What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-28 compared with 2023-03-31 · 510 added, 444 removed, 455 unchanged (68% of the section changed)

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Consolidated Financial Statements

Report of Independent Registered

Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

as of December 31, 2022 and 2021

Consolidated Statements of

Operations and Comprehensive Loss for the years ended December 31, 2022 and 2021

Consolidated Statements of

Changes in Stockholders’ Equity for the years ended December 31, 2022 and 2021

Consolidated Statements of

Cash Flows for the years ended December 31, 2022 and 2021

Notes to Consolidated Financial

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 2023 and 2022

Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023 and 2022

Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

Notes to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors

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(the “Company”) as of December 31, 2023 and 2022, the related consolidated statements

of operations and comprehensive loss, changes in stockholders’ equity and cash flows, for each of the two years in the period ended

December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion,

the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as

of December 31, 2022 and 2021, and the consolidated results of its operations and its cash flows for each of the two years in the period

ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

of operations, changes in stockholders’ equity and cash flows, for each of the two years in the period ended December 31, 2023,

and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated

financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023

and 2022, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31,

2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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/S/ WithumSmith+Brown, PC

We have served as the Company’s auditor since

We have served as the Company’s auditor

New York, New York

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Hoth Therapeutics, Inc.

Consolidated Balance Sheets

Consolidated Balance

Current assets:

Marketable equity securities, at fair value

Prepaid expenses

Note receivable - current

Prepaid expenses and other current assets

Total current assets

Right of use asset – operating lease

Investment in joint ventures at fair value

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Accrued license fee - current portion

Lease liability, current

Total current liabilities

Lease liability, noncurrent

Accrued license fee - less current portion

Total liabilities

Commitments and contingencies

Commitments and Contingencies (See Note 7)

Stockholders’ equity:

Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized;

2,000,000 and - 0 - shares issued and outstanding at December 31, 2022 and 2021, respectively

3,000,000 shares undesignated;

0 shares issued and outstanding as of December 31, 2023 and December 31, 2022

Series A Convertible Preferred Stock, $ 0.0001 par value, 5,000,000 shares designated;

- 0 - shares issued and outstanding at December 31, 2022 and 2021

0 shares issued and outstanding at December 31, 2023 and December 31, 2022

Series B Preferred Stock, $ 0.0001 par value, 2,000,000 shares designated;

- 0 - shares issued and outstanding at December 31, 2022 and 2021

Common stock, $ 0.0001 par value, 50,000,000 shares authorized;

1,302,113 and 959,009 shares issued and outstanding at December 31, 2022 and 2021, respectively

0 shares issued and outstanding as of December 31, 2023 and December 31, 2022

Common stock, $ 0.0001 par value, 50,000,000 shares authorized, 4,348,129 and 1,302,113 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

Additional paid-in capital

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Consolidated Statements of Operations and Comprehensive

For the Years Ended

For the Year Ended

Operating costs and expenses

Research and development

Research and development - licenses acquired (including stock-based compensation)

Compensation and related expenses (including stock-based compensation)

Professional fees (including stock-based compensation)

Other general and administrative expenses

General and administrative expenses

Total operating expenses

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( 11,065,554 )

Other (expenses) income

Losses on marketable securities

Other income (expense), net

Unrealized gain (loss) on marketable securities

Realized loss on marketable securities

Change in fair value of investments in joint ventures

Interest income

Other income (expenses), net

Total other expenses

$ ( 11,371,953 )

$ ( 14,313,705 )

Other comprehensive income

Foreign currency translation adjustment

Total comprehensive loss

Dividend income

Other income, net

Total other income (expense), net

$ ( 7,845,390 )

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$ ( 11,370,963 )

Net loss per share applicable to common stockholders - basic and diluted

Net loss per share - basic and diluted

Weighted average number of common shares outstanding, basic and diluted

Comprehensive loss:

$ ( 7,845,390 )

$ ( 11,371,953 )

Other comprehensive income

Foreign currency translation adjustment

Total comprehensive loss

$ ( 7,840,136 )

$ ( 11,367,533 )

The accompanying notes are an integral part

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Preferred Stock

Other Comprehensive

Comprehensive

Stockholders’

Balance at December 31, 2020

Income (Loss)

Balance as of December 31, 2021

$ ( 33,727,163 )

Issuance of common stock, common stock warrants and prefunded warrants (net of offering costs of $ 1,591,600 )

Issuance of common stock and warrants (net of offering costs of $ 572,500 )

Warrant exercise

Stock-based compensation

Vesting of restricted stock

Issuance of common stock (net of offering costs of $ 1,014,896 )

Issuance of Series B preferred stock

Redemption of Series B preferred stock

( 2,000,000 )

Fractional shares adjusted for reverse split

Cumulative translation adjustment

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( 11,371,953 )

Balance at December 31, 2021

Balance as of December 31, 2022

$ ( 45,099,116 )

Exercise of warrants

Stock-based compensation

Issuance of common stock (net of offering costs of $ 1,014,896 )

Issuance of Series B preferred stock

Redemption of Series B preferred stock

( 2,000,000 )

Fractional shares adjusted for reverse

Common stock and warrants issued in private placement (net of offering costs of $ 1,575,645 )

Vesting of restricted stock awards

Cumulative translation adjustment

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( 7,845,390 )

Balance at December

Balance as of December 31, 2023

$ ( 52,944,506 )

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Consolidated Statements of Cash Flows

For the Years Ended

Year Ended December 31,

Cash flows from operating activities

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Adjustments to reconcile net loss to net cash used in operating activities:

