Rocket One Inc. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended: September 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from: Commission File Number: 001-38803 Hoth Therapeutics, Inc. (Exact name of registrant as specified in its charter) Nevada 82-1553794 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1177 Avenue of the Americas , 5 th Floor , Suite 5066 , New York , NY 10036 (Address of principal executive offices) (Zip Code) (646) 756-2997 (Registrant’s telephone number, including area code) Not applicable (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock, $0.0001 par value HOTH The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The number of shares of the issuer’s common stock, $0.0001 par value per share, outstanding at November 11, 2025 was 15,514,312 . Table of Contents Page PART I - FINANCIAL INFORMATION 1 ITEM 1. Financial Statements 1 Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 1 Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) 2 Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) 3 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (Unaudited) 4 Notes to Unaudited Condensed Consolidated Financial Statements 5 ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 28 ITEM 4. Controls and Procedures 28 PART II - OTHER INFORMATION 29 ITEM 1. Legal Proceedings 29 ITEM 1A. Risk Factors 29 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 30 ITEM 3. Defaults Upon Senior Securities 30 ITEM 5. Other Information 31 ITEM 6. Exhibits 31 SIGNATURES 32 i CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA This Quarterly Report on Form 10-Q contains certain forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements in this Quarterly Report on Form 10-Q about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “believes,” “will,” “expects,” “anticipates,” “estimates,” “predicts,” “potential,” “continues” “intends,” “plans” and “would” or the negative of these terms or other comparable terminology. For example, statements concerning financial condition, possible or assumed future results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future management and organizational structure are all forward-looking statements. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Any forward-looking statements are qualified in their entirety by reference to the risk factors discussed in this Quarterly Report on Form 10-Q. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding: ● our business strategies; ● the timing of regulatory submissions; ● our ability to obtain and maintain regulatory approval of our existing product candidates and any other product candidates we may develop, and the labeling under any approval we may obtain; ● risks relating to the timing and costs of clinical trials and the timing and costs of other expenses; ● risks related to market acceptance of our products; ● the ultimate impact of any public health crisis on our business, our clinical trials, our research programs, healthcare systems or the global economy as a whole; ● intellectual property risks; ● risks associated with our reliance on third-party organizations; ● our competitive position; ● our industry environment; ● our anticipated financial and operating results, including anticipated sources of revenues; ● risks related to the restatement of our financial statements including risks of increased costs and the increased possibility of legal proceedings and regulatory inquiries, sanctions, or investigation; ii ● assumptions regarding the size of the available market, benefits of our products, product pricing and timing of product launches; ● management’s expectation with respect to future acquisitions; ● statements regarding our goals, intentions, plans and expectations, including the introduction of new products and markets; ● general business and economic conditions, such as inflationary pressures, geopolitical conditions and tariffs and other trade barriers; ● our implementation of a digital assets treasury strategy including, without limitation, the price volatility of digital assets; ● regulatory developments regarding digital assets and digital asset markets, which could adversely affect our business, financial condition, and results of operations; and ● our cash needs and financing plans. All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications, articles and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party sources. iii PART I – FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. HOTH THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2025 2024 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 7,847,911 $ 7,038,923 Prepaid expenses and other current assets 1,073,641 605,948 Total Current Assets 8,921,552 7,644,871 NON-CURRENT ASSETS: Crypto assets, at fair value 274,695 - Operating lease right-of-use asset, net 11,464 31,075 Investment in joint ventures at fair value 36,819 36,819 Total Non-Current Assets 322,978 67,894 Total Assets $ 9,244,530 $ 7,712,765 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 400,067 $ 412,071 Accrued expenses 599,018 390,760 Operating lease liability, current portion 13,599 28,366 Total Current Liabilities 1,012,684 831,197 LONG-TERM LIABILITIES: Operating lease liability, less current portion - 2,709 Total Long-Term Liabilities - 2,709 Total Liabilities 1,012,684 833,906 Commitments and Contingencies (Note 8) STOCKHOLDERS’ EQUITY: Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized; 3,000,000 shares undesignated; 0 shares issued and outstanding as of September 30, 2025 and December 31, 2024 - - Series A Convertible Preferred Stock, $ 0.0001 par value; 5,000,000 shares designated; 0 shares issued and outstanding as of September 30, 2025 and December 31, 2024 - - Series B Preferred Stock, $ 0.0001 par value; 2,000,000 shares designated; 0 shares issued and outstanding as of September 30, 2025 and December 31, 2024 - - Common stock, $ 0.0001 par value; 50,000,000 shares authorized; 15,127,622 and 8,042,747 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively 1,513 804 Additional paid-in capital 78,410,459 67,279,033 Accumulated deficit ( 70,191,154 ) ( 60,410,041 ) Accumulated other comprehensive income 11,028 9,063 Total Stockholders’ Equity 8,231,846 6,878,859 Total Liabilities and Stockholders’ Equity $ 9,244,530 $ 7,712,765 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2025 2024 2025 2024 NET REVENUES $ - $ - $ - $ - OPERATING COSTS AND EXPENSES: Research and development expense 1,633,476 994,474 4,631,791 2,210,141 General and administrative expenses 2,447,188 1,234,743 5,124,539 3,902,509 Total operating expenses 4,080,664 2,229,217 9,756,330 6,112,650 LOSS FROM OPERATIONS ( 4,080,664 ) ( 2,229,217 ) ( 9,756,330 ) ( 6,112,650 ) OTHER INCOME (EXPENSES), NET: Change in fair value of investment in joint venture - - - ( 581 ) Unrealized loss on crypto assets ( 25,305 ) - ( 25,305 ) - Dividend and interest income 168 200 522 27,521 Total other income (expenses), net ( 25,137 ) 200 ( 24,783 ) 26,940 NET LOSS $ ( 4,105,801 ) $ ( 2,229,017 ) $ ( 9,781,113 ) $ ( 6,085,710 ) NET LOSS PER COMMON SHARE: Basic and diluted $ ( 0.30 ) $ ( 0.32 ) $ ( 0.74 ) $ ( 1.00 ) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic and diluted 13,787,159 6,903,804 13,197,775 6,062,762 COMPREHENSIVE LOSS: Net loss $ ( 4,105,801 ) $ ( 2,229,017 ) $ ( 9,781,113 ) $ ( 6,085,710 ) Other comprehensive (loss) income: Foreign currency translation adjustment ( 1,016 ) 2,490 1,965 ( 1,645 ) Total comprehensive loss $ ( 4,106,817 ) $ ( 2,226,527 ) $ ( 9,779,148 ) $ ( 6,087,355 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 For the Three and Nine Months Ended September 30, 2025 Additional Accumulated other Total Common Stock Paid-in Accumulated Comprehensive Stockholders’ Shares Amount Capital Deficit Income (Loss) Equity Balance, December 31, 2024 8,042,747 $ 804 $ 67,279,033 $ ( 60,410,041 ) $ 9,063 $ 6,878,859 Common shares issued for exercise of warrants 3,750,000 375 5,624,625 - - 5,625,000 Stock-based compensation - - 219,929 - - 219,929 Common stock issued for cash, net 927,968 93 1,441,871 - - 1,441,964 Common stock issued for patent 450,000 45 850,455 - - 850,500 Cumulative translation adjustment - - - - ( 497 ) ( 497 ) Net loss - - - ( 3,475,836 ) - ( 3,475,836 ) Balance, March 31, 2025 (unaudited) 13,170,715 1,317 75,415,913 ( 63,885,877 ) 8,566 11,539,919 Issuance of warrants for professional fees - - 333,150 - - 333,150 Common stock issued for cash, net 63,312 6 66,095 - - 66,101 Cumulative translation adjustment - - - - 3,478 3,478 Net loss - - - ( 2,199,476 ) - ( 2,199,476 ) Balance, June 30, 2025 (unaudited) 13,234,027 1,323 75,815,158 ( 66,085,353 ) 12,044 9,743,172 Common stock issued for cash, net 1,404,339 141 2,003,350 - - 2,003,491 Common stock issued for compensation, net of tax withholdings 489,256 49 591,951 - - 592,000 Cumulative translation adjustment - - - - ( 1,016 ) ( 1,016 ) Net loss - - - ( 4,105,801 ) - ( 4,105,801 ) Balance, September 30, 2025 (unaudited) 15,127,622 $ 1,513 $ 78,410,459 $ ( 70,191,154 ) $ 11,028 $ 8,231,846 For the Three and Nine Months Ended September 30, 2024 Additional Accumulated other Total Common Stock Paid-in Accumulated Comprehensive Stockholders’ Shares Amount Capital Deficit Income (Loss) Equity Balance, December 31, 2023 4,348,129 $ 435 $ 61,732,106 $ ( 52,221,741 ) $ 27,260 $ 9,538,060 Exercise of pre-funded warrants 55,675 5 ( 5 ) - - - Stock-based compensation - - 513,350 - - 513,350 Deferred offering cost related to warrant inducement - - 550,500 - - 550,500 Cumulative translation adjustment - - - - ( 5,768 ) ( 5,768 ) Net loss - - - ( 2,146,529 ) - ( 2,146,529 ) Balance, March 31, 2024 (unaudited) 4,403,804 440 62,795,951 ( 54,368,270 ) 21,492 8,449,613 Stock-based compensation - - 7,054 - - 7,054 Common shares issued and issuable for exercise of warrants (1) 955,000 96 3,682,204 - - 3,682,300 Deferred offering cost related to warrant inducement - - ( 550,500 ) - - ( 550,500 ) Cumulative translation adjustment - - - - 1,634 1,634 Net loss - - - ( 1,710,164 ) - ( 1,710,164 ) Balance, June 30, 2024 (unaudited) 5,358,804 536 65,934,709 ( 56,078,434 ) 23,126 9,879,937 Stock-based compensation - - 283,332 - - 283,332 Common shares issued for warrants held in abeyance 1,545,000 154 ( 154 ) - - - Cumulative translation adjustment - - - - 2,490 2,490 Net loss - - - ( 2,229,017 ) - ( 2,229,017 ) Balance, September 30, 2024 (unaudited) 6,903,804 $ 690 $ 66,217,887 $ ( 58,307,451 ) $ 25,616 $ 7,936,742 (1) Represents the aggregate fair value of 2,500,000 shares of common stock, which includes 955,000 shares that have been issued and 1,545,000 shares held in abeyance as of June 30, 2024. See Note 7 – Stockholders’ Equity – Warrants for additional information. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Nine Months Ended September 30, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 9,781,113 ) $ ( 6,085,710 ) Adjustments to reconcile net loss to net cash used in operating activities: Research and development-acquired patent, expensed 850,500 - Stock-based compensation 1,187,929 803,736 Stock-based professional fees 222,100 - Change in fair value of investment in joint ventures - 581 Lease costs 2,135 - Unrealized loss of crypto assets 25,305 - Changes in operating assets and liabilities: Prepaid expenses ( 356,643 ) 201,740 Accounts payable and accrued expenses 196,254 129,408 NET CASH USED IN OPERATING ACTIVITIES ( 7,653,533 ) ( 4,950,245 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of crypto assets ( 300,000 ) - NET CASH USED IN INVESTING ACTIVITIES ( 300,000 ) - CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance common stock, net of offering costs 3,511,556 - Proceeds from exercise of warrants 5,625,000 3,682,300 Taxes paid related to net share settlement of equity award ( 376,000 ) - NET CASH PROVIDED BY FINANCING ACTIVITIES 8,760,556 3,682,300 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 807,023 ( 1,267,945 ) Effect of exchange rate changes on cash and cash equivalents 1,965 ( 1,644 ) CASH AND CASH EQUIVALENTS - beginning of period 7,038,923 9,292,352 CASH AND CASH EQUIVALENTS - end of period $ 7,847,911 $ 8,022,763 NON-CASH INVESTING AND FINANCING ACTIVITIES: Increase in deferred offering cost and additional paid-in capital $ - $ 550,500 Increase in prepaid expenses and other current assets and additional paid-in capital from the issuance of warrants $ 333,150 $ - The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 NOTE 1 – Organization and Description of Business Operations Hoth Therapeutics, Inc. (together with its wholly-owned 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); and (iii) a treatment and/or prevention for Alzheimer’s or other neuroinflammatory diseases (HT-ALZ). The Company also has assets being developed for (i) atopic dermatitis (also known as eczema) (BioLexa); (ii) a treatment for asthma and allergies using inhalational administration (HT-004); and (iii) a treatment for obesity, and obesity-related diseases and conditions (HT-VA). Liquidity and Capital