RKTO 10-K & 10-Q changes, risk factors and insider trading

Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.

Our financial statements as of December 31, 2025 have been prepared under the assumption that we will continue as a going concern for the next twelve months. Our independent registered public accounting firm included in its opinion for the year ended December 31, 2025 an explanatory paragraph referring to our recurring losses and negative cash flows from operations and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Our ability to continue as a going concern is dependent upon our ability to obtain additional funding through strategic relationships, public or private equity or debt financings, grants or other arrangements. Our financial statements as of December 31, 2025 did not include any adjustments that might result from the outcome of this uncertainty. The reaction of investors to the inclusion of a going concern statement by our auditors, and our potential inability to continue as a going concern, in future years could materially adversely affect our share price and our ability to raise new capital or enter into strategic alliances. Furthermore, we also could be required to seek funds through arrangements with collaborative partners or otherwise that may require us to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us.

If one or more of our product candidates receives marketing approval, the commercial success of such product may depend in part on our ability to obtain and maintain periods of regulatory exclusivity under the FDCA. However, there can be no assurance that our product candidates will qualify for or retain any such exclusivity.

We may not obtain any future orphan drug designations that we apply for. Orphan drug designations do not guarantee that we will be able to successfully develop our product candidates, and there is no guarantee that we will be able to maintain any orphan drug designations that we receive. For instance, orphan drug designations may be revoked if the FDA determines that our request for orphan drug designation was materially defective, if the FDA determines that the product candidate was not eligible for designation at the time of the submission of the request, or if we are unable to assure sufficient quantities of the commercial product for which the designation was granted to meet the needs of patients.

Moreover, even if we are able to receive and maintain orphan drug designations, we may ultimately not receive any period of regulatory exclusivity if our product candidates are approved. For instance, exclusive marketing rights in the United States may be limited if we seek approval for an indication broader than the orphan-designated indication or may be lost if the FDA later determines that the request for designation was materially defective. Orphan exclusivity may further be lost if we are unable to assure a sufficient quantity of the product to meet the needs of patients with the rare disease or condition.

Even if we obtain orphan exclusivity for any of our current or future product candidates, that exclusivity may not effectively protect the product from competition as different products can be approved for the same condition or products that are the same as ours can be approved for different conditions. Even after an orphan product is approved, competitors may receive approval of different products for the indication for which the orphan product has exclusivity, or obtain approval for the same product but for a different indication than that for which the orphan product has exclusivity. If another sponsor receives FDA approval for such product before we do, we would be prevented from launching our product in the United States for the orphan indication for a period of at least seven years, unless we can demonstrate clinical superiority. Moreover, third-party payors may reimburse for products off-label even if not indicated for the orphan condition.

Further, our product candidates may not be able to obtain and/or maintain NCE exclusivity. The FDA may determine that a product candidate does not contain a new active moiety if the active ingredient has been previously approved, if the molecule is determined to be a salt, ester, metabolite, or other derivative of a previously approved active moiety, or if the FDA otherwise interprets the statutory requirements in a manner that limits the availability of NCE exclusivity. If the FDA determines that our product candidates are not eligible for NCE exclusivity, competing applicants could submit abbreviated applications that rely on our safety and efficacy data earlier than would be permitted if we do obtain NCE exclusivity.

Our product candidates may also not be able to obtain and/or maintain NCI exclusivity. The FDA may determine that the clinical studies supporting approval do not qualify as “new clinical investigations” within the meaning of the statute or that the studies were not essential to approval. In addition, as discussed above, NCI exclusivity protects only the specific conditions of approval supported by the qualifying studies and does not prevent the FDA from approving competing products that rely on our data for other conditions of use or that rely on independently generated data. As a result, even if we obtain NCI exclusivity, competitors may still be able to obtain approval for competing products.