Research and development – licenses acquired

Research and development-acquired license, expensed

Gain on termination of license agreement

Change in fair value of investments in joint ventures

Stock-based compensation

Realized loss on marketable equity securities

Unrealized (gain) loss on marketable equity securities

Loss on foreign currency exchange

Realized loss on marketable securities

Unrealized (gain) loss on marketable securities

Changes in operating assets and liabilities:

Prepaid expenses

Accounts payable and accrued

Prepaid expenses and other current assets

Accounts payable and accrued expenses

Net cash used in operating activities

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Purchase of research and development licenses

Purchase of marketable equity securities

( 2,556,135 )

Sale of marketable equity securities

Net cash provided by (used in) investing activities

Sale of marketable securities

Net cash provided by investing activities

Cash flows from financing activities

Proceeds from issuance common stock, common stock warrants and prefunded warrants, net of offering cost

Proceeds from issuance common stock and warrants, net of offering cost

Proceeds from issuance common stock, net of offering cost

Proceeds from issuance common stock, common stock warrants and prefunded warrants, net of offering costs

Proceeds from exercise of warrants

Proceeds from issuance common stock, net of offering costs

Proceeds from issuance of Series B Preferred Stock

Redemption of Series B Preferred Stock

Proceeds from exercise of warrants

Proceeds from repayment of note receivable and interest received

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( 2,100,066 )

Cash, beginning of period

Cash, end of period

Non-cash investing and financing activities

Fractional shares adjusted for reverse split

Cash, beginning of year

Cash, end of year

Supplemental disclosure of cash flow information:

ROU assets obtained in exchange for lease liability

The accompanying notes are an integral part

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(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

The Company is focused on developing (i) a topical formulation for treating side effects from drugs used for the treatment of

cancer (HT-001);

subsidiaries, merveille.ai and Hoth Therapeutics Australia Pty Ltd, the “Company”) was incorporated under the laws of the

State of Nevada on May 16, 2017 .

The Company is a clinical-stage biopharmaceutical company focused on developing new generation therapies

for unmet medical needs.

The Company is focused on developing (i) a topical formulation for treating side effects from drugs used for

the treatment of cancer (HT-001);

(ii) a treatment for mast-cell derived cancers and anaphylaxis (HT-KIT);

(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).

(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

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);

(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 continuing to evaluate a novel peptide that may be used to slow the transmission of SARS-CoV-2.

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 6 for a discussion of the Company’s agreement with Zylö Therapeutics, Inc.

The Company also has interests in certain other assets being developed by third parties (see Note 5 to the consolidated financial statements

for a discussion of the Company’s agreement with Zylö Therapeutics, Inc.

and Voltron Therapeutics, Inc.).

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Accounting Standards Update (“ASU”)

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.

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

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

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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 equity securities when needed is subject to many risks and uncertainties and, even if it were successful, future equity issuances may

result in dilution to its existing shareholders and future debt securities may contain covenants that limit the Company’s operations

or ability to enter into certain transactions.

The Company believes its current cash is

sufficient to fund operations for at least the next 12 months from the issuance date of these financial statements.

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.

such funding is not available, or not available on terms acceptable to the Company, the Company’s current development plan and

plans for expansion of its general and administrative infrastructure may be curtailed.

On December 29, 2022, the Company entered into

a securities purchase agreement with an accredited investor pursuant to which it agreed to sell an aggregate of (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 and accompanying 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 H.C.

& 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

The Company believes its current cash is sufficient

to fund operations for at least the next 12 months from the issuance date 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.

On September 13, 2023, the Company entered into

a securities purchase agreement with certain institutional investors pursuant to which it sold (i) 549,275 shares of common stock and

(ii) pre-funded warrants (the “September Pre-Funded Warrants”) to purchase up to 550,725 shares of common stock at

a purchase price of $ 2.63 per share of common stock and a purchase price of $ 2.629 per September Pre-Funded Warrant.

Concurrently with

the sale of common stock and/or the September Pre-Funded Warrants, pursuant to the securities purchase agreement, in

a private placement, the Company issued and sold warrants (the “September Common Stock Warrants”) to purchase up to

1,100,000 shares of common stock.

Proceeds from the offering were approximately $ 2.9 million, prior

to deducting placement agent’s fees and other offering expenses payable by the Company .

The closing of the offering occurred

on September 15, 2023.

Each September Common Stock Warrant is exercisable for a period of five years from the issuance date at an exercise

price of $ 2.505 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis.

Each September

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

In addition, pursuant to the terms of the offering, the Company issued to designees of H.C.

Wainwright & Co., LLC warrants

(“September Wainwright Warrants”) to purchase up to 55,000 shares of the Company’s common stock.

The September Wainwright

Warrants are exercisable for a period of five years from the commencement of sales pursuant to the offering at an exercise price of $ 3.2875

per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis.

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 consolidated financial statements have been retrospectively adjusted

to reflect the effect of the Reverse Stock Split for all periods presented.

Note 2-Significant accounting policies

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The accompanying 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.

include the accounts of the Company’s wholly-owned subsidiaries, merveille.ai which was incorporated under the laws of Nevada on

October 4, 2023 and Hoth Therapeutics Australia Pty Ltd, which was incorporated under the laws of the State of Victoria in Australia on

June 5, 2019.

All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain line items on the statement of operations

and comprehensive loss for the year ended December 31, 2022 have been reclassified to conform to the current period presentation.

and development - licenses acquired (including stock-based compensation) of $ 0.1 million was reclassified to research and development.

Compensation and related expenses (including stock-based compensation) of $ 2.6 million, professional fees (including stock-based compensation)

of $ 2.5 million, rent of $ 0.1 million, and other general and administrative expense of $ 1.0 million were consolidated into one general

and administrative line item.

Dividend income and realized and unrealized gains and losses have been separately presented within other

income (expense), net.

These reclassifications did not change our reported net loss or comprehensive loss for the year ended December

Emerging growth

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required to comply with the new or revised financial accounting standards.

