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Item 9A. Controls and Procedures

2024-03-28 compared with 2023-03-31 · 484 added, 659 removed, 258 unchanged (82% of the section changed)

29 unchanged sentences

Based on this assessment, our management concluded that, as

of December 31, 2022, our internal control over financial reporting was not effective because it identified a material weakness.

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.

We expect to be materially dependent upon third parties to provide

us with accounting consulting services for the foreseeable future which we believe mitigates the impact of the material weaknesses discussed

In light of the material weakness, we performed additional analysis and other post-closing procedures to ensure the reliability

of financial reporting and that our financial statements were prepared in accordance with GAAP.

Accordingly, we believe that the financial

statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows

for the periods presented.

Our management, including our principal executive

officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent

all error and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance

that the objectives of the control system are met.

Further, the design of a control system must reflect the fact that there are resource

constraints, and the benefits of controls must be considered relative to their costs.

Due to the inherent limitations in all control systems,

no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have

been detected.

Remediation Plans

In order to address the material weakness related

to accruals and prepaids, we have implemented a new closing process for each quarter and year end to properly account for and book expenses

Attestation Report of our Registered Public

Accounting Firm

This Annual Report on Form 10-K does not include

an attestation report of our registered public accounting firm regarding internal control over financial reporting.

report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to the exemption provided

to issuers that are not “large accelerated filers” nor “accelerated filers” under the Dodd-Frank Wall Street Reform

and Consumer Protection Act.

of December 31, 2023, our internal control over financial reporting was effective based on such criteria.

Changes in Internal Control Over Financial

There have been no changes in our internal control

over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially

affect, our internal control over financial reporting.

over financial reporting that occurred during our last fiscal quarter ended December 31, 2023 that have materially affected, or are reasonably

likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

Robb Knie Employment Agreement

On March 28, 2023, we entered into an employment agreement (the “2023

Knie Employment Agreement”) with Robb Knie, pursuant to which Mr.

Knie continues to serve as our Chief Executive Officer.

of the 2023 Knie Employment Agreement will continue for a period of three years from the date of execution and automatically renews for

successive one year periods at the end of each term until either party delivers written notice of their intent not to review at least

six months prior to the expiration of the then effective term.

Knie’s base salary is $450,000 per year.

Knie is eligible

to receive an annual bonus of up to $350,000 per year at the discretion of the compensation committee of the Company, based upon the achievement

of Company and individual performance targets established by the compensation committee.

Under the 2023 Knie Employment Agreement, Mr.

Knie is also entitled to receive equity-based compensation awards.

In addition, the 2023 Knie Employment Agreement contains standard non-competition

and non-solicitation provisions.

Knie is also eligible to receive additional equity-based compensation awards as the Company may grant

from time to time.

The 2023 Knie Employment Agreement further provides for standard expense reimbursement, vacation time and other standard

executive benefits.

Pursuant to the 2023 Knie Employment Agreement, in the event Mr.

employment is terminated without Cause (as defined in the 2023 Knie Employment Agreement), due to a non-renewal by the Company, he voluntarily

resigns, or if he resigns for Good Reason (as defined in the 2023 Knie Employment Agreement), Mr.

Knie is entitled to (i) a cash

payment equal to the sum of (x) 24 months of his base salary at the then current rate (or 36 months if such termination occurs within

12 months of a Change in Control (as defined in the 2023 Knie Employment Agreement)) and (y) annual bonus in effect on his last day of

(ii) continuation of health benefits for a period of 24 months (or 36 months if such termination occurs within 12 months

of a Change in Control);

(iii) a lump sum payment equal to the amount of any annual bonus earned with respect to a prior fiscal year,

but unpaid as of the date of termination;

(iv) a lump sum payment equal to the amount of annual bonus that was accrued through the

date of termination for the year in which employment ends;

and (v) subject to Mr.

Knie’s compliance with his restrictive covenants,

the outstanding and unvested portion of any equity award will accelerate and immediately vest on the date of Mr.

Knie’s termination.

In the event that Mr.

Knie’s employment is terminated due to his death or disability, he will be entitled to receive (i) a lump sum payment equal

to the amount of any annual bonus earned with respect to a prior fiscal year, but unpaid as of the date of termination;

sum payment equal to the amount of annual bonus that was accrued for the year in which employment ends;

and (iii) the treatment of

any equity awards in accordance with their respective equity award agreements.

In the event that Mr.

Knie’s employment

is terminated due to his non-renewal or resignation without Good Reason, he will be entitled to receive a lump sum payment equal to the

amount of any annual bonus earned with respect to a prior fiscal year, but unpaid as of the date of termination.

The foregoing description of

the material terms of the 2023 Knie Employment Agreement does not purport to be complete

and is qualified in its entirety by reference to the full text of the 2023 Knie Employment Agreement ,

a copy of which is filed as Exhibit 10.36 to this Annual Report on Form 10-K and is incorporated herein by reference.

During our last fiscal quarter ended December

31, 2023, none of our directors or executive officers adopted, modified or terminated a “Rule 10b5-1 trading arrangement”

or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S K.

On March 27, 2024, the Company entered into a

warrant inducement agreement (the “Warrant Inducement Agreement”) with the holder of certain common stock purchase warrants

issued pursuant to a securities purchase agreement dated December 29, 2022 by and between the Company and holder.

