10-Q

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: March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from:

Commission File Number: 001-38803

Hoth Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Nevada	82-1553794
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1 Rockefeller Plaza, Suite 1039 New York, NY	10020
(Address of principal executive offices)	(Zip Code)

Issuer’s telephone number: (646) 756-2997

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 May 9, 2023 was 3,302,113.

Table of Contents

		Page
PART I - FINANCIAL INFORMATION		1
ITEM 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	17
ITEM 4.	Controls and Procedures	17
PART II - OTHER INFORMATION		18
ITEM 1.	Legal Proceedings	18
ITEM 1A.	Risk Factors	18
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
ITEM 3.	Defaults Upon Senior Securities	18
ITEM 4.	Mine Safety Disclosures	18
ITEM 5.	Other Information	18
ITEM 6.	Exhibits	19
SIGNATURES		20

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, and plans are all forward-looking statements. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:

● our business strategies;

● the timing of regulatory submissions;

● our ability to obtain and maintain regulatory approval of our existing product candidates and any other product candidates we may develop, and the labeling under any approval we may obtain;

● risks relating to the timing and costs of clinical trials and the timing and costs of other expenses;

● risks related to market acceptance of products;

● the ultimate impact of any health epidemics on our business, our clinical trials, our research programs, healthcare systems or the global economy as a whole;

● intellectual property risks;

● risks associated with our reliance on third-party organizations;

● our competitive position;

● our industry environment;

● our anticipated financial and operating results, including anticipated sources of revenues;

● assumptions regarding the size of the available market, benefits of our products, product pricing and timing of product launches;

● management’s expectation with respect to future acquisitions;

● statements regarding our goals, intentions, plans and expectations, including the introduction of new products and markets; and

● our cash needs and financing plans.

All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.

This Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications, articles and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party sources.

ii

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

HOTH THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2023			December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash	$	13,044,382		$	6,428,611
Marketable equity securities, at fair value		190,517			209,320
Prepaid expenses		193,693			88,450
Total current assets		13,428,592			6,726,381
Investment in joint ventures at fair value		33,000			33,000
Total assets	$	13,461,592		$	6,759,381
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	782,831		$	694,989
Accrued expenses		530,103			667,742
Accrued license fee - current portion		33,125			25,000
Total current liabilities		1,346,059			1,387,731
Accrued license fee - less current portion		250,000			250,000
Total liabilities		1,596,059			1,637,731
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2023 and December 31, 2022		—			—
Common stock, $0.0001 par value, 50,000,000 shares authorized, 3,302,113 and 1,302,113 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		330			130
Additional paid-in capital		59,120,450			50,198,630
Accumulated deficit		(47,282,623	)		(45,099,116	)
Accumulated other comprehensive income		27,376			22,006
Total stockholders’ equity		11,865,533			5,121,650
Total liabilities and stockholders’ equity	$	13,461,592		$	6,759,381

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

1

HOTH THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

	Three Months Ended March 31,
	2023			2022
Operating costs and expenses
Research and development	$	890,845		$	948,379
Research and development - licenses acquired (including stock-based compensation)		48,033			41,272
Compensation and related expenses (including stock-based compensation)		295,564			957,769
Professional fees (including stock-based compensation)		616,375			486,701
Rent		15,120			13,896
Other general and administrative expenses		326,880			212,677
Total operating expenses		2,192,817			2,660,694
Loss from operations		(2,192,817	)		(2,660,694	)
Other income, net
Unrealized gain (loss) on marketable securities		(18,803	)		21,949
Dividend income		28,113			25,553
Other income, net		—			41,685
Total other income, net		9,310			89,187
Net loss	$	(2,183,507	)	$	(2,571,507	)
Other comprehensive income
Foreign currency translation adjustment		5,370			(3,730	)
Total comprehensive loss	$	(2,188,877	)	$	(2,567,777	)
Net loss per share - basic and diluted	$	(0.88	)	$	(2.68	)
Weighted average number of common shares outstanding, basic and diluted		2,482,824			959,021

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

2

HOTH THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

	For the Three Months Ended March 31, 2023
	Common Stock				Additional Paid-in		Accumulated			Accumulated Other Comprehensive		Total Stockholders’
	Shares		Amount		Capital		Deficit			Income		Equity
Balance as of December 31, 2022		1,302,113	$	130	$	50,198,630	$	(45,099,116	)	$	22,006	$	5,121,650
Exercise of warrants		1,860,000		186		1,674		—			—		1,860
Stock-based compensation		—		—		10,630		—			—		10,630
Common stock and warrants issued in private placement, net of offering costs		140,000		14		8,909,516		—			—		8,909,530
Cumulative translation adjustment		—		—		—		—			5,370		5,370
Net loss		—		—		—		(2,183,507	)		—		(2,183,507	)
Balance as of March 31, 2023		3,302,113	$	330	$	59,120,450	$	(47,282,623	)	$	27,376	$	11,865,533

	For the Three Months Ended March 31, 2022
	Common Stock				Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Capital		Deficit			Income			Equity
Balance as of December 31, 2021		959,009	$	96	$	43,589,471	$	(33,727,163	)	$	17,586		$	9,882,292
Stock-based compensation		24		—		577,438		—			—			577,438
Cumulative translation adjustment		—		—		—		—			(3,730	)		(3,730	)
Net loss		—		—		—		(2,571,507	)		—			(2,571,507	)
Balance as of March 31, 2022		959,033	$	96	$	44,166,909	$	(36,298,670	)	$	13,856		$	7,884,493

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

3

HOTH THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended March 31,
	2023			2022
Cash flows from operating activities
Net loss	$	(2,183,507	)	$	(2,571,507	)
Adjustments to reconcile net loss to net cash used in operating activities:
Research and development-acquired license, expensed		8,125			25,000
Stock-based compensation		10,630			577,438
Unrealized loss (gain) on marketable securities		18,803			(21,949	)
Changes in operating assets and liabilities:
Prepaid expenses		(96,244	)		(92,556	)
Accounts payable and accrued expenses		(47,225	)		(52,915	)
Net cash used in operating activities		(2,289,419	)		(2,136,489	)
Cash flows from investing activities
Purchase of research and development licenses		—			(25,000	)
Net cash used in investing activities		—			(25,000	)
Cash flows from financing activities
Proceeds from issuance common stock, common stock warrants and prefunded warrants, net of offering costs		8,909,530			—
Proceeds from exercise of warrants		1,860			—
Net cash provided by financing activities		8,911,390			—
Effect of exchange rate changes on cash and cash equivalents		(6,201	)		4,001
Net change in cash		6,621,971			(2,161,489	)
Cash, beginning of period		6,428,611			8,538,270
Cash, end of period	$	13,044,382		$	6,380,782

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

4

HOTH THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – Organization and Description of Business Operations

Hoth Therapeutics, Inc. (together with its wholly-owned subsidiary, Hoth Therapeutics Australia Pty Ltd, the “Company”) was incorporated under the laws of the State of Nevada on May 16, 2017. The Company is a clinical-stage biopharmaceutical company focused on developing new generation therapies for unmet medical needs. The Company is focused on developing (i) a topical formulation for treating side effects from drugs used for the treatment of cancer (HT-001); (ii) a treatment for mast-cell derived cancers and anaphylaxis (HT-KIT); (iii) a treatment for traumatic brain injury and ischemic stroke (HT-TBI); and (iv) a treatment and/or prevention for Alzheimer’s or other neuroinflammatory diseases (HT-ALZ). We also have assets being developed for (i) atopic dermatitis (also known as eczema) (BioLexa); (ii) a treatment for asthma and allergies using inhalational administration (HT-004); and (iii) a treatment for acne as well as inflammatory bowel diseases (HT-003). In addition, the Company is developing a diagnostic device via a mobile device. The Company also has interests in certain other assets being developed by third parties (see Note 4 for a discussion of the Company’s agreement with Zylö Therapeutics, Inc. and Voltron Therapeutics, Inc.).

Liquidity and capital resources

Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - Going Concern, requires management to evaluate the Company’s ability to continue as a going concern one year beyond the filing date of the given financial statements. This evaluation requires management to perform two steps. First, management must evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern. Second, if management concludes that substantial doubt is raised, management is required to consider whether it has plans in place to alleviate that doubt. Disclosures in the notes to the consolidated financial statements are required if management concludes that substantial doubt exists or that its plans alleviate the substantial doubt that was raised.

The Company has funded its operations from proceeds from the sale of equity and debt securities. The Company will require significant additional capital to make the investments it needs to execute its longer-term business plan. The Company’s ability to successfully raise sufficient funds through the sale of debt or equity securities when needed is subject to many risks and uncertainties and, even if it were successful, future equity issuances may result in dilution to its existing shareholders and future debt securities may contain covenants that limit the Company’s operations or ability to enter into certain transactions.

On December 29, 2022, the Company entered into a securities purchase agreement with an accredited investor pursuant to which it sold (i) 140,000 shares of common stock, (ii) warrants (the “December Pre-Funded Warrants”) to purchase up to 1,860,000 shares of common stock and (iii) warrants (the “December Common Stock Warrants”) to purchase up to 2,500,000 shares of common stock at a purchase price of $5.00 per share and accompanying warrant (less $0.001 for each December Pre-Funded Warrant) in a private placement for aggregate gross proceeds of approximately $10 million, exclusive of placement agent commission and fees and other offering expenses. The closing of the offering occurred on January 3, 2023. Each December Common Stock Warrant is exercisable for a period of five and one-half years from the issuance date at an exercise price of $5.00 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis. Each December Pre-Funded Warrant is exercisable until exercised in full at an exercise price of $0.001 per share and may be exercised on a cashless basis. In addition, pursuant to the terms of the offering, the Company issued to designees of H.C. Wainwright & Co., LLC warrants (“December Wainwright Warrants”) to purchase up to 100,000 shares of the Company’s common stock. The December Wainwright Warrants are exercisable for a period of five and one-half years from the issuance date at an exercise price of $6.25 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis.

The Company believes current cash is sufficient to fund operations for at least the next 12 months from the date of issuance of these financial statements. However, the Company will need to raise additional funding, through strategic relationships, public or private equity or debt financings, grants or other arrangements, to develop and seek regulatory approvals for the Company’s current and future product candidates. If such funding is not available, or not available on terms acceptable to the Company, the Company’s current development plan and plans for expansion of its general and administrative infrastructure may be curtailed.

Reverse Stock Split

On October 20, 2022, the Company filed a Certificate of Change (the “Certificate of Change”) with the Secretary of State of the State of Nevada to effectuate a 1-for-25 reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding and authorized shares of common stock. The Reverse Stock Split became effective on October 26, 2022. Shareholders who otherwise would have been entitled to receive fractional shares of common stock had their holdings rounded up to the next whole share. All references to common stock, convertible preferred stock conversion ratio, warrants to purchase common stock, options to purchase common stock, restricted stock units, restricted stock awards, share data, per share data and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.

5

HOTH THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. These unaudited interim condensed consolidated financial statement results are not necessarily indicative of results to be expected for the full fiscal year or any future period. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 31, 2023.

