Rocket One Inc.
For the period ended Dec 31, 2024. Filed Mar 28, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 28, 2025
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31,2024
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 001-38803
HOTH THERAPEUTICS, INC.
(Exact name of registrant as specified in charter)
| Nevada | 82-1553794 |
|---|---|
| (State or other jurisdiction of incorporation or organization) | I.R.S. Employer Identification No. |
| 1177 Avenue of the Americas, 5th Floor, Suite 5066, New York, New York | 10036 |
|---|---|
| (Address of principal executive offices) | (Zip code) |
(646) 756-2997
(Registrant’s telephone number, including area code)
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, par value $0.0001 per share | HOTH | The Nasdaq Stock Market LLC |
Securities registered pursuant to Section 12(g) of the Act:None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No ☒
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 definition 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☒
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act) Yes ☐ No☒
The aggregate market value of the voting stock and non-voting common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter ended June 30, 2024 was approximately $4.9 million based upon the closing price of the registrant’s common stock of $0.9258 on The Nasdaq Capital Market as of June 28, 2024.
As of March 28, 2025, there were 13,170,715 shares of the Registrant’s common stock, par value $0.0001 per share, outstanding.
Documents Incorporated by Reference: None.
Table of Contents
| Part I | 1 | |
|---|---|---|
| Item 1. | Business | 1 |
| Item 1A. | Risk Factors | 10 |
| Item 1B. | Unresolved Staff Comments | 41 |
| Item 1C. | Cybersecurity | 41 |
| Item 2. | Properties | 41 |
| Item 3. | Legal Proceedings | 41 |
| Item 4. | Mine Safety Disclosures | 41 |
| Part II | 42 | |
| Item 5. | Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 42 |
| Item 6. | [Reserved] | 42 |
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 43 |
| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | 47 |
| Item 8. | Financial Statements and Supplementary Data | F-1 |
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 48 |
| Item 9A. | Controls and Procedures | 48 |
| Item 9B. | Other Information | 49 |
| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 49 |
| Part III | 50 | |
| Item 10. | Directors, Executive Officers and Corporate Governance | 50 |
| Item 11. | Executive Compensation | 54 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 59 |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 60 |
| Item 14. | Principal Accountant Fees and Services | 62 |
| Part IV | 63 | |
| Item 15. | Exhibit and Financial Statement Schedules | 63 |
| Signatures | 68 |
i
Explanatory Note
Restatement of Previously Issued Annual and Quarterly Consolidated Financial Statements
As previously disclosed in a Current Report on Form 8-K filed by Hoth Therapeutics, Inc. (the “Company”) with the Securities and Exchange Commission (“SEC”) on March 25, 2025, certain of the Company’s previously filed interim unaudited and annual audited consolidated financial statements should no longer be relied upon and a restatement is required for these previously issued consolidated financial statements. During the preparation of our 2024 audited consolidated financial statements and notes thereto, we concluded that there were material errors related to recording of prepaid research and development and the timing of the related research and development expense in our previously issued audited consolidated financial statements as of and for the year ended December 31, 2023, and in our previously issued unaudited condensed consolidated financial statements as of and for each of the quarterly and year to date periods ended March 31, 2024 and 2023, June 30, 2024 and 2023, and September 30, 2024 and 2023. As a result of such errors, we concluded that the issued audited consolidated financial statements and unaudited condensed consolidated financial statements discussed above were materially misstated, and we have restated, herein, our previously issued audited consolidated financial statement and unaudited condensed consolidated financial statements for each of the quarterly and year to date periods ended March 31, 2024 and 2023, June 30, 2024 and 2023, and September 30, 2024 and 2023. The December 31, 2022 understatement of prepaid expenses and other current assets of $983,497 was corrected by increasing prepaid expenses and other current assets and decreasing accumulated deficit as of December 31, 2022 by $983,497, as reflected of the consolidated statements of changes in stockholders’ equity as of December 31, 2022.
The restatement corrections impact certain components within operating cash flows of our audited consolidated financial statements and unaudited condensed consolidated statements of cash flows. Total operating cash flows, investing activities, financing activities, and cash and cash equivalents are unchanged as a result of the restatements and as a result are not restated herein.