The JOBS Act provides that an emerging growth company can

elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any

such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period which means that when

a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth

The JOBS Act provides that an emerging growth company can elect

to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such

election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period which means that when a

standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth

company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

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standards used.

However, beginning December 31, 2024, we will no longer be an “emerging growth company,” and will no longer

have the ability to delay adoption of these new or revised accounting standards, or to take advantage of reduced corporate governance

Use of estimates

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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 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.

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 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 will be affected.

To the extent there

are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Cash and cash equivalents

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There were no cash equivalents as of December

31, 2022 and 2021.

31, 2023 and December 31, 2022, respectively.

Cash held in foreign bank accounts totaled $ 0.1 million and $ 0.4 million as of December

31, 2023 and December 31, 2022, respectively.

Marketable securities

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and are carried at fair value.

The Company’s marketable securities consist of a mutual fund which is valued at a quoted market

The Company’s marketable securities consist of a mutual fund which is valued at a quoted market price.

Concentrations of credit risk and off-balance

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use in pricing an asset or a liability.

The fair value of the Company’s assets and liabilities, which

would qualify as financial instruments under ASC Topic 820, approximates the carrying amounts represented in the Company’s balance

sheet, primarily due to their short-term nature.

The fair value of the Company’s assets and

liabilities, which would qualify as financial instruments under ASC Topic 820, approximates the carrying amounts represented in the Company’s

balance sheet, primarily due to their short-term nature.

The accounting guidance classifies fair value

measurements in one of the following three categories for disclosure purposes:

Quoted prices in active markets

for identical assets or liabilities.

Inputs other than Level 1

prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.

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.

Quoted prices in active markets for identical assets or liabilities.

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

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

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categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

Fair value option - Note receivable

The guidance in ASC 825, Financial Instruments ,

provides a fair value option election that allows entities to make an irrevocable election of fair value as the initial and subsequent

measurement attribute for certain eligible financial assets and liabilities.

Unrealized gains and losses on items for which the fair

value option has been elected are reported in earnings.

The decision to elect the fair value option is determined on an instrument-by-instrument

basis and must be applied to an entire instrument and is irrevocable once elected.

Assets and liabilities measured at fair value pursuant

to this guidance are required to be reported separately in the Company’s consolidated balance sheets from those instruments using

another accounting method.

During the years ended December 31, 2023 and December 31, 2022, there were no changes in valuation techniques or transfers between Level

1, Level 2, and Level 3.

The Company determines if an arrangement is a

lease at inception and classifies its leases at commencement.

Operating leases are presented as right-of-use (“ROU”) assets

and the corresponding lease liabilities are included in lease liability, current and lease liability, on the Company’s balance sheets.

ROU assets represent the Company’s right to use an underlying asset, and lease liabilities represent the Company’s obligation

to make lease payments in exchange for the ability to use the asset for the duration of the lease term.

The Company has lease agreements which contain

both lease and non-lease components, which it has elected to account for as a single lease component.

As such, minimum lease payments

include fixed payments for non-lease components within a lease agreement but exclude variable lease payments not dependent on an index

or rate, such as common area maintenance, operating expenses, utilities, or other costs that are subject to fluctuation from period to

Certain of the leases contain an option to extend the term of the lease.

The option to extend a lease is included in the lease

term only when it is reasonably certain that the Company will elect that option.

Additionally, the Company does not record ROU assets

or lease liabilities for short-term leases that have a term of twelve months or less at lease commencement.

ROU assets and lease liabilities are recognized

at the commencement date and determined using the present value of the future minimum lease payments over the lease term.

uses an incremental borrowing rate based on an estimated rate of interest for collateralized borrowing since the Company’s leases

do not include an implicit interest rate.

The estimated incremental borrowing rate considers market data, actual lease economic environment,

and the lease term at commencement date.

Investment in joint ventures

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financial statements.

Accounts Payable

For the year ended December 31, 2023, the Company’s

subsidiary Hoth Therapeutics Australia Pty Ltd, recorded approximately a $ 260,000 gain due to a settlement agreement on a payable balance

with Novotech, a clinical trial management vendor.

The gain is recognized in the consolidated statements of operations and comprehensive

loss following a manner consistent with how the expense was originally recorded.

development costs

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Stock-based compensation

The Company accounts for share-based payment

awards exchanged for services at the estimated grant date fair value of the award.

Stock options issued under the Company’s long-term

incentive plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of

grant and expire up to ten years from the date of grant.

These options generally vest over a one to five year period .

The Company accounts

for forfeited awards as they occur.

The Company accounts for share-based payment awards

exchanged for services at the estimated grant date fair value of the award.

Stock options issued under the Company’s long-term incentive

plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and

expire up to ten years from the date of grant.

Options are generally issued fully vested.

The Company accounts for forfeited awards as

The Company estimates the fair value of stock

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future, and, therefore, uses an expected dividend yield of zero in its valuation models.

Income taxes are recorded in accordance with

ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach.

recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the 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

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 grants restricted stock awards under

its equity incentive plan.

Restricted stock awards are granted to employees and non-employees.

The restricted stock awards are measured

based on the grant-date fair value.

In general, the restricted stock awards vest over a service period of zero to three years.

compensation expense is generally recognized based on the straight-line basis over the requisite service period and forfeitures are accounted

for as they occur.

The Company has issued warrants to non-employees.

The warrants are measured based on the grant-date fair value.

In general, the warrants vest over a term of zero to ten years.

compensation expense is generally recognized based on the straight-line basis over the vesting term.

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 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

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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.

to the extent that the benefit would more likely than not be realized.