The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company’s wholly-owned subsidiary, Hoth Therapeutics Australia Pty Ltd, which was incorporated under the laws of the State of Victoria in Australia on June 5, 2019. All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. These reclassifications had no impact on net income (loss), stockholder’s equity or cash flows as previously reported.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. The most significant estimates in the Company’s condensed consolidated financial statements relate to stock-based compensation and the valuation allowance of deferred tax assets resulting from net operating losses. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations may be affected.

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as filed with the SEC on March 31, 2023.

Cash

Cash consists of bank accounts and total $13,044,382 and $6,428,611 as of March 31, 2023 and December 31, 2022, respectively. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits at the two financial institutions the Company utilizes for its banking requirements. Accounts at each financial institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. The Company’s cash deposits above the FDIC insured amounts totaled $12,221,474 and $5,542,838 as of March 31, 2023 and December 31, 2022, respectively. The Company’s foreign bank accounts are not subject to FDIC insurance. Cash held in the Company’s Australian bank accounts as of March 31, 2023 and December 31, 2022, was $322,908 and $385,771 in U.S. dollars, respectively.

Fair Value of Financial Instruments

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

Fair Value Measurement

FASB ASC 820, Fair Value Measurements, provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

6

HOTH THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.

Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

Investment in joint ventures

Ownership interests in entities for which the Company has significant influence that are not consolidated are accounted for as equity method investments. SEC Staff Announcement: Accounting for Limited Partnership Investments (codified in ASC 323-30-S99-1) guidance requires the use of the equity method unless the investor’s interest “is so minor that the limited partner may have virtually no influence over partnership operating and financial policies.” The SEC staff’s position is that investments in limited partnerships of greater than 3% to 5% are considered more than minor and, therefore, should be accounted for using the equity method or fair value option. Investments accounted for using the equity method may be reported on a lag up to three months if financial statements of the investee are not available in sufficient time for the investor to apply the equity method as of the current reporting date. The determination of whether an investee’s results are recorded on a lag is made on an investment-by-investment basis. This investment in joint ventures is further described in Note of 4 these consolidated financial statements.

Income taxes

Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

Net loss per share

Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Since the Company had a net loss in 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 March 31,
Potentially dilutive securities	2023		2022
Warrants		3,002,840		402,840
Options		104,651		104,651
Non-vested restricted stock awards		3,384		76
Total		3,110,875		507,567

7

HOTH THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Recent accounting pronouncements

Currently, management does not believe that any other recently issued, but not yet effective accounting pronouncements, if currently adopted, would have a material impact on the Company’s condensed consolidated financial statements.

NOTE 3 - License Agreements

The following summarizes the Company’s research and development expenses for licenses acquired (including stock-based compensation) during the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
The George Washington University	$	41,158	$	16,272
North Carolina State University		—		20,000
Virginia Commonwealth University		6,250		—
University of Cincinnati		625		5,000
	$	48,033	$	41,272

The George Washington University

During three months ended March 31, 2023, the Company recorded an expense of $30,000 related to the initiation of a clinical trial. The Company also recorded an expense of $8,658 for the three months ended March 31, 2023 related to warrants granted to The George Washington University (“GW”) pursuant to the patent license agreement with 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”). Further, during the three months ended March 31, 2023 and 2022, the Company recorded expenses of $2,500 and $16,272, respectively, for license fees.

North Carolina State University

During the three months ended March 31, 2023 and 2022, the Company recognized expenses of $0 and $20,000, respectively, for license fees associated with the license agreement by and between the Company and North Carolina State University dated February 25, 2021.

Virginia Commonwealth University

During the three months ended March 31, 2023 and 2022, the Company recognized expenses of $6,250 and $0, respectively, for license fees associated with the exclusive license agreement between the Company and Virginia Commonwealth University Intellectual Property Foundation dated as of May 18, 2020.

Chelexa Biosciences, Inc. and the University of Cincinnati

During the three months ended March 31, 2023 and 2022, the Company recognized expenses of $625 and $5,000, respectively, for license fees associated with the Assignment and Assumption Agreement by and between the Company and Chelexa Biosciences dated May 14, 2020.

NOTE 4 – Fair Value of Financial Assets and Liabilities

The following table presents the Company’s assets and liabilities that are measured at fair value at March 31, 2023 and December 31, 2022:

	Fair value measured at March 31, 2023
	Total at March 31, 2023		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Marketable securities - mutual funds	$	190,517	$	190,517	$	—	$	—
Investment in joint ventures	$	33,000	$	—	$	—	$	33,000

8

HOTH THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Fair value measured at December 31, 2022
	Total at December 31, 2022		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Marketable securities - mutual funds	$	209,320	$	209,320	$	—	$	—
Investment in joint ventures	$	33,000	$	—	$	—	$	33,000

Level 3 Measurement

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets that are measured at fair value on a recurring basis as of March 31, 2023 and 2022:

Investment in joint venture at March 31, 2023
Investment in joint ventures at fair value at December 31, 2022	$	33,000
Change in fair value of investments in joint ventures		—
Investment in joint ventures at fair value at March 31, 2023	$	33,000

Investment in joint venture at March 31, 2022
Investment in joint ventures at fair value at December 31, 2021	$	410,000
Change in fair value of investments in joint ventures		—
Investment in joint ventures at fair value at March 31, 2022	$	410,000

Investment in joint ventures

The Company has elected to measure the investment in joint ventures using the fair value option at each reporting date. The fair value of investments in joint ventures are determined based on third party 409A valuations. Under the fair value option, bifurcation of an embedded derivative is not necessary, and all related gains and losses on the host contract and derivative due to change in the fair value will be reflected in interest income and other, net in the consolidated statements of operations and comprehensive loss.

The value at which the Company’s investment in joint ventures is carried on its books is adjusted to estimated fair value at the end of each quarter, taking into account general economic and stock market conditions and those characteristics specific to the underlying investments.

Investment in HaloVax

On March 23, 2020, the Company entered into a Development and Royalty Agreement (the “Development and Royalty Agreement”) with Voltron Therapeutics, Inc. (“Voltron”) to form a joint venture entity named HaloVax, LLC (“HaloVax”) to jointly develop potential product candidates for the prevention of COVID-19 based upon certain technology that had been exclusively licensed by Voltron from The General Hospital Corporation (d/b/a Massachusetts General Hospital). Pursuant to the Development and Royalty Agreement, the Company is entitled to receive sales-based royalties. In addition, pursuant to the terms of the Development and Royalty Agreement, on March 23, 2020, the Company and HaloVax entered into a Membership Interest Purchase Agreement pursuant to which the Company purchased 5% of HaloVax’s outstanding membership interests for $250,000 on March 27, 2020 (the “Initial Closing Date”) and had the option to purchase up to an additional 25% of HaloVax’s membership interests (for $3,000,000 (inclusive of the $250,000)), which option expired 30 days after the Initial Closing Date. On May 28, 2020, the Company entered into a Membership Interest Purchase Agreement to purchase 1% of HaloVax’s outstanding membership interest for a purchase price of $100,000.

During the fourth quarter of 2022, the Company identified indicators of impairment for the HaloVax investment as a result of adverse changes in HaloVax’s business operations, including liquidity concerns. As a result, the Company recorded an impairment charge of approximately $0.4 million in the fourth quarter of 2022. The investment in HaloVax was valued at $0 as of March 31, 2023 and December 31, 2022.

9

HOTH THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Investment in Zylö

In connection with the Company’s March 2020 underwritten public offering of shares of its common stock, on May 4, 2020, the Company purchased 120,000 shares of Zylö’s Class B common stock for $60,000. No change in fair value occurred during the nine months ended September 30, 2022. On December 8, 2021, the Company entered into a third amendment (the “Zylö Amendment”) to the Exclusive Sublicense Agreement with Zylö originally dated August 19, 2019, pursuant to which the Company licensed its novel cannabinoid therapeutic, HT-005 for lupus patients, back to Zylö. Pursuant to the Zylö Amendment, on December 6, 2021, Zylö issued the Company 100,000 shares of its Class B common stock. In addition, pursuant to the Zylö Amendment, within 90 days following a sale by Zylö of all of its assets and rights related to HT-005 to a third-party (a “Sale”), Zylö shall pay the Company a low single digit percent of the net proceeds received by it attributable to HT-005 in the United States and Canada and their respective territories (collectively, the “Territory”) for the purposes of therapeutic uses related to lupus in humans (the “Field”). After the Sale, any and all rights of the Company pursuant to the Exclusive Sublicense Agreement, including all amendments thereto, shall terminate. Furthermore, pursuant to the Zylö Amendment, following the date of the first commercial sale of HT-005 in the Territory, in the Field, Zylö shall pay the Company (i) a low single digit percent of the Net Sales (as defined in the Exclusive Sublicense Agreement) of HT-005 in the event HT-005 is sold in the Territory and (ii) a low double digit percent of any royalty that Zylö receives through the sublicense to a third-party based on Net Sales of HT-005 in the Territory which payments shall continue in each country in the Territory until expiration of the last-to-expire Valid Claim (as defined in the Exclusive Sublicense Agreement). Zylö conducted a 409A valuation of their Class B common stock and valued its share price at $0.15 per share. This value was ratified by Zylö’s board of directors in December 2022. Therefore, the Company recorded approximately $27,000 in unrealized loss on this investment during the fourth quarter of 2022. The investment in Zylö was valued at $33,000 as of March 31, 2023 and December 31, 2022.

NOTE 5 - Stockholders Equity

Common Shares

On December 12, 2022, shareholders of the Company approved an increase to the number of authorized shares of the Company’s common stock from 3,000,000 shares to 50,000,000 shares, and on December 13, 2022, the Company filed a Certificate of Amendment to its Articles of Incorporation, as amended, to effectuate such increase.

Securities Purchase Agreements

On December 29, 2022, the Company entered into a securities purchase agreement with an accredited investor pursuant to which it sold (i) 140,000 shares of common stock, (ii) December Pre-Funded Warrants to purchase up to 1,860,000 shares of common stock and (iii) December Common Stock Warrants to purchase up to 2,500,000 shares of common stock at a purchase price of $5.00 per share and accompanying warrant (less $0.001 for each December Pre-Funded Warrant) in a private placement for aggregate gross proceeds of approximately $10 million, exclusive of placement agent commission and fees and other offering expenses, and approximately $8.9 million in net proceeds. The closing of the offering occurred on January 3, 2023.

2018 Equity Incentive Plan

The compensation committee of the board of directors increased the number of shares reserved pursuant to the Company’s 2018 Equity Incentive Plan (“2018 Plan”) by 26,878 shares effective as of January 1, 2021, such that as of January 1, 2021, the Company had an aggregate of 66,878 shares of common stock reserved for issuance pursuant to the 2018 Plan. On June 24, 2021, at the annual meeting of shareholders, shareholders of the Company approved an amendment to the 2018 Plan to further increase the number of shares reserved for issuance thereunder from 66,878 shares to 146,878 shares. On February 2, 2022, the compensation committee of the board of directors further increased the number of shares reserved for issuance under the 2018 Plan from 146,878 shares to 156,878 shares. On January 11, 2023, the compensation committee of the board of directors further increased the number of shares reserved for issuance under the 2018 Plan from 156,878 shares to 166,878 shares.

