Hoth Therapeutics Inc

Previous wording

For the three months ended June 30, 2024, research and development expenses decreased by approximately $86,000, or 13.2%, as compared to the three months ended June 30, 2023.

Current wording

For the three months ended September 30, 2024, research and development expenses decreased by approximately $77,000, or 7.9%, as compared to the three months ended September 30, 2023.

Previous wording

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 $360,000 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.

Current wording

For the three months ended September 30, 2024, research and development expenses were approximately $0.9 million related to ongoing research and development projects. Specifically, during the quarter ended September 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 $0.6 million related to manufacturing, preclinical and clinical activities; (ii) HT-KIT, approximately $154,300 related to manufacturing and preclinical activities; (iii) HT-004, approximately $18,700 in sponsored research activities; and (iv) HT-ALZ, approximately $96,500 related to manufacturing and preclinical activities. In addition to the foregoing, we also incurred fees of approximately $37,200 payable to members of our scientific advisory board for services.

Previous wording

For the six months ended June 30, 2023, research and development expenses were approximately $1.6 million, of which approximately $0.1 million was related to licenses acquired and approximately $1.5 million was related to other research and development expenses. Specifically, during the six months ended June 30, 2023, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) BioLexa, approximately $40,000 related to manufacturing costs; (ii) HT-001, approximately $1.0 million related to manufacturing, preclinical and clinical activities; and (iii) HT-KIT, approximately $0.2 million related to manufacturing and preclinical activities. In addition to the foregoing, we also incurred fees of approximately $0.1 million payable to members of our scientific advisory board for services. Additionally, our subsidiary, Hoth Therapeutics Australia Pty Ltd, recorded approximately a $260,000 gain due to a settlement agreement on a payable balance with Novotech, a clinical trial management vendor.

Current wording

For the three months ended September 30, 2023, research and development expenses were approximately $1.0 million, of which approximately $1.2 million was related to research and development expenses, with an offsetting gain of approximately $0.3 million related to a gain recognized on the settlement of a license agreement with Virginia Commonwealth University. Specifically, during the quarter ended September 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 $11,000 related to manufacturing costs; (ii) HT-001, approximately $0.4 million related to manufacturing, preclinical and clinical activities; (iii) HT-KIT, approximately $1.0 million related to preclinical activities; and (iv) HT-004, approximately $12,000 related to sponsored research. In addition to the foregoing, we also incurred fees of approximately $42,200 payable to members of our scientific advisory board for services. Additionally, our subsidiary, Hoth Therapeutics Australia Pty Ltd, recorded a gain of approximately $0.3 million due to a settlement agreement on a payable balance with Novotech, a clinical trial management vendor.

Previous wording

For the three months ended June 30, 2024, general and administrative expenses amounted to approximately $1.1 million as compared to $1.1 million for the three months ended June 30, 2023, an increase of $23,077, or 2.2%. For the three months ended June 30, 2024 and 2023, general and administrative expenses consisted of the following:

Current wording

For the three months ended September 30, 2024, general and administrative expenses amounted to approximately $1.2 million as compared to $1.1 million for the three months ended September 30, 2023, an increase of approximately $116,100, or 10.4%. For the three months ended September 30, 2024 and 2023, general and administrative expenses consisted of the following:

Previous wording

During the three months ended June 30, 2024, the increase in general and administrative expenses of approximately $23,000 was primarily attributed to an increase other general and administrative expenses of approximately $53,700, which was attributable to an increase in conference expense offset by a decrease in insurance expense, and an increase in rent expense of approximately $3,600, offset by a decrease in compensation and related expenses of approximately $11,800 and a decrease in professional and consulting expenses of approximately $22,400.

Current wording

During the three months ended September 30, 2024, the increase in general and administrative expenses of approximately $116,100 was primarily attributed to an increase compensation and related expenses of approximately $54,500, an increase in other general and administrative expenses of approximately $79,400, and an increase in rent expense of approximately $8,400, offset by a decrease in professional and consulting expenses of approximately $26,200. During the three months ended September 30, 2023, we received a vendor credit of approximately $139,400, which reduced our other general and administrative expenses for the period. We did not receive any credit in the 2024 period. This reduction of other general administrative expenses was offset by an increase in insurance expense and other general and administrative expenses.