The determination as to whether the tax benefit will more likely

than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

Net loss per share

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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 December 31,

Year Ended December 31,

Potentially dilutive securities

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Note 3-License Agreements

The following summarizes the Company’s

research and development expenses for licenses acquired during the years ended December 31, 2022 and 2021:

For the Years Ended

The following summarizes the Company’s research

and development expenses for licenses acquired during the years ended December 31, 2023 and 2022:

Year Ended December 31,

The George Washington University

Isoprene Pharmaceuticals, Inc.

North Carolina State University

Virginia Commonwealth University

Chelexa Biosciences, Inc.

and the University of Cincinnati

Washington University

University of Cincinnati

$ ( 201,328 )

The George Washington University

During the year ended December 31, 2023, the Company

recorded an expense of approximately $ 53,000 for related to warrants granted to The George Washington University (“GW”) pursuant

recorded an expense of approximately $ 29,000 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”).

The Company recorded an expense of $ 30,000 for a milestone

payment pursuant to GW Patent License Agreement.

The Company also recorded $ 7,500 the year ended December 31, 2023 for license maintenance

During the year ended December 31, 2022, the Company

recorded an expense of approximately $ 53,000 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”).

The Company also recorded $ 14,000 the year ended December

31, 2022 for a license maintenance fee.

During the year ended December 31, 2021, the

Company recorded an expense of approximately $ 0.1 million for related to warrants granted to GW pursuant to the GW Patent License Agreement

and the Second GW Patent License Agreement.

Isoprene Pharmaceuticals, Inc.

During the years ended December 31, 2022 and 2021,

the Company paid $ 0 and $ 15,000 , respectively, for the license fee associated with the sublicense agreement by and between the Company

and Isoprene Pharmaceuticals, Inc.

dated July 30, 2020.

31, 2022 for license maintenance fees.

North Carolina

1 unchanged sentence

During the year ended December 31, 2023, the Company

paid $ 0 for the license fee associated with the license agreement by and between the Company and North Carolina State University dated

February 25, 2021.

During the year ended December 31, 2022, the Company

paid approximately $ 28,000 for the license fee associated with the license agreement by and between the Company and North Carolina State

University dated February 25, 2021.

During the year ended December 31, 2021, the

Company paid $ 30,000 for the license fee.

Commonwealth University

During the year ended December 31, 2022 and 2021,

the Company paid $ 0 and $ 30,000 , respectively, for annual maintenance fees associated with the exclusive license agreement between the

Company and Virginia Commonwealth University Intellectual Property Foundation.

As of December 31, 2022, the Company accrued

$ 150,000 for five years of annual minimum payments and $ 125,000 for annual maintenance fees.

Virginia Commonwealth

On August 16, 2023, the Company terminated its

license agreement by and between the Company and Virginia Commonwealth University dated May 18, 2020.

As of December 31, 2023, the Company

reversed its prior accrual of $ 150,000 for five years of annual minimum payments and $ 125,000 for annual maintenance fees.

As of December 31, 2022, the Company accrued $ 150,000

4 unchanged sentences

During the year ended December 31, 2023, the Company

paid $ 2,500 for the annual license maintenance fee and $ 5,000 for the yearly minimum annual royalty fee associated with the Assignment

and Assumption Agreement by and between the Company and Chelexa Biosciences dated May 14, 2020.

paid $ 2,500 for the annual license maintenance fee and $ 5,000 for the minimum royalty fee to the University of Cincinnati associated with

the Assignment and Assumption Agreement by and between the Company and Chelexa Biosciences dated May 14, 2020.

During the year ended December 31, 2022, the Company

paid $ 2,500 for the annual license maintenance fee and $ 5,000 for the minimum royalty fee associated to the University of Cincinnati with

the Assignment and Assumption Agreement by and between the Company and Chelexa Biosciences dated May 14, 2020.

Note 4-Note Receivable

Pursuant to the sublicense agreement dated

July 30, 2020 by and between the Company and Isoprene Pharmaceuticals, Inc.

(“Isoprene”), the Company made an investment

of $ 50,000 in Isoprene in the form of a convertible promissory note (the “Isoprene Note”) on September 10, 2020.

Isoprene Note was due to mature on September 10, 2022 and accrued interest at a rate equal to the lower of:

(i) the highest lawful

rate permitted under applicable law and (ii) 6 % per annum.

The Isoprene Note could not be prepaid without the prior written consent

of the Company;

provided, however, that if the Isoprene Note had not been converted in connection with a Qualified Financing (as

defined herein) or a Change of Control (as defined in the Isoprene Note) by the two year anniversary of the date of the issuance of

the Isoprene Note, Isoprene could elect, in its sole discretion, to repay the Isoprene Note and any accrued interest thereon.

event a Qualified Financing occurred before the Isoprene Note was repaid in full on the maturity date or the conversion of such note

pursuant to a Change of Control, the Isoprene Note could be converted into such number of convertible preferred stock issued in the

Qualified Financing equal to the balance of such note divided by the Capped Conversion Price.

“Qualified Financing”

means the first sale of Isoprene’s convertible preferred stock in a private financing that results in gross proceeds of at

least $ 5 million.

“Capped Conversion Price” means the lesser of (i) the per share or unit price in the Qualified

Financing and (ii) an amount determined by dividing (A) $ 15 million by (B) the fully diluted capitalization of Isoprene immediately

prior to the conversion of the Isoprene Note.

In the event a Change of Control occurred before the Isoprene Note was repaid in full

on the maturity date or the conversion of such note pursuant to a Qualified Financing, the Isoprene Note could be converted into

such number of shares of Isoprene’s common stock equal to the quotient obtained by dividing (i) the balance of the Isoprene

Note by (ii) two times the fair market value of a share of Isoprene common stock as set for in the acquisition agreement pertaining

to such Change of Control.