2022 Equity Incentive Plan

On March 24, 2022, the Company’s board of directors adopted the Hoth Therapeutics, Inc. 2022 Omnibus Equity Incentive Plan (the “2022 Plan”) initially reserving 96,000 shares of the Company’s common stock for issuance thereunder. The 2022 Plan became effective on June 23, 2022 upon approval of the 2022 Plan by the Company’s shareholders at the Company’s annual meeting of shareholders.

10

HOTH THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Awards

A summary of the Company’s restricted stock awards granted under the equity incentive plans during the three months ended March 31, 2023 is as follows:

	Number of Restricted Stock Awards		Weighted Average Grant Day Fair Value
Nonvested at December 31, 2022		3,384		3.16
Granted		—		—
Vested		—		—
Nonvested at March 31, 2023		3,384		3.16

As of March 31, 2023, approximately $8,000 of unrecognized stock-based compensation expense was related to restricted stock awards. The weighted average remaining contractual terms of unvested restricted stock awards was approximately 1.2 years at March 31, 2023.

Stock Options

A summary of option activity under the Company’s stock option plan for the three months ended March 31, 2023 is presented below:

	Number of Shares		Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2022		104,651	$	49.80	$	—		8.3
Employee options issued		—	$	—		—		—
Outstanding as of March 31, 2023		104,651	$	49.80	$	—		8.1
Options vested and exercisable as of March 31, 2023		104,651	$	49.80	$	—		8.1

All stock compensation associated with the amortization of employee stock option expense was recorded as a component of compensation and related expense in the condensed consolidated statements of operations and comprehensive loss. All stock compensation associated with the amortization of nonemployee stock option expense was recorded as a component of professional fees in the condensed consolidated statements of operations and comprehensive loss.

Estimated future stock-based compensation expense relating to unvested stock options is $0.

Stock Based Compensation

Stock-based compensation expense for the three months ended March 31, 2023 and 2022 was as follows:

	Three Months Ended March 31,
	2023		2022
Employee stock option awards	$	—	$	560,375
Non-employee restricted stock awards		1,972		791
Non-employee stock warrant awards		8,658		16,272
	$	10,630	$	577,438

Employee and director related stock-based compensation was included in compensation and related expenses, and non-employee related stock-based compensation was included in professional fees and research and development related with licenses acquisition in the consolidated statements of operations and comprehensive loss.

11

HOTH THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Warrants

On December 29, 2022, the Company entered into a securities purchase agreement with an accredited investor pursuant to which it sold (i) 140,000 shares of common stock, (ii) December Pre-Funded Warrants to purchase up to 1,860,000 shares of common stock and (iii) December Common Stock Warrants to purchase up to 2,500,000 shares of common stock at a purchase price of $5.00 per share and accompanying warrant (less $0.001 for each December Pre-Funded Warrant), in a private placement, for aggregate gross proceeds of approximately $10 million, exclusive of placement agent commission and fees and other offering expenses. The closing of the offering occurred on January 3, 2023. Each December Common Stock Warrant is exercisable for a period of five and one-half years from the issuance date at an exercise price of $5.00 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis. Each December Pre-Funded Warrant is exercisable until exercised in full at an exercise price of $0.001 per share and may be exercised on a cashless basis.

The measurement of fair value of the December Pre-Funded Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at January 3, 2023, the date of issuance (i.e., share price of $6.56, exercise price of $0.001, term of 30 years beginning January 3, 2023 (as these do not have an expiration date), volatility of 135.07%, risk-free rate of 3.88%, and expected dividend rate of 0%). The grant date fair value of the December Pre-Funded Warrants was estimated to be $12.2 million on January 3, 2023 and is reflected within additional paid-in capital as of March 31, 2023 as the Pre-Funded Warrants were determined to be equity classified.

The measurement of fair value of the December Common Stock Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at January 3, 2023, the date of issuance (i.e., share price of $6.56, exercise price of $5.00, term of five and a half years beginning January 3, 2023, volatility of 135.07%, risk-free rate of 3.94%, and expected dividend rate of 0%). The grant date fair value of these December Common Stock Warrants was estimated to be $15.0 million on January 3, 2023 and is reflected within additional paid-in capital as of March 31, 2023 as the December Common Stock Warrants were determined to be equity classified.

On various dates in February 2023, the investor exercised all the December Pre-Funded Warrants for 1,860,000 shares of the Company’s common stock for proceeds to the Company of $1,860.

In addition, pursuant to the terms of the offering, the Company issued the designees of the placement agent, H.C. Wainwright & Co., LLC, the December Wainwright Warrants to purchase up to 100,000 shares of the Company’s common stock. The December Wainwright Warrants had a determined fair value of $591,090, as of the date of issuance. The December Wainwright Warrants are exercisable for a period of five and one-half years from the issuance date, at an exercise price of $6.25 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis. As these December Wainwright Warrants were issued for services provided in facilitating the private placement, the Company recorded the fair value of such December Wainwright Warrants as a cost of capital on the issuance date. The measurement of fair value was determined utilizing a Black-Scholes model considering all relevant assumptions current at January 3, 2023, the date of issuance (i.e., share price of $6.56, exercise price of $6.25, term of five and a half years beginning January 3, 2023, volatility of 135.07%, risk-free rate of 3.94%, and expected dividend rate of 0%).

A summary of warrant activity for the three months ended March 31, 2023 is as follows:

	Number of Warrants			Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2022		402,840		$	49.73	$	—		1.4
Issued		4,460,000			2.94		—		—
Expired		—			—		—		—
Exercised		(1,860,000	)		0.001		—		—
Outstanding as of March 31, 2023		3,002,840			11.04		—		4.83
Warrants exercisable as of March 31, 2023		3,002,840		$	11.04	$	—		4.83

The Company has determined that the warrants should be accounted as a component of stockholders’ equity.

12

HOTH THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - Commitments and Contingencies

Office lease

The Company leases office space for approximately $4,500 a month. Rent expense for the three months ended March 31, 2023 and 2022 was approximately $15,120 and $13,896, respectively. The Company is not a party to a lease that is in excess of 12 months.

Litigation

The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims. From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities.

NOTE 7 – Subsequent Events

The Company evaluates events that have occurred after the balance sheet date through the date for which the condensed consolidated financial statements are issued. Based upon the evaluation, except as set forth herein, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.

On May 11, 2023, the Company provided notice to the Virginia Commonwealth University Intellectual Property Foundation (“VCU”) of its intent to terminate the exclusive license agreement (the “Agreement”) by and between the Company and VCU dated May 18, 2020. The Agreement will terminate 90 days after the date notice is provided, or August 9, 2023.

13

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as may be amended, supplemented or superseded from time to time by other reports we file with the SEC. All amounts in this report are in U.S. dollars, unless otherwise noted.

Overview

We are a clinical-stage biopharmaceutical company focused on developing new generation therapies for unmet medical needs. We are focused on developing (i) a topical formulation for treating side effects from drugs used for the treatment of cancer (HT-001); (ii) a treatment for mast-cell derived cancers and anaphylaxis (HT-KIT); (iii) a treatment for traumatic brain injury and ischemic stroke (HT-TBI); and (iv) a treatment and/or prevention for Alzheimer’s or other neuroinflammatory diseases (HT-ALZ). We also have assets being developed for (i) atopic dermatitis (also known as eczema) (BioLexa); (ii) a treatment for asthma and allergies using inhalational administration (HT-004); and (iii) a treatment for acne as well as inflammatory bowel diseases (HT-003). We are also developing a diagnostic device via a mobile device. Furthermore, we have interests in certain other assets being developed by third parties including a treatment for patients with lupus that is being developed by Zylö Therapeutics, Inc. and potential product candidates being developed pursuant to our agreement with Voltron Therapeutics, Inc. for the prevention of COVID-19.

Results of Operations

Comparison of the Three Months Ended March 31, 2023 and 2022

Operating Costs and Expenses

Research and Development Expenses

For the three months ended March 31, 2023, research and development expenses were approximately $0.9 million, of which approximately $48 thousand 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.

For the three months ended March 31, 2022, research and development expenses were approximately $1.0 million, of which approximately $41 thousand 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, 2022, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) BioLexa, approximately $0.1 million related to clinical trial costs; (ii) HT-001, approximately $0.3 million related to manufacturing, preclinical and clinical activities; (iii) HT-003, approximately $41,000 related to preclinical studies; (iv) HT-004, approximately $37,000 related to sponsored research; (v) GW breath based diagnostic device, approximately $80,000 related to research and development with respect to the design of device; and (vi) HT-ALZ approximately $0.1 million related to sponsored research. In addition to the foregoing, we also incurred fees of approximately $59,000 payable to members of our scientific advisory board for services.

14

We expect our research and development activities to increase as we develop our existing product candidates and potentially acquire new product candidates, reflecting increasing costs associated with the following:

● employee-related expenses, which include salaries and benefits, and rent expenses;

● fees related to in-licensed products and technology;

● expenses incurred under agreements with contract research organizations, investigative sites and consultants that conduct our clinical trials and a substantial portion of our pre-clinical activities;

● the cost of acquiring and manufacturing clinical trial materials; and

● costs associated with non-clinical activities and regulatory approvals.

Compensation, Professional Fees, Rent and Other (“General and Administrative Expenses”)

During the three months ended March 31, 2023, we incurred General and Administrative Expenses of approximately $1.3 million as compared to approximately $1.7 million during the three months ended March 31, 2022. The approximately $0.4 million decrease was primarily attributed to a decrease in compensation and related expenses including stock based compensation.

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 the regulatory requirements.

Liquidity and Capital Resources

To date we have funded our operations primarily through the sale of equity and debt securities. As of March 31, 2023, we had approximately $13.0 million in cash, marketable securities of approximately $0.2 million, working capital of approximately $12.1 million and an accumulated deficit of approximately $47.3 million. Net cash used in operating activities was $2.3 million and $2.1 million for the three months ended March 31, 2023 and 2022, respectively. We incurred losses of approximately $2.2 million and $2.6 million for the three months ended March 31, 2023 and 2022, respectively. We have incurred substantial operating losses since inception and expect to continue to incur significant operating losses for the foreseeable future as we continue our pre-clinical and clinical development of our product candidates. We have not yet commercialized any products and have never generated any revenue from product sales. We believe that our existing cash as of March 31, 2023 will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the date of this Quarterly Report on Form 10-Q.

We have entered into certain license, sublicense, sponsored research and option agreements with third parties. Pursuant to such agreements, we may be required to make certain: (i) license maintenance fee payments; (ii) out-of-pocket expense payments, including, but not limited to, payments related to intellectual property and research related expenses; (iii) development and commercialization expense payments; (iv) annual and quarterly minimum payments; (v) diligence expense payments; and (vi) revenue interest payments. In addition, subject to the achievement of certain development and/or commercialization events, we may also be required to make certain: (i) minimum royalty payments, ranging from middle to high five figures, (ii) sales-based royalties and running royalties, ranging from low single digits to low double digits; and (iii) milestone payments, of up to approximately $15.2 million (if all milestones in all of our current agreements are achieved).