Our product candidates may also not be able to obtain and/or maintain pediatric exclusivity. As discussed above, pediatric exclusivity is granted only if the FDA issues a written request for pediatric studies and we complete those studies in accordance with the request and within the required timeframes. There can be no assurance that the FDA will issue such a request, that we will be able to complete the required studies within the specified timelines, that the studies will be deemed responsive to the written request, or that we will otherwise satisfy the regulatory requirements necessary to obtain pediatric exclusivity. In addition, pediatric exclusivity relies on our ability to obtain some other exclusivity period or patent protection, as it extends existing exclusivity periods and/or patent protection but does not create an independent exclusivity period if no underlying exclusivity or patent protection exists.

Finally, any exclusivity that we obtain could be subject to challenge, reinterpretation, or limitation by the FDA, legislative changes, or judicial decisions. Changes in law, regulation, or FDA policy regarding the scope or availability of regulatory exclusivity could also reduce the period of protection afforded to our product candidates. If we fail to obtain or maintain regulatory exclusivity for any approved product, competitors may be able to rely on our clinical and nonclinical data to support approval of competing products earlier than if we had obtained exclusivity, which could materially adversely affect our business, financial condition, and results of operations.

Furthermore, on July 4, 2025, the OBBBA was signed into law which is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing Federal funding, and limiting provider taxes used to fund the program. OBBBA also narrows access to Affordable Care Act, marketplace exchange enrollment and declines to extend the Affordable Care Act enhanced advanced premium tax credits, which expired on December 31, 2025, which, among other provisions in the law, have reduced the number of Americans with health insurance and led to significantly higher, often doubled, premiums for 2026 coverage. In addition, there have been actions and proposals from the Trump administration that include: reducing agency workforce and cutting programs; directing The U.S. Department of Health and Human Services and other agencies to lower prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing Most-Favored-Nation pricing for pharmaceutical products; imposing tariffs on imported pharmaceutical products; and directing certain federal agencies to enforce existing law regarding hospital and plan price transparency and by standardizing prices across hospitals and health plans. Although any proposed measures will require authorization through additional legislation to become effective (and Congress and the current administration have each indicated that they will continue to seek new legislative and/or administrative measures to control drug costs), each of these initiatives has been implemented to some degree through executive orders regarding the same. For example, the president’s 2026 Federal Budget, which is being incrementally enacted through a series of "minibus" spending bills, proposed significant reductions to federal agency staffing from 2024/2025 levels, which were already significantly reduced due to agency actions based on an executive order mandating the same. At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or successfully commercialize our drugs.

For the year ended December 31, 2025, research and development expenses were approximately $5.9 million. Specifically, during the year ended December 31, 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 $3,646,000 related to manufacturing and clinical activities; (ii) HT-KIT, approximately $753,000 related to manufacturing and preclinical activities; (iii) HT-VA, approximately $137,000, and (iv) HT-ALZ, approximately $12,000 related to preclinical studies. In addition to the foregoing, we also incurred fees of approximately $131,000 payable to members of our scientific advisory board for services and recorded approximately $1,268,000 of in-process research and development expenses in connection with the acquisition of patent applications.

During the year ended December 31, 2025, the increase in general and administrative expenses of approximately $1,449,000 was primarily attributed to an increase in compensation and related expenses of $590,000, 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 $196,000, which were offset by a decrease in stock-based compensation of approximately $574,000 in connection with the issuance of stock options during the year ended December 31, 2025 as compared to the year ended December 31, 2024. Additionally, during the year December 31, 2025, professional and consulting expenses increased by approximately $892,000 which was primarily attributable to an increase in legal and consulting fees of approximately $538,000, an increase in stock-based professional fees of $333,000 an increase in directors’ fees of approximately $21,000, and an increase in rent expense of $1,000. These increases were offset by a decrease in other general and administrative expenses of approximately $34,000.

