restated 2022 Plan.

Restricted Stock Awards

A summary of the Company’s restricted stock awards granted under the equity incentive plans during the three months ended June 30, 2025 and 2024 is as follows:

		For the Six Months Ended June 30, 2025								For the Six Months Ended June 30, 2024
		Number of Restricted Stock Awards				Weighted Average Grant Date Fair Value				Number of Restricted Stock Awards				Weighted Average Grant Date Fair Value
Nonvested at beginning of period			—				—				1,693				3.16
Vested			—				—				—				—
Nonvested at end of period			—				—				1,693				3.16

During the six months ended June 30, 2025 and 2024, the Company recognized stock-based compensation of $0 and $665, respectively, in connection with restricted stock awards.

Stock Options

On January 5, 2024, pursuant to and subject to the available number of shares reserved under the Amended and Restated 2022 Plan, the Company issued options to the Company’s employees and directors to purchase up to 450,000 shares of the Company’s common stock at an exercise price of $1.36 per share. The options vested immediately and expire on January 5, 2034. The aggregate grant date fair value of these options was $512,685, which was recorded as stock-based compensation during the three months ended June 30, 2024.

On January 14, 2025, pursuant to and subject to the available number of shares reserved under the 2018 Plan, the Company issued options to the Company’s Chief Executive Officer to purchase up to 93,000 shares of the Company’s common stock at an exercise price of $1.55 per share. Additionally, on January 14, 2025, pursuant to and subject to the available number of shares reserved under the Amended and Restated 2022 Plan, the Company issued options to the Company’s Chief Executive Officer and an employee to purchase up to 77,000 shares of the Company’s common stock at an exercise price of $1.55 per share. The options vested immediately in full upon grant and expire on January 14, 2035. The aggregate grant date fair value of these options was $219,929, which was recorded as stock-based compensation in January 2025.

The fair value of option grants was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

		Six Months Ended June 30,
		2025				2024
Exercise price		$	1.55			$	1.36
Term (years)			5.0				5.0
Expected stock price volatility			118.32	%			120.00	%
Risk-free rate of interest			4.59	%			4.02	%

18

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

A summary of option activity under the Company’s equity incentive plans for the six months ended June 30, 2025 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, 2024			1,090,362			$	4.78			$	—				9.1
Employee options issued			170,000				1.55				—				—
Outstanding as of June 30, 2025			1,260,362			$	4.34			$	196,390				8.7
Options vested and exercisable as of June 30, 2025			1,260,362			$	4.34			$	196,390				8.7

A summary of stock options outstanding at June 30, 2025 by price range is as follows:

		Options outstanding and exercisable
Range of Exercise Prices		Number of Shares				Weighted Average Remaining Contractual Life (in years)				Weighted Average Exercise Price
Up to $2.59			1,183,000				8.8			$	1.24
$14.75 to $76.25			62,562				6.2			$	32.95
Above $76.25			14,800				4.5			$	131.50
Options outstanding and exercisable as of June 30, 2025			1,260,362				8.7			$	4.34

All stock compensation associated with the amortization of employee stock option expense was recorded as a component of general and administrative expenses in the unaudited 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, 2025 and 2024 was as follows:

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Employee stock option awards		$	—			$	—			$	219,929			$	512,685
Non-employee restricted stock awards			—				665				—				1,330
Non-employee stock warrant awards			55,525				6,389				55,525				6,389
		$	55,525			$	7,054			$	275,454			$	520,404

For the three and six months ended June 30, 2025 and 2024, the amount of stock-based compensation expense included within research and development, professional fees and general and administrative expenses was as follows:

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Research and development		$	—			$	6,389			$	—			$	6,389
Professional fees			55,525				—				55,525				—
General and administrative			—				665				219,929				514,015
		$	55,525			$	7,054			$	275,454			$	520,404

