Hoth Therapeutics Inc

Previous wording

For the three months ended March 31, 2023, research and development expenses were approximately $0.9 million, of which approximately $48,000 was related to licenses acquired and approximately $0.9 million was related to other research and development expenses. Specifically, during the quarter ended March 31, 2023, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) BioLexa, approximately $13,000 related to manufacturing costs; (ii) HT-001, approximately $0.6 million related to manufacturing, preclinical and clinical activities; and (iii) HT-KIT, approximately $0.2 million related to manufacturing and preclinical activities. In addition to the foregoing, we also incurred fees of approximately $57,000 payable to members of our scientific advisory board for services.

Current wording

For the three months ended June 30, 2023, research and development expenses were approximately $0.7 million, of which approximately $11,000 was related to licenses acquired and approximately $0.6 million was related to other research and development expenses. Specifically, during the quarter ended June 30, 2023, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) BioLexa, approximately $13,000 related to manufacturing costs; (ii) HT-001, approximately $0.6 million related to manufacturing, preclinical and clinical activities; and (iii) HT-KIT, approximately $0.2 million related to manufacturing and preclinical activities. In addition to the foregoing, we also incurred fees of approximately $57,000 payable to members of our scientific advisory board for services.

Previous wording

For the three months ended March 31, 2024 and 2023, we incurred a net loss of approximately $2.0 million, or $0.46 per common share (basic and diluted), and $2.2 million, or $0.88 per common share (basic and diluted), respectively, a decrease of approximately $0.1 million.

Current wording

For the three months ended June 30, 2024 and 2023, we incurred a net loss of approximately $1.6 million, or $0.24 per common share (basic and diluted), and $1.9 million, or $0.57 per common share (basic and diluted), respectively, a decrease of approximately $0.3 million.

Previous wording

For the three months ended March 31, 2024, research and development expenses were approximately $0.4 million, of which approximately $3,000 was related to licenses acquired and approximately $0.5 million was related to other research and development expenses. Specifically, during the quarter ended March 31, 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 $281,000 related to manufacturing, preclinical and clinical activities; (ii) HT-ALZ, approximately $16,000 related to preclinical studies; (iii) HT-KIT, approximately $77,000 related to manufacturing and preclinical activities; and (iv) HT-004, approximately $51,000 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.

Current wording

For the six months ended June 30, 2024, research and development expenses were approximately $1.0 million, of which approximately $13,000 was related to licenses acquired and approximately $1.0 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 $641,000 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.

Previous wording

During the three months ended March 31, 2024, we incurred General and Administrative Expenses of approximately $1.6 million as compared to approximately $1.3 million during the three months ended March 31, 2023, an increase of approximately $300,000. The increase was primarily attributed to an increase in stock-based compensation of approximately $500,000 related to the issuance stock options to executives and board of director members, offset by a decrease in other compensation and related expenses of approximately $100,000, a decrease in professional fees of approximately $60,000, and a reduction in other general and administrative expenses.

Current wording

During the six months ended June 30, 2024, the increase in general and administrative expenses of approximately $357,000 was primarily attributed to an increase other general and administrative expenses of approximately $38,000 and an increase in compensation and related expenses of approximately $403,000, which consisted of an increase in stock-based compensation of approximately $510,000 related to the issuance of stock options to executives and board of director members, offset by a decrease in other compensation and related expenses of approximately $107,000, and a decrease in professional and consulting expenses of approximately $84,000.

Previous wording

To date we have funded our operations primarily through the sale of equity and debt securities. As of March 31, 2024, we had approximately $7.6 million in cash and cash equivalents, working capital of approximately $7.8 million and an accumulated deficit of approximately $55.0 million. Net cash used in operating activities was $1.7 million and $2.3 million for the three months ended March 31, 2024 and 2023, respectively. We incurred net losses of approximately $2.0 million and $2.2 million for the three months ended March 31, 2024 and 2023, 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 March 31, 2024 will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the date of this Quarterly Report on Form 10-Q.

Current wording

To date we have funded our operations primarily through the sale of equity and debt securities. As of June 30, 2024, we had approximately $9.7 million in cash and cash equivalents, working capital of approximately $9.3 million and an accumulated deficit of approximately $56.6 million. Net cash used in operating activities was $3.3 million and $3.7 million for the six months ended June 30, 2024 and 2023, respectively. We incurred net losses of approximately $3.7 million and $4.1 million for the six months ended June 30, 2024 and 2023, 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, 2024 will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the date of this Quarterly Report on Form 10-Q.