Resources Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - Going Concern , requires management to evaluate the Company’s ability to continue as a going concern one year beyond the filing date of the given financial statements. This evaluation requires management to perform two steps. First, management must evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern. Second, if management concludes that substantial doubt is raised, management is required to consider whether it has plans in place to alleviate that doubt. Disclosures in the notes to the unaudited condensed 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 incurred losses and generated negative cash flows from operations since its inception. At September 30, 2025, the Company had an accumulated deficit of $ 70.2 million and cash and cash equivalents of $ 7.8 million. The Company has funded its operations from proceeds from the sale of equity securities. The Company will require significant additional capital to make the investments it needs to execute its longer-term business plan. The Company’s ability to successfully raise sufficient funds through the sale of debt or equity securities when needed is subject to many risks and uncertainties and, even if it were successful, future equity issuances may result in dilution to its existing shareholders and future debt securities may contain covenants that limit the Company’s operations or ability to enter into certain transactions. The Company believes its current cash is sufficient to fund operations for at least the next 12 months from the issuance date of these unaudited condensed consolidated 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 November 8, 2024, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) under which the Company could offer and sell shares of its common stock having an aggregate sales price of up to $ 2,700,000 through Wainwright as the sales agent pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-272620), including an accompanying base prospectus, and a prospectus supplement dated November 8, 2024. Sales of shares of the Company’s common stock through Wainwright, if any, will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. Wainwright will use commercially reasonable efforts to sell shares of the Company’s common stock from time to time, based on instructions from the Company (including any price, time or size limits or other parameters or conditions the Company may impose). The Company will pay Wainwright a commission equal to 3.0 % of the aggregate gross proceeds from the sales of shares of the Company’s common stock sold through Wainwright under the ATM Agreement and will also reimburse Wainwright for certain specified expenses in connection with the ATM Agreement. On February 7, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $ 5,000,000 pursuant to a prospectus supplement dated February 7, 2025. The offering of shares pursuant to the ATM Agreement will terminate on the earlier of (1) the sale, pursuant to the ATM Agreement, of shares having an aggregate offering price of $ 7,700,000 and (2) the termination of the ATM Agreement by either the Company or Wainwright, as set forth therein. As of November 11, 2025, the Company has sold shares of its common stock having a total aggregate sales price of approximately $ 5.5 million. NOTE 2 – Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. These unaudited condensed consolidated financial statement results are not necessarily indicative of results to be expected for the full fiscal year or any future period. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 28, 2025. 5 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 The accompanying unaudited condensed consolidated financial statements 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. Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. The most significant estimates in the Company’s unaudited condensed consolidated financial statements relate to stock-based compensation, the valuation of modified warrants, the valuation of common stock issued for research and development-acquired patent, and the valuation allowance of deferred tax assets resulting from net operating losses. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations may be affected. Significant Accounting Policies There have been no material changes to the Company’s significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 as filed with the SEC on March 28, 2025. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents consist of bank accounts and highly liquid money funds and totaled $ 7,847,911 and $ 7,038,923 as of September 30, 2025 and December 31, 2024, respectively. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits at the three financial institutions the Company utilizes for its banking requirements. The Company’s foreign bank account is not subject to Federal Deposit Insurance Corporation insurance. Cash held in foreign bank accounts totaled approximately $ 0.1 million and $ 0.1 million as of September 30, 2025 and December 31, 2024, respectively. Concentrations of Credit Risk and Off-Balance Sheet Risk The Company has significant cash balances at financial institutions which, throughout the year, regularly exceed the federally insured limit of $ 250,000 . Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. Fair Value of Financial Instruments Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements (“ASC-820”), provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The fair value of the Company’s assets and liabilities, which would qualify as financial instruments under ASC-820, approximates the carrying amounts represented in the Company’s condensed consolidated balance sheets, primarily due to their short-term nature. The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. During the nine months ended September 30, 2025 and 2024, there were no changes in valuation techniques or transfers between Level 1, Level 2, and Level 3. 6 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 Leases 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 operating lease liability, current and lease liability, on the Company’s condensed consolidated 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 period. 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. The Company 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 Ownership interests in entities for which the Company has significant influence that are not consolidated are accounted for as equity method investments. SEC Staff Announcement: Accounting for Limited Partnership Investments (codified in ASC 323-30-S99-1) guidance requires the use of the equity method unless the investor’s interest “is so minor that the limited partner may have virtually no influence over partnership operating and financial policies.” The SEC staff’s position is that investments in limited partnerships of greater than 3 % to 5 % are considered more than minor and, therefore, should be accounted for using the equity method or fair value option. Investments accounted for using the equity method may be reported on a lag up to three months if financial statements of the investee are not available in sufficient time for the investor to apply the equity method as of the current reporting date. The determination of whether an investee’s results are recorded on a lag is made on an investment-by-investment basis. This investment in joint ventures is further described in Note 5 of these unaudited condensed consolidated financial statements. Digital Assets, at Fair Value The Company’s digital assets primarily include Bitcoin (BTC), Ethereum (ETH) and Solana (SOL), which are actively traded on public exchanges. The Company distinguishes between digital assets which fall within the scope of ASC 350-60 and those which do not. The Company refers to digital assets which fall within the scope of ASC 350-60 (e.g., BTC) as “crypto assets.” Digital assets which do not fall within the scope of ASC 350-60, Accounting for and Disclosure of Crypto Assets , are referred to as “digital intangible assets.” As of September 30, 2025, the Company did not own any digital intangible assets. Crypto assets are recorded at fair value in accordance with ASC 820, Fair Value Measurement . Changes in fair value are recognized in the Company’s consolidated statements of operations within “other income (expense)” for the period in which they occur. Digital assets are classified on the balance sheets based on management’s intent and the expected period of use or sale: ● Current assets: Digital assets held for trading or intended to be sold within 12 months are classified as current assets . ● Non-current assets: Digital assets held for investment or long-term strategic purposes are classified as non-current assets . The fair value of each cryptocurrency holding is based on the closing market price on the reporting date. As of September 30, 2025, the Company held $ 274,695 of crypto assets comprised of BTC, ETH and SOL, which are in the scope of ASC 350-60 at fair value. In determining the fair value of the crypto assets in accordance with ASC 820, the Company utilizes Coinbase as the principal market. The Company uses a first-in, first-out methodology to assign costs to crypto assets. Sales and purchases of crypto assets are reflected as cash flows from investing activities in the consolidated statements of cash flows. 7 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 Research and Development Costs Research and development costs, including acquired in-process research and development expenses for which there is no alternative future use, are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are accrued and then expensed when the activity has been performed or when the goods have been received rather than when the payment is made. Stock-Based Compensation The Company accounts for stock-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 they occur. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. Expected Term - The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding based on the simplified method, which is the half-life from vesting to the end of its contractual term. Expected Volatility - The Company computes stock price volatility over expected terms based on its historical common stock trading prices. Risk-Free Interest Rate - The Company bases the risk-free interest rate on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. Expected Dividend - The Company has never declared or paid any cash dividends on its common shares and does not plan to pay cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models. 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. Stock-based 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. Stock-based compensation expense is generally recognized based on the straight-line basis over the vesting term. Income Taxes Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the unaudited condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized. 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. 8 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law. With the passing of this tax legislation, the most notable corporate tax issue that impacts the Company is the change to IRC §174. Since 2022, the Company has been required to capitalize U.S. and foreign research and development expenditures in accordance with IRC §174 and amortize those costs over 5 years for U.S. costs and 15 years for foreign costs. The new legislation will no longer require U.S. research and development costs to be capitalized; however, foreign costs will continue to be capitalized and amortized over 15 years. U.S. costs that were capitalized in tax years 2022 through 2024 can be expensed in 2025 or over a two-year period, 2025 and 2026. The Company continues to evaluate various elections available to the Company under OBBBA related to IRC Section 174 capitalized R&D costs. Because of the Company’s loss and full valuation allowance, we expect no impact on the Company’s 2025 financial statements regardless of the elections that the Company makes related to IRC Section 174 capitalized R&D costs for the 2025 year. Net Loss per Share Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Since the Company had a net loss in the periods presented, basic and diluted net loss per common share are the same. The following were excluded from the computation of diluted shares outstanding due to the losses for each period presented, as they would have had an anti-dilutive impact on the Company’s net loss: As of September 30, Potentially dilutive securities 2025 2024 Warrants 1,740,752 5,209,403 Options 1,260,362 1,090,362 Non-vested restricted stock awards - 1,693 Total 3,001,114 6,301,458 Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance. For issued warrants that do not meet all the criteria for equity classification, the warrants are classified as liability and are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Comprehensive Loss Comprehensive loss is composed of net loss and other comprehensive income (loss). During the three and nine months ended September 30, 2025 and 2024, other comprehensive (loss) income was attributable to foreign currency translation adjustment. Foreign Currency The reporting currency of the Company is the U.S. dollar. For the Company’s subsidiary with non-U.S. dollar functional currencies, assets and liabilities are translated into U.S. dollars at period-end exchange rates. Revenue and expenses are translated at the average exchange rates during the period. Equity transactions are translated using historical exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive income as a component of stockholders’ equity. Foreign currency translation adjustments arising from differences in exchange rates from period to period are recorded within “accumulated other comprehensive income” in the condensed consolidated balance sheets. Segment Reporting In November 2023, the FASB issued ASU 2023-07, Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses among other disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 on January 1, 2024. The Company operates as a single operating segment as a clinical-stage biopharmaceutical company focused on developing new generation therapies for unmet medical needs. In accordance with ASC 280, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company and decides how to allocate resources based on loss from operations, managing cash flows and evaluating research and development and general and administrative expenses. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similarities in economic characteristics such as nature of services and procurement processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying notes to unaudited condensed consolidated financial statements. 9 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 Recent Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including, but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on its unaudited condensed consolidated financial statements. Currently, management does not believe that any other recently issued, but not yet effective accounting pronouncements, if currently adopted, would have a material impact on the Company’s unaudited condensed consolidated financial statements. NOTE 3 – Crypto Assets, at Fair Value The following table sets forth the units held, cost basis, and fair value of crypto assets held, as shown on the consolidated balance sheet as of September 30, 2025: Classification Units Held Cost Basis Fair Value on September 30, 2025 Balance, September 30, 2025 BTC (Bitcoin) Long-term 0.85673339 $ 100,000 $ 97,717 ETH (Ethereum) Long-term 21.96726563 100,000 91,087 SOL (Solana) Long-term 411.62365256 100,000 85,891 Total $ 300,000 $ 274,695 Cost basis is equal to the cost of the crypto assets plus transaction fees, if any, at the time of purchase or upon receipt. Fair value represents the quoted crypto asset prices within the crypto assets principal market at the time of measurement. As of December 31, 2024, the Company did not hold any crypto assets. The following table represents a reconciliation of crypto assets held: For the Three and Nine Months Ended September 30, 2025 Fair Value, December 31, 2024 $ - Additions 300,000 Unrealized loss ( 25,305 ) Fair Value, September 30, 2025 $ 274,695 NOTE 4 – License Agreements and Acquired Patent Applications The following summarizes the Company’s research and development expenses for licenses and patent applications acquired during the three and nine months ended September 30, 2025 and 2024: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 The George Washington University $ 1,250 $ 2,522 $ 3,750 $ 12,370 North Carolina State University 937 1,562 2,812 4,687 University of Cincinnati — 625 3,333 1,042 Patent applications acquired — — 1,250,500 — $ 2,187 $ 4,709 $ 1,260,395 $ 18,099 10 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 The George Washington University During the three and nine months ended September 30, 2025, the Company recorded expenses of $ 1,250 and $ 3,750 , respectively, related to license fees pursuant to the patent license agreement with The George Washington University (“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”). During the three and nine months ended September 30, 2024, the Company recorded expenses of $ 2,522 and $ 12,370 , respectively, for license fees, including an expense of $ 1,272 and $ 7,661 for the three and nine months ended September 30, 2024, respectively, related to warrants granted to GW pursuant to the GW Patent License Agreement and the Second GW Patent License Agreement. North Carolina State University During the three months ended September 30, 2025 and 2024, the Company recorded expenses of $ 937 and $ 1,562 , respectively, for license fees associated with the license agreement by and between the Company and North Carolina State University dated February 25, 2021. During the nine months ended September 30, 2025 and 2024, the Company recorded expenses of $ 2,812 and $ 4,687 , respectively, for license fees associated with the license agreement by and between the Company and North Carolina State University dated February 25, 2021. Chelexa Biosciences, Inc. and the University of Cincinnati During the three months ended September 30, 2025 and 2024, the Company recognized expenses of $ 0 and $ 625 , respectively, for license fees associated with the Assignment and Assumption Agreement by and between the Company and Chelexa Biosciences, Inc. dated May 14, 2020. During the nine months ended September 30, 2025 and 2024, the Company recognized expenses of $ 3,333 and $ 1,042 , respectively, for license fees associated with the Assignment and Assumption Agreement by and between the Company and Chelexa Biosciences, Inc. dated May 14, 2020. Patent Application Acquisition Agreement On January 13, 2025, the Company entered into a Patent Application Acquisition Agreement with Med30, LLC (the “Seller”), whereby the Seller sold, conveyed, assigned and transferred to the Company all of Seller’s right, title, and interest in and to certain patent applications and associated rights, subject to the terms and conditions set forth in such agreement for a cash payment of $ 400,000 and the issuance of 450,000 shares of the Company’s common stock with a fair value of $ 850,500 for an aggregate purchase price of $ 1,250,500 . These common shares were valued at $ 850,500 , or $ 1.89 per share, on the measurement date based on the closing price of the Company’s common stock. For asset acquisitions, in-process research and development (“IPRD”) is expensed immediately unless there is an alternative future use. The patent applications acquired do not constitute a business, as defined under ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business (such when there is no substantive process in the acquired entity). The acquired IPRD intangible asset will be used in research and development projects which have been determined to not have alternative future use at the acquisition date and was expensed immediately. Accordingly, during the three and nine months ended September 30, 2025, the Company recorded $ 0 and $ 1,250,500 in research and development expenses, respectively. NOTE 5 – Fair Value of Financial Assets and Liabilities The following table presents the Company’s assets and liabilities that are measured at fair value on September 30, 2025 and December 31, 2024: Fair value measured on September 30, 2025 Total at September 30, 2025 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Crypto assets $ 274,695 $ 274,695 $ — $ — Investment in joint ventures $ 36,819 $ — $ — $ 36,819 Fair value measured on December 31, 2024 Total at December 31, 2024 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Investment in joint ventures $ 36,819 $ — $ — $ 36,819 11 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 Level 3 Measurement The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets that are measured at fair value on a recurring basis for the three and nine months ended September 30, 2025 and 2024: Investment in joint ventures for the three months ended September 30, 2025 and 2024 For the Three Months Ended September 30, 2025 2024 Investment in joint ventures at fair value – beginning of period $ 36,819 $ 36,819 Change in fair value of investment in joint ventures — — Investment in joint ventures at fair value – end of period $ 36,819 $ 36,819 Investment in joint ventures for the nine months ended September 30, 2025 and 2024 For the Nine Months Ended September 30, 2025 2024 Investment in joint ventures at fair value – beginning of period $ 36,819 $ 37,400 Change in fair value of investments in joint ventures — ( 581 ) Investment in joint ventures at fair value – end of period $ 36,819 $ 36,819 Investment in Joint Ventures The Company has elected to measure the investment in joint ventures using the fair value option at each reporting date. Under the fair value option, bifurcation of an embedded derivative is not necessary, and all related gains and losses on the host contract and derivative due to change in the fair value will be reflected in other income (expenses), net in the unaudited condensed consolidated statements of operations and comprehensive loss. The value at which the Company’s investment in joint ventures is carried on its books is adjusted to estimated fair value at the end of each quarter, taking into account general economic and stock market conditions and those characteristics specific to the underlying investments. Investment in Zylö Therapeutics In connection with the Company’s March 2020 underwritten public offering of shares of its common stock, on May 4, 2020, the Company purchased 120,000 shares of Zylö Therapeutics (“Zylö”) Class B common stock for $ 60,000 . 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 (as amended, the “Exclusive Sublicense Agreement”), 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 its Class B common stock in February 2024, and as of September 30, 2025 and December 31, 2024, valued its share price at $ 0.167 and $ 0.167 per share, respectively. This value was ratified by Zylö’s board of directors in February 2024 and December 2023, respectively. On February 23, 2024, the Company acquired 22,000 shares of Class B Common stock of Atticus Pharma, a subsidiary of Zylö Therapeutics, based upon a 1-for-10 ratio of current shares and was instructed, on July 3, 2024, that the 409A valuation of the shares was $ 79 , or $ 0.0036 per share, pursuant to the February 2024 valuation ratified by Zylö’s board of directors. The valuations reflect a probability-weighted present value of expected future investment returns considering certain possible outcomes and the rights of each class of Zylö’s and Atticus Pharma’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. 12 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 The consolidated investment in Zylö was valued at $ 36,819 as of both September 30, 2025 and December 31, 2024. NOTE 6 – Prepaid Expenses and Other Current Assets As of September 30, 2025 and December 31, 2024, prepaid expenses and other current assets consisted of the following: As of September 30, 2025 As of December 31, 2024 Prepaid clinical trial expenses $ 759,643 $ 476,235 Prepaid insurance 93,323 28,479 Prepaid stock-based professional fees 111,050 - R&D credit receivable 11,707 46,769 Other prepaid expenses 97,918 54,465 $ 1,073,641 $ 605,948 NOTE 7 – Stockholders’ Equity Preferred Stock The Company is authorized to issue up to 10,000,000 shares of preferred stock. This preferred stock may be issued in one or more series, and shall have such designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof as shall be determined at the time of issuance by the Company’s board of directors without further action by the Company’s shareholders. As of September 30, 2025 and December 31, 2024, 5,000,000 shares of the Company’s preferred stock have been designated as Series A Convertible Preferred Stock, 2,000,000 shares of the Company’s preferred stock have been designated as Series B Preferred Stock, and 3,000,000 shares of the Company’s preferred stock remain undesignated. Series A Convertible Preferred Stock 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 condensed consolidated balance sheets. 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. As of September 30, 2025 and December 31, 2024, no shares of Series A Convertible Preferred Stock were issued and outstanding. Series B Preferred Stock On November 2, 2022, the Company filed a Certificate of Designation of the Series B Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada to create a new class of Series B Preferred Stock, par value $ 0.0001 per share (the “Series B Preferred Stock”). The Certificate of Designation designated 2,000,000 shares of authorized preferred stock as Series B Preferred Stock. The Series B Preferred Stock was not entitled to receive dividends or any other distributions. The Series B Preferred Stock was 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 a proposal to increase the number of shares of common stock that the Company was authorized to issue, together with any ancillary or administrative matters necessary or advisable in connection with the implementation of such increase. The Series B Preferred Stock had no rights as to any distribution or assets of the Company upon liquidation, bankruptcy, reorganization, merger, acquisition, sale, dissolution or winding up of the Company. As of September 30, 2025 and December 31, 2024, no shares of Series B Preferred Stock were issued and outstanding. 