19

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

NOTE 6 – Commitments and Contingencies

Office Lease

Effective November 2023, the Company leased office space for a two-year term. The Company’s office lease contained a renewal option. The Company evaluated several factors in assessing whether there is reasonable certainty that the Company will exercise its contractual renewal option concluding that it is not reasonably certain to exercise such option. As it is not reasonably certain to be exercised, the Company excluded the renewal term in determining the lease term used in calculating the ROU asset and lease liability. In December 2024, the landlord notified the Company that it will be closing its operations at the Company’s location and offered to relocate the Company to a new location. The Company agreed to relocate and accordingly, on December 9, 2024, the Company and the landlord entered into a new lease agreement (the “December 2024 Lease”). Pursuant to the December 2024 Lease, effective December 20, 2024, the Company leased office space for a term of 14 months, expiring on February 28, 2026. Pursuant to the December 2024 Lease, the Company is required to pay a monthly base rent of $2,732 from March 1, 2025 through February 2026. In connection with December 2024 Lease, in December 2024, the Company increased ROU assets and lease liabilities by $31,075 and removed all remaining ROU assets and lease liabilities associated with the November 2023 lease.

The table below presents certain information related to the Company’s lease costs, which are included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operation and comprehensive loss.

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Operating lease expense		$	7,124			$	5,615			$	14,539			$	14,232
Short-term lease expense			5,715				5,840				11,375				10,493
Total lease cost		$	12,839			$	11,455			$	25,914			$	24,725

ROU asset for operating leases was recorded in the condensed consolidated balance sheets as follows:

		June 30, 2025				December 31, 2024
Office lease ROU asset		$	31,075			$	31,075
Less: accumulated amortization			(12,994	)			-
Total ROU asset, net		$	18,081			$	31,075

Operating lease liability for operating leases was recorded in the condensed consolidated balance sheets as follows:

		June 30, 2025				December 31, 2024
Current portion of operating lease liability		$	21,326			$	28,366
Long-term portion of operating lease liability			-				2,709
Total operating lease liability		$	21,326			$	31,075

Supplemental cash flow information related to the Company’s leases for the six months ended June 30, 2025 was as follows:

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases		$	2,732

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HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

The weighted-average remaining lease term for the operating lease is 0.67 years and the weighted-average incremental borrowing rate is 10% as of June 30, 2025 and December 31, 2024.

As of June 30, 2025, future annual minimum lease payments required under operating leases are as follows:

2025 (remainder of year)		$	16,392
2026			5,750
Total minimum lease payments			22,142
Less: effects of discounting			(816	)
Present value of future minimum lease payments		$	21,326

Other

On December 23, 2024, the Company provided notice to Isoprene Pharmaceutical, Inc. (“Isoprene”) of its intent to terminate the exclusive license agreement (the “Isoprene Agreement”) by and between the Company and Isoprene dated July 2, 2021. The Isoprene Agreement terminated on March 23, 2025.  

NOTE 7 – Subsequent Events

The Company has evaluated subsequent events and transactions that occurred up to the date the unaudited condensed consolidated financial statements were issued. Based upon this review, except for as noted below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.

On May 9, 2025, the Company’s compensation committee recommended, and the board of directors approved, an increase to the number of shares of common stock reserved for issuance under the Amended and Restated 2022 Plan by 2,000,000 shares from 1,091,317 shares to 3,091,317 shares. The 2025 Increase was approved by shareholders of the Company on August 5, 2025.

21

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, 2024 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); and (iii) 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 obesity, and obesity-related diseases and conditions (HT-VA).

Results of Operations

Comparison of Our Results of Operations for the Three Months Ended June 30, 2025 and 2024

Operating Costs and Expenses

Research and Development Expenses

For the three months ended June 30, 2025, research and development expenses were approximately $1.0 million. Specifically, during the three months ended June 30, 2025, 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 and clinical activities; and (ii) HT-KIT, approximately $0.3 million related to manufacturing and preclinical activities. In addition to the foregoing, we also incurred fees of approximately $31,000 payable to members of our scientific advisory board for services. 

For the three months ended June 30, 2024, research and development expenses were approximately $0.6 million, of which approximately $4,000 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, 2024, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) HT-001, approximately $437,000 related to manufacturing, preclinical and clinical activities; (ii) HT-KIT, approximately $133,000 related to manufacturing and preclinical activities; and (iii) HT-004, approximately $26,000 in sponsored research activities. In addition to the foregoing, we also incurred fees of approximately $37,000 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 clinical 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.