For the year ended December 31, 2025, net cash used in operating activities was approximately $9.8 million, which primarily resulted from a net loss of approximately $12.5 million and an increase in prepaid expenses and other current assets of approximately $460,000 and an increase in accounts payable and accrued expenses of approximately $644,000, offset by approximately $850,000 of non-cash research and development-acquired patent, $1.5 million in stock-based compensation and professional fees, and unrealized loss on crypto assets of $109,000.

During the year ended December 31, 2025, the Company purchased $300,000 in crypto assets.

For the year ended December 31, 2025, net cash provided by financing activities was approximately $9.3 million, which primarily resulted from net proceeds from the issuance of common stock of approximately $4.1 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.

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.

Risks Related to the Company

Our technologies are based on early-stage technologies that have not been demonstrated at commercial scale, and if we are unable to advance these technologies beyond their current developmental stage, our business, financial condition, and prospects could be materially adversely affected.

Our three core platforms — the nanomagnetic matrix multiplier, skyrmion-mediated spintronic memory, and Swarm Stage AI — are at early stages of development. We license our intellectual property Virginia Commonwealth University and our technologies have only been validated in laboratory or simulation environments, not in commercial products. Our development path depends on advancing device simulation, chip architecture modeling, and experimental device characterization through sponsored university research, and we currently lack our own manufacturing capabilities. There can be no assurance that these technologies, which operate on potentially novel principles, can be successfully translated into commercially viable, manufacturable products Even if these technologies are commercially viable, there is no guarantee that they will achieve market acceptance.. If we are unable to advance these technologies beyond their current developmental stage, our business, financial condition, and prospects could be materially adversely affected.

Many of our initiatives, including those to develop our nanomagnetic matrix multiplier, skyrmion-mediated spintronic memory, and Swarm Stage AI, may involve significant technical complexity, unproven technologies, or technologies that do not exist or may require significant advancement, and such initiatives may not achieve commercial viability.

Our initiatives to develop our nanomagnetic matrix multiplier, skyrmion-mediated spintronic memory, and Swarm Stage AI are in developmental stages of conception, design and development and have not yet been proven at commercial scale, or at all, and may ultimately be unsuccessful. In particular, the timeline for these initiatives, may be difficult or impossible to determine. These efforts require substantial and ongoing investments of financial, technical, and human resources over extended time horizons, including, but not limited to, research and development, testing, infrastructure, regulatory approvals, and mission execution. The technologies, systems, and operational capabilities required for each of these initiatives involve significant technical complexity and are subject to design, engineering, and performance risks, many of which may only become apparent as development and testing progress. Many of these technologies, systems and operational capabilities are novel and untested, and we expect to incur significant capital expenditures before our products and services and other strategic initiatives become profitable, which may never occur. We may be required to devote financial, technical, human or other resources in excess of our current expectations, and there can be no assurance that these investments will generate adequate revenue, which could adversely affect our business, financial condition, results of operations, and future prospects.

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Our products are dependent on the market for commercial satellite manufacturing, launch and data services for satellites which is not well established, is still emerging and may not achieve the growth potential we expect or may grow more slowly than expected.

The market for in-space infrastructure services, in particular commercial satellite manufacturing, launch and data services for small satellites, has not been well established and is still emerging. Sales of our future products and technology will be dependent on this market. Our estimates for the total addressable market are based on several internal and third-party estimates and while we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the accuracy of these underlying factors. As a result, our estimates of the total addressable market for our future products and services, as well as the expected growth rate for the total addressable market for our future products and services, may prove to be incorrect.

Any delays in the development and manufacture of satellites and related technology may adversely impact our business, financial condition and results of operations.

We may, in the future, experience delays or other complications in the design, manufacture, launch, production, delivery and servicing ramp of satellites and related technology. Our ability to sell our products and generate revenue may be impacted by delays in the manufacturing of satellites and related technology. If delays like this arise or recur, we could experience issues in sustaining sales of our products which could result in adverse publicity and damage to our brand and reputation, all of which could have a material adverse effect on our business and results of operations.