Pursuant to the Warrant

Inducement Agreement, the holder has agreed to immediately exercise in cash all 2,500,000 of the common stock purchase warrants at a reduced

exercise price of $1.6675 per share (reduced from $5.00 per share) for gross proceeds to the Company of approximately $4.2 million.

an inducement to such exercise, the Company has agreed to issue to the Holder unregistered warrants to purchase up to 3,750,000 shares

of the Company’s common stock at an exercise price of $1.50 per share.

Each new warrant will be immediately exercisable upon issuance

and expire on July 3, 2028.

The offering is expected to close on or about April 1, 2024, subject

to satisfaction of customary closing conditions.

The Company intends to use the net proceeds from the offering for general working capital

DISCLOSURE REGARDING FOREIGN JURISDICTIONS

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Officer and as a director of the Company since May 2017 and served as our principal financial and accounting officer from June 2018 until

Since October 2020, Mr.

Knie has served as the Chief Executive Officer, Chief Financial Officer and chairman of the board

of directors of FoxWayne Enterprises Acquisition Corp.

From October 2020 to January 2023, Mr.

Knie served as the Chief Executive Officer, Chief Financial Officer and chairman of

the board of directors of FoxWayne Enterprises Acquisition Corp.

(“FoxWayne”), a special purpose acquisition corporation.

Knie served as the President of Lifeline Industries Inc.

its inception in 1995.

From 2002 to 2010 he was a Semiconductor Analyst for PAW Partners.

since its inception in 1995.

From 2002 to 2010 he was a Semiconductor Analyst

for PAW Partners.

From 1993 until 1995, Mr.

Knie served as Northeast

Regional Manager of American Express Financial Advisors.

Knie has served as a board member for Nasdaq-listed companies.

featured on Bloomberg, The Wall Street Journal and Forbes Magazine as an Independent Equity Analyst.

Knie has over 20 years of equity

markets experience.

Knie has been a member of the American Chemical Society, Institute of Electrical and Electronics Engineers, as

well as The National Alliance for Youth Sports.

We believe that Mr.

Knie is qualified to serve as a director because of his business and

leadership experience and experience as a board member of public companies in the healthcare industry.

Knie served as Northeast Regional Manager of American Express Financial Advisors.

has served as a board member for Nasdaq-listed companies.

He has been featured on Bloomberg, The Wall Street Journal and Forbes Magazine

as an Independent Equity Analyst.

Knie has over 20 years of equity markets experience.

Knie has been a member of the American

Chemical Society, Institute of Electrical and Electronics Engineers, as well as The National Alliance for Youth Sports.

We believe that

Knie is qualified to serve as a director because of his business and leadership experience and experience as a board member of public

companies in the healthcare industry.

David Briones

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of the Company since March 2019 and has over 24 years of public accounting and executive level experience.

He consults with various

public companies in financial reporting, internal control development and evaluation, budgeting and forecasting.

Since September 2021,

Briones has served as Chief Financial Officer, Treasurer and Secretary and a member of the board of directors of Larkspur Healthcare

Acquisition Corp.

He consults with various public

companies in financial reporting, internal control development and evaluation, budgeting and forecasting.

Since September 2021, Mr.

has served as Chief Financial Officer, Treasurer and Secretary and a member of the board of directors of Larkspur Healthcare Acquisition

LSPR), a special purpose acquisition corporation.

Since October 2010, he has served as the managing member

and founder of Brio Financial Group, LLC, a full-service financial consulting firm that brings experienced finance and accounting expertise

to both public and private companies.

Since October 2010, he has served as the managing member and founder

of Brio Financial Group, LLC, a full-service financial consulting firm that brings experienced finance and accounting expertise to both

public and private companies.

Since 2010, Mr.

Briones has served over 75 companies as well as numerous banks, hedge funds, venture

capital funds and private equity firms.

Briones has served over 75 companies as well as numerous banks, hedge funds, venture capital

funds and private equity firms.

In addition, from May 2018 until its dissolution in April 2021, Mr.

Briones served as Executive

Chair of Zovis Pharmaceuticals, and from August 2013 to January 2020, Mr.

Briones served as Chief Financial Officer of Petro River Oil

Briones served as Executive Chair

of Zovis Pharmaceuticals, and from August 2013 to January 2020, Mr.

Briones served as Chief Financial Officer of Petro River Oil Corp.

(“PTRC”), an independent energy company focused on the exploration and development of conventional oil and gas assets.

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Wayne Linsley

Linsley has served as a director of the Company since April

Linsley has served as a director of the

Company since April 2020.

Linsley has been in business management for over 40 years.

He possesses a wide and varied skillset including sales and sales

management, finance (for both public and private companies), accounting, audit support and financial reporting.

He has a bachelor’s

in business administration from Siena College in Loudonville, NY.

From 2009 to September 2021 he worked for a financial reporting firm

that works with publicly traded companies.

He has extensive knowledge of financial statements, MD&A, SEC Filings (10-K, 10-Q, 8-K,

etc.) Edgar, etc.

He possesses a wide and varied skillset including

sales and sales management, finance (for both public and private companies), accounting, audit support and financial reporting.

a bachelor’s in business administration from Siena College in Loudonville, NY.

From 2009 to September 2021 he worked for a financial

reporting firm that works with publicly traded companies.

He has extensive knowledge of financial statements, MD&A, SEC Filings (10-K,

10-Q, 8-K, etc.) Edgar, etc.