In this Annual Report on Form 10-K for the year ended December 31, 2024, we are restating (the “Restatement”) our previously issued (A) (i) audited consolidated balance sheet as of December 31, 2023, (ii) consolidated statement of operations and comprehensive loss for the year ended December 31, 2023 and (iii) consolidated statement of cash flows for the years ended December 2023, which are included in the Annual Report on Form 10-K for the year ended December 31, 2023 (collectively, the “Prior Annual Financial Statements”), and (B) (i) unaudited condensed consolidated balance sheets as of March 31, 2024 and 2023, June 30, 2024 and 2023, and September 30, 2024 and 2023, (ii) unaudited condensed consolidated statements of operations and comprehensive loss 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, and (iii) unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023, six months ended June 30, 2024 and 2023, and nine months ended September 30, 2024 and 2023, which are included in each of the Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2024 and 2023, June 30, 2024 and 2023, and September 30, 2024 and 2023 (collectively, the “Prior Quarterly Financial Statements”).
The financial information that was previously filed or otherwise reported for the Prior Quarterly Financial Statements is superseded by the information in this Annual Report on Form 10-K, Note 8 - Restatement of Previously Issued Audited Consolidated Financial Statements and Unaudited Condensed Financial Statements. We have not filed and do not intend to file amendments to our Annual Report of Form 10-K and Quarterly Reports on Form 10-Q for any of the annual and quarterly periods in fiscal years 2024 and 2023. Accordingly, investors should rely only on the restated consolidated financial statements and related disclosures included in this Annual Report on Form 10-K for the year ended December 31, 2024 for the applicable periods or in future filings with the SEC (as applicable), and not on any previously issued or filed reports, earnings releases or similar communications including the consolidated financial statements.
Internal Control Considerations
In connection with the Restatement described above, management has determined that there was a material weakness in the Company’s operation of effective internal control over financial reporting related to the recording of prepaid research and development and the related timing of research and development expenses as of and for the periods indicated above. For a discussion of management’s considerations of the Company’s disclosures controls and procedures, internal controls over financial reporting, and the material weakness identified, see “Controls and Procedures” in Part II, Item 9A in this Annual Report on Form 10-K for the year ended December 31, 2024.
ii
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains certain forward-looking statements within the meaning 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 Annual Report on Form 10-K 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 “believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” 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. Forward-looking statements are not guarantees of performance. 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.
Any forward-looking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10-K. Some of the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, but are not limited to:
| ● | our business strategies; |
| ● | the timing of regulatory submissions; |
| ● | our ability to obtain and maintain regulatory approval of our existing product candidates and any other product candidates we may develop, and the labeling under any approval we may obtain; |
| ● | risks relating to the timing and costs of clinical trials and the timing and costs of other expenses; |
| ● | risks related to market acceptance of products; |
| ● | the ultimate impact of any 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; |
| ● | 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 and geopolitical conditions; and |
| ● | our cash needs and financing plans. |
The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forward-looking statements. You should read this Annual Report on Form 10-K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10-K, completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the information appearing in this Annual Report on Form 10-K is accurate as of the date hereof. Because the risk factors referred to on page 10 of the Annual Report on Form 10-K could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the information presented in this Annual Report on Form 10-K, and particularly our forward-looking statements, by these cautionary statements.
iii
RISK FACTOR SUMMARY
Our business is subject to significant risks and uncertainties that make an investment in us speculative and risky. Below we summarize what we believe are the principal risk factors, but these risks are not the only ones we face, and you should carefully review and consider the full discussion of our risk factors in the section titled “Risk Factors,” together with the other information in this Annual Report on Form 10-K. If any of the following risks actually occurs (or if any of those listed elsewhere in this Annual Report on Form 10-K occur), our business, reputation, financial condition, results of operations, revenue, and future prospects could be seriously harmed. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business.