15

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 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.

For the three months ended March 31, 2022, net cash used in operations was approximately $2.1 million, which primarily resulted from a net loss of approximately $2.6 million and changes in operating assets and liabilities of approximately $0.1 million, partially offset by approximately $0.6 million stock-based compensation.

Cash Flows from Investing Activities

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

For the three months ended March 31, 2022, net cash used in investing activities was $25 thousand which was related to the purchase of research and development licenses.

Cash Flows from Financing Activities

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.

For the three months ended March 31, 2022, there was no net cash provided by financing activities.

Critical Accounting Estimates

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

● it requires assumptions to be made that were uncertain at the time the estimate was made; and

● changes in the estimate or different estimates that could have been selected could have material impact in our results of operations or financial condition.

While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable under the circumstances, actual results could differ from those estimates and the differences could be material.

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

Recently Issued Accounting Standards Not Yet Effective or Adopted

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

JOBS Act

On April 5, 2012, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We have chosen to take advantage of the extended transition periods available to emerging growth companies under the JOBS Act for complying with new or revised accounting standards until those standards would otherwise apply to private companies provided under the JOBS Act. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates for complying with new or revised accounting standards.

16

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our principal executive officer and principal financial officer evaluated the effectiveness of our “disclosure controls and procedures” as of March 31, 2023, the end of the period covered by this Quarterly Report on Form 10-Q.  The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is accumulated and communicated to a company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as of March 31, 2023, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective because of the material weakness in our internal control over financial reporting identified during the year ended December 31, 2022, as described below, and which remained in place as of March 31, 2023.

As previously disclosed, as of December 31, 2022, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework - 2013. Based on this assessment, our management concluded that, as of December 31, 2022, our internal control over financial reporting was not effective because management identified a material weakness. A material weakness is a significant deficiency or a combination of significant deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Specifically, our management concluded that we lacked sufficient resources necessary to provide adequate segregation of duties related to the preparation and review of our financial information used in financial reporting and review of controls over the financial reporting process, including cutoff related to accruals and prepaids.

Status of Remediation of Material Weaknesses in Internal Control over Financial Reporting

To address the material weakness described above, we have expanded our controls related to the preparation and review of our financial information used in financial reporting, the controls over the financial reporting process and the controls over the accuracy and completeness of accruals and prepaid account balances. The full implementation of these enhanced controls remains in process as of March 31, 2023, and we will continue to monitor the effectiveness of these controls and will make any further changes management determines necessary.

In addition, management is continuing to develop the design and implementation of internal controls to require appropriate reviews as well as retain documentation of those reviews. We continuously evaluate the effectiveness of our internal control over financial reporting and may implement additional changes or remediation efforts as we implement the above actions. The weakness will be determined to be remediated when revised controls have been operating for a reasonable period of time and have been tested to determine they are operating effectively. The remediation actions are being monitored by our audit committee of our board of directors.

Changes in Internal Control

There have been no significant changes in our internal control over financial reporting during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting other than the changes to address the remediation of the material weakness as discussed above. 

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

17

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be subject to litigation and claims arising in the ordinary course of business. We are not currently a party to any material legal proceedings and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition.

ITEM 1A. RISK FACTORS

Risk factors that affect our business and financial results are discussed in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on March 31, 2023 (“Annual Report”). There have been no material changes in our risk factors from those previously disclosed in our Annual Report. You should carefully consider the risks described in our Annual Report, which could materially affect our business, financial condition or future results. The risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

On May 11, 2023, the Company provided notice to the Virginia Commonwealth University Intellectual Property Foundation (“VCU”) of its intent to terminate the exclusive license agreement (the “Agreement”) by and between the Company and VCU dated May 18, 2020. The Agreement will terminate 90 days after the date notice is provided, or August 9, 2023.

On May 10, 2023, the Company and Algorithm Sciences, Inc. mutually agreed to terminate that certain Non-Binding Confidential Term Sheet dated as of April 24, 2023.

18

ITEM 6. EXHIBITS

Exhibit No.	Description
10.1+	Employment Agreement by and between the Company and Robb Knie dated as of March 28, 2023 (Incorporated by reference to Exhibit 10.36 to the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2023)
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 March 31, 2023 is formatted in Inline XBRL

* Filed herewith.

** Furnished herewith.

+ Indicates a management contract or any compensatory plan, contract or arrangement.

19

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: May 15, 2023	By:	/s/ Robb Knie
		Robb Knie,
		Chief Executive Officer
		(Principal Executive Officer)
Date: May 15, 2023	By:	/s/ David Briones
		David Briones,
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

20

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer of Hoth Therapeutics, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Robb Knie, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hoth Therapeutics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2023	/s/ Robb Knie
	Robb Knie,
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

 Exhibit 31.2

Certification of Chief Financial Officer of Hoth Therapeutics, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, David Briones, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hoth Therapeutics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2023	/s/ David Briones
	David Briones,
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

Statement of Chief Executive Officer
Pursuant to Section 1350 of Title 18 of the United States Code

Pursuant to Section 1350 of Title 18 of the United States Code as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Robb Knie, Chief Executive Officer of Hoth Therapeutics, Inc. (the “Company”), hereby certifies that based on the undersigned’s knowledge:

1. The Company’s quarterly report on Form 10-Q for the period ended March 31, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 15, 2023	/s/ Robb Knie
	Robb Knie,
	Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

Statement of Chief Financial Officer
Pursuant to Section 1350 of Title 18 of the United States Code

Pursuant to Section 1350 of Title 18 of the United States Code as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, David Briones, Chief Financial Officer of Hoth Therapeutics, Inc. (the “Company”), hereby certifies that based on the undersigned’s knowledge:

1. The Company’s quarterly report on Form 10-Q for the period ended March 31, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 15, 2023	/s/ David Briones
	David Briones,
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2023	May 09, 2023
Document Information Line Items
Entity Registrant Name	Hoth Therapeutics, Inc.
Trading Symbol	HOTH
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		3,302,113
Amendment Flag	false
Entity Central Index Key	0001711786
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Mar. 31, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Shell Company	false
Entity Ex Transition Period	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-38803
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	82-1553794
Entity Address, Address Line One	1 Rockefeller Plaza
Entity Address, Address Line Two	Suite 1039
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10020
City Area Code	(646)
Local Phone Number	756-2997
Title of 12(b) Security	Common Stock, $0.0001 par value
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes

XML

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash	$ 13,044,382	$ 6,428,611
Marketable equity securities, at fair value	190,517	209,320
Prepaid expenses	193,693	88,450
Total current assets	13,428,592	6,726,381
Investment in joint ventures at fair value	33,000	33,000
Total assets	13,461,592	6,759,381
Current liabilities:
Accounts payable	782,831	694,989
Accrued expenses	530,103	667,742
Accrued license fee - current portion	33,125	25,000
Total current liabilities	1,346,059	1,387,731
Accrued license fee - less current portion	250,000	250,000
Total liabilities	1,596,059	1,637,731
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2023 and December 31, 2022
Common stock, $0.0001 par value, 50,000,000 shares authorized, 3,302,113 and 1,302,113 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	330	130
Additional paid-in capital	59,120,450	50,198,630
Accumulated deficit	(47,282,623)	(45,099,116)
Accumulated other comprehensive income	27,376	22,006
Total stockholders’ equity	11,865,533	5,121,650
Total liabilities and stockholders’ equity	$ 13,461,592	$ 6,759,381

XML

Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	3,302,113	1,302,113
Common stock, shares outstanding	3,302,113	1,302,113

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating costs and expenses
Research and development	$ 890,845	$ 948,379
Research and development - licenses acquired (including stock-based compensation)	48,033	41,272
Compensation and related expenses (including stock-based compensation)	295,564	957,769
Professional fees (including stock-based compensation)	616,375	486,701
Rent	15,120	13,896
Other general and administrative expenses	326,880	212,677
Total operating expenses	2,192,817	2,660,694
Loss from operations	(2,192,817)	(2,660,694)
Other income, net
Unrealized gain (loss) on marketable securities	(18,803)	21,949
Dividend income	28,113	25,553
Other income, net		41,685
Total other income, net	9,310	89,187
Net loss	(2,183,507)	(2,571,507)
Other comprehensive income
Foreign currency translation adjustment	5,370	(3,730)
Total comprehensive loss	$ (2,188,877)	$ (2,567,777)
Net loss per share - basic (in Dollars per share)	$ (0.88)	$ (2.68)
Weighted average number of common shares outstanding, basic (in Shares)	2,482,824	959,021

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parentheticals) - $ / shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Net loss per share applicable to common stockholders - diluted	$ (0.88)	$ (2.68)
Weighted average number of common shares outstanding, diluted	2,482,824	959,021

XML

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($)	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income	Total
Balance at Dec. 31, 2021	$ 96	$ 43,589,471	$ (33,727,163)	$ 17,586	$ 9,882,292
Balance (in Shares) at Dec. 31, 2021	959,009
Stock-based compensation		577,438			577,438
Stock-based compensation (in Shares)	24
Cumulative translation adjustment				(3,730)	(3,730)
Net loss			(2,571,507)		(2,571,507)
Balance at Mar. 31, 2022	$ 96	44,166,909	(36,298,670)	13,856	7,884,493
Balance (in Shares) at Mar. 31, 2022	959,033
Balance at Dec. 31, 2022	$ 130	50,198,630	(45,099,116)	22,006	5,121,650
Balance (in Shares) at Dec. 31, 2022	1,302,113
Exercise of warrants	$ 186	1,674			1,860
Exercise of warrants (in Shares)	1,860,000
Stock-based compensation		10,630			10,630
Common stock and warrants issued in private placement, net of offering costs	$ 14	8,909,516			8,909,530
Common stock and warrants issued in private placement, net of offering costs (in Shares)	140,000
Cumulative translation adjustment				5,370	5,370
Net loss			(2,183,507)		(2,183,507)
Balance at Mar. 31, 2023	$ 330	$ 59,120,450	$ (47,282,623)	$ 27,376	$ 11,865,533
Balance (in Shares) at Mar. 31, 2023	3,302,113

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities
Net loss	$ (2,183,507)	$ (2,571,507)
Adjustments to reconcile net loss to net cash used in operating activities:
Research and development-acquired license, expensed	8,125	25,000
Stock-based compensation	10,630	577,438
Unrealized loss (gain) on marketable securities	18,803	(21,949)
Changes in operating assets and liabilities:
Prepaid expenses	(96,244)	(92,556)
Accounts payable and accrued expenses	(47,225)	(52,915)
Net cash used in operating activities	(2,289,419)	(2,136,489)
Cash flows from investing activities
Purchase of research and development licenses		(25,000)
Net cash used in investing activities		(25,000)
Cash flows from financing activities
Proceeds from issuance common stock, common stock warrants and prefunded warrants, net of offering costs	8,909,530
Proceeds from exercise of warrants	1,860
Net cash provided by financing activities	8,911,390
Effect of exchange rate changes on cash and cash equivalents	(6,201)	4,001
Net change in cash	6,621,971	(2,161,489)
Cash, beginning of period	6,428,611	8,538,270
Cash, end of period	$ 13,044,382	$ 6,380,782