22

General and Administrative Expenses

For the three months ended June 30, 2025, general and administrative expenses amounted to approximately $1.2 million as compared to approximately $1.1 million for the three months ended June 30, 2024, a decrease of approximately $81,000, or 7.5%. For the three months ended June 30, 2025 and 2024, general and administrative expenses consisted of the following (rounded to the nearest $1,000):

		Three Months Ended June 30,
		2025				2024
Compensation and related expenses		$	358,000			$	369,000
Professional and consulting expenses			581,000				403,000
Rent expense			13,000				11,000
Other general and administrative expenses			208,000				296,000
Total		$	1,160,000			$	1,079,000

During the three months ended June 30, 2025, the increase in general and administrative expenses of approximately $81,000 was primarily attributed to an increase in rent expense of $2,000, and professional and consulting expenses of approximately $178,000 which was primarily attributable to an increase in legal and consulting fees of approximately $64,000, an increase in accounting fees of approximately $50,000, an increase in stock-based professional fees of $56,000 and an increase in directors fees of $8,000. These increases were offset by a decrease in compensation and related expenses of approximately $11,000 attributable to a decrease in bonus expense of approximately $17,000, offset by an increase in compensation and related benefits of approximately $6,000. Additionally, we reflected a decrease in other general and administrative expenses of approximately $88,000 attributable to a decrease in conference expense of approximately $154,000, offset by an increase in travel expenses of approximately $42,000 and an increase in other general and administrative expenses of approximately $24,000.

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.

Other Income, net

For the three months ended June 30, 2025, other income, net was approximately $170, which resulted from $170 of interest income.

For the three months ended June 30, 2024, other income, net was approximately, which $13,400 resulted from $13,400 of interest income.

Net Loss

For the three months ended June 30, 2025 and 2024, we incurred a net loss of approximately $2.2 million, or $0.17 per common share (basic and diluted), and $1.7 million, or $0.25 per common share (basic and diluted), respectively.

23

Comparison of Our Results of Operations for the Six Months Ended June 30, 2025 and 2024

Operating Costs and Expenses

Research and Development Expenses

For the six months ended June 30, 2025, research and development expenses were approximately $3.0 million. Specifically, during the six months ended June 30, 2025, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) HT-001, approximately $1.1 million related to manufacturing and clinical activities; (ii) HT-KIT, approximately $0.5 million related to manufacturing and preclinical activities; and (iii) HT-ALZ, approximately $12,000 related to preclinical studies. In addition to the foregoing, we also incurred fees of approximately $69,000 payable to members of our scientific advisory board for services and recorded approximately $1.3 million of in-process research and development expenses in connection with the acquisition of patent applications. 

For the six months ended June 30, 2024, research and development expenses were approximately $1.2 million, of which approximately $13,000 was related to licenses acquired and approximately $1.2 million was related to other research and development expenses. Specifically, during the six months ended June 30, 2024, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) HT-001, approximately $824,000 related to manufacturing, preclinical and clinical activities; (ii) HT-ALZ, approximately $16,000 related to preclinical studies; (iii) HT-KIT, approximately $209,000 related to manufacturing and preclinical activities; and (iv) HT-004, approximately $77,000 in sponsored research activities. In addition to the foregoing, we also incurred fees of approximately $75,000 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 clinical 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.

General and Administrative Expenses

For the six months ended June 30, 2025 and 2024, general and administrative expenses amounted to approximately $2.7 million and $2.7 million, respectively. For the six months ended June 30, 2025 and 2024, general and administrative expenses consisted of the following (rounded to the nearest $1,000):

		Six Months Ended June 30,
		2025				2024
Compensation and related expenses		$	1,008,000			$	1,217,000
Professional and consulting expenses			1,252,000				957,000
Rent expense			26,000				25,000
Other general and administrative expenses			391,000				469,000
Total		$	2,677,000			$	2,668,000

24

During the six months ended June 30, 2025, the increase in general and administrative expenses of approximately $9,000 was primarily attributed to an increase in professional and consulting expenses of approximately $295,000, primarily attributable to an increase in legal and consulting fees, accounting fees, and stock-based professional fees. These increases were offset by a decrease in compensation and related expenses of approximately $209,000, attributable to a decrease in stock-based compensation of approximately $293,000 related to the issuance of stock options to executives and board members and an increase in compensation and related benefits of approximately $84,000. Additionally, we had a decrease in other general and administrative expenses of approximately $78,000.