Developing AI can be capital intensive and we operate in a nascent and rapidly evolving market in which the potential of AI remains uncertain.

AI is a nascent and rapidly evolving technology, and although we believe AI holds significant promise for consumers and enterprises, its long-term impact will depend on the degree to which AI products and services prove to be broadly useful in real-world applications. There can be no assurance that demand for AI solutions will develop or be sustained at the levels we anticipate, or at all. While industry interest in AI has grown substantially, the commercial value proposition of AI models remains largely unproven, and long-term market acceptance of the use of AI in our products and services is uncertain. Developing, training, and providing inference for AI models requires substantial and growing capital expenditures, including investments in specialized computing hardware, data center infrastructure, energy procurement, and technical personnel, and we expect these costs to continue to increase for the foreseeable future. Furthermore, the continued improvement of AI model capabilities has historically depended in part on scaling laws, the empirical observation that model performance improves with increased compute, data, and model size, but there is uncertainty as to how long these scaling relationships will continue to hold. As a result of these factors, the use of AI in our products may not achieve the growth or returns we expect.

The semiconductor industry is highly cyclical and has experienced severe downturns that have materially adversely affected, and may continue to materially adversely affect, our business in the future.

The semiconductor industry is highly cyclical and has experienced significant downturns, often alongside constant and rapid technological change, wide fluctuations in supply and demand, continuous new product introductions, price erosion and declines in general economic conditions. The growth of AI is further creating pressure on the semiconductor industry to timely design, manufacture and deliver semiconductor products and solutions to meet customer demand for computing power and AI infrastructure. Furthermore, global economic uncertainty and weakness have in the past impacted the semiconductor market as consumers and businesses have deferred purchases, which may negatively impact demand for our products. Our financial performance may in the future be negatively affected by these downturns.

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Our products may be subject to security vulnerabilities that could have a material adverse effect on us.

The products that we intend to sell will be complex and may be subject to security vulnerabilities that could result in, among other things, the loss, corruption, theft or misuse of confidential data or system performance issues. Our efforts to prevent and address security vulnerabilities may decrease performance, be only partially effective or not successful at all. We may depend on vendors to create mitigations to their technology that we incorporate into our products and they may delay or decline to make such mitigations. We may also depend on third parties, such as customers and end-users, to deploy our mitigations alone or as part of their own mitigations, and they may delay, decline or modify the implementation of such mitigations. Our relationships with our customers could be adversely affected as some of our customers may stop purchasing our products, reduce or delay future purchases of our products, or use competing products. Any of these actions by our customers could adversely affect our revenue. In addition, we may be subject to claims and litigation related to security vulnerabilities. Actual or perceived security vulnerabilities of our products may subject us to adverse publicity, damage to our brand and reputation, and could materially harm our business or results of operations.

If essential equipment, materials, or manufacturing processes are not available to manufacture our products, we could be materially adversely affected.

We may purchase equipment and materials for manufacturing use and our operations depend upon obtaining deliveries of adequate supplies of equipment and materials of acceptable quality on a timely basis. In addition, if our products increase in technical complexity, we may rely on third-party suppliers to update their processes to meet our back-end manufacturing needs. There is currently an industry-wide memory shortage as the demand for such components has outpaced supply. The price of memory has also increased as a result of the shortage. If we are unable to procure a stable supply of memory, equipment or materials of acceptable quality on an ongoing basis and at reasonable costs to meet our production requirements, we could experience a shortage in memory, equipment materials or supply or an increase in production costs, which could have a material adverse effect on our business. Because some of the equipment and materials that we may purchase may be complex, it may be difficult to substitute one equipment or materials supplier for another.