XML

Organization and Description of Business Operations

3 Months Ended

Mar. 31, 2023

Organization and Description of Business Operations [Abstract]

Organization and description of business operations

NOTE 1 – Organization and Description of Business Operations

Hoth Therapeutics, Inc. (together with its wholly-owned subsidiary, Hoth Therapeutics Australia Pty Ltd, the “Company”) was incorporated under the laws of the State of Nevada on May 16, 2017. The Company is a clinical-stage biopharmaceutical company focused on developing new generation therapies for unmet medical needs. The Company is focused on developing (i) a topical formulation for treating side effects from drugs used for the treatment of cancer (HT-001); (ii) a treatment for mast-cell derived cancers and anaphylaxis (HT-KIT); (iii) a treatment for traumatic brain injury and ischemic stroke (HT-TBI); and (iv) a treatment and/or prevention for Alzheimer’s or other neuroinflammatory diseases (HT-ALZ). We also have assets being developed for (i) atopic dermatitis (also known as eczema) (BioLexa); (ii) a treatment for asthma and allergies using inhalational administration (HT-004); and (iii) a treatment for acne as well as inflammatory bowel diseases (HT-003). In addition, the Company is developing a diagnostic device via a mobile device. The Company also has interests in certain other assets being developed by third parties (see Note 4 for a discussion of the Company’s agreement with Zylö Therapeutics, Inc. and Voltron Therapeutics, Inc.).

Liquidity and capital resources

Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - Going Concern, requires management to evaluate the Company’s ability to continue as a going concern one year beyond the filing date of the given financial statements. This evaluation requires management to perform two steps. First, management must evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern. Second, if management concludes that substantial doubt is raised, management is required to consider whether it has plans in place to alleviate that doubt. Disclosures in the notes to the consolidated financial statements are required if management concludes that substantial doubt exists or that its plans alleviate the substantial doubt that was raised.

The Company has funded its operations from proceeds from the sale of equity and debt securities. The Company will require significant additional capital to make the investments it needs to execute its longer-term business plan. The Company’s ability to successfully raise sufficient funds through the sale of debt or equity securities when needed is subject to many risks and uncertainties and, even if it were successful, future equity issuances may result in dilution to its existing shareholders and future debt securities may contain covenants that limit the Company’s operations or ability to enter into certain transactions.

On December 29, 2022, the Company entered into a securities purchase agreement with an accredited investor pursuant to which it sold (i) 140,000 shares of common stock, (ii) warrants (the “December Pre-Funded Warrants”) to purchase up to 1,860,000 shares of common stock and (iii) warrants (the “December Common Stock Warrants”) to purchase up to 2,500,000 shares of common stock at a purchase price of $5.00 per share and accompanying warrant (less $0.001 for each December Pre-Funded Warrant) in a private placement for aggregate gross proceeds of approximately $10 million, exclusive of placement agent commission and fees and other offering expenses. The closing of the offering occurred on January 3, 2023. Each December Common Stock Warrant is exercisable for a period of five and one-half years from the issuance date at an exercise price of $5.00 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis. Each December Pre-Funded Warrant is exercisable until exercised in full at an exercise price of $0.001 per share and may be exercised on a cashless basis. In addition, pursuant to the terms of the offering, the Company issued to designees of H.C. Wainwright & Co., LLC warrants (“December Wainwright Warrants”) to purchase up to 100,000 shares of the Company’s common stock. The December Wainwright Warrants are exercisable for a period of five and one-half years from the issuance date at an exercise price of $6.25 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis.

The Company believes current cash is sufficient to fund operations for at least the next 12 months from the date of issuance of these financial statements. However, the Company will need to raise additional funding, through strategic relationships, public or private equity or debt financings, grants or other arrangements, to develop and seek regulatory approvals for the Company’s current and future product candidates. If such funding is not available, or not available on terms acceptable to the Company, the Company’s current development plan and plans for expansion of its general and administrative infrastructure may be curtailed.

Reverse Stock Split

On October 20, 2022, the Company filed a Certificate of Change (the “Certificate of Change”) with the Secretary of State of the State of Nevada to effectuate a 1-for-25 reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding and authorized shares of common stock. The Reverse Stock Split became effective on October 26, 2022. Shareholders who otherwise would have been entitled to receive fractional shares of common stock had their holdings rounded up to the next whole share. All references to common stock, convertible preferred stock conversion ratio, warrants to purchase common stock, options to purchase common stock, restricted stock units, restricted stock awards, share data, per share data and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.

XML

Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Significant accounting policies

NOTE 2 – Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. These unaudited interim condensed consolidated financial statement results are not necessarily indicative of results to be expected for the full fiscal year or any future period. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 31, 2023.

The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company’s wholly-owned subsidiary, Hoth Therapeutics Australia Pty Ltd, which was incorporated under the laws of the State of Victoria in Australia on June 5, 2019. All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. These reclassifications had no impact on net income (loss), stockholder’s equity or cash flows as previously reported.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. The most significant estimates in the Company’s condensed consolidated financial statements relate to stock-based compensation and the valuation allowance of deferred tax assets resulting from net operating losses. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations may be affected.

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as filed with the SEC on March 31, 2023.

Cash

Cash consists of bank accounts and total $13,044,382 and $6,428,611 as of March 31, 2023 and December 31, 2022, respectively. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits at the two financial institutions the Company utilizes for its banking requirements. Accounts at each financial institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. The Company’s cash deposits above the FDIC insured amounts totaled $12,221,474 and $5,542,838 as of March 31, 2023 and December 31, 2022, respectively. The Company’s foreign bank accounts are not subject to FDIC insurance. Cash held in the Company’s Australian bank accounts as of March 31, 2023 and December 31, 2022, was $322,908 and $385,771 in U.S. dollars, respectively.

Fair Value of Financial Instruments

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

Fair Value Measurement

FASB ASC 820, Fair Value Measurements, provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.

Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

Investment in joint ventures

Ownership interests in entities for which the Company has significant influence that are not consolidated are accounted for as equity method investments. SEC Staff Announcement: Accounting for Limited Partnership Investments (codified in ASC 323-30-S99-1) guidance requires the use of the equity method unless the investor’s interest “is so minor that the limited partner may have virtually no influence over partnership operating and financial policies.” The SEC staff’s position is that investments in limited partnerships of greater than 3% to 5% are considered more than minor and, therefore, should be accounted for using the equity method or fair value option. Investments accounted for using the equity method may be reported on a lag up to three months if financial statements of the investee are not available in sufficient time for the investor to apply the equity method as of the current reporting date. The determination of whether an investee’s results are recorded on a lag is made on an investment-by-investment basis. This investment in joint ventures is further described in Note of 4 these consolidated financial statements.

Income taxes

Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

Net loss per share

Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Since the Company had a net loss in 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 March 31,
Potentially dilutive securities	2023		2022
Warrants		3,002,840		402,840
Options		104,651		104,651
Non-vested restricted stock awards		3,384		76
Total		3,110,875		507,567

Recent accounting pronouncements

Currently, management does not believe that any other recently issued, but not yet effective accounting pronouncements, if currently adopted, would have a material impact on the Company’s condensed consolidated financial statements.

XML

License Agreements

3 Months Ended

Mar. 31, 2023

License Agreement [Abstract]

License agreements

NOTE 3 - License Agreements

The following summarizes the Company’s research and development expenses for licenses acquired (including stock-based compensation) during the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
The George Washington University	$	41,158	$	16,272
North Carolina State University		—		20,000
Virginia Commonwealth University		6,250		—
University of Cincinnati		625		5,000
	$	48,033	$	41,272

The George Washington University

During three months ended March 31, 2023, the Company recorded an expense of $30,000 related to the initiation of a clinical trial. The Company also recorded an expense of $8,658 for the three months ended March 31, 2023 related to warrants granted to The George Washington University (“GW”) pursuant to the patent license agreement with 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”). Further, during the three months ended March 31, 2023 and 2022, the Company recorded expenses of $2,500 and $16,272, respectively, for license fees.

North Carolina State University

During the three months ended March 31, 2023 and 2022, the Company recognized expenses of $0 and $20,000, respectively, for license fees associated with the license agreement by and between the Company and North Carolina State University dated February 25, 2021.

Virginia Commonwealth University

During the three months ended March 31, 2023 and 2022, the Company recognized expenses of $6,250 and $0, respectively, for license fees associated with the exclusive license agreement between the Company and Virginia Commonwealth University Intellectual Property Foundation dated as of May 18, 2020.

Chelexa Biosciences, Inc. and the University of Cincinnati

During the three months ended March 31, 2023 and 2022, the Company recognized expenses of $625 and $5,000, respectively, for license fees associated with the Assignment and Assumption Agreement by and between the Company and Chelexa Biosciences dated May 14, 2020.

XML

Fair Value of Financial Assets and Liabilities

3 Months Ended

Mar. 31, 2023

Fair Value of Financial Assets and Liabilities [Abstract]

Fair Value of Financial Assets and Liabilities

NOTE 4 – Fair Value of Financial Assets and Liabilities

The following table presents the Company’s assets and liabilities that are measured at fair value at March 31, 2023 and December 31, 2022:

	Fair value measured at March 31, 2023
	Total at March 31, 2023		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Marketable securities - mutual funds	$	190,517	$	190,517	$	—	$	—
Investment in joint ventures	$	33,000	$	—	$	—	$	33,000

	Fair value measured at December 31, 2022
	Total at December 31, 2022		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Marketable securities - mutual funds	$	209,320	$	209,320	$	—	$	—
Investment in joint ventures	$	33,000	$	—	$	—	$	33,000

Level 3 Measurement

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets that are measured at fair value on a recurring basis as of March 31, 2023 and 2022:

Investment in joint venture at March 31, 2023
Investment in joint ventures at fair value at December 31, 2022	$	33,000
Change in fair value of investments in joint ventures		—
Investment in joint ventures at fair value at March 31, 2023	$	33,000

Investment in joint venture at March 31, 2022
Investment in joint ventures at fair value at December 31, 2021	$	410,000
Change in fair value of investments in joint ventures		—
Investment in joint ventures at fair value at March 31, 2022	$	410,000

Investment in joint ventures

The Company has elected to measure the investment in joint ventures using the fair value option at each reporting date. The fair value of investments in joint ventures are determined based on third party 409A valuations. Under the fair value option, bifurcation of an embedded derivative is not necessary, and all related gains and losses on the host contract and derivative due to change in the fair value will be reflected in interest income and other, net in the consolidated statements of operations and comprehensive loss.

The value at which the Company’s investment in joint ventures is carried on its books is adjusted to estimated fair value at the end of each quarter, taking into account general economic and stock market conditions and those characteristics specific to the underlying investments.