Risks Related to our Financial Position, Financial Reporting Matters and Need for Capital
| ● | We have generated no revenue from commercial sales and our future profitability is uncertain. If we fail to obtain the capital necessary to fund our operations, we will be unable to continue or complete our product development. |
| ● | The Restatement of our financial statements may affect shareholder and investor confidence in us or harm our reputation, and may subject us to additional risks and uncertainties, including increased costs and the increased possibility of legal proceedings and regulatory inquiries, sanctions or investigations. |
Risks Related to Product Development, Regulatory Approval, Manufacturing and Commercialization
| ● | The marketing approval process is lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain marketing approval for the product candidates we intend to develop, our business may be substantially harmed. |
| ● | We may encounter substantial delays in completing our clinical studies which in turn will require additional costs, or we may fail to demonstrate adequate safety and efficacy to the satisfaction of applicable regulatory authorities. If we are not able to obtain any required regulatory approvals for our product candidates, we will not be able to commercialize our product candidates and our ability to generate revenue will be limited. |
| ● | Conducting successful clinical studies may require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit. |
| ● | We rely on and intend to rely on third parties to conduct our clinical trials, to assist us with pre-clinical development and for manufacturing and marketing of our proposed product candidates. If we are not able to secure favorable arrangements with such third parties, or such third parties do not perform as contractually required or expected, we may not be able to obtain regulatory approval for or commercialize our products and our business and financial condition could be harmed. |
| ● | We rely on and intend to rely on third parties to manufacture our clinical product supplies, and to produce and process our product candidates, if approved. Our commercialization of any of our product candidates could be stopped, delayed, or made less profitable if those third parties fail to obtain approval of government regulators, fail to provide us with sufficient quantities of drug products, devices, or device components, or fail to do so at acceptable quality levels or prices. |
| ● | Even if our product candidates are approved by regulatory authorities, if we or our suppliers fail to comply with ongoing U.S. Food and Drug Administration regulations or if we experience unanticipated problems with our products, these products could be subject to restrictions or withdrawal from the market. |
| ● | Our revenue stream will depend upon third-party reimbursement. |
| ● | Our products will face significant competition, and if they are unable to compete successfully, our business will suffer. |
| ● | If we fail to comply with healthcare regulations, we could face substantial enforcement actions, including civil and criminal penalties and our business, operations and financial condition could be adversely affected. |
iv
Risks Related to our Intellectual Property Rights
| ● | Our business depends upon us securing and protecting critical intellectual property. Patent positions in our industry are highly uncertain and involve complex legal and factual questions. |
| ● | We rely upon licenses granted to us by various licensors, and if such licensors do not adequately defend such licenses, our business may be harmed. |
Risks Related to our Company
| ● | We have expanded and may continue to expand our business through the acquisition of rights to new drug candidates that could disrupt our business, harm our financial condition and may also dilute current shareholders’ ownership interests in our Company. |
| ● | If a product liability claim is successfully brought against us for uninsured liabilities, or such claim exceeds our insurance coverage, we could be forced to pay substantial damage awards that could materially harm our business. |
| ● | Significant disruptions of information technology systems or breaches of data security could adversely affect our business |
| ● | Any international operations we undertake may subject us to risks inherent with operations outside of the United States. |
Risks Related to our Common Stock
| ● | Unstable market and economic conditions and adverse developments with respect to financial institutions and associated liquidity risk may have serious adverse consequences on our business, financial condition and stock price. |
| ● | Future sales and issuances of our securities could result in additional dilution of the percentage ownership of our shareholders and could cause our share price to fall. |
| ● | We do not intend to pay cash dividends on our shares of common stock so any returns will be limited to the value of our shares. |
| ● | If we are unable to maintain listing of our securities on The Nasdaq Capital Market (“Nasdaq”) or any stock exchange, our stock price could be adversely affected and the liquidity of our stock and our ability to obtain financing could be impaired. |
| ● | Our Amended and Restated Bylaws provide that the Eighth Judicial District Court of Clark County, Nevada will be the sole and exclusive forum for certain disputes which could limit shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents. |
| ● | We identified a material weakness in our internal control over financial reporting, which resulted in the restatement of certain or our financial statements. If we are unable to remediate this weakness, or if we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately or timely report our financial condition or operating results, which may adversely affect investor confidence in our Company and, as a result, the value of our common stock. |
v
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.