From time to time, suppliers may extend lead times, limit supply or increase prices due to capacity constraints or other factors. Also, some of these materials and components may be subject to rapid changes in price, quality and availability. Interruption of supply or increased demand in the industry could cause shortages and price increases in various essential materials. If we are unable to procure certain of these materials for our back-end manufacturing operations, or our third-party manufacturers are unable to procure materials for manufacturing our products, our business would be materially adversely affected.

Risk Relating to Government Regulations

Our business is subject to a wide variety of extensive and evolving government laws and regulations. Failure to comply with such laws and regulations could have a material adverse effect on our business.

We are subject to a wide variety of laws and regulations relating to various aspects of our business, including with respect to export controls, defense procurement and contracting, intellectual property, semiconductor development and manufacturing, employment and labor, tax, privacy and data security, health and safety, and environmental issues. Laws and regulations at the foreign, federal, state, and local levels frequently change, especially in relation to new and emerging industries such as artificial intelligence, and we cannot always reasonably predict the impact from, or the ultimate cost of compliance with, current or future regulatory or administrative changes. We monitor these developments and intend to devote a significant amount of management’s time and external resources towards compliance with these laws, regulations and guidelines, and anticipate that such compliance will place a significant burden on management’s time and other resources, and it may limit our ability to expand into certain jurisdictions. Moreover, changes in law, the imposition of new or additional regulations or the enactment of any new or more stringent legislation that impacts our business could require us to change the way we operate and could have a material adverse effect on our sales, profitability, cash flows and financial condition.

Failure to comply with these laws, such as with respect to obtaining and maintaining licenses, certificates, authorizations and permits critical for the operation of our business, may result in civil penalties or private lawsuits, or the suspension or revocation of licenses, certificates, authorizations or permits, which would prevent us from operating our business. For example, deploying space assets such as satellites in the United States require licenses and permits from certain agencies of the Department of Transportation, including the Federal Aviation Administration and review by other agencies of the U.S. Government, including the National Oceanic and Atmospheric Administration, the Department of Defense, Department of State, NASA, Federal Communications Commission and the International Telecommunications Union. License approval includes an interagency review of safety, operational, national security, and foreign policy and international obligations implications, as well as a review of foreign ownership. Delays in licensing and approvals allowing us to deploy our commercial satellites could adversely affect our ability to operate our business and our financial results.

-3636-- Moreover, regulation of our industry is still evolving, and new or different laws or regulations could affect our operations, increase direct compliance costs for us or cause any third-party suppliers or contractors to raise the prices they charge us because of increased compliance costs. Application of these laws to our business may negatively impact our performance in various ways, limiting the collaborations we may pursue, further regulating the export and re-export of our products, services, and technology from the United States and abroad, and increasing our costs and the time necessary to obtain required authorization. The adoption of a multi-layered regulatory approach to any one of the laws or regulations to which we are or may become subject, particularly where the layers are in conflict, could require alteration of our manufacturing processes or operational parameters which may adversely impact our business. We may not be in complete compliance with all such requirements at all times and, even when we believe we are in complete compliance, a regulatory agency may determine that we are not.

Issues related to the responsible use of AI may result in reputational, competitive and financial harm and liability.

We intend to offer products that include capabilities to support AI deployment. As with many new emerging technologies, AI presents risks and challenges and increasing legal, social and ethical concerns relating to its responsible use that could affect the adoption of AI, and thus our business. Third-party misuse of AI applications, models, or solutions, or ineffective or inadequate AI development or deployment practices by us or our customers, could cause harm to individuals or society and impair the public’s acceptance of AI. Moreover, we may be subject to competitive harm, regulatory action and legal liability as a result of new and proposed legislation regulating AI, as well as new applications of existing data protection, privacy and intellectual property and other laws. Such regulations and changes thereto could cause us to incur greater compliance costs, could impact our ability to sell or the ability of our customers and users worldwide to acquire, deploy and use systems that include our AI-related products and services and reduce the number of customers, which could negatively impact our business and financial results. As there continues to be an increasing focus on risks related to AI technologies, there may be an increasing focus on regulatory restrictions that target products and services that enable or facilitate AI and that may negatively impact some of our AI-related products and services. If the AI-related products that we offer have unintended consequences, infringe intellectual property rights or rights of publicity, or are misused by our customers or are otherwise controversial due to their perceived or actual impact on human rights, privacy, cybersecurity, employment or other social, economic or political issues the public’s acceptance of AI may be impaired and this may also result in reputational, competitive and financial harm and liability to our business.