As of the maturity date of the Isoprene Note, neither a Qualified Financing nor a Change of Control had

occurred, and the Isoprene Note of $ 50,000 and accrued interest of approximately $ 6,000 was paid off on October 21, 2022.

Note 5-Investments in Marketable Equity Securities

The realized gain or loss, unrealized gain or

loss, and dividend income related to marketable equity securities for the years ended December 31, 2022 and 2021, which are recorded

as a component of other income (expenses) on the consolidated statements of operations and comprehensive loss, are as follows:

For the Years Ended

Unrealized gain (loss)

$ ( 176,974 )

Realized loss

Dividend income

$ ( 386,909 )

$ ( 152,682 )

Pursuant to the sublicense agreement dated July

30, 2020 by and between the Company and Isoprene Pharmaceuticals, Inc.

(“Isoprene”), the Company made an investment of $ 50,000

in Isoprene in the form of a convertible promissory note (the “Isoprene Note”) on September 10, 2020.

The Isoprene Note was

due to mature on September 10, 2022 and accrued interest at a rate equal to the lower of:

(i) the highest lawful rate permitted under

applicable law and (ii) 6 % per annum.

The Isoprene Note could not be prepaid without the prior written consent of the Company;

however, that if the Isoprene Note had not been converted in connection with a Qualified Financing (as defined or a Change of Control

(as defined) by the two year anniversary of the date of the issuance of the Isoprene Note, Isoprene could elect, in its sole discretion,

to repay the Isoprene Note and any accrued interest thereon.

As of the maturity date of the Isoprene Note, neither a Qualified Financing

nor a Change of Control had occurred, and the Isoprene Note of $ 50,000 and accrued interest of approximately $ 6,000 was paid off on October

Note 5-Fair Value of Financial Assets and

2 unchanged sentences

Fair value measured at December 31, 2023

Marketable securities - mutual funds

Marketable securities - mutual fund

Investment in joint ventures

Note receivable - current

Fair value measured at December 31, 2022

Marketable securities - mutual funds

Marketable securities - mutual fund

Investment in joint ventures

Note receivable - current

Level 3 Measurement

2 unchanged sentences

Investment in joint ventures at fair value at December 31, 2021

Change in fair value of investments in joint ventures

Investment in joint ventures at fair value at December 31, 2022

24 unchanged sentences

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 and $ 350,000 as of December 31, 2022 and 2021.

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

The investment in HaloVax was valued at $ 0 as of December 31, 2023 and 2022.

Investment in Zylö

2 unchanged sentences

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.

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

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).

During December 2022, 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 approximate $ 27,000 in unrealized loss on this investment during the second quarter of 2022.

investment in Zylö was valued at $ 33,000 and $ 60,000 as of December 31, 2022 and 2021, respectively.

Note 7-Stockholders’ Equity

In December 2023, Zylö conducted a 409A valuation

of their Class B common stock and valued its share price at $ 0.17 per share.

This value was ratified by Zylö’s board of directors

in December 2023.

The valuation reflects a probability-weighted present value of expected future investment returns considering certain

possible outcomes and the rights of each class of Zylö’s equity.

The future values of the common stock under the various outcomes

are discounted back to the valuation date at a risk-adjusted discount rate and probability weighted to determine the value for the Class

B common stock.

Significant unobservable inputs in the valuation include:

(i) probabilities of each scenario, (ii) timing of occurrence,

(iii) future valuation;

(iv) and the risk-adjusted discount rate.

During the years ended December 31, 2023 and 2022,

the Company recorded approximately $ 4,400 in unrealized gain on this investment and $ 27,000 in unrealized loss on this investment, respectively.

The investment in Zylö was valued at $ 37,400 and $ 33,000 as of December 31, 2023 and 2022, respectively.

Note 6-Stockholder’s Equity

Preferred Stock

8 unchanged sentences

Series A Convertible Preferred Stock

The shares of Series A Convertible Preferred

Stock are not mandatorily redeemable and do not embody an unconditional obligation to settle in a variable number of equity shares.

such, the shares of Series A Convertible Preferred Stock are classified as permanent equity on the consolidated balance sheets.

contingent redemption right in the event of certain deemed liquidation events does not preclude permanent equity classification.

the shares of Series A Convertible Preferred Stock are considered an equity-like host for purposes of assessing embedded derivative features

for potential bifurcation.

The embedded conversion feature is considered to be clearly and closely related to the associated convertible

preferred stock host instrument and therefore was not bifurcated from the equity host.

The shares of Series A Convertible Preferred Stock,

par value $ 0.0001 per share, are not mandatorily redeemable and do not embody an unconditional obligation to settle in a variable number

of equity shares.

As such, the shares of Series A Convertible Preferred Stock are classified as permanent equity on the consolidated balance

The holders’ contingent redemption right in the event of certain deemed liquidation events does not preclude permanent equity

classification.

Further, the shares of Series A Convertible Preferred Stock are considered an equity-like host for purposes of assessing

embedded derivative features for potential bifurcation.

The embedded conversion feature is considered to be clearly and closely related

to the associated convertible preferred stock host instrument and therefore was not bifurcated from the equity host.

Series B Preferred Stock

5 unchanged sentences

Stock were not entitled to receive dividends or any other distributions.

The Series B Preferred Stock were entitled to ten votes per

share and voted together with the Company’s issued and outstanding shares of common stock as a single class exclusively with respect

to the Authorized Stock Increase (as defined herein).

The Series B Preferred Stock had no rights as to any distribution or assets of

the Company upon a liquidation, bankruptcy, reorganization, merger, acquisition, sale, dissolution or winding up of the Company.

outstanding shares of Series B Preferred Stock were redeemed in whole an aggregate price of $10automatically and effective immediately

after the effectiveness of the Authorized Stock Increase.