He often negotiated on behalf of clients in such areas as audit fees, transfer agents, Edgar companies, etc.

serves as an independent director for DatChat Inc.

DATS), serving the chair of its audit committee, compensation committee and

nominating and corporate governance committee, and Silo Pharma, Inc.

He currently serves as an independent director for DatChat Inc.

DATS), serving as the chair of its audit committee, compensation

committee and nominating and corporate governance committee, and Silo Pharma, Inc.

SILO) serving as the chair of its audit committee

and compensation committee.

We believe Mr.

Linsley is qualified to serve as a

member of the board because his business management experience.

Linsley is qualified to serve as a member of the board because of his business management experience.

David Sarnoff has served as a director of the

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compliance with federal rules and regulations.

Jeff Pavell has served as a director of the Company

since December 2022.

Pavell has served as a director of the Company since December 2022.

Since January 2017, Dr.

Pavell has served as Chief of Rehabilitation Medicine

at Englewood Health, and since November 2021, he has been on the teaching staff at New York-Presbyterian.

In addition, since December

2020 he has been on the teaching staff at Hackensack Meridian School of Medicine at Seton Hall.

Pavell has served as Chief of Rehabilitation

Medicine at Englewood Health, and since November 2021, he has been on the teaching staff at New York-Presbyterian.

In addition, since

December 2020 he has been on the teaching staff at Hackensack Meridian School of Medicine at Seton Hall.

Furthermore, since 2010, Dr.

served as a partner at Patient Care Associates, an outpatient surgical center, and since 2002, he has served as a Partner at the Physical

Medicine and Rehabilitation Center, a private medical practice serving patients with spine, sports and occupational injuries.

is a Board Certified physician specializing in the field of physical medicine and rehabilitation.

Pavell is also certified in pain

medicine and specializes in the most advanced non-operative treatments for spine, sports and interventional pain medicines.

received his bachelor of arts from Johns Hopkins University and his D.O.

degree with honors from the New York College of Osteopathic Medicine.

Since January 2021, Dr.

Pavell has served as a member of the board of directors as well as chairman of the audit committee and a member of the compensation committee of FoxWayne, a special purpose acquisition

Furthermore, since September 2022, Dr.

Pavell has served as a partner at Patient Care Associates, an outpatient surgical center, and since 2002, he has served as a Partner

at the Physical Medicine and Rehabilitation Center, a private medical practice serving patients with spine, sports and occupational injuries.

Pavell is a Board Certified physician specializing in the field of physical medicine and rehabilitation.

Pavell is also certified

in pain medicine and specializes in the most advanced non-operative treatments for spine, sports and interventional pain medicines.

Pavell received his bachelor of arts from Johns Hopkins University and his D.O.

degree with honors from the New York College of Osteopathic

From January 2021 to January 2023, Dr.

Pavell served as a member of the board of directors as well as chairman of the audit

committee and a member of the compensation committee of FoxWayne, a special purpose acquisition corporation.

Furthermore, since September

Pavell has served as a director of Silo Pharma, Inc.

SILO) (“Silo”) as well

as a member of the audit committee, compensation committee and chair of the nominating and corporate governance committee of Silo.

believe that Dr.

Pavell is qualified to serve as a director due to his extensive experience practicing in the healthcare industry as well

as his prior experience serving as a director for other public companies.

Family Relationships

There are no family relationships among any of

our executive officers or directors.

Arrangements between Officers and Directors

Except as set forth herein, to our knowledge,

there is no arrangement or understanding between any of our officers or directors and any other person pursuant to which the officer or

director was selected to serve as an officer or director.

Involvement in Certain Legal Proceedings

We are not aware of any of our directors or officers

being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy, insolvency, criminal proceedings

(other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation S-K.

Committees of Our Board of Directors

Our board of directors directs the management

of our business and affairs, as provided by Nevada law, and conducts its business through meetings of the board of directors and its standing

We have a standing audit committee, compensation committee and nominating and corporate governance committee.

from time to time, special committees may be established under the direction of the board of directors when necessary to address specific

Our board of directors has determined that all

of the members of the audit committee, the compensation committee and the nominating and corporate governance committee are independent

as defined under the applicable rules of The Nasdaq Capital Market, including, in the case of all of the members of our audit committee,

the independence requirements contemplated by Rule 10A-3 under the Exchange Act.

In making such determination, the board of directors

considered the relationships that each director has with our Company and all other facts and circumstances that the board of directors

deemed relevant in determining director independence, including the beneficial ownership of our capital stock by each director.

Audit Committee

Our audit committee is responsible for, among

other things:

approving and retaining the independent registered public accounting firm to conduct the annual audit of our consolidated financial statements;

reviewing the proposed scope and results of the audit;

reviewing and pre-approval of audit and non-audit fees and services;

reviewing accounting and financial controls with the independent registered public accounting firm and our financial and accounting staff;

reviewing and approving transactions between us and our directors, officers and affiliates;

establishing procedures for complaints received by us regarding accounting matters;

overseeing internal audit functions, if any;

preparing the report of the audit committee that the rules of the Securities and Exchange Commission require to be included in our annual meeting proxy statement.

Our audit committee consists of Wayne Linsley,

David Sarnoff and Graig Springer, with Wayne Linsley serving as chair.

Each member of our audit committee meets the financial literacy

requirements of the Nasdaq rules.