Investment in HaloVax

On March 23, 2020, the Company entered into a Development and Royalty Agreement (the “Development and Royalty Agreement”) with Voltron Therapeutics, Inc. (“Voltron”) to form a joint venture entity named HaloVax, LLC (“HaloVax”) to jointly develop potential product candidates for the prevention of COVID-19 based upon certain technology that had been exclusively licensed by Voltron from The General Hospital Corporation (d/b/a Massachusetts General Hospital). Pursuant to the Development and Royalty Agreement, the Company is entitled to receive sales-based royalties. In addition, pursuant to the terms of the Development and Royalty Agreement, on March 23, 2020, the Company and HaloVax entered into a Membership Interest Purchase Agreement pursuant to which the Company purchased 5% of HaloVax’s outstanding membership interests for $250,000 on March 27, 2020 (the “Initial Closing Date”) and had the option to purchase up to an additional 25% of HaloVax’s membership interests (for $3,000,000 (inclusive of the $250,000)), which option expired 30 days after the Initial Closing Date. On May 28, 2020, the Company entered into a Membership Interest Purchase Agreement to purchase 1% of HaloVax’s outstanding membership interest for a purchase price of $100,000.

During the fourth quarter of 2022, the Company identified indicators of impairment for the HaloVax investment as a result of adverse changes in HaloVax’s business operations, including liquidity concerns. As a result, the Company recorded an impairment charge of approximately $0.4 million in the fourth quarter of 2022. The investment in HaloVax was valued at $0 as of March 31, 2023 and December 31, 2022.

Investment in Zylö

In connection with the Company’s March 2020 underwritten public offering of shares of its common stock, on May 4, 2020, the Company purchased 120,000 shares of Zylö’s Class B common stock for $60,000. No change in fair value occurred during the nine months ended September 30, 2022. On December 8, 2021, the Company entered into a third amendment (the “Zylö Amendment”) to the Exclusive Sublicense Agreement with Zylö originally dated August 19, 2019, pursuant to which the Company licensed its novel cannabinoid therapeutic, HT-005 for lupus patients, back to Zylö. Pursuant to the Zylö Amendment, on December 6, 2021, Zylö issued the Company 100,000 shares of its Class B common stock. In addition, pursuant to the Zylö Amendment, within 90 days following a sale by Zylö of all of its assets and rights related to HT-005 to a third-party (a “Sale”), Zylö shall pay the Company a low single digit percent of the net proceeds received by it attributable to HT-005 in the United States and Canada and their respective territories (collectively, the “Territory”) for the purposes of therapeutic uses related to lupus in humans (the “Field”). After the Sale, any and all rights of the Company pursuant to the Exclusive Sublicense Agreement, including all amendments thereto, shall terminate. Furthermore, pursuant to the Zylö Amendment, following the date of the first commercial sale of HT-005 in the Territory, in the Field, Zylö shall pay the Company (i) a low single digit percent of the Net Sales (as defined in the Exclusive Sublicense Agreement) of HT-005 in the event HT-005 is sold in the Territory and (ii) a low double digit percent of any royalty that Zylö receives through the sublicense to a third-party based on Net Sales of HT-005 in the Territory which payments shall continue in each country in the Territory until expiration of the last-to-expire Valid Claim (as defined in the Exclusive Sublicense Agreement). Zylö conducted a 409A valuation of their Class B common stock and valued its share price at $0.15 per share. This value was ratified by Zylö’s board of directors in December 2022. Therefore, the Company recorded approximately $27,000 in unrealized loss on this investment during the fourth quarter of 2022. The investment in Zylö was valued at $33,000 as of March 31, 2023 and December 31, 2022.

XML

Stockholders Equity

3 Months Ended

Mar. 31, 2023

Stockholders' Equity Note [Abstract]

Stockholders Equity

NOTE 5 - Stockholders Equity

Common Shares

On December 12, 2022, shareholders of the Company approved an increase to the number of authorized shares of the Company’s common stock from 3,000,000 shares to 50,000,000 shares, and on December 13, 2022, the Company filed a Certificate of Amendment to its Articles of Incorporation, as amended, to effectuate such increase.

Securities Purchase Agreements

On December 29, 2022, the Company entered into a securities purchase agreement with an accredited investor pursuant to which it sold (i) 140,000 shares of common stock, (ii) December Pre-Funded Warrants to purchase up to 1,860,000 shares of common stock and (iii) December Common Stock Warrants to purchase up to 2,500,000 shares of common stock at a purchase price of $5.00 per share and accompanying warrant (less $0.001 for each December Pre-Funded Warrant) in a private placement for aggregate gross proceeds of approximately $10 million, exclusive of placement agent commission and fees and other offering expenses, and approximately $8.9 million in net proceeds. The closing of the offering occurred on January 3, 2023.

2018 Equity Incentive Plan

The compensation committee of the board of directors increased the number of shares reserved pursuant to the Company’s 2018 Equity Incentive Plan (“2018 Plan”) by 26,878 shares effective as of January 1, 2021, such that as of January 1, 2021, the Company had an aggregate of 66,878 shares of common stock reserved for issuance pursuant to the 2018 Plan. On June 24, 2021, at the annual meeting of shareholders, shareholders of the Company approved an amendment to the 2018 Plan to further increase the number of shares reserved for issuance thereunder from 66,878 shares to 146,878 shares. On February 2, 2022, the compensation committee of the board of directors further increased the number of shares reserved for issuance under the 2018 Plan from 146,878 shares to 156,878 shares. On January 11, 2023, the compensation committee of the board of directors further increased the number of shares reserved for issuance under the 2018 Plan from 156,878 shares to 166,878 shares.

2022 Equity Incentive Plan

On March 24, 2022, the Company’s board of directors adopted the Hoth Therapeutics, Inc. 2022 Omnibus Equity Incentive Plan (the “2022 Plan”) initially reserving 96,000 shares of the Company’s common stock for issuance thereunder. The 2022 Plan became effective on June 23, 2022 upon approval of the 2022 Plan by the Company’s shareholders at the Company’s annual meeting of shareholders.

Restricted Stock Awards

A summary of the Company’s restricted stock awards granted under the equity incentive plans during the three months ended March 31, 2023 is as follows:

	Number of Restricted Stock Awards		Weighted Average Grant Day Fair Value
Nonvested at December 31, 2022		3,384		3.16
Granted		—		—
Vested		—		—
Nonvested at March 31, 2023		3,384		3.16

As of March 31, 2023, approximately $8,000 of unrecognized stock-based compensation expense was related to restricted stock awards. The weighted average remaining contractual terms of unvested restricted stock awards was approximately 1.2 years at March 31, 2023.

Stock Options

A summary of option activity under the Company’s stock option plan for the three months ended March 31, 2023 is presented below:

	Number of Shares		Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2022		104,651	$	49.80	$	—		8.3
Employee options issued		—	$	—		—		—
Outstanding as of March 31, 2023		104,651	$	49.80	$	—		8.1
Options vested and exercisable as of March 31, 2023		104,651	$	49.80	$	—		8.1

All stock compensation associated with the amortization of employee stock option expense was recorded as a component of compensation and related expense in the condensed consolidated statements of operations and comprehensive loss. All stock compensation associated with the amortization of nonemployee stock option expense was recorded as a component of professional fees in the condensed consolidated statements of operations and comprehensive loss.

Estimated future stock-based compensation expense relating to unvested stock options is $0.

Stock Based Compensation

Stock-based compensation expense for the three months ended March 31, 2023 and 2022 was as follows:

	Three Months Ended March 31,
	2023		2022
Employee stock option awards	$	—	$	560,375
Non-employee restricted stock awards		1,972		791
Non-employee stock warrant awards		8,658		16,272
	$	10,630	$	577,438

Employee and director related stock-based compensation was included in compensation and related expenses, and non-employee related stock-based compensation was included in professional fees and research and development related with licenses acquisition in the consolidated statements of operations and comprehensive loss.

Warrants

On December 29, 2022, the Company entered into a securities purchase agreement with an accredited investor pursuant to which it sold (i) 140,000 shares of common stock, (ii) December Pre-Funded Warrants to purchase up to 1,860,000 shares of common stock and (iii) December Common Stock Warrants to purchase up to 2,500,000 shares of common stock at a purchase price of $5.00 per share and accompanying warrant (less $0.001 for each December Pre-Funded Warrant), in a private placement, for aggregate gross proceeds of approximately $10 million, exclusive of placement agent commission and fees and other offering expenses. The closing of the offering occurred on January 3, 2023. Each December Common Stock Warrant is exercisable for a period of five and one-half years from the issuance date at an exercise price of $5.00 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis. Each December Pre-Funded Warrant is exercisable until exercised in full at an exercise price of $0.001 per share and may be exercised on a cashless basis.

The measurement of fair value of the December Pre-Funded Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at January 3, 2023, the date of issuance (i.e., share price of $6.56, exercise price of $0.001, term of 30 years beginning January 3, 2023 (as these do not have an expiration date), volatility of 135.07%, risk-free rate of 3.88%, and expected dividend rate of 0%). The grant date fair value of the December Pre-Funded Warrants was estimated to be $12.2 million on January 3, 2023 and is reflected within additional paid-in capital as of March 31, 2023 as the Pre-Funded Warrants were determined to be equity classified.

The measurement of fair value of the December Common Stock Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at January 3, 2023, the date of issuance (i.e., share price of $6.56, exercise price of $5.00, term of five and a half years beginning January 3, 2023, volatility of 135.07%, risk-free rate of 3.94%, and expected dividend rate of 0%). The grant date fair value of these December Common Stock Warrants was estimated to be $15.0 million on January 3, 2023 and is reflected within additional paid-in capital as of March 31, 2023 as the December Common Stock Warrants were determined to be equity classified.

On various dates in February 2023, the investor exercised all the December Pre-Funded Warrants for 1,860,000 shares of the Company’s common stock for proceeds to the Company of $1,860.

In addition, pursuant to the terms of the offering, the Company issued the designees of the placement agent, H.C. Wainwright & Co., LLC, the December Wainwright Warrants to purchase up to 100,000 shares of the Company’s common stock. The December Wainwright Warrants had a determined fair value of $591,090, as of the date of issuance. The December Wainwright Warrants are exercisable for a period of five and one-half years from the issuance date, at an exercise price of $6.25 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis. As these December Wainwright Warrants were issued for services provided in facilitating the private placement, the Company recorded the fair value of such December Wainwright Warrants as a cost of capital on the issuance date. The measurement of fair value was determined utilizing a Black-Scholes model considering all relevant assumptions current at January 3, 2023, the date of issuance (i.e., share price of $6.56, exercise price of $6.25, term of five and a half years beginning January 3, 2023, volatility of 135.07%, risk-free rate of 3.94%, and expected dividend rate of 0%).