The Series B Preferred Stock were entitled to ten votes per share

and voted together with the Company’s issued and outstanding shares of common stock as a single class exclusively with respect to

the Authorized Stock Increase (as defined herein).

The Series B Preferred Stock had no rights as to any distribution or assets of the

Company upon a liquidation, bankruptcy, reorganization, merger, acquisition, sale, dissolution or winding up of the Company.

On November 2, 2022, the Company entered into

2 unchanged sentences

On December 12, 2022, the Company’s shareholders

approved the an increase to the number of authorized shares of the Company’s common stock from 3,000,000 to 50,000,000 shares (the

“Authorized Stock Increase”).

On December 13, 2022, upon filing a Certificate of Amendment to its Articles of Incorporation,

as amended, to increase its authorized shares of common stock, the Series B Preferred Stock was automatically redeemed for an aggregate

approved an increase to the number of authorized shares of the Company’s common stock from 3,000,000 to 50,000,000 shares (the “Authorized

Stock Increase”).

On December 13, 2022, upon filing a Certificate of Amendment to its Articles of Incorporation, as amended, to

increase its authorized shares of common stock, the outstanding shares of Series B Preferred Stock were redeemed in whole for an aggregate

price of $ 10 automatically and effective immediately after the effectiveness of the Authorized Stock Increase.

Common Shares

3 unchanged sentences

Securities Purchase Agreements

On January 5, 2021, the Company entered into

a securities purchase agreement with certain accredited investors pursuant to which the Company offered and sold to the investors an

aggregate of 99,010 shares of its common stock and warrants to purchase up to 49,505 shares of common stock in a private placement for

aggregate net proceeds to the Company of $ 4.6 million, after deducting estimated offering expenses payable by the Company.

purchase price for each share of common stock and accompanying warrant to purchase one half of a share of common stock was $ 50.50 .

closing of the offering occurred on January 7, 2021.

Each warrant is exercisable for a period of five years from the issuance date at

an exercise price of $ 56.25 per share, subject to adjustment, and may be exercised on a cashless basis.

In addition, pursuant to the

terms of the offering, the Company issued The Benchmark Company, LLC (“Benchmark”) warrants to purchase up to 7,426 shares

of the Company’s common stock.

Benchmark’s warrants are exercisable for a period of five years from the closing date of the

offering at an exercise price of $ 56.25 per share, subject to adjustment, and may be exercised on a cashless basis.

On March 8, 2021, the Company entered into a securities purchase agreement

with certain institutional and accredited investors pursuant to which it offered and sold to the investors 273,079 shares of common stock,

pre-funded warrants (the “March Pre-Funded Warrants”) to purchase up to 30,719 shares of common stock and warrants (the “March

Common Stock Warrants”) to purchase up to 303,798 shares of common stock in a private placement for aggregate net proceeds to the

Company of $ 13.5 million, after deducting estimated offering expenses payable by the Company.

The combined purchase price for each share

of common stock and accompanying warrant was $ 49.375 .

The closing of the offering occurred on March 10, 2021.

Each March Common Stock

Warrant is exercisable for a period of three years from the issuance date at an exercise price of $ 46.50 per share, subject to adjustment,

and may be exercised on a cashless basis.

Each March Pre-Funded Warrant is exercisable until exercised in full at an exercise price of

$ 0.025 per share and may be exercised on a cashless basis.

In addition, pursuant to the terms of the offering, the Company issued H.C.

Wainwright & Co., LLC warrants (“March Wainwright Warrants”) to purchase up to 15,190 shares of the Company’s common

The March Wainwright Warrants are exercisable for a period of three years from the issuance date at an exercise price of $ 61.72

per share, subject to adjustment, and may be exercised on a cashless basis.

On December 29, 2022, the Company entered into a securities purchase

agreement with an accredited investor pursuant to which it agreed to sell an aggregate of (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

and accompanying 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 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 are exercisable for a period of five and one-half years from the issuance date at an exercise

On September 13, 2023, the Company entered into

a securities purchase agreement with certain institutional investors pursuant to which it sold (i) 549,275 shares of common stock and

(ii) pre-funded warrants (the “September Pre-Funded Warrants”) to purchase up to 550,725 shares of common stock at

a purchase price of $ 2.63 per share of common stock and a purchase price of $ 2.629 per September Pre-Funded Warrant.

Concurrently with

the sale of common stock and/or the September Pre-Funded Warrants, pursuant to the securities purchase agreement, in

a private placement, the Company issued and sold warrants (the “September Common Stock Warrants”) to purchase up to

1,100,000 shares of common stock.

Proceeds from the offering were approximately $ 2.9 million, prior

to deducting placement agent’s fees and other offering expenses payable by the Company .

The closing of the offering occurred

on September 15, 2023.

Each September Common Stock Warrant is exercisable for a period of five years from the issuance date at an exercise

price of $ 2.505 per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis.

Each September

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

In addition, pursuant to the terms of the offering, the Company issued to designees of H.C.

Wainwright & Co., LLC warrants

(“September Wainwright Warrants”) to purchase up to 55,000 shares of the Company’s common stock.

The September Wainwright

Warrants are exercisable for a period of five years from the commencement of sales pursuant to the offering at an exercise price of $ 3.2875

per share, subject to adjustment, and may, under certain circumstances, be exercised on a cashless basis.

On December 29, 2022, the Company entered into

a securities purchase agreement with an accredited investor pursuant to which it agreed to sell an aggregate of (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 and accompanying 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.

pursuant to the terms of the offering, the Company issued 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 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.

Public Offering of Securities

18 unchanged sentences

for issuance under the 2018 Plan from 146,878 shares to 156,878 shares.