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.

Other Income, net

For the six months ended June 30, 2025, other income, net was $354, which resulted from $354 of interest income.

For the six months ended June 30, 2024, other income, net was approximately $27,000, which primarily resulted from approximately $27,300 of interest income, offset by a change in fair value of investment in joint venture of approximately $581.

Net Loss

For the six months ended June 30, 2025 and 2024, we incurred a net loss of approximately $5.7 million, or $0.44 per common share (basic and diluted), and $3.9 million, or $0.68 per common share (basic and diluted), respectively.

Liquidity and Capital Resources 

To date we have funded our operations primarily through the sale of equity and debt securities. As of June 30, 2025, we had approximately $9.0 million in cash and cash equivalents, working capital of approximately $9.7 million and an accumulated deficit of approximately $66.1 million. Net cash used in operating activities was approximately $5.2 million and $3.3 million for the six months ended June 30, 2025 and 2024, respectively. We incurred net losses of approximately $5.7 million and $3.9 million for the six months ended June 30, 2025 and 2024, 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, 2025 will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the date that our unaudited condensed consolidated financial statements are available to be issued.

During the six months ended June 30, 2025, we issued 3,750,000 shares of our common stock upon the exercise of the 3,750,000 warrants issued in April 2024 for gross proceeds of approximately $5.6 million.

25

On November 8, 2024, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) under which we could offer and sell shares of our common stock having an aggregate sales price of up to $2,700,000 through Wainwright as the sales manager pursuant to our effective shelf registration statement on Form S-3 (File No. 333-272620), including an accompanying base prospectus and a prospectus supplement dated November 8, 2024. Sales of shares of the Company’s common stock through Wainwright, if any, will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. Wainwright will use commercially reasonable efforts to sell shares of the Company’s common stock from time to time, based on instructions from us (including any price, time or size limits or other parameters or conditions we may impose). We will pay Wainwright a commission equal to 3.0% of the aggregate gross proceeds from the sales of shares of the Company’s common stock sold through Wainwright under the ATM Agreement and will also reimburse Wainwright for certain specified expenses in connection with the ATM Agreement. On February 7, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $5,000,000 pursuant to a prospectus supplement dated February 7, 2025. The offering of shares pursuant to the ATM Agreement will terminate on the earlier of (1) the sale, pursuant to the ATM Agreement, of shares having an aggregate offering price of $7,700,000 and (2) the termination of the ATM Agreement by either us or Wainwright, as set forth therein. During the six months ended June 30, 2025 we issued 86,280 shares of our common stock for net proceeds of approximately $0.1 million pursuant to the ATM Agreement.

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 $36 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, 2025, net cash used in operating activities was approximately $5.2 million, which primarily resulted from a net loss of approximately $5.7 million, an increase in prepaid expenses and other current assets of approximately $0.2 million and a decrease in accounts payable and accrued expenses of approximately $0.5 million, offset by approximately $0.9 million of non-cash research and development-acquired patent, and $0.3 million in stock-based compensation and professional fees.

For the six months ended June 30, 2024, net cash used in operations was approximately $3.3 million, which primarily resulted from a net loss of approximately $3.9 million, adjusted for the add back of stock-based compensation of approximately $0.5 million, and changes in operating assets and liabilities consisting of an increase in prepaid expenses and other current assets of approximately $0.1 million.

26

Cash Flows from Investing Activities

The Company did not have any cash flows from investing activities for the six months ended June 30, 2025 or 2024.

Cash Flows from Financing Activities

For the six months ended June 30, 2025, net cash provided by financing activities was approximately $7.1 million, which primarily resulted from net proceeds from the issuance of common stock of approximately $1.5 million and proceeds from the exercise of warrants of approximately $5.6 million.

For the six months ended June 30, 2024, net cash provided by financing activities was approximately $3.7 million, which resulted from net proceeds from the exercise of warrants.

Critical Accounting Estimates

The preparation of consolidated 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 a 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 unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for an additional discussion of our significant accounting policies.