13 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 Warrants 2024 On March 27, 2024, the Company entered into an inducement offer agreement with a holder (the “Holder”) of certain of the Company’s existing warrants (the “January 2023 Existing Warrants”) to immediately exercise for cash an aggregate 2,500,000 of the January 2023 Existing Warrants to purchase shares of the Company’s common stock at a reduced exercise price of $ 1.6775 per share for gross proceeds to the Company of approximately $ 4.2 million before deducting placement agent fees and other offering expenses payable by the Company. The exercised January 2023 Existing Warrants were issued pursuant to a securities purchase agreement dated December 29, 2022 by and between the Company and the Holder. Each January 2023 Existing 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 share (the “April 2024 Inducement Warrants”) to the Holder. The April 2024 Inducement Warrants are exercisable immediately upon issuance and will expire on July 3, 2028 . On April 1, 2024, the Holder exercised the January 2023 Existing Warrants, and the Company issued the Holder 3,750,000 April 2024 Inducement Warrants. Additionally, in connection with the exercise of the January 2023 Existing Warrants, the Company issued 125,000 placement agent warrants to the designees of the placement agent, Wainwright, which are immediately exercisable and expire on July 3, 2028 at an exercise price of $ 2.0969 per share. The amendment to the January 2023 Existing Warrants on March 27, 2024 to lower the exercise price thereof was considered a modification of the January 2023 Existing Warrants under the guidance of ASU 2021-04. This was modification of an equity classified financial instrument under that guidance and the exercise was treated as an equity issuance as the reason for the modification was to induce the holders to cash exercise their warrants, resulting in the exercise of the January 2023 Existing Warrants on April 1, 2024. On March 27, 2024, the Company calculated the total fair value of the consideration for the modification of the January 2023 Existing Warrants, which includes the incremental fair value of the January 2023 Existing Warrants (determined by comparing the fair values immediately prior to and immediately after the modification). The fair values were calculated using the Black-Scholes option-pricing model, and the Company determined that the total fair value of the consideration related to the modification of the January 2023 Existing Warrants amounted to $ 550,500 , which is reflected as a deferred offering cost on the unaudited condensed consolidated balance sheet as of June 30, 2024. The deferred offering cost was netted against the net proceeds received on April 1, 2024. 14 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 On April 1, 2024, in connection with the March 27, 2024 inducement offer agreement with the Holder of the January 2023 Existing Warrants, the Holder exercised the January 2023 Existing Warrants for cash at a reduced exercise price of $ 1.6775 per share resulting in gross proceeds to the Company of approximately $ 4.2 million (net proceeds of approximately $ 3.7 million, after deducting placement agent fees and other offering expenses of $ 436,450 ). In connection with such exercise, during the nine months ended September 30, 2024, the Company issued 2,500,000 shares of common stock upon the exercise of the January 2023 Existing Warrants. On April 1, 2024, in connection with the issuance of the April 2024 Inducement Warrants and the placement agent warrants, the Company calculated the fair value of such warrants using the Black-Scholes option-pricing model, and the Company determined that the aggregate total fair value of the April 2024 Inducement Warrants and placement agent warrants amounted to $ 4,166,800 , which are considered offering costs and were netted against the net proceeds received by the warrant exercise under the guidance of ASU 2021-04. The fair value of the January 2023 Existing Warrants on the modification date was estimated using the Black-Scholes option-pricing model with the following assumptions: March 27, 2024 to April 1, 2024 Exercise price $ 1.50 to $ 5.00 Term (years) 4.25 Expected stock price volatility 109.8 % Risk-free rate of interest 4.18 % to 4.34 % 2025 On January 7, 2025, the Company issued 3,750,000 common shares in connection with the exercise of the 3,750,000 April 2024 Inducement Warrants for cash proceeds of $ 5,625,000 . On June 4, 2025, pursuant to a six-month marketing service agreement, the Company issued warrants to purchase up to 300,000 shares of the Company’s common stock at an exercise price of $ 1.00 per share to a consultant of the Company for investor relations services. The warrants expire on June 4, 2027. The grant date fair value of these warrants was $ 333,150 , which was recorded as a prepaid expense and will be expensed as stock-based professional fees over the term of the marketing service agreement. The Company will have the option, but not obligation, to renew/extend this agreement for an additional six months by issuing an additional two-year warrant to purchase up to 200,000 shares of the Company’s common stock at an exercise price of $ 1.00 per share. In connection with this warrant, during the three and nine months ended September 30, 2025, the Company recorded stock-based professional fees of $ 166,575 and $ 222,100 , respectively, and as of September 30, 2025, the Company has reflected $ 111,050 of prepaid stock-based professional fees, which is included in prepaid expenses and other current assets on the accompanying unaudited condensed consolidated balance sheet. The fair value of warrant grants was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: June 4, 2025 Exercise price $ 1.00 Term (years) 2.0 Expected stock price volatility 129.68 % Risk-free rate of interest 3.87 % A summary of warrant activity for the nine months ended September 30, 2025 is as follows: Number of Warrants Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of December 31, 2024 5,203,243 $ 2.62 $ — 3.52 Granted 300,000 $ 1.00 $ — — Expired ( 12,491 ) $ 55.96 $ — — Exercised ( 3,750,000 ) $ 1.50 $ — — Outstanding as of September 30, 2025 1,740,752 $ 4.38 $ 51,000 2.63 Warrants exercisable as of September 30, 2025 1,740,752 $ 4.38 $ 51,000 2.63 15 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 The Company has determined that the warrants are equity classified instruments and should be accounted for as a component of stockholders’ equity. Common Shares 2024 On January 8, 2024, the Company issued 55,675 common shares in connection with the exercise of 55,675 pre-funded warrants that were issued in connection with a securities purchase agreement dated September 13, 2023. As of June 30, 2024, the Company issued 955,000 shares of its common stock that were held in abeyance in connection with the exercise of 2,500,000 warrants. See Warrants section above. On July 24, 2024, the Company issued 1,545,000 shares of its common stock that were held in abeyance in connection with the exercise of 2,500,000 warrants. See Warrants section above. 2025 On January 7, 2025, the Company issued 3,750,000 common shares in connection with the exercise of the 3,750,000 April 2024 Inducement Warrants for cash proceeds of $ 5,625,000 . See Warrants section above. On January 13, 2025, the Company entered into a Patent Application Acquisition Agreement with the Seller, whereby the Seller sold, conveyed, assigned and transferred to the Company all of Seller’s right, title, and interest in and to certain patent applications and associated rights, subject to the terms and conditions set forth in such agreement for a cash payment of $ 400,000 and the issuance of 450,000 shares of the Company’s common stock. These common shares were valued at $ 850,500 , or $ 1.89 per share, on the measurement date based on quoted closing price of the Company’s common stock (see Note 4). On November 8, 2024, the Company entered into the ATM Agreement with Wainwright under which the Company could offer and sell shares of its common stock having an aggregate sales price of up to $ 2,700,000 through Wainwright as the sales agent pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-272620), including an accompanying base prospectus and a prospectus supplement dated November 8, 2024. Sales of shares of the Company’s common stock through Wainwright, if any, will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. Wainwright will use commercially reasonable efforts to sell shares of the Company’s common stock from time to time, based on instructions from the Company (including any price, time or size limits or other parameters or conditions the Company may impose). The Company will pay Wainwright a commission equal to 3.0 % of the aggregate gross proceeds from the sales of shares of the Company’s common stock sold through Wainwright under the ATM Agreement and will also reimburse Wainwright for certain specified expenses in connection with the ATM Agreement. On February 7, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $ 5,000,000 pursuant to a prospectus supplement dated February 7, 2025. The offering of shares pursuant to the ATM Agreement will terminate on the earlier of (1) the sale, pursuant to the ATM Agreement, of shares having an aggregate offering price of $ 7,700,000 and (2) the termination of the ATM Agreement by either the Company or Wainwright, as set forth therein. During the three months ended March 31, 2025, pursuant to the ATM Agreement, the Company issued an aggregate of 927,968 shares of its common stock for net proceeds of $ 1,441,964 . During the three months ended June 30, 2025, pursuant to the ATM Agreement, the Company issued an aggregate of 63,312 shares of its common stock for net proceeds of $ 66,101 . During the three months ended September 30, 2025, pursuant to the ATM Agreement, the Company issued an aggregate of 1,404,339 shares of its common stock for net proceeds of $ 2,003,491 . On August 28, 2025, the Company issued 800,000 shares of common stock to the Company’s Chief Executive Officer as compensation under its equity incentive plan. The total grant-date fair value of the awards was $ 968,000 , which was recognized as compensation expense in the consolidated statements of operations for the three and nine months ended September 30, 2025. In connection with the issuance, the Company withheld 310,744 shares with a total fair value of $ 376,000 to satisfy employees’ minimum statutory tax withholding obligations. As a result, the Company issued a net of 489,256 shares to the Chief Executive Officer. The shares withheld for taxes are accounted for as a repurchase of shares and do not reduce the amount of compensation expense recognized. The Company remitted the related cash obligation to taxing authorities during the period. The Company’s policy is to allow net-share settlement of equity awards for tax withholding purposes. Cash paid to tax authorities in connection with such share withholding arrangements is classified as a financing activity in the consolidated statement of cash flows, in accordance with ASC 718-20-45. The following table summarizes share activity related to stock compensation during the three and nine months ended September 30, 2025: Activity Number of Shares Shares granted (gross) 800,000 Less: shares withheld for taxes ( 310,744 ) Net shares issued to employee 489,256 16 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 2018 Equity Incentive Plan On May 4, 2018, the Company’s board of directors adopted the Hoth Therapeutics, Inc. 2018 Equity Incentive Plan (the “2018 Plan”) initially reserving 40,000 shares of the Company’s common stock for issuance thereunder. The 2018 Plan became effective on May 14, 2018 upon written approval of the 2018 Plan by shareholders holding a majority of the Company’s voting capital. The compensation committee of the board of directors increased the number of shares reserved pursuant to the 2018 Plan by 26,878 shares effective as of January 1, 2021, such that as of January 1, 2021, the Company had an aggregate of 66,878 shares of common stock reserved for issuance pursuant to the 2018 Plan. On June 24, 2021, at the annual meeting of shareholders, shareholders of the Company approved an amendment to the 2018 Plan to further increase the number of shares reserved for issuance thereunder from 66,878 shares to 146,878 shares. On February 2, 2022, the compensation committee of the board of directors further increased the number of shares reserved for issuance under the 2018 Plan from 146,878 shares to 156,878 shares. On January 11, 2023, the compensation committee of the board of directors further increased the number of shares reserved for issuance under the 2018 Plan from 156,878 shares to 166,878 shares. On January 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. On January 6, 2025, the compensation committee of the board of directors further increased the number of shares reserved for issuance under the 2018 plan from 176,878 shares to 186,878 shares. As of September 30, 2025, there were 738 shares of Company common stock available for grant under the 2018 Plan. 2022 Equity Incentive Plan On March 24, 2022, the Company’s board of directors adopted the Hoth Therapeutics, Inc. 2022 Omnibus Equity Incentive Plan (the “2022 Plan”) initially reserving 96,000 shares of the Company’s common stock for issuance thereunder. The 2022 Plan became effective on June 23, 2022 upon approval of the 2022 Plan by the Company’s shareholders at the Company’s annual meeting of shareholders. 