In addition, our board of directors has determined that Wayne Linsley qualifies as an “audit committee

financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.

Our board of directors adopted a written charter

for the audit committee which is available on our website at www.hoththerapeutics.com .

Compensation Committee

Our compensation committee is responsible for, among other things:

reviewing and recommending the compensation arrangements for management, including the compensation for our president and chief executive officer;

establishing and reviewing general compensation policies with the objective to attract and retain superior talent, to reward individual performance and to achieve our financial goals;

administering our stock incentive plans;

preparing the report of the compensation committee that the rules of the Securities and Exchange Commission require to be included in our annual meeting proxy statement.

On December 7, 2022, David Sarnoff resigned as

a member of our compensation committee.

Our audit committee currently consists of Wayne Linsley, Graig Springer and Jeff Pavell, with

Wayne Linsley serving as chair.

Our board of directors adopted a written charter

for the compensation committee which is available on our website at www.hoththerapeutics.com.

Nominating and Governance Committee

Our nominating and governance committee is responsible for, among other

identifying and nominating members of the board of directors;

developing and recommending to the board of directors a set of corporate governance principles applicable to our Company;

overseeing the evaluation of our board of directors.

Our nominating and corporate governance committee

consists of Wayne Linsley, Graig Springer and David Sarnoff, with Graig Springer serving as chair.

Our board of directors adopted a written charter

for the nominating and corporate governance committee which is available on our website at www.hoththerapeutics.com.

Scientific Advisory Board

SILO) (“Silo”) as well as a member of the audit committee,

compensation committee and chair of the nominating and corporate governance committee.

We believe that Dr.

Pavell is qualified to

serve as a director due to his extensive experience practicing in the healthcare industry as well as his prior experience serving as

a director for other public companies.

Relationships

are no family relationships among any of our executive officers or directors.

between Officers and Directors

as set forth herein, to our knowledge, there is no arrangement or understanding between any of our officers or directors and any other

person pursuant to which the officer or director was selected to serve as an officer or director.

in Certain Legal Proceedings

are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters

in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set

forth under Item 401(f) of Regulation S-K.

of Our Board of Directors

board of directors directs the management of our business and affairs, as provided by Nevada law, and conducts its business through meetings

of the board of directors and its standing committees.

We have a standing audit committee, compensation committee and nominating and

corporate governance committee.

In addition, from time to time, special committees may be established under the direction of the board

of directors when necessary to address specific issues.

board of directors has determined that all of the members of the audit committee, the compensation committee and the nominating and corporate

governance committee are independent as defined under the applicable rules of Nasdaq, including, in the case of all of the members of

our audit committee, the independence requirements contemplated by Rule 10A-3 under the Exchange Act.

In making such determination, the

board of directors considered the relationships that each director has with our Company and all other facts and circumstances that the

board of directors deemed relevant in determining director independence, including the beneficial ownership of our capital stock by each

audit committee is responsible for, among other things:

approving and retaining

the independent registered public accounting firm to conduct the annual audit of our consolidated financial statements;

reviewing the proposed

scope and results of the audit;

reviewing and pre-approval

of audit and non-audit fees and services;

reviewing accounting and

financial controls with the independent registered public accounting firm and our financial and accounting staff;

reviewing and approving

transactions between us and our directors, officers and affiliates;

establishing procedures

for complaints received by us regarding accounting matters;

overseeing internal audit

functions, if any;

preparing the report of

the audit committee that the rules of the Securities and Exchange Commission require to be included in our annual meeting proxy statement.

audit committee consists of Wayne Linsley, David Sarnoff and Graig Springer, with Wayne Linsley serving as chair.

Each member of our

audit committee meets the financial literacy requirements of the Nasdaq rules.

In addition, our board of directors has determined that

Wayne Linsley qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation

board of directors adopted a written charter for the audit committee which is available on our website at www.hoththerapeutics.com .

compensation committee is responsible for, among other things:

reviewing and recommending

the compensation arrangements for management, including the compensation for our president and chief executive officer;

establishing and reviewing

general compensation policies with the objective to attract and retain superior talent, to reward individual performance and to achieve

our financial goals;

administering our stock

incentive plans;

preparing the report of

the compensation committee that the rules of the Securities and Exchange Commission require to be included in our annual meeting

proxy statement.

compensation committee currently consists of Wayne Linsley, Graig Springer and Jeff Pavell, with Wayne Linsley serving as chair.

board of directors adopted a written charter for the compensation committee which is available on our website at www.hoththerapeutics.com.

and Governance Committee

nominating and governance committee is responsible for, among other things:

identifying and nominating

members of the board of directors;

developing and recommending

to the board of directors a set of corporate governance principles applicable to our Company;

overseeing the evaluation

of our board of directors.

nominating and corporate governance committee consists of Wayne Linsley, Graig Springer and David Sarnoff, with Graig Springer serving

board of directors adopted a written charter for the nominating and corporate governance committee which is available on our website

at www.hoththerapeutics.com.

Advisory Board

In July 2017, the board of directors formed a

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Mario Lacouture, Dr.

William Weglicki, Dr.

Mark Heaney and Dr.

William Weglicki, and Dr.

Adam Friedman as Medical Doctor members and (ii) Dr.

Glenn Cruse, Dr.

Vincent Njar, Dr.

Carla Yuede, Dr.

John Cirrito, Dr.

Stefanie Johns and Sergio Traversa as Non-Medical Doctor members.