Risks Related to Our Intellectual Property Rights

If we fail to adequately protect our proprietary intellectual property rights, including our rights under our exclusive license agreements, our competitive position could be impaired and we may lose valuable assets and incur costly litigation to protect our rights.

Our success depends, in part, on our ability to protect our proprietary intellectual property rights, including our exclusive licenses from Virginia Commonwealth University. To date, we have relied primarily on our exclusive license agreements and other intellectual property laws to protect our intellectual property and intend to continue to rely on these and other means, including patent protection, in the future. However, the steps we take to protect our intellectual property may be inadequate, and we may choose not to pursue or maintain protection for our intellectual property in the United States or foreign jurisdictions. We will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property. Despite our precautions, it may be possible for unauthorized third parties to copy our technology and use information that we regard as proprietary to create technology that competes with ours.

Further, the laws of some countries do not protect proprietary rights to the same extent as the laws of the United States, and mechanisms for enforcement of intellectual property rights in some foreign countries may be inadequate. To the extent we expand our international activities, our exposure to unauthorized copying and use of our technologies and proprietary information may increase. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon, misappropriating or otherwise violating our technology and intellectual property.

In May 2026, we announced a strategic repositioning pursuant to which we are now pursuing opportunities in artificial intelligence (“AI”) infrastructure, next-generation semiconductor technologies, and ultra-low-power AI computing. Specifically, we are an AI semiconductor infrastructure company building nanomagnetic and spintronic computing for ultra-low-power AI, resilient edge, defense, and space. We are also focused on developing (i) a nanomagnetic matrix multiplier; (ii) Skyrmion Spintronic memory; and (iii) Swarm Stage AI. Additionally, we also continue to have preclinical and clinical assets that will developed under our wholly owned subsidiary, Hoth Therapeutics LLC, for (i) a topical formulation for treating side effects from drugs used for the treatment of cancer (HT-001); (ii) a treatment for mast-cell derived cancers and anaphylaxis (HT-KIT); (iii) a treatment for obesity, and obesity-related diseases and conditions (HT-VA); and (iv) a treatment for Alzheimer’s Disease (HT-ALZ).

For the three months ended June 30, 2025, research and development expenses were approximately $1,040,000. Specifically, during the three months ended June 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 $652,000 related to manufacturing and clinical activities; and (ii) HT-KIT, approximately $351,000 related to manufacturing and preclinical activities. In addition to the foregoing, we also incurred fees of approximately $31,000 payable to members of our scientific advisory board for services.

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

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General and Administrative Expenses

For the three months ended June 30, 2026, general and administrative expenses amounted to approximately $1,879,000 as compared to $1,160,000 for the three months ended June 30, 2025, an increase of $719,000, or 62.0%. For the three months ended June 30, 2026 and 2025, general and administrative expenses consisted of the following (rounded to the nearest $1,000):

During the three months ended June 30, 2026, the increase in general and administrative expenses of approximately $719,000 was primarily attributed to an increase in compensation and related expenses of $668,000 primarily attributable to an increase in stock-based compensation of approximately $625,000 in connection with the issuance of stock options during the three months ended June 30, 2026 as compared to none during the three months ended June 30, 2025, as well as an increase in other compensation and related expenses of $43,000 and an increase in professional and consulting expenses of approximately $119,000 which was primarily attributable to an increase in legal and consulting fees of approximately $51,000, an increase in accounting fees of approximately $45,000, and an increase in directors’ fees of approximately $27,000 offset by a decrease in rent expense of $7,000 and a decrease in other general and administrative expenses of $61,000, primarily attributable to a decrease in travel expense.