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, among other things, increased the number of shares reserved under the plan by 495,317 shares, which Amended and Restated 2022 Plan was approved by stockholders on August 18, 2023. On May 15, 2024, the Company’s compensation committee recommended, and the board of directors approved an increase to the number of shares of common stock reserved for issuance under the Amended and Restated 2022 Plan by 500,000 shares from 591,317 shares to 1,091,317 shares (“2024 Increase”). The 2024 Increase was approved by shareholders of the Company on August 7, 2024. On May 9, 2025, the Company’s compensation committee recommended, and the board of directors approved an increase to the number of shares of common stock reserved for issuance under the Amended and Restated 2022 Plan by 2,000,000 shares from 1,091,317 shares to 3,091,317 shares (“2025 Increase”). The 2025 Increase was approved by shareholders of the Company on August 5, 2025. On August 27, 2025, the Company’s compensation committee granted 800,000 shares of restricted stock with a cost basis of $ 1.21 per share, to the Company’s Chief Executive Officer. As of September 30, 2025, there were 1,201,317 shares of Company common stock available for grant under the Amended and Restated 2022 Plan. Restricted Stock Awards A summary of the Company’s restricted stock awards granted under the equity incentive plans during the nine months ended September 30, 2025 and 2024 is as follows: For the Nine Months Ended September 30, 2025 For the Nine Months Ended September 30, 2024 Number of Restricted Stock Awards Weighted Average Grant Date Fair Value Number of Restricted Stock Awards Weighted Average Grant Date Fair Value Nonvested at beginning of period — $ — 1,693 $ 3.16 Shares granted 800,000 $ 1.21 — $ — Vested ( 800,000 ) $ 1.21 — $ — Nonvested at end of period — $ — 1,693 $ 3.16 17 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 During the three months ended September 30, 2025 and 2024, the Company recognized stock-based compensation of $ 968,000 and $ 672 , respectively, in connection with restricted stock awards. During the nine months ended September 30, 2025 and 2024, the Company recognized stock-based compensation of $ 968,000 and $ 2,003 , respectively, in connection with restricted stock awards. Stock Options On January 5, 2024, pursuant to and subject to the available number of shares reserved under the Amended and Restated 2022 Plan, the Company issued options to the Company’s employees and directors to purchase up to 450,000 shares of the Company’s common stock at an exercise price of $ 1.36 per share. The options vested immediately and expire on January 5, 2034. The aggregate grant date fair value of these options was $ 512,685 , which was recorded as stock-based compensation during the nine months ended September 30, 2024. On August 19, 2024, pursuant to and subject to the available number of shares reserved under the 2022 Plan, the Company issued options to the Company’s employees and directors to purchase up to an aggregate of 473,000 shares of the Company’s common stock at an exercise price of $ 0.7548 per share. The options vested immediately in full upon grant and expire on August 19, 2034. The aggregate grant date fair value of these options was $ 281,388 , which was recorded as stock-based compensation during the three and nine months ended September 30, 2024. On January 14, 2025, pursuant to and subject to the available number of shares reserved under the 2018 Plan, the Company issued options to the Company’s Chief Executive Officer to purchase up to 93,000 shares of the Company’s common stock at an exercise price of $ 1.55 per share. Additionally, on January 14, 2025, pursuant to and subject to the available number of shares reserved under the Amended and Restated 2022 Plan, the Company issued options to the Company’s Chief Executive Officer and an employee to purchase up to 77,000 shares of the Company’s common stock at an exercise price of $ 1.55 per share. The options vested immediately in full upon grant and expire on January 14, 2035. The aggregate grant date fair value of these options was $ 219,929 , which was recorded as stock-based compensation in January 2025. The fair value of option grants was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: Nine Months Ended September 30, 2025 2024 Exercise price $ 1.55 $ 0.7548 to $ 1.36 Term (years) 5.0 5.0 Expected stock price volatility 118.32 % 106.65 % to 120.00 % Risk-free rate of interest 4.59 % 4.02 % A summary of option activity under the Company’s equity incentive plans for the nine months ended September 30, 2025 is presented below. Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of December 31, 2024 1,090,362 $ 4.78 $ — 9.1 Employee options issued 170,000 1.55 — — Outstanding as of September 30, 2025 1,260,362 $ 4.34 $ 538,140 8.4 Options vested and exercisable as of September 30, 2025 1,260,362 $ 4.34 $ 538,140 8.4 A summary of stock options outstanding at September 30, 2025 by price range is as follows: Options outstanding and exercisable Range of Exercise Prices Number of Shares Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Up to $2.59 1,183,000 8.5 $ 1.24 $14.75 to $76.25 62,562 5.9 $ 32.95 Above $76.25 14,800 4.2 $ 131.50 Options outstanding and exercisable as of September 30, 2025 1,260,362 8.4 $ 4.34 18 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 All stock compensation associated with the amortization of employee stock option expense was recorded as a component of general and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive loss. Estimated future stock-based compensation expense relating to unvested stock options is $ 0 . Stock-Based Compensation Stock-based compensation expense for the three and nine months ended September 30, 2025 and 2024 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Employee stock option awards $ — $ 281,388 $ 219,929 $ 794,073 Employee restricted stock award 968,000 — 968,000 — Non-employee restricted stock awards — 672 — 2,002 Non-employee stock warrant awards 166,575 1,272 222,100 7,661 $ 1,134,575 $ 283,332 $ 1,410,029 $ 803,736 For the three and nine months ended September 30, 2025 and 2024, the amount of stock-based compensation expense included within research and development, professional fees and general and administrative expenses was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Research and development $ — $ 1,272 $ — $ 7,661 Professional fees 166,575 — 222,100 — General and administrative 968,000 282,060 1,187,929 796,075 $ 1,134,575 $ 283,332 $ 1,410,029 $ 803,736 NOTE 8 – Commitments and Contingencies Office Lease Effective November 2023, the Company leased office space for a two-year term. The Company’s office lease contained a renewal option. The Company 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 ROU asset and lease liability. In December 2024, the landlord notified the Company that it will be closing its operations at the Company’s location and offered to relocate the Company to a new location. The Company agreed to relocate and accordingly, on December 9, 2024, the Company and the landlord entered into a new lease agreement (the “December 2024 Lease”). Pursuant to the December 2024 Lease, effective December 20, 2024, the Company leased office space for a term of 14 months, expiring on February 28, 2026. Pursuant to the December 2024 Lease, the Company is required to pay a monthly base rent of $ 2,732 from March 1, 2025 through February 2026. In connection with December 2024 Lease, in December 2024, the Company increased ROU assets and lease liabilities by $ 31,075 and removed all remaining ROU assets and lease liabilities associated with the November 2023 lease. The table below presents certain information related to the Company’s lease costs, which are included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operation and comprehensive loss. Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Operating lease expense $ 7,136 $ 11,175 $ 21,675 $ 28,210 Short-term lease expense 7,620 3,990 18,995 11,680 Total lease cost $ 14,756 $ 15,165 $ 40,670 $ 39,890 19 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 ROU asset for operating leases was recorded in the condensed consolidated balance sheets as follows: September 30, 2025 December 31, 2024 Office lease ROU asset $ 31,075 $ 31,075 Less: accumulated amortization ( 19,611 ) — Total ROU asset, net $ 11,464 $ 31,075 Operating lease liability for operating leases was recorded in the condensed consolidated balance sheets as follows: September 30, 2025 December 31, 2024 Current portion of operating lease liability $ 13,599 $ 28,366 Long-term portion of operating lease liability — 2,709 Total operating lease liability $ 13,599 $ 31,075 Supplemental cash flow information related to the Company’s leases for the nine months ended September 30, 2025 was as follows: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 19,124 The weighted-average remaining lease term for the operating lease is 0.42 years and the weighted-average incremental borrowing rate is 10 % as of September 30, 2025 and December 31, 2024. As of September 30, 2025, future annual minimum lease payments required under operating leases are as follows: 2025 (remainder of year) $ 8,196 2026 5,750 Total minimum lease payments 13,946 Less: effects of discounting ( 347 ) Present value of future minimum lease payments $ 13,599 Employment Agreement On August 21, 2025, the board of directors of the Company approved the entry into an employment agreement (the “Employment Agreement”) with Robb Knie and on August 22, 2025 (the “Effective Date”) the Company entered into the Employment Agreement with Robb Knie pursuant to which Mr. Knie shall continue to serve as Chief Executive Officer and President of the Company. Unless terminated earlier pursuant to its terms, the Employment Agreement shall commence on the Effective Date and shall continue until the third anniversary of the Effective Date and thereafter shall automatically renew for successive one year terms unless either party provides written notice of non-renewal to the other party at least six months prior to the last day of the then-current term. Pursuant to the Employment Agreement, Mr. Knie shall (i) receive an annual base salary of $ 550,000 , (ii) be eligible to receive an annual bonus of up to $ 550,000 based upon the achievement of Company and individual performance targets established by the Company’s compensation committee, (iii) be eligible to receive equity incentive and (iv) be entitled to participate in any benefit plans offered by the Company (the “Benefit Plans”). Furthermore, the Company will cover Mr. Knie under directors’ and officers’ liability insurance during his employment and for a period of six years following the termination of his employment. In addition, if during the term of the Employment Agreement (and so long as Mr. Knie is employed by the Company on the closing date of the Transaction (as defined below)), the Company enters into a Transaction, Mr. Knie will be eligible to receive a one-time bonus (the “Transaction Bonus”), based on the Equity Value (as defined in the Employment Agreement) of the Company measured as of the closing date of such Transaction as set forth in the Employment Agreement; provided that if multiple Transactions occur during the term of the Employment Agreement which would qualify as the Transaction, the Transaction Bonus will only be payable with respect to the first Transaction. The Transaction Bonus shall be payable to Mr. Knie in the same form of consideration received by the Company’s stockholders or in cash at the rate of 1.5 % of license fees received from an out license agreement. 