Previous wording

For the three months ended June 30, 2024 and 2023, we recorded other income (expenses), net of approximately $13,000 and $(164,000), respectively. During the three months ended June 30, 2023, we recorded an unrealized loss of marketable securities of approximately $166,000 as compared to $0 for the three months ended June 30, 2024.

Current wording

For the three months ended September 30, 2024 and 2023, we recorded other income, net of approximately $200 and $6,400, respectively. During the three months ended September 30, 2023, we recorded dividend income of approximately $5,600 as compared to $200 for the three months ended September 30, 2024.

Previous wording

For the six months ended June 30, 2024 and 2023, we incurred a net loss of approximately $3.7 million, or $0.65 per common share (basic and diluted), and $4.1 million, or $1.40 per common share (basic and diluted), respectively, a decrease of approximately $0.4 million.

Current wording

For the three months ended September 30, 2024 and 2023, we incurred a net loss of approximately $2.1 million, or $0.31 per common share (basic and diluted), and $2.1 million, or $0.60 per common share (basic and diluted), respectively, a decrease of approximately $45,500.

Previous wording

For the six months ended June 30, 2024, research and development expenses decreased by approximately $559,000, or 35.1%, as compared to the six months ended June 30, 2023.

Current wording

For the nine months ended September 30, 2024, research and development expenses decreased by approximately $635,700, or 24.8%, as compared to the nine months ended September 30, 2023.

Previous 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.

Current wording

For the nine months ended September 30, 2024, research and development expenses were approximately $1.9 million. Specifically, during the nine months ended September 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 $1.2 million related to manufacturing, preclinical and clinical activities; (ii) HT-ALZ, approximately $112,800 related to preclinical studies; (iii) HT-KIT, approximately $363,300 related to manufacturing and preclinical activities; and (iv) HT-004, approximately $96,100 in sponsored research activities. In addition to the foregoing, we also incurred fees of approximately $111,800 payable to members of our scientific advisory board for services.

Previous 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.

Current wording

For the nine months ended September 30, 2023, research and development expenses were approximately $2.6 million, of which approximately $2.8 million was related to research and development expenses, with an offsetting gain of approximately $275,000 related to licenses acquired. Specifically, during the nine months ended September 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 $52,400 related to manufacturing costs; (ii) HT-001, approximately $1.3 million related to manufacturing, preclinical and clinical activities; (iii) HT-KIT, approximately $1.4 million related to manufacturing and preclinical activities; (iv) HT-ALZ, approximately $48,900 related to sponsored research; (v) HT-004, approximately $26,000 related to sponsored research; and (vi) HT-TBI credit of approximately $11,900 related to manufacturing. In addition to the foregoing, we also incurred fees of approximately $143,600 payable to members of our scientific advisory board for services. Additionally, our subsidiary, Hoth Therapeutics Australia Pty Ltd, recorded a gain of approximately $0.3 million due to a settlement agreement on a payable balance with Novotech, a clinical trial management vendor.

Previous wording

For the six months ended June 30, 2024, general and administrative expenses amounted to $2,667,766 as compared to $2,310,366 for the six months ended June 30, 2023, an increase of $357,400, or 15.5%. For the six months ended June 30, 2024 and 2023, general and administrative expenses consisted of the following:

Current wording

For the nine months ended September 30, 2024, general and administrative expenses amounted to approximately $3,902,500 as compared to $3,429,000 for the nine months ended September 30, 2023, an increase of $473,500, or 13.8%. For the nine months ended September 30, 2024 and 2023, general and administrative expenses consisted of the following:

Previous 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.