We anticipate that our general and administrative expenses will continue to increase in future periods, reflecting continued and increasing costs associated with:

Other Income

For the three months ended June 30, 2026 and 2025, other income was approximately $149 and $173, respectively, which resulted from interest income.

Net Loss

For the three months ended June 30, 2026 and 2025, we incurred a net loss of approximately $3,835,000, or $0.19 per common share (basic and diluted), and $2,199,000, or $0.17 per common share (basic and diluted), respectively.

Comparison of Our Results of Operations for the Six Months Ended June 30, 2026 and 2025

Operating Costs and Expenses

Research and Development Expenses

For the six months ended June 30, 2026, research and development expenses were approximately $3,474,000. Specifically, during the six months ended June 30, 2026, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) HT-001, approximately $3,065,000 related to manufacturing and clinical activities; (ii) HT-KIT, approximately $12,000 related to manufacturing and preclinical activities; and (iii) HT-VA approximately $80,000 related to preclinical studies. In addition to the foregoing, we also incurred fees of approximately $60,000 payable to members of our scientific advisory board for services, $47,000 in licensing fees, and $210,000 of in-process research and development expenses in connection with the acquisition of software and other technologies.

-2828-- For the six months ended June 30, 2025, research and development expenses were approximately $2,998,000. Specifically, during the six months ended June 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 $1,110,000 related to manufacturing and clinical activities; (ii) HT-KIT, approximately $549,000 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 $69,000 payable to members of our scientific advisory board for services and recorded approximately $1,258,000 of in-process research and development expenses in connection with the acquisition of patent applications.

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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 through Wainwright. We have agreed to pay Wainwright a commission equal to 3.0% of the aggregate gross proceeds from the sales of shares of our stock sold through Wainwright under the ATM Agreement and will also reimburse Wainwright for certain specified expenses in connection with the ATM Agreement. The aggregate market value of the shares of common stock eligible for sale is currently $5,257,000. From November 8, 2024 through August 13, 2026, the Company sold 9,825,684 shares of common stock through the ATM Agreement which resulted in approximately $13.56 million in gross proceeds. During the three and six months ended June 30, 2026, we sold an aggregate of 3,436,991 and 4,193,178 shares of common stock for net proceeds of $5,145,579 and $5,847,063, respectively. Furthermore, from July 1 to August 13, 2026, pursuant to the ATM Agreement, we issued an aggregate of 1,712,947 shares of common stock for net proceeds of $1,938,593.

On April 1, 2026, we entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors, pursuant to which we agreed to sell to such investors 2,857,144 shares of common stock at a purchase price of $0.70 per share. For each share of common stock purchased by the investors, in a private placement pursuant to the Purchase Agreement, we concurrently issued to such investors an unregistered warrant (each a “April Warrant” and, collectively, the “April Warrants”) to purchase one share of common stock at an exercise price of $0.85 per share. The April Warrants are exercisable six months from the date of issuance (the “Initial Exercise Date”) for a period of five years from the Initial Exercise Date. We received gross proceeds of approximately $2,000,000, and net proceeds of approximately $1,611,880, after deducting placement agent’s fees and other offering expenses paid by us of $388,121. Additionally, in connection with the offering, we issued placement agent warrants to the designees of the placement agent, Wainwright, to purchase up to 142,857 shares of common stock (the “April Placement Agent Warrants”). The April Placement Agent Warrants are immediately exercisable at an exercise price of $0.875 per share and expire on April 1, 2031.

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For the six months ended June 30, 2025, net cash provided by financing activities was approximately $7,133,000, which primarily resulted from net proceeds from the issuance of common stock of approximately $1,508,000 and proceeds from the exercise of warrants of $5,625,000.

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