20 HOTH THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 Mr. Knie’s employment may be terminated (i) upon his death, (ii) by the Company (A) in the event of his Disability (as defined in the Employment Agreement), (B) for Cause (as defined in the Employment Agreement) or (C) without Cause on 30 days’ prior written notice or (iii) by Mr. Knie for (A) Good Reason (as defined in the Employment Agreement) or (B) on 30 days’ prior written notice to the Company. If Mr. Knie’s employment is terminated by (i) the Company without Cause or the Company’s decision not to renew the Employment Agreement or (ii) by Mr. Knie for Good Reason or his voluntary termination, Mr. Knie shall receive (A) his accrued but unpaid base salary and reimbursement of expenses through the date of termination (“Accrued Salary”), (B) a cash payment equal to the sum of 24 months (or 36 months if such termination occurs within 12 months of a Change in Control (as defined in the Employment Agreement)) of his base salary, (C) his annual bonus as in effect as of the last day of employment, (D) 24 months (or 36 months if such termination occurs within 12 months of a Change in Control) of COBRA coverage, (E) any annual bonus earned with respect to a fiscal year ending prior to the date of termination but unpaid as of such date (“Earned Bonus”), (F) any annual bonus accrued for the year in which Mr. Knie’s employment ends as determined by the Company’s board (“Accrued Bonus” and together with the Earned Bonus, the “Termination Bonus”) and (G) all other accrued or vested amounts or benefits due to Mr. Knie in accordance with the Employment Agreement, the Company’s benefit plans, programs or policies (other than severance) (the “Accrued Benefits”). In addition, Mr. Knie’s awards shall be treated as set forth in the respective award agreements. Furthermore, if Mr. Knie complies with the restrictive covenants set forth in the Employment Agreement, the outstanding and unvested portion of any time-vesting equity award granted to Mr. Knie shall automatically accelerate and vest in full upon his termination. If Mr. Knie’s employment is terminated for death or Disability, Mr. Knie shall receive the Accrued Salary, the Termination Bonus and the Accrued Benefits and any then outstanding and unvested portion of any time-vesting equity award granted to Mr. Knie shall accelerate and vest in full. In the event Mr. Knie’s employment is terminated due to non-renewal by Mr. Knie or by him without Good Reason, Mr. Knie shall receive the Accrued Salary, the Earned Bonus and the Accrued Benefits and his awards shall be treated as set forth in the respective award agreements. If Mr. Knie’s employment is terminated by the Company for Cause, Mr. Knie shall receive his Accrued Salary and Accrued Benefits and his awards shall be treated as set forth in the respective award agreements. The foregoing payments other than the Accrued Salary, Earned Bonus and Accrued Benefits shall be payable if Mr. Knie executes a general release in favor of the Company as set forth in the Employment Agreement. NOTE 9 – Subsequent Events The Company has evaluated subsequent events and transactions that occurred up to the date the unaudited condensed consolidated financial statements were issued. Based upon this review the Company did not identify any subsequent events, except for as noted below, that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements. From October 1, 2025 to November 11, 2025, the Company issued an aggregate of 386,690 shares of its common stock for net proceeds of $ 607,309 pursuant to the ATM Agreement. 21 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 as may be amended, supplemented or superseded from time to time by other reports we file with the SEC. All amounts in this report are in U.S. dollars, unless otherwise noted. Overview We are a clinical-stage biopharmaceutical company focused on developing new generation therapies for unmet medical needs. We are focused on developing (i) a topical formulation for treating side effects from drugs used for the treatment of cancer (HT-001); (ii) a treatment for mast-cell derived cancers and anaphylaxis (HT-KIT); and (iii) a treatment and/or prevention for Alzheimer’s or other neuroinflammatory diseases (HT-ALZ). We also have assets being developed for (i) atopic dermatitis (also known as eczema) (BioLexa); (ii) a treatment for asthma and allergies using inhalational administration (HT-004); and (iii) a treatment for obesity, and obesity-related diseases and conditions (HT-VA). Recent Developments In June 2025, we entered into a non-binding letter of intent with Silo Pharma, Inc. to pursue a strategic joint venture focused on developing and commercializing a treatment for obesity and metabolic disease utilizing technology licensed to us from the U.S. Department of Veterans Affairs (“VA”). Both parties have mutually agreed to not proceed with the joint venture. In July 2025, we entered into a Cooperative Research and Development Agreement with the VA and recently initiated a VA-backed study aimed at assessing the technology underlying this license, glial cell line–derived neurotrophic factor (“GDNF”), as a potential new therapy for obesity and fatty liver disease (hepatic steatosis). The studies are underway and we expect results in early 2026. Results of Operations Comparison of Our Results of Operations for the Three Months Ended September 30, 2025 and 2024 Operating Costs and Expenses Research and Development Expenses For the three months ended September 30, 2025, research and development expenses were approximately $1.6 million. Specifically, during the three months ended September 30, 2025, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) HT-001, approximately $1.48 million related to manufacturing and clinical activities; and (ii) HT-KIT, approximately $125,000 related to manufacturing and preclinical activities. In addition to the foregoing, we also incurred fees of approximately $31,200 payable to members of our scientific advisory board for services. 22 For the three months ended September 30, 2024, research and development expenses were approximately $0.9 million related to ongoing research and development projects. Specifically, during the quarter ended September 30, 2024, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) HT-001, approximately $0.7 million related to manufacturing, preclinical and clinical activities; (ii) HT-KIT, approximately $154,300 related to manufacturing and preclinical activities; (iii) HT-004, approximately $18,700 in sponsored research activities; and (iv) HT-ALZ, approximately $96,500 related to manufacturing and preclinical activities. In addition to the foregoing, we also incurred fees of approximately $37,200 payable to members of our scientific advisory board for services. We expect our research and development activities to increase as we develop our existing product candidates and potentially acquire new product candidates, reflecting increasing costs associated with the following: ● employee-related expenses, which include salaries and benefits, and rent expenses; ● fees related to in-licensed products and technology; ● expenses incurred under agreements with clinical research organizations, investigative sites and consultants that conduct our clinical trials and a substantial portion of our pre-clinical activities; ● the cost of acquiring and manufacturing clinical trial materials; and ● costs associated with non-clinical activities and regulatory approvals. General and Administrative Expenses For the three months ended September 30, 2025, general and administrative expenses amounted to approximately $2.5 million as compared to approximately $1.2 million for the three months ended September 30, 2024, an increase of approximately $1.2 million, or 98.2%. For the three months ended September 30, 2025 and 2024, general and administrative expenses consisted of the following (rounded to the nearest $1,000): Three Months Ended September 30, 2025 2024 Compensation and related expenses $ 1,376,000 $ 621,000 Professional and consulting expenses 894,000 452,000 Rent expense 15,000 15,000 Other general and administrative expenses 162,000 147,000 Total $ 2,447,000 $ 1,235,000 23 During the three months ended September 30, 2025, the increase in general and administrative expenses of approximately $1.2 million was primarily attributed to an increase in compensation and related expenses of $755,000, primarily attributable to the issuance of 800,000 shares of common stock to our Chief Executive Officer valued at $968,000, which was offset by a decrease in stock-based compensation of approximately $281,000 in connection with the issuance of stock options during the three months ended September 30, 2024 as compared to $0 for the three months ended September 30, 2025. Additionally, during the three months ended September 30, 2025, professional and consulting expenses increased by approximately $442,000 which was primarily attributable to an increase in legal and consulting fees of approximately $208,000, an increase in accounting fees of approximately $61,000, an increase in stock-based professional fees of $167,000 and an increase in directors fees of $6,000. We anticipate that our general and administrative expenses will increase in future periods, reflecting continued and increasing costs associated with: ● support of our research and development activities; ● stock compensation granted to key employees and non-employees; ● support of business development activities; and ● increased professional fees and other costs associated with regulatory requirements that we are subject to. Other Income (Expense), net For the three months ended September 30, 2025, other expense, net was approximately $25,000, which resulted from the recording of an unrealized loss of crypto assets of $25,000. For the three months ended September 30, 2024, other income, net was approximately, which $200 resulted from $200 of interest income. Net Loss For the three months ended September 30, 2025 and 2024, we incurred a net loss of approximately $4.11 million, or $0.30 per common share (basic and diluted), and $2.2 million, or $0.32 per common share (basic and diluted), respectively. Comparison of Our Results of Operations for the Nine Months Ended September 30, 2025 and 2024 Operating Costs and Expenses Research and Development Expenses For the nine months ended September 30, 2025, research and development expenses were approximately $4.6 million. Specifically, during the nine months ended September 30, 2025, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) HT-001, approximately $2,585,000 related to manufacturing and clinical activities; (ii) HT-KIT, approximately $674,000 related to manufacturing and preclinical activities; and (iii) HT-ALZ, approximately $12,000 related to preclinical studies. In addition to the foregoing, we also incurred fees of approximately $100,000 payable to members of our scientific advisory board for services and recorded approximately $1,260,000 of in-process research and development expenses in connection with the acquisition of patent applications. For the nine months ended September 30, 2024, research and development expenses were approximately $2.21 million, of which approximately $18,100 was related to licenses acquired and approximately $2.2 million was related to other research and development expenses. Specifically, during the nine months ended September 30, 2024, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) HT-001, approximately $1,508,000 related to manufacturing, preclinical and clinical activities; (ii) HT-ALZ, approximately $112,800 related to preclinical studies; (iii) HT-KIT, approximately $363,300 related to manufacturing and preclinical activities; and (iv) HT-004, approximately $96,100 in sponsored research activities. In addition to the foregoing, we also incurred fees of approximately $111,800 payable to members of our scientific advisory board for services. We expect our research and development activities to increase as we develop our existing product candidates and potentially acquire new product candidates, reflecting increasing costs associated with the following: ● employee-related expenses, which include salaries and benefits, and rent expenses; ● fees related to in-licensed products and technology; 24 ● expenses incurred under agreements with clinical research organizations, investigative sites and consultants that conduct our clinical trials and a substantial portion of our pre-clinical activities; ● the cost of acquiring and manufacturing clinical trial materials; and ● costs associated with non-clinical activities and regulatory approvals. General and Administrative Expenses For the nine months ended September 30, 2025 and 2024, general and administrative expenses amounted to approximately $5.1 million and $3.9 million, respectively. For the nine months ended September 30, 2025 and 2024, general and administrative expenses consisted of the following (rounded to the nearest $1,000): Nine Months Ended September 30, 2025 2024 Compensation and related expenses $ 2,384,000 $ 1,838,000 Professional and consulting expenses 2,146,000 1,410,000 Rent expense 41,000 40,000 Other general and administrative expenses 554,000 615,000 Total $ 5,125,000 $ 3,903,000 During the nine months ended September 30, 2025, the increase in general and administrative expenses of approximately $1,222,000 was primarily attributed to an increase in compensation and related expenses of $546,000, primarily attributable to the issuance of 800,000 shares of common stock to our chief executive officer valued at $968,000 and an increase in other compensation and related expenses of $152,000, which were offset by a decrease in stock-based compensation of approximately $574,000 in connection with the issuance of stock options during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. Additionally, during the nine months ended September 30, 2025, professional and consulting expenses increased by approximately $735,000 which was primarily attributable to an increase in legal and consulting fees of approximately $498,000, an increase in stock-based professional fees of $222,000 and an increase in directors’ fees of approximately $15,000. These increases were offset by a decrease in other general and administrative expenses of approximately $61,000. We anticipate that our general and administrative expenses will increase in future periods, reflecting continued and increasing costs associated with: ● support of our research and development activities; ● stock compensation granted to key employees and non-employees; ● support of business development activities; and ● increased professional fees and other costs associated with regulatory requirements that we are subject to. Other Income (Expense), net For the nine months ended September 30, 2025, other expense, net was approximately $25,000, which resulted from the recording of an unrealized loss of crypto assets of $25,000. For the nine months ended September 30, 2024, other income, net was approximately $27,000, which primarily resulted from approximately $27,300 of interest income, offset by a change in fair value of investment in joint venture of approximately $581. Net Loss For the nine months ended September 30, 2025 and 2024, we incurred a net loss of approximately $9.8 million, or $0.74 per common share (basic and diluted), and $6.1 million, or $1.00 per common share (basic and diluted), respectively. Liquidity and Capital Resources To date we have funded our operations primarily through the sale of equity and debt securities. As of September 30, 2025, we had approximately $7.8 million in cash and cash equivalents, working capital of approximately $7.9 million and an accumulated deficit of approximately $70.2 million. Net cash used in operating activities was approximately $7.65 million and $4.95 million for the nine months ended September 30, 2025 and 2024, respectively. We incurred net losses of approximately $9.8 million and $6.1 million for the nine months ended September 30, 2025 and 2024, respectively. We have incurred substantial operating losses since inception and expect to continue to incur significant operating losses for the foreseeable future as we continue our pre-clinical and clinical development of our product candidates. We have not yet commercialized any products and have never generated any revenue from product sales. We believe that our existing cash as of September 30, 2025 will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the date that our unaudited condensed consolidated financial statements are available to be issued. 25 During the nine months ended September 30, 2025, we issued 3,750,000 shares of our common stock upon the exercise of the 3,750,000 warrants issued in April 2024 for gross proceeds of approximately $5.6 million. On November 8, 2024, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) under which we could offer and sell shares of our common stock having an aggregate sales price of up to $2,700,000 through Wainwright as the sales manager pursuant to our effective shelf registration statement on Form S-3 (File No. 333-272620), including an accompanying base prospectus and a prospectus supplement dated November 8, 2024. Sales of shares of the Company’s common stock through Wainwright, if any, will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. Wainwright will use commercially reasonable efforts to sell shares of the Company’s common stock from time to time, based on instructions from us (including any price, time or size limits or other parameters or conditions we may impose). We will pay Wainwright a commission equal to 3.0% of the aggregate gross proceeds from the sales of shares of the Company’s common stock sold through Wainwright under the ATM Agreement and will also reimburse Wainwright for certain specified expenses in connection with the ATM Agreement. On February 7, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $5,000,000 pursuant to a prospectus supplement dated February 7, 2025. The offering of shares pursuant to the ATM Agreement will terminate on the earlier of (1) the sale, pursuant to the ATM Agreement, of shares having an aggregate offering price of $7,700,000 and (2) the termination of the ATM Agreement by either us or Wainwright, as set forth therein. During the nine months ended September 30, 2025 we issued an aggregate of 2,395,619 shares of our common stock for net proceeds of approximately $3.5 million pursuant to the ATM Agreement. From October 1, 2025 to November 11, 2025, the Company issued an aggregate of 386,690 shares of its common stock for net proceeds of $607,309 pursuant to the ATM Agreement. We have entered into certain license, sublicense, sponsored research and option agreements with third parties. Pursuant to such agreements, we may be required to make certain: (i) license maintenance fee payments; (ii) out-of-pocket expense payments, including, but not limited to, payments related to intellectual property and research related expenses; (iii) development and commercialization expense payments; (iv) annual and quarterly minimum payments; (v) diligence expense payments; and (vi) revenue interest payments. In addition, subject to the achievement of certain development and/or commercialization events, we may also be required to make certain: (i) minimum royalty payments, ranging from middle to high five figures, (ii) sales-based royalties and running royalties, ranging from low single digits to low double digits; and (iii) milestone payments, of up to approximately $35 million (if all milestones in all of our current agreements are achieved). Additional funding will be necessary to fund our future clinical and pre-clinical activities. We may obtain additional financing through sales of our equity and debt securities or entering into strategic partnership arrangements, or a combination of the foregoing. There are no assurances that we will be successful in obtaining an adequate level of financing as and when needed to finance our operations on terms acceptable to us or at all, particularly in light of the economic downturn. If we are unable to secure adequate additional funding as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates. Cash Flows from Operating Activities For the nine months ended September 30, 2025, net cash used in operating activities was approximately $7.65 million, which primarily resulted from a net loss of approximately $9.78 million, an increase in prepaid expenses and other current assets of approximately $357,000 and an increase in accounts payable and accrued expenses of approximately $196,000, offset by approximately $850,000 of non-cash research and development-acquired patent, $1.4 million in stock-based compensation and professional fees, and unrealized loss on crypto assets of $25,000. For the nine months ended September 30, 2024, net cash used in operations was approximately $5.0 million, which primarily resulted from a net loss of approximately $6.1 million, adjusted for the add back of stock-based compensation of approximately $804,000, a decrease in prepaid expenses and other current assets of approximately $200,000, and an increase in accounts payable and accrued expenses of $100,000. Cash Flows from Investing Activities During the nine months ended September 30, 2025, the Company purchased $300,000 in crypto assets. The Company did not have any cash flows from investing activities for the nine months ended September 30, 2024. Cash Flows from Financing Activities For the nine months ended September 30, 2025, net cash provided by financing activities was approximately $8.76 million, which primarily resulted from net proceeds from the issuance of common stock of approximately $3.5 million and proceeds from the exercise of warrants of approximately $5.6 million, offset by the payment of taxes related to the net share settlement of an equity award of $376,000. For the nine months ended September 30, 2024, net cash provided by financing activities was approximately $3.7 million, which resulted from net proceeds from the exercise of warrants. 26 Critical Accounting Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if: ● it requires assumptions to be made that were uncertain at the time the estimate was made; and ● changes in the estimate or different estimates that could have been selected could have a material impact in our results of operations or financial condition. While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable under the circumstances, actual results could differ from those estimates and the differences could be material. See Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for an additional discussion of our significant accounting policies. Stock-based compensation The Company accounts for stock-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 they occur. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. Expected Term - The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding based on the simplified method, which is the half-life from vesting to the end of its contractual term. Expected Volatility - The Company computes stock price volatility over expected terms based on its historical common stock trading prices. Risk-Free Interest Rate - The Company bases the risk-free interest rate on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. Expected Dividend - The Company has never declared or paid any cash dividends on its common shares and does not plan to pay cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models. 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. Stock-based 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. Stock-based compensation expense is generally recognized based on the straight-line basis over the vesting term. Income taxes Income taxes are recorded in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes (“ASC 740”) which provides for deferred taxes using an asset and liability approach. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our unaudited condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between our 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. We account for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, we recognize the tax benefit of tax positions 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. 27 Recently Adopted Accounting Standards In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on its consolidated financial statements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act. ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2025, the end of the period covered by this Quarterly Report on Form 10-Q. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, as a result of the material weaknesses in our internal control identified below, our disclosure controls and procedures were not effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. Identified Material Weakness In connection with the audit of our financial statements as of December 31, 2024, for the years ended December 31, 2024 and 2023, we identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness that we have identified related to the proper classification of prepaid expenses and other current assets and research and development expenses, which impacted our previously issued consolidated financial statements as of and for the year ended December 31, 2023, and our previously issued unaudited condensed consolidated financial statements as of March 31, 2024 and 2023, June 30, 2024 and 2023 and September 30, 2024 and 2023, and for the three months ended March 31, 2024 and 2023, three and nine months ended June 30, 2024 and 2023, and three and nine months ended September 30, 2024 and 2023. Remediation Plan Our management, with the oversight of the Audit Committee of the board of directors, has updated our internal processes and controls to strengthen their effectiveness and developed a remediation plan which includes the following actions: ● Enhance our review procedures over significant contracts with contract research and clinical studies organizations; and ● Strengthen our review process. We will not be able to conclude whether the actions we are taking will fully remediate the material weakness in our internal control over financial reporting until the updated controls have operated for a sufficient period of time and management has concluded, through testing, that such controls are operating effectively. We may also conclude that additional measures may be required to remediate the material weakness in our internal control over financial reporting, which may necessitate further action. Changes in Internal Control Over Financial Reporting Other than as described above, there have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We are taking actions to remediate the material weakness described above, which may result in changes in our internal control over financial reporting in periods subsequent to September 30, 2025. 