A summary of warrant activity for the three months ended March 31, 2023 is as follows:

	Number of Warrants			Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2022		402,840		$	49.73	$	—		1.4
Issued		4,460,000			2.94		—		—
Expired		—			—		—		—
Exercised		(1,860,000	)		0.001		—		—
Outstanding as of March 31, 2023		3,002,840			11.04		—		4.83
Warrants exercisable as of March 31, 2023		3,002,840		$	11.04	$	—		4.83

The Company has determined that the warrants should be accounted as a component of stockholders’ equity.

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies [Abstract]

Commitments and contingencies

NOTE 6 - Commitments and Contingencies

Office lease

The Company leases office space for approximately $4,500 a month. Rent expense for the three months ended March 31, 2023 and 2022 was approximately $15,120 and $13,896, respectively. The Company is not a party to a lease that is in excess of 12 months.

Litigation

The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims. From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities.

XML

Subsequent Events

3 Months Ended

Mar. 31, 2023

Subsequent Events [Abstract]

Subsequent Events

NOTE 7 – Subsequent Events

The Company evaluates events that have occurred after the balance sheet date through the date for which the condensed consolidated financial statements are issued. Based upon the evaluation, except as set forth herein, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.

On May 11, 2023, the Company provided notice to the Virginia Commonwealth University Intellectual Property Foundation (“VCU”) of its intent to terminate the exclusive license agreement (the “Agreement”) by and between the Company and VCU dated May 18, 2020. The Agreement will terminate 90 days after the date notice is provided, or August 9, 2023.

XML

Accounting Policies, by Policy (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Basis of presentation and principles of consolidation

Basis of Presentation and Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. These unaudited interim condensed consolidated financial statement results are not necessarily indicative of results to be expected for the full fiscal year or any future period. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 31, 2023.

The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company’s wholly-owned subsidiary, Hoth Therapeutics Australia Pty Ltd, which was incorporated under the laws of the State of Victoria in Australia on June 5, 2019. All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Reclassifications

Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. These reclassifications had no impact on net income (loss), stockholder’s equity or cash flows as previously reported.

Use of estimates

Use of estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. The most significant estimates in the Company’s condensed consolidated financial statements relate to stock-based compensation and the valuation allowance of deferred tax assets resulting from net operating losses. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations may be affected.

Significant Accounting Policies

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as filed with the SEC on March 31, 2023.

Cash

Cash

Cash consists of bank accounts and total $13,044,382 and $6,428,611 as of March 31, 2023 and December 31, 2022, respectively. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits at the two financial institutions the Company utilizes for its banking requirements. Accounts at each financial institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. The Company’s cash deposits above the FDIC insured amounts totaled $12,221,474 and $5,542,838 as of March 31, 2023 and December 31, 2022, respectively. The Company’s foreign bank accounts are not subject to FDIC insurance. Cash held in the Company’s Australian bank accounts as of March 31, 2023 and December 31, 2022, was $322,908 and $385,771 in U.S. dollars, respectively.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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

Fair Value Measurement

Fair Value Measurement

FASB ASC 820, Fair Value Measurements, provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.

Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

Investment in joint ventures

Investment in joint ventures

Ownership interests in entities for which the Company has significant influence that are not consolidated are accounted for as equity method investments. SEC Staff Announcement: Accounting for Limited Partnership Investments (codified in ASC 323-30-S99-1) guidance requires the use of the equity method unless the investor’s interest “is so minor that the limited partner may have virtually no influence over partnership operating and financial policies.” The SEC staff’s position is that investments in limited partnerships of greater than 3% to 5% are considered more than minor and, therefore, should be accounted for using the equity method or fair value option. Investments accounted for using the equity method may be reported on a lag up to three months if financial statements of the investee are not available in sufficient time for the investor to apply the equity method as of the current reporting date. The determination of whether an investee’s results are recorded on a lag is made on an investment-by-investment basis. This investment in joint ventures is further described in Note of 4 these consolidated financial statements.

Income taxes

Income taxes

Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

Net loss per share

Net loss per share

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 March 31,
Potentially dilutive securities	2023		2022
Warrants		3,002,840		402,840
Options		104,651		104,651
Non-vested restricted stock awards		3,384		76
Total		3,110,875		507,567

Recent accounting pronouncements

Recent accounting pronouncements

Currently, management does not believe that any other recently issued, but not yet effective accounting pronouncements, if currently adopted, would have a material impact on the Company’s condensed consolidated financial statements.

XML

Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule of anti-dilutive impact on the company’s net loss

	As of March 31,
Potentially dilutive securities	2023		2022
Warrants		3,002,840		402,840
Options		104,651		104,651
Non-vested restricted stock awards		3,384		76
Total		3,110,875		507,567

XML

License Agreements (Tables)

3 Months Ended

Mar. 31, 2023

License Agreement [Abstract]

Schedule of research and development expenses for licenses acquired

	Three Months Ended March 31,
	2023		2022
The George Washington University	$	41,158	$	16,272
North Carolina State University		—		20,000
Virginia Commonwealth University		6,250		—
University of Cincinnati		625		5,000
	$	48,033	$	41,272

XML

Fair Value of Financial Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value of Financial Assets and Liabilities [Abstract]

Schedule of assets and liabilities that are measured at fair value

	Fair value measured at March 31, 2023
	Total at March 31, 2023		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Marketable securities - mutual funds	$	190,517	$	190,517	$	—	$	—
Investment in joint ventures	$	33,000	$	—	$	—	$	33,000

	Fair value measured at December 31, 2022
	Total at December 31, 2022		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Marketable securities - mutual funds	$	209,320	$	209,320	$	—	$	—
Investment in joint ventures	$	33,000	$	—	$	—	$	33,000

Schedule of changes in the fair value of the company’s level 3 financial assets

Investment in joint venture at March 31, 2023
Investment in joint ventures at fair value at December 31, 2022	$	33,000
Change in fair value of investments in joint ventures		—
Investment in joint ventures at fair value at March 31, 2023	$	33,000

Investment in joint venture at March 31, 2022
Investment in joint ventures at fair value at December 31, 2021	$	410,000
Change in fair value of investments in joint ventures		—
Investment in joint ventures at fair value at March 31, 2022	$	410,000

XML

Stockholders Equity (Tables)

3 Months Ended

Mar. 31, 2023

Stockholders' Equity Note [Abstract]

Schedule of restricted stock awards granted

	Number of Restricted Stock Awards		Weighted Average Grant Day Fair Value
Nonvested at December 31, 2022		3,384		3.16
Granted		—		—
Vested		—		—
Nonvested at March 31, 2023		3,384		3.16

Schedule of stock option plan

	Number of Shares		Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2022		104,651	$	49.80	$	—		8.3
Employee options issued		—	$	—		—		—
Outstanding as of March 31, 2023		104,651	$	49.80	$	—		8.1
Options vested and exercisable as of March 31, 2023		104,651	$	49.80	$	—		8.1

Schedule of stock-based compensation expense

	Three Months Ended March 31,
	2023		2022
Employee stock option awards	$	—	$	560,375
Non-employee restricted stock awards		1,972		791
Non-employee stock warrant awards		8,658		16,272
	$	10,630	$	577,438

Schedule of warrant activity

	Number of Warrants			Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2022		402,840		$	49.73	$	—		1.4
Issued		4,460,000			2.94		—		—
Expired		—			—		—		—
Exercised		(1,860,000	)		0.001		—		—
Outstanding as of March 31, 2023		3,002,840			11.04		—		4.83
Warrants exercisable as of March 31, 2023		3,002,840		$	11.04	$	—		4.83

XML

Organization and Description of Business Operations (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended
	Dec. 29, 2022	Mar. 31, 2023
Organization and Description of Business Operations (Details) [Line Items]
Shares of common stock	140,000
Common stock, shares purchase	1,860,000
Warrants to purchase	2,500,000
Common stock, purchase price (in Dollars per share)	$ 5
Aggregate gross proceeds (in Dollars)	$ 10
Exercise price, per share (in Dollars per share)	$ 5
Warrant exercisable term, description		The December Wainwright Warrants are exercisable for a period of five and one-half years from the issuance date at an exercise price of $6.25 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis.
Pre-Funded Warrant [Member]
Organization and Description of Business Operations (Details) [Line Items]
Exercise price, per share (in Dollars per share)	$ 0.001
Wainwright Warrants [Member]
Organization and Description of Business Operations (Details) [Line Items]
Purchase of shares	100,000

XML

Significant Accounting Policies (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Significant Accounting Policies (Details) [Line Items]
Bank accounts	$ 13,044,382	$ 6,428,611
Federal deposit insurance corporation	250,000
Insured amount	12,221,474	5,542,838
Australian bank accounts	$ 322,908	$ 385,771
Minimum [Member] | Limited Partnership [Member]
Significant Accounting Policies (Details) [Line Items]
Limited partnership, percentage	3.00%
Maximum [Member] | Limited Partnership [Member]
Significant Accounting Policies (Details) [Line Items]
Limited partnership, percentage	5.00%

XML

Significant Accounting Policies (Details) - Schedule of anti-dilutive impact on the company’s net loss - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	3,110,875	507,567
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	3,002,840	402,840
Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	104,651	104,651
Non-Vested Restricted Stock Awards [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	3,384	76

XML

License Agreements (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
License Agreements (Details) [Line Items]
Recorded an expense	$ 30,000
Warrant [Member]
License Agreements (Details) [Line Items]
Expenses related to warrants granted	8,658
The George Washington University [Member]
License Agreements (Details) [Line Items]
License fee	2,500	$ 16,272
North Carolina State University [Member]
License Agreements (Details) [Line Items]
License fee	0	20,000
Virginia Commonwealth University [Member]
License Agreements (Details) [Line Items]
License fee	6,250	0
Chelexa Biosciences, Inc. and the University of Cincinnati [Member]
License Agreements (Details) [Line Items]
License fee	$ 625	$ 5,000

XML

License Agreements (Details) - Schedule of research and development expenses for licenses acquired - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
License Agreements (Details) - Schedule of research and development expenses for licenses acquired [Line Items]
Total	$ 48,033	$ 41,272
The George Washington University [Member]
License Agreements (Details) - Schedule of research and development expenses for licenses acquired [Line Items]
Total	41,158	16,272
North Carolina State University [Member]
License Agreements (Details) - Schedule of research and development expenses for licenses acquired [Line Items]
Total		20,000
Virginia Commonwealth University [Member]
License Agreements (Details) - Schedule of research and development expenses for licenses acquired [Line Items]
Total	6,250
Chelexa Biosciences, Inc. and the University of Cincinnati [Member]
License Agreements (Details) - Schedule of research and development expenses for licenses acquired [Line Items]
Total	$ 625	$ 5,000

XML

Fair Value of Financial Assets and Liabilities (Details) - USD ($)	1 Months Ended		3 Months Ended	12 Months Ended
	Mar. 28, 2020	Mar. 27, 2020	Mar. 31, 2023	Dec. 31, 2022	Dec. 06, 2021	May 04, 2020
Fair Value of Financial Assets and Liabilities (Details) [Line Items]
Purchased percentage		$ 5
Outstanding membership interests		$ 250,000
Membership interests		25.00%
Interest amount		$ 3,000,000
Membership interest amount		$ 250,000
Interest purchase agreement	1.00%
Purchase price	$ 100,000
Impairment charges				$ 400,000
Investment value			$ 0	0
Unrealized loss				27,000
Investment value			$ 33,000	$ 33,000
Class B common stock [Member]
Fair Value of Financial Assets and Liabilities (Details) [Line Items]
Purchased shares (in Shares)						120,000
Common stock value						$ 60,000
Shares issued (in Shares)					100,000
Price per share (in Dollars per share)			$ 0.15