Code of Business Code and Ethics Conduct

We adopted a written code of business conduct

and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer,

principal accounting officer or controller, or persons performing similar functions.

John Cirrito, and Sergio Traversa as Non-Medical Doctor members.

of Business Code and Ethics Conduct

have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal

executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

A copy of the code is posted on our website at www.hoththerapeutics.com.

Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to our directors, principal

executive and financial officers will be posted on the “Investors-Corporate Governance” section of our website at www.hoththerapeutics.com

or will be included in a Current Report on Form 8-K, which we will file within four business days following the date of the amendment

Changes in Nominating Procedures

Disclosure regarding any amendments to, or waivers from, provisions

of the code of conduct and ethics that apply to our directors, principal executive and financial officers will be posted on the “Investors-Corporate

Governance” section of our website at www.hoththerapeutics.com or will be included in a Current Report on Form 8-K, which we will

file within four business days following the date of the amendment or waiver.

in Nominating Procedures

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the compensation paid or accrued during

the fiscal year ended December 31, 2022 and 2021 to our principal executive officer and an additional officer (collectively, the “named

executive officers”):

Robb Knie, Chief Executive Officer and President;

Stefanie Johns, former Chief Scientific Officer.

Name and Principal Position

Compensation Table

following table sets forth the compensation paid or accrued during the fiscal year ended December 31, 2023 and 2022 to our principal

executive officer and an additional officer (collectively, the “named executive officers”):

Robb Knie, Chief Executive

Officer and President;

Stefanie Johns, former

Chief Scientific Officer.

and Principal Position

Incentive Plan

Chief Executive Officer and President

Stefanie Johns

Former Chief Scientific Officer

(1) Represents

payments of discretionary bonuses for performance during the applicable years as determined

by the board, and as further described below Bonus Arrangements.

(2) Represents

the aggregate grant date fair value of options granted for the fiscal year ended December

31, 2022 and December 31, 2021 as determined in accordance with FASB ASC Topic 718, rather

than the amount paid to or realized by Robb Knie and Stefanie Johns.

Executive Officer and President

Chief Scientific Officer

Represents payments of

discretionary bonuses for performance during the applicable years as determined by the board, and as further described below Bonus

Arrangements.

Represents the aggregate

grant date fair value of options granted for the fiscal year ended December 31, 2023 and December 31, 2022 as determined in accordance

with FASB ASC Topic 718, rather than the amount paid to or realized by Robb Knie and Stefanie Johns.

See Note 6, “Stockholders’

Equity” in the notes to the Company’s consolidated financial statements for the

fiscal year ended December 31, 2022 and December 31, 2021 included in this Annual Report

on Form 10-K for more information regarding the Company’s accounting for share-based

Equity” in the notes to the Company’s consolidated financial statements for the fiscal year ended December 31, 2023 and

December 31, 2022 included in this Annual Report on Form 10-K for more information regarding the Company’s accounting for share-based

compensation plans.

other compensation represents the employer matching contributions to each Robb Knie’s

and Stefanie Johns’ 401(k) accounts and the amounts received for their executive health

or supplemental health insurance premiums.

All other compensation

represents the employer matching contributions to each Robb Knie’s and Stefanie Johns’ 401(k) accounts and the amounts

received for their executive health or supplemental health insurance premiums.

Knie received (i) an employer 401(k) contribution

in the amount $18,000 and $15,917 for fiscal years 2022 and 2021, respectively, and (ii)

payments for executive health or supplemental medical insurance premiums in the amounts of

$76,009 and $70,344 for fiscal years 2022 and 2021, respectively.

Johns received (A)

an employer 401(k) contribution in the amount $18,300 and $6,475 for fiscal years 2022 and

2021, respectively, and (B) payments for executive health or supplemental medical insurance

premiums in the amounts of $34,463 and $40,419 for fiscal years 2022 and 2021, respectively.

in the amounts of $19,800 and $18,000 for fiscal years 2023 and 2022, respectively, and (ii) payments for executive health or supplemental

medical insurance premiums in the amounts of $95,422 and $76,009 for fiscal years 2023 and 2022, respectively.

Johns received

(A) an employer 401(k) contribution in the amounts of $0 and $18,300 for fiscal years 2023 and 2022, respectively, and (B) payments

for executive health or supplemental medical insurance premiums in the amounts of $0 and $34,463 for fiscal years 2023 and 2022,

respectively.

For 2022, all other compensation for Ms.

Johns includes the following in connection with

payments received under the Stefanie Johns Separation Agreement and General Release, dated

December 9, 2022, pursuant to which Ms.

Johns was entitled to the following payments for

the fiscal year ended on December 31, 2022:

Johns includes the following in connection with payments received under the

Stefanie Johns Separation Agreement and General Release, dated December 9, 2022, pursuant to which Ms.

Johns was entitled to the

following payments for the fiscal year ended on December 31, 2022:

Stefanie Jones

Employment Agreements

Robb Knie Employment Agreement

On February 20, 2019 (the “Knie Effective

Date”), the Company entered into an amended and restated employment agreement with Robb Knie, as amended on June 25, 2021 (as amended,

the “Employment Agreement”), pursuant to which Robb Knie serves as Chief Executive Officer of the Company.

The term of the

Employment Agreement will continue for a period of one year from the Knie Effective Date and automatically renews for successive one year

periods at the end of each term until either party delivers written notice of their intent not to review at least six months prior to

the expiration of the then effective term.