Current wording

During the nine months ended September 30, 2024, the increase in general and administrative expenses of approximately $473,500 was primarily attributed to an increase other general and administrative expenses of approximately $182,400, which primarily consisted of an increase in conference fees of approximately $161,000, an increase in compensation and related expenses of approximately $457,900, comprising of an increase in stock-based compensation of approximately $607,600 related to the issuance of stock options to executives and board of director members, and an increase in rent of approximately $10,100, offset by a decrease in other compensation and related expenses of approximately $149,700, and a decrease in professional and consulting expenses of approximately $176,900. During the nine months ended September 30, 2023, we received a vendor credit of approximately $139,400, which reduced our other general and administrative expenses for the period. We did not receive any credit in the 2024 period. During the nine months ended September 30, 2024, the increase in other general and administrative was also attributable to an increase in insurance expense and other general and administrative expenses.

Previous wording

For the six months ended June 30, 2024 and 2023, we recorded other income (expenses), net of approximately $27,000 and $(155,000), respectively. During the six months ended June 30, 2023, we recorded an unrealized loss of marketable securities of approximately $185,000 as compared to $0 for the six months ended June 30, 2024.

Current wording

For the nine months ended September 30, 2024 and 2023, we recorded other income (expenses), net of approximately $27,000 and $(148,700), respectively, an increase in other income of $175,700. During the nine months ended September 30, 2023, we recorded an unrealized loss of marketable securities of approximately $184,800 as compared to $0 for the nine months ended September 30, 2024.

Previous 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.

Current wording

For the nine months ended September 30, 2024 and 2023, we incurred a net loss of approximately $5.8 million, or $0.96 per common share (basic and diluted), and $6.1 million, or $1.99 per common share (basic and diluted), respectively, a decrease of approximately $0.3 million.

Previous 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.

Current wording

To date we have funded our operations primarily through the sale of equity and debt securities. As of September 30, 2024, we had approximately $8.0 million in cash and cash equivalents, working capital of approximately $7.4 million and an accumulated deficit of approximately $58.7 million. Net cash used in operating activities was $5.0 million and $5.4 million for the nine months ended September 30, 2024 and 2023, respectively. We incurred net losses of approximately $5.8 million and $6.1 million for the nine months ended September 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 September 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 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.

Current wording

During the nine months ended September 30, 2024, we issued 2,500,000 shares (the “Warrant Shares”) of our common stock upon the exercise of the 2,500,000 January 2023 Existing Warrants (as defined herein) for net proceeds of approximately $3.8 million, after deducting placement agent fees and other offering expenses of approximately $0.4 million. The Warrant Shares were issued as a result of a March 27, 2024 inducement offer agreement, which closed on April 1, 2024, with a holder (the “Holder”) of certain of our existing warrants (“January 2023 Existing Warrants”) to immediately exercise, for cash, an aggregate of 2,500,000 January 2023 Existing Warrants to purchase shares of our common stock at a reduced exercise price of $1.6775 per share.

Previous wording

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 $12 million (if all milestones in all of our current agreements are achieved).

Current wording

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 $10.5 million (if all milestones in all of our current agreements are achieved).

Previous 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.

Current wording

For the nine months ended September 30, 2024, net cash used in operations was approximately $5.0 million, which primarily resulted from a net loss of approximately $5.8 million, adjusted for the add back of stock-based compensation of approximately $0.8 million.

Previous 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.

Current wording

For the nine months ended September 30, 2023, net cash used in operations was approximately $5.4 million, which primarily resulted from a net loss of approximately $6.1 million, adjusted for the add back of stock-based compensation of approximately $210,600 and unrealized loss on marketable securities of $184,800, and net changes in operating assets and liabilities of approximately $397,000, which consisted of an increase in prepaid expenses of $141,100 and an increase in accounts payable and accrued expenses of approximately $538,100.

Previous wording

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

Current wording

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

Previous wording

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.

Current wording

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

Previous 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.

Current wording

For the nine months ended September 30, 2023, net cash provided by financing activities was approximately $11.3 million, which resulted from net proceeds from the issuance of common stock and warrants and proceeds from the exercise of warrants.

Previous 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.

Current wording

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.