XML

Fair Value of Financial Assets and Liabilities (Details) - Schedule of assets and liabilities that are measured at fair value - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Assets
Marketable securities - mutual funds	$ 190,517	$ 209,320
Investment in joint ventures	33,000	33,000
Quoted prices in active markets (Level 1) [Member]
Assets
Marketable securities - mutual funds	190,517	209,320
Investment in joint ventures
Significant other observable inputs (Level 2) [Member]
Assets
Marketable securities - mutual funds
Investment in joint ventures
Significant unobservable inputs (Level 3) [Member]
Assets
Marketable securities - mutual funds
Investment in joint ventures	$ 33,000	$ 33,000

XML

Fair Value of Financial Assets and Liabilities (Details) - Schedule of changes in the fair value of the company’s level 3 financial assets - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Schedule Of Changes In The Fair Value Of The Company SLevel3 Financial Assets [Abstract]
Investment in joint ventures at fair value	$ 33,000	$ 410,000
Change in fair value of investments in joint ventures
Investment in joint ventures at fair value	$ 33,000	$ 410,000

XML

Stockholders Equity (Details) - USD ($)							1 Months Ended		3 Months Ended
	Jan. 11, 2023	Jan. 03, 2023	Mar. 24, 2022	Feb. 02, 2022	Jun. 24, 2021	Jan. 02, 2021	Feb. 28, 2023	Dec. 29, 2022	Mar. 31, 2023	Dec. 31, 2022	Dec. 12, 2022
Stockholders Equity (Details) [Line Items]
Common stock, shares authorized									50,000,000	50,000,000
Securities purchase agreements description									On December 29, 2022, the Company entered into a securities purchase agreement with an accredited investor pursuant to which it sold (i) 140,000 shares of common stock, (ii) December Pre-Funded Warrants to purchase up to 1,860,000 shares of common stock and (iii) December Common Stock Warrants to purchase up to 2,500,000 shares of common stock at a purchase price of $5.00 per share and accompanying warrant (less $0.001 for each December Pre-Funded Warrant) in a private placement for aggregate gross proceeds of approximately $10 million, exclusive of placement agent commission and fees and other offering expenses, and approximately $8.9 million in net proceeds. The closing of the offering occurred on January 3, 2023.
Aggregate of shares						66,878
Unrecognized stock-based compensation expense (in Dollars)									$ 8,000
Unrecognized stock-based compensation term									1 year 2 months 12 days
Unvested stock options (in Dollars)									$ 0
Common stock shares								140,000
Purchase of share								2,500,000
Purchase price per share (in Dollars per share)								$ 5
Accompanying warrant per share (in Dollars per share)								$ 0.001
Gross proceeds (in Dollars)								$ 10,000,000
Common stock warrant term, description								Each December Common Stock Warrant is exercisable for a period of five and one-half years from the issuance date at an exercise price of $5.00 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis.
Exercise price per share (in Dollars per share)		$ 5						$ 5
Warrants exercise price (in Dollars per share)		$ 0.001
Issuance term		6 years 6 months 21 days
Debt term		30 years
Volatility rate		135.07%
Risk-free rate		3.94%
Dividend rate		0.00%
Common stock and accompanying warrant (in Dollars)		$ 15
Fair value (in Dollars)									$ 591,090
Pre-Funded Warrant [Member]
Stockholders Equity (Details) [Line Items]
Purchase of share								1,860,000
Common Stock [Member]
Stockholders Equity (Details) [Line Items]
Volatility rate		135.07%
Risk-free rate		3.88%
Dividend rate		0.00%
Warrant [Member]
Stockholders Equity (Details) [Line Items]
Exercise price per share (in Dollars per share)		$ 6.25
Minimum [Member] | Common Shares [Member]
Stockholders Equity (Details) [Line Items]
Common stock, shares authorized											3,000,000
Maximum [Member] | Common Shares [Member]
Stockholders Equity (Details) [Line Items]
Common stock, shares authorized											50,000,000
Public Offering of Securities [Member]
Stockholders Equity (Details) [Line Items]
Wainwright warrants, description									The December Wainwright Warrants are exercisable for a period of five and one-half years from the issuance date, at an exercise price of $6.25 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis.
Warrant [Member]
Stockholders Equity (Details) [Line Items]
Warrants exercise price (in Dollars per share)		$ 6.56
Volatility rate		135.07%
Risk-free rate		3.94%
Dividend rate		0.00%
Warrant [Member] | Placement Agent Warrant [Member]
Stockholders Equity (Details) [Line Items]
Warrants exercise price (in Dollars per share)								$ 0.001
Series B Convertible Preferred Stock [Member]
Stockholders Equity (Details) [Line Items]
Redeemed for aggregate (in Dollars)		$ 6.56
Preferred stock designated							1,860,000
aggregate purchase price (in Dollars)							$ 1,860
Series B Convertible Preferred Stock [Member] | Minimum [Member]
Stockholders Equity (Details) [Line Items]
Common stock, shares authorized									100,000
Investor [Member] | Common Stock [Member]
Stockholders Equity (Details) [Line Items]
Aggregate of shares		12.2
2018 Equity Incentive Plan [Member]
Stockholders Equity (Details) [Line Items]
Aggregate of shares						26,878
2018 Equity Incentive Plan [Member] | Minimum [Member]
Stockholders Equity (Details) [Line Items]
Issuance of share	156,878			146,878	66,878
2018 Equity Incentive Plan [Member] | Maximum [Member]
Stockholders Equity (Details) [Line Items]
Issuance of share	166,878			156,878	146,878
2022 Equity Incentive Plan [Member]
Stockholders Equity (Details) [Line Items]
Issuance of share			96,000

XML

Stockholders Equity (Details) - Schedule of restricted stock awards granted	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Schedule Of Restricted Stock Awards Granted [Abstract]
Number of Restricted Stock Awards, Nonvested at Beginning Balance | shares	3,384
Weighted Average Grant Day Fair Value, Nonvested at Beginning Balance | $ / shares	$ 3.16
Number of Restricted Stock Awards, Granted | shares
Weighted Average Grant Day Fair Value, Granted | $ / shares
Number of Restricted Stock Awards, Vested | shares
Weighted Average Grant Day Fair Value, Vested | $ / shares
Number of Restricted Stock Awards, Nonvested at Ending Balance | shares	3,384
Weighted Average Grant Day Fair Value, Nonvested at Ending Balance | $ / shares	$ 3.16

XML

Stockholders Equity (Details) - Schedule of stock option plan	3 Months Ended
	Mar. 31, 2023 USD ($) $ / shares shares
Schedule Of Stock Option Plan [Abstract]
Number of Shares, Outstanding as of Beginning Balance | shares	104,651
Weighted Average Exercise Price, Outstanding as of Beginning Balance | $ / shares	$ 49.8
Total Intrinsic Value, Outstanding as of Beginning Balance | $
Weighted Average Remaining Contractual Life (in years), Outstanding as of Beginning Balance	8 years 3 months 18 days
Number of Shares, Employee options issued | shares
Weighted Average Exercise Price, Employee options issued | $ / shares
Total Intrinsic Value, Employee options issued | $
Weighted Average Remaining Contractual Life (in years), Employee options issued
Number of Shares, Outstanding Ending Balance | shares	104,651
Weighted Average Exercise Price, Outstanding Ending Balance | $ / shares	$ 49.8
Total Intrinsic Value, Outstanding Ending Balance | $
Weighted Average Remaining Contractual Life (in years), Outstanding Ending Balance	8 years 1 month 6 days
Number of Shares, Options vested and exercisable | shares	104,651
Weighted Average Exercise Price, Options vested and exercisable | $ / shares	$ 49.8
Total Intrinsic Value, Options vested and exercisable | $
Weighted Average Remaining Contractual Life (in years), Options vested and exercisable	8 years 1 month 6 days

XML

Stockholders Equity (Details) - Schedule of stock-based compensation expense - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Stockholders Equity (Details) - Schedule of stock-based compensation expense [Line Items]
Stock-based compensation expense, total	$ 10,630	$ 577,438
Employee stock option awards [Member]
Stockholders Equity (Details) - Schedule of stock-based compensation expense [Line Items]
Stock-based compensation expense, total		560,375
Non-employee restricted stock awards [Member]
Stockholders Equity (Details) - Schedule of stock-based compensation expense [Line Items]
Stock-based compensation expense, total	1,972	791
Non-employee stock warrant awards [Member]
Stockholders Equity (Details) - Schedule of stock-based compensation expense [Line Items]
Stock-based compensation expense, total	$ 8,658	$ 16,272

XML

Stockholders Equity (Details) - Schedule of warrant activity - Warrants [Member]	3 Months Ended
	Mar. 31, 2023 USD ($) $ / shares shares
Stockholders Equity (Details) - Schedule of warrant activity [Line Items]
Number of Warrants, Outstanding as of Beginning Balance | shares	402,840
Weighted Average Exercise Price, Outstanding as of Beginning Balance | $ / shares	$ 49.73
Total Intrinsic Value, Outstanding as of Beginning Balance | $
Weighted Average Remaining Contractual Life (in years), Outstanding as of Beginning Balance	1 year 4 months 24 days
Number of Warrants, Issued | shares	4,460,000
Weighted Average Exercise Price, Issued | $ / shares	$ 2.94
Total Intrinsic Value, Issued | $
Weighted Average Remaining Contractual Life (in years), Issued
Number of Warrants, Expired | shares
Weighted Average Exercise Price, Expired | $ / shares
Total Intrinsic Value, Expired | $
Weighted Average Remaining Contractual Life (in years), Expired
Number of Warrants, Exercised | shares	(1,860,000)
Weighted Average Exercise Price, Exercised | $ / shares	$ 0.001
Total Intrinsic Value, Exercised | $
Weighted Average Remaining Contractual Life (in years), Exercised
Number of Warrants, Outstanding as of Ending Balance | shares	3,002,840
Weighted Average Exercise Price, Outstanding as of Ending Balance | $ / shares	$ 11.04
Total Intrinsic Value, Outstanding as of Ending Balance | $
Weighted Average Remaining Contractual Life (in years), Outstanding as of Ending Balance	4 years 9 months 29 days
Number of Warrants, Warrants exercisable | shares	3,002,840
Weighted Average Exercise Price, Warrants exercisable | $ / shares	$ 11.04
Total Intrinsic Value, Warrants exercisable | $
Weighted Average Remaining Contractual Life (in years), Warrants exercisable	4 years 9 months 29 days

XML

Commitments and Contingencies (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Commitments and Contingencies [Abstract]
Leases office space	$ 4,500
Rent expense	$ 15,120	$ 13,896