Stock-based compensation

The Company accounts for stock-based payment awards exchanged for services at the estimated grant date fair value of the award. Stock options issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and expire up to ten years from the date of grant. Options are generally issued fully vested. The Company accounts for forfeited awards as they occur.

The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment.

27

Expected Term - The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding based on the simplified method, which is the half-life from vesting to the end of its contractual term.

Expected Volatility - The Company computes stock price volatility over expected terms based on its historical common stock trading prices.

Risk-Free Interest Rate - The Company bases the risk-free interest rate on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term.

Expected Dividend - The Company has never declared or paid any cash dividends on its common shares and does not plan to pay cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models. 

The Company grants restricted stock awards under its equity incentive plan. Restricted stock awards are granted to employees and non-employees. The restricted stock awards are measured based on the grant-date fair value. In general, the restricted stock awards vest over a service period of zero to three years. Stock-based compensation expense is generally recognized based on the straight-line basis over the requisite service period and forfeitures are accounted for as they occur.

The Company has issued warrants to non-employees. The warrants are measured based on the grant-date fair value. In general, the warrants vest over a term of zero to ten years. Stock-based compensation expense is generally recognized based on the straight-line basis over the vesting term.

Income taxes

Income taxes are recorded in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes (“ASC 740”) which provides for deferred taxes using an asset and liability approach. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our unaudited condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between our 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.

We account for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, we recognize the tax benefit of tax positions to the extent that the benefit would more likely than not be realized. 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. 

Recently Adopted Accounting Standards

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on its consolidated financial statements.

28

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 management, with the participation of our  principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2025, the end of the period covered by this Quarterly Report on Form 10-Q. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, as a result of the material weaknesses in our internal control identified below, our disclosure controls and procedures were not effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. 

Identified Material Weakness

In connection with the audit of our financial statements as of December 31, 2024 for the years ended December 31, 2024 and 2023, we identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness that we have identified related to the proper classification of prepaid expenses and other current assets and research and development expenses, which impacted our previously issued consolidated financial statements as of and for the year ended December 31, 2023, and our previously issued unaudited condensed consolidated financial statements as of March 31, 2024 and 2023, June 30, 2024 and 2023 and September 30, 2024 and 2023, and for the three months ended March 31, 2024 and 2023, three and six months ended June 30, 2024 and 2023, and three and nine months ended September 30, 2024 and 2023.

Remediation Plan

Our management, with the oversight of the Audit Committee of the board of directors, has updated our internal processes and controls to strengthen their effectiveness and developed a remediation plan which includes the following actions:

	●	Enhance our review procedures over significant contracts with contract research and clinical studies organizations; and
	●	Strengthen our review process.

We will not be able to conclude whether the actions we are taking will fully remediate the material weakness in our internal control over financial reporting until the updated controls have operated for a sufficient period of time and management has concluded, through testing, that such controls are operating effectively. We may also conclude that additional measures may be required to remediate the material weakness in our internal control over financial reporting, which may necessitate further action.

Changes in Internal Control Over Financial Reporting

Other than as described above, there have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We are taking actions to remediate the material weakness described above, which may result in changes in our internal control over financial reporting in periods subsequent to June 30, 2025.

29

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, 2024 as filed with the SEC on March 28, 2025 (“Annual Report”). Except as set forth herein, there have been no material changes in our risk factors from those previously disclosed in our Annual Report. You should carefully consider the risks in our Annual Report as supplemented by the risk factors set forth herein which could materially affect our business, financial condition or future results. The risks in our Annual Report and this Quarterly Report on Form 10-Q 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.

Current and future legislation and other regulatory reform measures may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates, affect the prices we may obtain for such product candidates and may have a negative impact on our business and results of operations.

In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval for our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell our product candidates. Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We do not know whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.

