HOTH THERAPEUTICS, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS. (Form 10-Q)
You should read the following discussion and analysis of our financial condition and results of operations and our financial statements and 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 financial year closed
Overview
We are a clinical-stage biopharmaceutical company focused on developing next-generation therapies for unmet medical needs. We are focused on the development of (i) a topical formulation for the treatment of side effects of drugs used for the treatment of cancer (HT-001); (ii) a treatment for mast cell-derived cancers and anaphylaxis (HT-KIT); (iii) a treatment for traumatic brain injury and ischemic stroke (HT-TBI); and (iv) treatment and/or prevention of Alzheimer’s disease or other neuroinflammatory diseases (HT-ALZ). We also have actives in development for (i) atopic dermatitis (also known as eczema) (BioLexa); (ii) a treatment of asthma and allergies by inhalation (HT-004); and (iii) a treatment for inflammatory bowel disease (HT-003). Additionally, we continue to evaluate HT-002, a novel peptide that may be used to slow the transmission of SARS-CoV-2, and HT-006 for the treatment of lung disease resulting from bacterial infections. We are also developing diagnostic device via mobile device. In addition, we have interests in certain other assets developed by third parties, including a treatment for lupus patients developed by Zylö
Results of Operations
Comparison of the three months ended
Operating Costs and Expenses
Research and development costs
In the three months ended
in the three months ended
We expect our research and development activities to increase as we develop our existing product candidates and potentially acquire new product candidates, reflecting increased costs associated with the following:
? employee-related expenses, which include salaries and benefits, and rent
expenses;
? fees related to licensed products and technologies;
? expenses incurred under agreements with research organizations under contract,
investigational sites and consultants who conduct our clinical trials and a
substantial part of our preclinical activities;
? the costs of acquiring and manufacturing clinical trial materials; and
? costs associated with non-clinical activities and regulatory approvals.
Remuneration, Professional Fees, Rent and Other (“General and Administrative Expenses”)
In the three months ended
We expect our general and administrative expenses to increase in future periods, reflecting the ongoing and increasing costs associated with:
? supporting our research and development activities;
? stock-based compensation granted to key employees and non-employees;
? support for business development activities; and
? increased professional fees and other regulatory costs
requirements. 13
Cash and capital resources
We have incurred substantial operating losses since inception and expect to continue to incur significant operating losses for the foreseeable future and never become profitable. From
We have entered into certain license, sublicense, sponsored search and option agreements with third parties. Pursuant to such agreements, we may be required to make certain: (i) license maintenance fee payments; (ii) disbursements, including but not limited to intellectual property payments and research expenses; (iii) payment of development and marketing costs; (iv) annual and quarterly minimum payments; (v) payments of due diligence fees; and (vi) income interest payments. In addition, subject to the achievement of certain development and/or commercialization events, we may also be required to secure: (i) minimum royalty payments, ranging from mid to high five digits, (ii) royalties based on current sales and royalties, ranging from low single digits to low double digits; and (iii) milestone payments, up to approximately
Cash flow from operating activities
For the three months ended
stock-based compensation.
For the three months ended
Cash flow from investing activities
For the three months ended
For the three months ended
Cash flow from financing activities
For the three months ended
For the three months ended
JOBS Act
On
We have elected to take advantage of the extended transition periods offered to emerging growth companies under the JOBS Act to comply with new or revised accounting standards until such standards otherwise apply to private companies under the JOBS Act. . Accordingly, our financial statements may not be comparable to those of companies that adhere to the public company effective dates to comply with new or revised accounting standards.
Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company”, we intend to avail ourselves of certain of these exemptions, including, without limitation, (i) providing a auditor’s attestation report on our system of internal control over financial report pursuant to section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and (ii) comply with any requirements that can be adopted by the
14 Critical Accounting Estimates
The preparation of financial statements in accordance with generally accepted accounting principles in
? it requires assumptions to be made that were uncertain at the time the estimate was made; and ? changes in the estimate or different estimates that could have been selected could have material impact in our results of operations or financial condition.
Although we base our estimates and judgments on our experience and various other factors we believe are reasonable under the circumstances, actual results could differ from those estimates and the differences could be material.
See Note 2 to our condensed consolidated financial statements for a discussion of our significant accounting policies.
Recently issued accounting standards that have not yet become effective or adopted
Management does not believe that the recently issued but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying condensed consolidated financial statements.
© Edgar Online, source
Comments are closed.