Pursuant to the Employment Agreement, Mr.

Knie (i) shall receive an annual base salary of $450,000

(effective as of July 1, 2021) and (ii) shall be entitled to receive an annual bonus of $350,000 (effective as July 1, 2021), which annual

bonus may be increased by the compensation committee of the Company in its sole discretion, upon the achievement of additional criteria

established by the compensation committee from time to time.

In addition, Mr.

Knie is also entitled to participate in any and all Benefit

Plans (as defined in the Employment Agreement), from time to time, in effect for senior executives, along with vacation, sick and holiday

pay in accordance with the Company’s policies established and in effect from time to time.

The Employment Agreement may be terminated upon

Knie’s death, (ii) Mr.

Knie’s Total Disability (as defined in the Employment Agreement), (iii) expiration of the term

if either party has provided a timely non-renewal notice, (iv) at Mr.

Knie’s option (A) upon 90 days prior written notice;

Knie may terminate the Employment Agreement by providing written notice at any time within 40 days of the consummation of

a Change in Control Transaction (as defined in the Employment Agreement) or (B) for Good Reason (as defined in the Employment Agreement);

or (v) at the Company’s option (A) for Cause (as defined in the Employment Agreement) or (B) upon 90 days prior written notice without

Cause (as defined in the Employment Agreement).

Upon the termination of Mr.

Knie’s employment

for any reason, whether by Mr.

Knie or by the Company, Mr.

Knie shall be paid (i) accrued but unpaid compensation and vacation pay through

the date of termination, (ii) any other benefits accrued to him under any Benefit Plans outstanding at the date of termination and (iii)

the reimbursement of expenses incurred on or prior to such date (collectively, the “Severance Package”).

In addition to the

Severance Package, upon Mr.

Knie’s termination for death or Total Disability, Mr.

Knie or his estate or beneficiaries, as applicable,

shall receive (i) 24 months base salary at the then current rate, (ii) if Mr.

Knie elects continuation coverage for group health coverage

pursuant to COBRA Rights (as defined in the Employment Agreement), then for a period of 24 months following Mr.

Knie’s termination

he will be obligated to pay only the portion of the full COBRA Rights cost of the coverage equal to an active employee’s share of

premiums (if any) for coverage for the respective plan year and (iii) payment on a pro-rated basis of any annual bonus or other payments

earned in connection with any bonus plan to which the Mr.

Knie was a participant as of the date of death or Total Disability.

Knie’s termination for Good Reason, without Cause or Mr.

Knie’s termination upon 90 days prior written notice to the Company

or notice to the Company within 40 days of the consummation of a Change in Control Transaction, in addition to the Severance Package,

Knie shall receive (i) 24 months base salary at the then current rate, (ii) if Mr.

Knie elects continuation coverage for group health

coverage pursuant to COBRA Rights, then for a period of 24 months following Mr.

Knie’s termination he will be obligated to pay only

the portion of the full COBRA Rights cost of the coverage equal to an active employee’s share of premiums (if any) for coverage

for the respective plan year, (iii) payment on a pro-rated basis of any annual bonus or other payments earned in connection with any bonus

plan to which the Mr.

Knie was a participant as of the date of termination;

provided, however, that the pro-rated annual bonus payable

pursuant to the Employment Agreement shall be no less than $200,000 and (iv) any equity grants to Mr.

Knie shall immediately vest upon

termination of Mr.

Knie’s employment by him for Good Reason or by the Company at its option upon 90 days prior written notice to

Knie, without Cause.

The Employment Agreement also contains covenants prohibiting Mr.

Knie from disclosing confidential information

with respect to the Company.

On March 28, 2023, the Company

entered into the 2023 Knie Employment Agreement which is fully described in “Item 9B.

Other Information.” The 2023 Knie Employment

Agreement generally provides for the same material terms described above, except the material changes are as follows:

(i) in the event

Knie’s employment is terminated without Cause, due to a non-renewal by the Company, he voluntarily resigns, or if he resigns

for Good Reason, Mr.

Knie is entitled to (A) a cash payment equal to the sum of (x) 24 months of his base salary at the then current rate

(or 36 months if such termination occurs within 12 months of a Change in Control) and (y) annual bonus in effect on his last day of employment;

(B) continuation of health benefits for a period of 24 months (or 36 months if such termination occurs within 12 months of a Change in

(C) a lump sum payment equal to the amount of any annual bonus earned with respect to a prior fiscal year, but unpaid as of

the date of termination;

(D) a lump sum payment equal to the amount of annual bonus that was accrued through the date of termination for

the year in which employment ends;

and (E) subject to Mr.

Knie’s compliance with his restrictive covenants, the outstanding and

unvested portion of any equity award will accelerate and immediately vest on the date of Mr.

Knie Employment Agreement

March 28, 2023, we entered into an employment agreement (the “2023 Knie Employment Agreement”) with Robb Knie, pursuant to

Knie continues to serve as our Chief Executive Officer.

The term of the 2023 Knie Employment Agreement will continue for a

period of three years from the date of execution and automatically renews for successive one-year periods at the end of each term until

either party delivers written notice of their intent not to review at least six months prior to the expiration of the then effective

Knie’s base salary is $450,000 per year.