On January 11, 2023, the compensation committee of the board

of directors further increased the number of shares reserved for issuance under the 2018 Plan from 156,878 shares to 166,878 shares.

On January 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.

4, 2024, the compensation committee of the board of directors further increased the number of shares reserved for issuance under the 2018

Plan from 166,878 shares to 176,878 shares.

2022 Equity Incentive Plan

On March 24, 2022, the Company’s board

of directors adopted the Hoth Therapeutics, Inc.

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.

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.

On June 2, 2023, the Company’s

board of directors approved the Hoth Therapeutics, Inc.

Amended and Restated 2022 Omnibus Equity Incentive Plan (the “Amended and

Restated 2022 Plan”) which was approved by stockholders on August 18, 2023.

Under the Amended and Restated 2022 Plan there are 591,317

shares of Company common stock available for grant.

Restricted Stock Awards

1 unchanged sentence

awards granted under the equity incentive plans during the years ended December 31, 2023 and 2022 is as follows:

Restricted Stock

Nonvested at December 31, 2021

1 unchanged sentence

Nonvested at December 31, 2023

As of December 31, 2022, there is approximately

$ 10,000 of unrecognized stock-based compensation expense related to restricted stock awards.

The weighted average remaining contractual

terms of unvested restricted stock awards is approximately 1.45 years at December 31, 2022.

As of December 31, 2023, approximately $ 3,000

of unrecognized stock-based compensation expense was related to restricted stock awards.

The weighted average remaining contractual term

of unvested restricted stock awards was approximately 1.0 year at December 31, 2023.

Stock Options

1 unchanged sentence

to and subject to the available number of shares reserved under the 2022 Plan, the Company issued an aggregate of 90,000 options to the

Company’s directors.

Company’s employees and directors.

The aggregate grant date fair value of these options was approximately $ 0.2 million.

5 unchanged sentences

2022 was estimated using the following assumptions:

For the Years Ended

Year Ended December 31,

Exercise price

4 unchanged sentences

Outstanding as of December 31, 2021

Employee options issued

Options issued

Outstanding as of December 31, 2022

Employee options issued

Options expired

Options issued

Outstanding as of December 31, 2023

Options vested and exercisable as of December 31, 2023

All stock compensation associated with the amortization of employee stock option expense was recorded as a component of compensation

and related expense in the 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 consolidated statements of operations and

comprehensive loss.

Estimated future stock-based compensation expense

relating to unvested stock options is approximately $ 0 .

All outstanding stock options are fully vested.

Stock Based Compensation

1 unchanged sentence

ended December 31, 2023 and 2022 was as follows:

For the Years Ended

Employee stock option awards

Employee restricted stock awards

Non-employee restricted stock awards

Year Ended December 31,

Employee and director stock option awards

Employee and director restricted stock awards

Non-employee stock warrant awards

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.

For the years ended December 31, 2023 and 2022,

the amount of stock-based compensation expense included within research and development and general and administrative expenses was as

Year Ended December 31,

Research and development

General and administrative

A summary of warrant activity for the years ended

2 unchanged sentences

Outstanding as of December 31, 2022

( 2,355,050 )

Outstanding as of December 31, 2023

Warrants exercisable as of December 31, 2023

The Company has determined that the warrants

should be accounted as a component of stockholders’ equity.

The Company has determined that the warrants should

be accounted as a component of stockholders’ equity.

Note 7-Commitments and Contingencies

The Company leases office space for approximately

$ 4,500 a month.

Rent expense for the years ended December 31, 2022 and 2021 was approximately $ 67,000 and $ 47,000 , respectively.

Company is not a party to a lease that is in excess of 12 months.

The Company is not currently 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 9-Income

Effective November 2023, the Company leased office

space for a two year term.

The Company’s office lease contains a renewal option.

The Company has evaluated several factors in assessing

whether there is reasonable certainty that the Company will exercise its contractual renewal option concluding that it is not reasonably

certain to exercise such option.

As it is not reasonably certain to be exercised, the Company excluded the renewal term in determining

the lease term used in calculating the right-of-use asset and lease liability.

Prior to entering into this lease, the Company has not

entered into any lease arrangements in excess of 12 months.

The table below presents certain information related

to the Company’s lease cost:

Year Ended December 31,

Operating lease expense

Short term lease expense

Total lease cost

Right-of-use asset and lease liability for operating

leases were recorded in the consolidated balance sheets as follows:

Lease right of use assets

Total lease assets

Current liabilities:

Lease liability - current portion

Noncurrent liabilities:

Lease liability, net of current portion

Total lease liability

Supplemental cash flow information related to the Company’s leases

for the year ended December 31, 2023 were as follows:

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows for operating leases

The weighted-average remaining lease term for

the operating lease is 1.8 years and the weighted-average incremental borrowing rate is 10 % as of December 31, 2023.

As of December 31, 2023, future minimum lease

payments required under operating leases are as follows:

Total minimum lease payments

effects of discounting

Present value of future minimum lease payments

The Company is not currently 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 8-Income taxes

The table below presents the components of the

provision for taxes:

The Company's provision is primarily driven by the full valuation allowance in 2022 and 2021.

The Company’s provision is primarily driven

by the full valuation allowance in 2023 and 2022.