Previous wording

On April 1, 2024, in connection with a March 27, 2024 inducement offer agreement with a holder (the “Holder”) of certain of its existing warrants (“January 2023 Existing Warrants”) to immediately exercise for cash an aggregate 2,500,000 January 2023 Existing Warrants to purchase shares of the Company’s common stock at a reduced exercise price of $1.6775 per share, we were to issue up to 2,500,000 shares (the “Warrant Shares”) of our common stock upon the exercise of the 2,500,000 January 2023 Existing Warrants for net proceeds of approximately $3.8 million, after deducting placement agent fees and other offering expenses of approximately $0.4 million. In accordance with the terms of the inducement offer agreement, we shall only issue 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 to be held in abeyance until notice from the Holder that the balance (or portion thereof) may be issued in compliance with the limitations set forth in the inducement offer agreement, which abeyance shall be evidenced through the January 2023 Existing Warrants which shall be 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 shall be due and payable). As of April 1, 2024, the Company issued 485,000 common shares to the Holder and 2,015,000 shares are held in abeyance for future issuance.

Current wording

On April 1, 2024, in connection with a March 27, 2024 inducement offer agreement with a holder (the “Holder”) of certain of our existing warrants (“January 2023 Existing Warrants”) to immediately exercise, for cash, an aggregate 2,500,000 January 2023 Existing Warrants to purchase shares of our common stock at a reduced exercise price of $1.6775 per share, we were to issue up to 2,500,000 shares (the “Warrant Shares”) of our common stock upon the exercise of the 2,500,000 January 2023 Existing Warrants for net proceeds of approximately $3.8 million, after deducting placement agent fees and other offering expenses of approximately $0.4 million. As of June 30, 2024, 1,545,000 of the 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, we 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) may be issued in compliance with the limitations set forth in the inducement offer agreement, which abeyance shall be evidenced through the January 2023 Existing Warrants which shall be 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 shall be due and payable). As of June 30, 2024, we 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 Company issued the remaining 1,545,000 Warrant Shares being held in abeyance.

Previous wording

As an inducement to such exercise, the Company issued new unregistered warrants to the warrant holder to purchase up to 3,750,000 shares of the Company’s common stock at an exercise price of $1.50 per share. The warrants are exercisable immediately upon issuance and will expire on July 3, 2028. Additionally, in connection with this exercise, the Company issued 125,000 placement agent warrants at an exercise price of $2.0969 per share. The placement agent warrants are exercisable immediately upon issuance and will expire on July 3, 2028.

Current wording

As an inducement to such exercise, we issued new unregistered warrants to the warrant holder to purchase up to 3,750,000 shares of our common stock at an exercise price of $1.50 per share. The warrants are exercisable immediately upon issuance and will expire on July 3, 2028. Additionally, in connection with this exercise, we issued 125,000 placement agent warrants at an exercise price of $2.0969 per share. The placement agent warrants are exercisable immediately upon issuance and will expire on July 3, 2028.

Previous wording

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.

Current wording

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, entering into strategic partnerships, grants or other 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.

Previous wording

For the three months ended March 31, 2024, net cash used in operations was approximately $1.7 million, which primarily resulted from a net loss of approximately $2.0 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 $158,000 and a net decrease in accounts payable and accrued expenses of approximately $39,000.

Current wording

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 $3.7 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.

Previous wording

For the three months ended March 31, 2023, net cash used in operations was approximately $2.3 million, which primarily resulted from a net loss of approximately $2.2 million.

Current wording

For the six months ended June 30, 2023, net cash used in operations was approximately $3.7 million, which primarily resulted from a net loss of approximately $4.1 million.

Previous wording

For the three months ended March 31, 2024 and 2023, there was no net cash provided by investing activities.

Current wording

For the six months ended June 30, 2024 and 2023, there was no net cash provided by or used in investing activities.

Previous wording

For the three months ended March 31, 2023, net cash provided by financing activities was approximately $8.9 million, which primarily resulted from net proceeds from the issuance of common stock and warrants.

Current wording

For the six months ended June 30, 2023, net cash provided by financing activities was approximately $8.9 million, which primarily resulted from net proceeds from the issuance of common stock and warrants.

Previous wording

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:

Current wording

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:

Previous wording

See Note 2 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a discussion of our significant accounting policies.

Current wording

See Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a discussion of our significant accounting policies.

Previous wording

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying condensed consolidated financial statements.

Current wording

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying unaudited condensed consolidated financial statements.

Previous wording

Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions, including, without limitation, (i) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of our initial public offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

Current wording

Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions, including, without limitation, (i) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of our initial public offering, which would be December 31, 2024; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.