Knie is eligible to receive an annual bonus of up to $350,000 per year at

the discretion of the compensation committee of the Company, based upon the achievement of Company and individual performance targets

established by the compensation committee.

Under the 2023 Knie Employment Agreement, Mr.

Knie is also entitled to receive equity-based

compensation awards.

In addition, the 2023 Knie Employment Agreement contains standard non-competition and non-solicitation provisions.

Knie is also eligible to receive additional equity-based compensation awards as the Company may grant from time to time.

Knie Employment Agreement further provides for standard expense reimbursement, vacation time and other standard executive benefits.

to the 2023 Knie Employment Agreement, in the event Mr.

Knie’s employment is terminated without Cause (as defined in the 2023 Knie

Employment Agreement), due to a non-renewal by the Company, he voluntarily resigns, or if he resigns for Good Reason (as defined in the

2023 Knie Employment Agreement), Mr.

Knie is entitled to (i) a cash payment equal to the sum of (x) 24 months of his base salary

at the then current rate (or 36 months if such termination occurs within 12 months of a Change in Control (as defined in the 2023 Knie

Employment Agreement)) and (y) annual bonus in effect on his last day of employment;

(ii) continuation of health benefits for a

period of 24 months (or 36 months if such termination occurs within 12 months of a Change in Control);

(iii) a lump sum payment

equal to the amount of any annual bonus earned with respect to a prior fiscal year, but unpaid as of the date of termination;

lump sum payment equal to the amount of annual bonus that was accrued through the date of termination for the year in which employment

and (v) subject to Mr.

Knie’s compliance with his restrictive covenants, the outstanding and unvested portion of any

equity award will accelerate and immediately vest on the date of Mr.

Knie’s termination.

(ii) in the event

Knie’s employment is terminated due to his death or disability, he will be entitled to receive (A) a lump sum payment equal

to the amount of any annual bonus earned with respect to a prior fiscal year, but unpaid as of the date of termination;

(B) a lump sum

payment equal to the amount of annual bonus that was accrued for the year in which employment ends;

and (C) the treatment of any equity

awards in accordance with their respective equity award agreements;

and (iii) in the event that Mr.

Knie’s employment is terminated

due to his non-renewal or resignation without Good Reason he will be entitled to receive a lump sum payment equal to the amount of any

annual bonus earned with respect to a prior fiscal year, but unpaid as of the date of termination.

See “Item 9B.

Other Information” for additional details.

Stephanie Johns Employment Agreement

On August 28, 2020, the Company entered into an

employment agreement with Dr.

Johns, as amended on January 29, 2021, June 25, 2021 and November 10, 2022 (as amended, the “Johns

Employment Agreement”), pursuant to which Dr.

Johns served as Chief Scientific Officer of the Company effective as of September

8, 2020 (the “Effective Date”).

Pursuant to the third amendment to the Johns Employment Agreement dated November 10, 2022

(the “Third Amendment”), the term of the Johns Employment Agreement was to continue for a period of no

more than six months from the date of the Third Amendment;

provided, however, the Company or Dr.

Johns had the right to terminate Dr.

Johns’ employment prior to the expiration of such six month period for any reason upon 10 days prior notice.

the terms of the Johns Employment Agreement, Dr.

Johns was to receive an annual base salary of $265,000 (effective as of July 1, 2021)

and was eligible to participate in Benefit Plans (as defined in the Johns Employment Agreement) from time to time, in effect for senior

however, pursuant to the Third Amendment, Dr.

Johns would no longer be eligible to receive

any annual bonus or equity awards.

Furthermore, pursuant to the Third Amendment, upon separation

Johns’ employment from the Company for any reason, the Company would be required to provide Dr.

Johns with all accrued but

unpaid compensation earned through her final day of employment, all accrued but unused vacation and reimbursement of all documented, unreimbursed

expenses incurred prior to her separation.

Moreover, upon Dr.

Johns’ execution of a release of claims after her final day of employment,

as set forth in the Third Amendment, the Company was required to provide Dr.

Johns with certain benefits as set forth therein.

9, 2022 (the “Johns Separation Date”), the employment of Stefanie Johns as Chief Scientific Officer of the Company ceased.

On the Johns Separation Date, the Company entered into a Separation Agreement and General Release (the “Johns Separation Agreement”)

Johns pursuant to which Dr.

Johns shall (i) receive six months of base salary, subject to applicable withholdings and deductions

and (ii) be entitled to continue any benefits (the “Benefits”) under Company sponsored health and medical plans for a period

of six months from the Johns Separation Date;

provided, however, in the event that Dr.

Johns obtains benefits that are equivalent to or

greater than the Benefits provided by the Company through an alternative source prior to the end of such six month period, the Company’s

obligation to provide the Benefits shall cease.

Furthermore, pursuant to the Johns Separation Agreement, Dr.

Johns agreed to release and

discharge the Released Parties (as defined in the Johns Separation Agreement) from any and all charges, complaints, claims, liabilities,

obligations, promises, agreements, damages, actions, causes of action, whether accrued or to be accrued, suits, rights, demands, costs,

losses, debts and expenses of any nature whatsoever, whether in law or in equity, whether known or unknown and under any legal theory

whatsoever, against the Released Parties through the Johns Separation Date.

the event that Mr.