As of December 31,

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Total provision for income taxes

At December 31, 2022 and 2021, the tax effects of the temporary differences

and carryforwards that give rise to deferred tax assets consist of the following:

At December 31, 2023 and 2022, the tax effects

of the temporary differences and carryforwards that give rise to deferred tax assets consist of the following:

As of December 31,

Deferred tax assets

Net operating loss carryforwards

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Accruals and other temporary differences

Gross deferred tax assets

Accruals and other temporary differences

Total deferred tax assets

Less valuation allowance

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( 12,813,374 )

Net deferred taxes

A reconciliation of the statutory income tax rates and the Company’s

effective tax rate for the years ended December 31, 2022 and 2021 is as follows:

Tax provision at statutory rate

Deferred tax assets, net of allowance

A reconciliation of the statutory income tax rates

and the Company’s effective tax rate for the years ended December 31, 2023 and 2022 is as follows:

Statutory federal income tax rate

State taxes, net of federal benefit

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Foreign rate differential

RTP and other

Increase/(decrease) in valuation reserve

Previous tax year adjustment

Change in valuation allowance

The Company has determined, based upon available

1 unchanged sentence

valuation allowance against its net deferred tax assets.

As of December 31, 2022, the Company has net operating loss carryforwards

of approximately $ 32.9 million and $ 65.8 million available to reduce future taxable income, if any, for Federal and state income tax purposes,

respectively.

Approximately $ 1.5 million of Federal net operating losses can be carried forward to future tax years and expire in 2037.

The Federal net operating loss generated during the years ended after December 31, 2017 of approximately $ 31.4 million can be carried

forward indefinitely;

however, the deduction for net operating losses incurred in tax years beginning after January 1, 2018 is limited

to 80 % of annual taxable income.

In addition, the Company had approximately $ 0.3 million of net operating losses at its subsidiary located

in Australia, as of December 31, 2022.

As required by the 2017 Tax

Cuts and Jobs Act and effective in 2022, the deferred tax asset as of December 31, 2022 included $ 1.2 million related to the

mandatory capitalization of research and development expenses.

As of December 31, 2022, the Company does

not have any research and development credits available to reduce future income taxes for Federal and state income tax purposes.

The Federal credits expire if not utilized by 2042.

As of December 31, 2023 and December 31, 2022,

the Company has Federal net operating loss carryforwards of approximately $ 37.7 million and $ 32.9 million available to reduce future taxable

income, if any, for Federal tax purposes.

Approximately $ 1.5 million of Federal net operating losses can be carried forward to future

tax years and expire in 2037.

The Federal net operating loss generated during the years ended after December 31, 2017 of approximately

$ 36.0 million can be carried forward indefinitely; however, the deduction for net operating losses incurred in tax years beginning

after January 1, 2018 is limited to 80 % of annual taxable income.

In addition, the Company had approximately $ 0.5 million and $ 0.3 million

of net operating losses at its subsidiary located in Australia, as of December 31, 2023 and December 31, 2022, respectively.

As required by the 2017 Tax Cuts and Jobs Act

and effective in 2022, the deferred tax asset as of December 31, 2023 and December 31, 20222, included $ 2.3 million and $ 1.2 million related

to the mandatory capitalization of research and development expenses.

On August 16, 2022, the Inflation Reduction Act

of 2022 (“IRA”) was signed into law.

The IRA increased and modified the qualified small business (“QSB”) payroll

tax credit for increasing research activities.

Provision 13902 of the IRA of 2022 increased the maximum amount of payroll tax research

credit that a QSB can elect to apply against payroll tax liability from $ 250,000 to $ 500,000 for tax years beginning after December 31,

This payroll tax credit is a creditable tax credit against the employer’s portion of social security taxes, and the IRA also

modified IRC 3111(f) to allow a portion of the payroll tax credit to apply against the employer’s portion of Medicare tax.

year ended December 31, 2023, the Company recorded $ 0.1 million of other income for the payroll tax credit and $ 0.2 million is still outstanding.

The remaining research credit carryforward of $ 0.2 million will be utilized in the future as an offset against payroll taxes at the time

the payroll tax is incurred.

The utilization of the Company’s net operating

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open for examination by the Federal and state tax authorities from the date of utilization of the net operating loss.

Management asserts that its foreign earnings are

permanently reinvested, and therefore, have not provided deferred taxes on foreign cash.

Additionally, no additional income taxes have

been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis differences

inherent in our foreign subsidiaries, as these amounts continue to be indefinitely reinvested in foreign operations.

The company will

continue to monitor the foreign cash position as they maintain the assertion that foreign earnings are permanently reinvested.

Note 9-Subsequent Events

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below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial

On December 29, 2022, the Company entered into a securities purchase

agreement with certain institutional and accredited investors pursuant to which it agreed to sell an aggregate of (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 and accompanying 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 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 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 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 be exercised on a cashless basis.

On January 4, 2024, the compensation committee

of the board of directors increased the number of shares reserved for issuance under the 2018 Plan from 166,878 shares to 176,878 shares.

On January 26, 2024, the Company provided 60 days

notice to the George Washington University of its termination of the license agreement for its breath based diagnostic device.

agreement terminated on March 26, 2024.

On February 6, 2024, the Company received notice

that its office lease was to be terminated.

The Company and its landlord agreed to relocate its office space to another location under

substantially the same terms and conditions as its existing lease.

Monthly payments for the new office lease are unchanged and term of

the lease expires in February 2026.

On March 27, 2024, the Company entered into a

warrant inducement agreement with a holder of certain of its existing warrants to immediately exercise for cash an aggregate 2,500,000

warrants to purchase shares of the Company’s common stock at a reduced exercise price of $ 1.6675 per share for gross proceeds to

the Company of approximately $ 4.2 million.

The exercised warrants were issued pursuant to a securities purchase agreement dated December

29, 2022, by and between the Company and a certain accredited investor.

Each warrant was exercisable for a period of five and one-half

years from the issuance date at an original exercise price of $ 5.00 per share.

As an inducement to such exercise, the Company agreed to

issue new unregistered warrants to purchase up to 3,750,000 shares of the Company’s common stock at an exercise price of $ 1.50 per

The warrants are exercisable immediately upon issuance and will expire on July 3, 2028.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data