28 PART II – OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS From time to time, we may be subject to litigation and claims arising in the ordinary course of business. We are not currently a party to any material legal proceedings and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition. ITEM 1A. RISK FACTORS Risk factors that affect our business and financial results are discussed in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 28, 2025 (“Annual Report”), as subsequently updated, amended or superseded by our other filings made with the SEC. Except as set forth herein, there have been no material changes in our risk factors from those previously disclosed in our Annual Report and other filings made with the SEC. You should carefully consider the risks in our filings with the SEC as supplemented by the risk factors set forth herein which could materially affect our business, financial condition or future results. The risks in our SEC filings are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected. Risks Related to Our Digital Assets Strategy The availability of spot ETPs for digital assets may adversely affect the market price of our common stock. Until recently investors in the United States had limited means to gain direct exposure to digital assets through traditional investment channels, and instead generally were only able to hold digital assets through “hosted” wallets provided by digital asset service providers or through “unhosted” wallets that expose the investor to risks associated with loss or hacking of their private keys. Given the relative novelty of digital assets, general lack of familiarity with the processes needed to hold digital assets directly, as well as the potential reluctance of financial planners and advisers to recommend direct digital assets holdings to their retail customers because of the manner in which such holdings are custodied, some investors have sought exposure to digital assets through investment vehicles that hold digital assets and issue shares representing fractional undivided interests in their underlying digital assets holdings. These vehicles, which were previously offered only to “accredited investors” on a private placement basis, have in the past traded at substantial premiums to net asset value, possibly due to the relative scarcity of traditional investment vehicles providing investment exposure to digital assets. On January 10, 2024, the SEC approved the listing and trading of spot Bitcoin ETPs, the shares of which can be sold in public offerings and are traded on U.S. national securities exchanges. The approved ETPs commenced trading directly to the public on January 11, 2024, with a trading volume of $4.6 billion on the first trading day. Additionally, on May 23, 2024, the SEC approved rule changes permitting the listing and trading of spot ETPs that invest in ether, the main crypto asset supporting the Ethereum blockchain. The approved spot ETPs commenced trading directly to the public on July 23, 2024. The listing and trading of spot ETPs for ether offers investors another alternative to gain exposure to digital assets, which could result in a decline in the trading price of Bitcoin as well as a decline in the value of our common stock relative to the value of our Bitcoin. Although we are an operating company, and we believe we offer a different value proposition than a Bitcoin investment vehicle such as a spot Bitcoin ETP, investors may nevertheless view our commons as an alternative to an investment in an ETP, and choose to purchase shares of a spot Bitcoin ETP instead of our common stock. They may do so for a variety of reasons, including if they believe that ETPs offer a “pure play” exposure to Bitcoin that is generally not subject to federal income tax at the entity level as we are, or the other risk factors applicable to an operating business, such as ours. Additionally, unlike spot Bitcoin ETPs, we (i) do not seek for our shares of common stock to track the value of the underlying Bitcoin we hold before payment of expenses and liabilities, (ii) do not benefit from various exemptions and relief under the Exchange Act, including Regulation M, and other securities laws, which enable ETPs to continuously align the value of their shares to the price of the underlying assets they hold through share creation and redemption, (iii) are a corporation rather than a statutory trust, and do not operate pursuant to a trust agreement that would require us to pursue one or more stated investment objectives, and (iv) are not required to provide daily transparency as to our Bitcoin holdings or our daily net asset value. Furthermore, recommendations by broker-dealers to buy, hold, or sell complex products and non-traditional ETPs, or an investment strategy involving such products, may be subject to additional or heightened scrutiny that would not be applicable to broker-dealers making recommendations with respect to our common stock. Based on how we are viewed in the market relative to ETPs, and other vehicles which offer economic exposure to Bitcoin, such as Bitcoin futures ETFs, leveraged Bitcoin futures ETFs, and similar vehicles offered on international exchanges, any premium or discount in our common stock relative to the value of our Bitcoin holdings may increase or decrease in different market conditions. As a result of the foregoing factors, availability of spot ETPs for Bitcoin and other digital assets could have a material adverse effect on the market price of our common stock. The emergence or growth of other digital assets, including those with significant private or public sector backing, could have a negative impact on the price of Bitcoin, Ethereum and Solana and adversely affect our future results of operations. The emergence or growth of digital assets such as Dogecoin may have a material adverse effect on our future results of operations. As of December 31, 2024, Bitcoin was the largest digital asset by market capitalization. However, there are numerous alternative digital assets and many entities, including consortiums and financial institutions, are researching and investing resources into private or permissioned blockchain platforms or digital assets that do not use proof-of-work mining like the Bitcoin network. Since January 2025, the new U.S. Presidential Administration has signaled that it is receptive to cryptocurrency as a medium of exchange. This change has fueled the growth of other cryptocurrencies. As money is directed to these alternative cryptocurrencies, it may lessen demand for certain digital assets such as Bitcoin, Ethereum and Solana which may reduce their respective trading price. In turn, this may adversely affect our future results of operations. 29 If Coinbase experiences a security breach or cyberattack and unauthorized parties obtain access to our digital assets, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our digital assets and our financial condition and results of operations could be materially adversely affected. All of the digital assets we own are held at Coinbase. Security breaches and cyberattacks are of particular concern with respect to our digital assets. Digital assets and the entities that provide services to participants in the digital assets ecosystem have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities. A successful security breach or cyberattack could result in: ● a partial or total loss of our digital assets in a manner that may not be covered by insurance or the liability provisions of the custody agreements with Coinbase; ● improper disclosure of data and violations of applicable data privacy and other laws; ● harm to our reputation and brand; and/or ● significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, contractual and financial exposure. Further, any actual or perceived data security breach or cybersecurity attack directed at other companies with digital assets or companies that operate digital asset networks, regardless of whether we are directly impacted, could lead to a general loss of confidence in the broader digital assets blockchain ecosystem or in the use of the digital assets network to conduct financial transactions, which could negatively impact us. Attacks upon systems across a variety of industries, including industries related to digital assets, are increasing in frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on our systems or those of our third-party service providers or partners. We may experience breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. The risk of cyberattacks could also be increased by cyberwarfare in connection with the ongoing Russia-Ukraine and Israel-Hamas conflicts, or other future conflicts, including potential proliferation of malware into systems unrelated to such conflicts. Any future hacking of third-party like Coinbase, could materially and adversely affect our business. Digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty. Digital assets are relatively novel and are subject to significant uncertainty, which could adversely impact their price. The application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, and it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of digital assets or the ability of individuals or institutions such as us to own or transfer digital assets. It is not possible to predict whether, or when, new laws will be enacted that change the legal framework governing digital assets or provide additional authorities to the SEC or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions. It is also not possible to predict the nature of any such additional laws or authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function, the willingness of financial and other institutions to continue to provide services to the digital assets industry, or how any new laws or regulations, or changes to existing laws or regulations, might impact the value of digital assets generally and bitcoin specifically. The consequences of any new law or regulation relating to digital assets and digital asset activities could adversely affect the market price of our digital assets, as well as our ability to hold or transact in digital assets, and in turn adversely affect the market price of our common stock. The growth, use and acceptance of digital assets may also impact the price of digital assets and is subject to a high degree of uncertainty. The pace of worldwide growth in the adoption and use of digital assets may depend, for instance, on public familiarity with digital assets, ease of buying, accessing or gaining exposure to digital assets, institutional demand for digital assets as an investment asset, the participation of traditional financial institutions in the digital assets industry, consumer demand for digital assets as a store of value or means of payment, and the availability and popularity of alternatives to Bitcoin, Ethereum and Solana. Even if growth in digital assets adoption occurs in the near or medium-term, there is no assurance that digital asset usage will continue to grow over the long-term. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. 30 ITEM 5. OTHER INFORMATION Rule 10b5-1 Trading Plans During the fiscal quarter ended September 30, 2025, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.” ITEM 6. EXHIBITS Exhibit No. Description 10.1+ Amendment No. 2 to Hoth Therapeutics, Inc. Amended and Restated 2022 Omnibus Equity Incentive Plan (Incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-8 filed with the SEC on August 5, 2025) 10.2+ Employment Agreement by and between the Company and Robb Knie dated August 22, 2025 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 22, 2025) 31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2** Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104* Cover Page Interactive Data File - the cover page from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 is formatted in Inline XBRL * Filed herewith. ** Furnished herewith. + Indicates a management contract or any compensatory plan, contract or arrangement. 31 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. HOTH THERAPEUTICS, INC. Date: November 12, 2025 By: /s/ Robb Knie Robb Knie, Chief Executive Officer (Principal Executive Officer) Date: November 12, 2025 By: /s/ David Briones David Briones, Chief Financial Officer (Principal Financial and Accounting Officer) 32