In the United States, the Medicare Modernization Act (“MMA”) changed the way Medicare covers and pays for pharmaceutical products. The legislation expanded Medicare coverage for drug purchases by the elderly and introduced a new reimbursement methodology based on average sales prices for drugs. In addition, this legislation authorized Medicare Part D prescription drug plans to use formularies where they can limit the number of drugs that will be covered in any therapeutic class. As a result of this legislation and the expansion of federal coverage of drug products, we expect that there will be additional pressure to contain and reduce costs. These cost reduction initiatives and other provisions of this legislation could decrease the coverage and price that we receive for our product candidates and could seriously harm our business. While the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates, and any reduction in reimbursement that results from the MMA may result in a similar reduction in payments from private payors.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (collectively, the “Health Care Reform Law”) is a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms. The Health Care Reform Law revised the definition of “average manufacturer price” for reporting purposes, which could increase the amount of Medicaid drug rebates to states. Further, the law imposed a significant annual fee on companies that manufacture or import branded prescription drug products.

The Health Care Reform Law remains subject to legislative efforts to repeal, modify or delay the implementation of the law. However, if the Health Care Reform Law is repealed or modified, or if implementation of certain aspects of the Health Care Reform Law are delayed, such repeal, modification or delay may materially adversely impact our business, strategies, prospects, operating results or financial condition. We are unable to predict the full impact of any repeal, modification or delay in the implementation of the Health Care Reform Law on us at this time. Due to the substantial regulatory changes that will need to be implemented by the Centers for Medicare & Medicaid Services and others, and the numerous processes required to implement these reforms, we cannot predict which healthcare initiatives will be implemented at the federal or state level, the timing of any such reforms, or the effect such reforms or any other future legislation or regulation will have on our business.

In addition, other legislative changes have been proposed and adopted in the United States since the Health Care Reform Law was enacted. We expect that additional federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, and in turn could significantly reduce the projected value of certain development projects and reduce or eliminate our profitability.

Furthermore, on July 4, 2025, the “One Big Beautiful Bill Act” (“OBBBA”) was signed into law which is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing Federal funding, and limiting provider taxes used to fund the program. OBBBA also narrows access to Affordable Care Act, marketplace exchange enrollment and declines to extend the Affordable Care Act enhanced advanced premium tax credits, set to expire in 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance. In addition, there have been actions and proposals from the Trump administration that include: reducing agency workforce and cutting programs; directing The U.S. Department of Health and Human Services and other agencies to lower prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing Most-Favored-Nation pricing for pharmaceutical products; imposing tariffs on imported pharmaceutical products; and directing certain federal agencies to enforce existing law regarding hospital and plan price transparency and by standardizing prices across hospitals and health plans. While any proposed measures will require authorization through additional legislation to become effective, Congress and the current administration have each indicated that they will continue to seek new legislative and/or administrative measures to control drug costs. At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or successfully commercialize our drugs. 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On June 4, 2025, the Company issued warrants to purchase up to 300,000 shares of the Company’s common stock at an exercise price of $1.00 per share to a consultant for investor relations services. The warrants expire on June 4, 2027 and were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Plans

During the fiscal quarter ended June 30, 2025, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

30

ITEM 6. EXHIBITS

Exhibit No.		Description
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File - the cover page from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 is formatted in Inline XBRL

* Filed herewith.

** Furnished herewith.

31

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 12, 2025	By:	/s/ Robb Knie
		Robb Knie,
		Chief Executive Officer
		(Principal Executive Officer)
Date: August 12, 2025	By:	/s/ David Briones
		David Briones,
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

32

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FAQ

How much cash did Hoth Therapeutics (HOTH) have as of June 30, 2025?

As of June 30, 2025, Hoth Therapeutics reported $9,014,108 in cash and cash equivalents.

What was Hoth Therapeutics' net loss for the six months ended June 30, 2025?

The company recorded a six-month net loss of $5,675,312 for the period ended June 30, 2025.

Did Hoth Therapeutics raise capital during the period?

Yes. Net cash provided by financing activities was $7,133,065, including $5,625,000 from warrant exercises and proceeds from share issuances.

What one-time or significant charges affected R&D expense this period?

The company expensed $1,250,500 for acquired patent applications during the six months ended June 30, 2025.

How many shares were outstanding as of the most recent available date?

The number of common shares outstanding at August 11, 2025 was 13,259,027.

Does management believe the company has sufficient runway?

Management stated that current cash is sufficient to fund operations for at least the next 12 months from the issuance date of these financial statements.