Knie’s employment is terminated due to his death or disability, he will be entitled to receive (i) a lump

sum payment equal to the amount of any annual bonus earned with respect to a prior fiscal year, but unpaid as of the date of termination;

(ii) a lump sum payment equal to the amount of annual bonus that was accrued for the year in which employment ends;

and (iii) the

treatment of any equity awards in accordance with their respective equity award agreements.

the event that Mr.

Knie’s employment is terminated due to his non-renewal or resignation without Good Reason, he will be entitled

to receive a lump sum payment equal to the amount of any annual bonus earned with respect to a prior fiscal year, but unpaid as of the

date of termination.

Grant Practices

Equity Incentive Plan

On May 4, 2018, the Company’s board of directors

adopted the Hoth Therapeutics, Inc.

2018 Omnibus Equity Incentive Plan (the “2018 Plan”).

The 2018 Plan became effective on

May 4, 2018 upon approval of the 2018 Plan by the Company’s shareholders at the Company’s annual meeting of shareholders.

Pursuant to the 2018 Plan, the Company can grant stock options, stock appreciation rights, restricted stock, restricted stock units, deferred

stock units, annual or long-term performance awards or other stock-based awards.

As of December 31, 2022, the outstanding option awards

total 104,651, as described in the table “Option Awards” below.

May 4, 2018, the Company’s board of directors adopted the Hoth Therapeutics, Inc.

2018 Omnibus Equity Incentive Plan (the “2018

The 2018 Plan became effective on May 4, 2018 upon approval of the 2018 Plan by the Company’s shareholders at the

Company’s annual meeting of shareholders.

Pursuant to the 2018 Plan, the Company can grant stock options, stock appreciation rights,

restricted stock, restricted stock units, deferred stock units, annual or long-term performance awards or other stock-based awards.

of December 31, 2023, the outstanding option awards under the 2018 Plan total 79,360, as described in the table “Option Awards”

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.

Pursuant to the 2022, the Company

can grant stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, annual or long-term

performance awards or other stock-based awards.

Bonus Arrangements

Pursuant to the terms of the executive employment

agreements described above, the Company, through the board, has the discretion to determine the amounts of the annual incentive bonus

payments which executives may receive Based on the review of the Company’s performance for calendar year 2022, the board, in its

sole discretion, determined to pay the bonuses to the named executive officers listed in the summary compensation table above.

The Company maintains a defined contribution employee

retirement plan, or 401(k) plan, for its employees.

The 401(k) plan is intended to qualify as a tax-qualified plan under Section 401(k)

of the Code so that contributions to the 401(k) plan, and income earned on such contributions, are not taxable to participants until withdrawn

or distributed from the 401(k) plan.

The Company will match a participant's contribution 100% up to 6% of their compensation, subject

to statutory limits.

Perquisites are not a material component of compensation.

In general, named executive officers do not receive reimbursements for meals, airlines, and travel costs, other than those costs allowed

for all employees.

During 2022, no named executive officers received an allowance from the Company or any of the above or a reimbursement

for any expense incurred for non-business purposes.

Outstanding Equity Awards at December

The following table provides information regarding

option awards held by each of our named executive officers that were outstanding as of December 31, 2022.

There were no stock awards or

other equity awards outstanding as of December 31, 2022.

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.

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.

the Amended and Restated 2022 Plan, the Company can grant stock options, stock appreciation rights, restricted stock, restricted stock

units, deferred stock units, annual or long-term performance awards or other stock-based awards.

As of December 31, 2023, the outstanding

option awards under the Amended and Restated 2022 Plan total 90,000, as described in the table “Option Awards” below.

to the terms of the executive employment agreements described above, the Company, through the board, has the discretion to determine

the amounts of the annual incentive bonus payments which executives may receive Based on the review of the Company’s performance

for calendar year 2023, the board, in its sole discretion, determined to pay the bonuses to the named executive officers listed in the

summary compensation table above.

Company maintains a defined contribution employee retirement plan, or 401(k) plan, for its employees.

The 401(k) plan is intended to

qualify as a tax-qualified plan under Section 401(k) of the Code so that contributions to the 401(k) plan, and income earned on such

contributions, are not taxable to participants until withdrawn or distributed from the 401(k) plan.

The Company will match a participant’s

contribution 100% up to 6% of their compensation, subject to statutory limits.

are not a material component of compensation.

In general, named executive officers do not receive reimbursements for meals, airlines,

and travel costs, other than those costs allowed for all employees.

During 2023, no named executive officers received an allowance from

the Company or any of the above or a reimbursement for any expense incurred for non-business purposes.

Equity Awards at December 31, 2023

following table provides information regarding option awards held by each of our named executive officers that were outstanding as of

December 31, 2023.

There were no stock awards or other equity awards outstanding as of December 31, 2023.

Option Awards

1 unchanged sentence

Unexercisable

Stefanie Johns

Stock options granted to Robb Knie vested in full immediately upon grant.

Stock options granted to Stefanie Johns vested in full immediately upon grant.

On December 9, 2022, the employment of Stefanie Johns as Chief Scientific Officer of the Company ceased.

As a result, on March 9, 2023, the options which were vested but unexercised expired pursuant to the terms of the option agreements.

Non-Employee Director Compensation

The following table presents the total compensation

for each person who served as a non-employee member of our board of directors and received compensation for such service during the fiscal

year ended December 31, 2022.

Other than as set forth in the table and described more fully below, we did not pay any compensation, make

any equity awards or non-equity awards to, or pay any other compensation to any of the non-employee members of our board of directors

Stock options granted to