BioRestorative Therapies Inc

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated interim financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Amendment No. 1 to the Annual Report on Form 10-K/A, which was filed with the Securities and Exchange Commission (the “SEC”) on June 11, 2024.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated interim financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K/A (Amendment No. 1) for the fiscal year ended December 31, 2023, which was filed with the Securities and Exchange Commission (the “SEC”) on June 11, 2024.

Previous wording

This Quarterly Report on Form 10-Q includes a number of forward-looking statements that reflect management’s current views with respect to future events and financial performance. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements include statements regarding the intent, belief or current expectations of us and members of our management team, as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2023, as filed with the SEC on June 11, 2024, any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in our forward-looking statements. These risks and factors include, by way of example and without limitation:

Current wording

This Quarterly Report on Form 10-Q includes a number of forward-looking statements that reflect management’s current views with respect to future events and financial performance. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements include statements regarding the intent, belief or current expectations of us and members of our management team, as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K/A (Amendment No. 1) for the fiscal year ended December 31, 2023, as filed with the SEC on June 11, 2024, any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in our forward-looking statements. These risks and factors include, by way of example and without limitation:

Previous wording

As of June 30, 2024, our accumulated deficit was $152,951,151. We have historically only generated a modest amount of revenue, and our losses have principally been operating expenses incurred in research and development, marketing and promotional activities in order to commercialize our products and services, plus costs associated with meeting the requirements of being a public company. We expect to continue to incur substantial costs for these activities over at least the next year.

Current wording

As of September 30, 2024, our accumulated deficit was $154,042,567. We have historically only generated a modest amount of revenue, and our losses have principally been operating expenses incurred in research and development, marketing and promotional activities in order to commercialize our products and services, plus costs associated with meeting the requirements of being a public company. We expect to continue to incur substantial costs for these activities over at least the next year.

Previous wording

For the three months ended June 30, 2024 and 2023, we generated $19,800 and $64,500, respectively, of royalty revenue in connection with our sublicense agreement with the SCTC primarily due to a decrease in disc procedures which we expect will increase in future periods.

Current wording

For the three months ended September 30, 2024 and 2023, we generated $2,900 and $30,700, respectively, of royalty revenue in connection with our sublicense agreement with the SCTC. The decrease was primarily due to a decrease in disc procedures.

Previous wording

For the three months ended June 30, 2024 and 2023, we generated $69,300 and $0, respectively, of cosmetic product sales revenue in connection with our exclusive supply agreement with Cartessa. We expect that our product sales revenue will increase in future periods as we execute on our contract with Cartessa.

Current wording

For the three months ended September 30, 2024 and 2023, we generated $230,700 and $0, respectively, of cosmetic product sales revenue in connection with our exclusive supply agreement with Cartessa.

Previous wording

Research and development expenses include cash and non-cash compensation of (a) our Vice President of Research and Development; (b) our Scientific Advisory Board members; and (c) laboratory staff and costs related to our brown fat and disc/spine initiatives. Research and development expenses are expensed as they are incurred. For the three months ended June 30, 2024, research and development expenses increased by $389,291, or 43%, compared to the three months ended June 30, 2023. The increase was primarily the result of an increase in lab supply expense of $208,374, an increase in payroll expense of $129,348, an increase in consulting expense of $23,482 and an increase in equipment deprecation related to new equipment of $20,319. We expect that our research and development expenses will continue to increase in subsequent fiscal periods.

Current wording

Research and development expenses include cash compensation of (a) our Vice President of Research and Development; (b) our Scientific Advisory Board members; and (c) laboratory staff and costs related to our brown fat and disc/spine initiatives. Research and development expenses are expensed as they are incurred. For the three months ended September 30, 2024, research and development expenses increased by $510,206, or 63%, as compared to the three months ended September 30, 2023. The increase was primarily the result of an increase in lab supply expense of $246,384, an increase in recruitment costs for our Phase 2 clinical trial of $73,194, an increase in payroll expense of $141,079 and an increase in consulting expense of $12,680. We expect that our research and development expenses will continue to increase in subsequent fiscal periods.

Previous wording

General and administrative expenses consist primarily of salaries, bonuses, payroll taxes and stock-based compensation to employees, as well as corporate expenses such as legal and professional fees, investor relations and occupancy-related expenses. For the three months ended June 30, 2024, general and administrative expenses decreased by $1,018,925, or 45%, as compared to the three months ended June 30, 2023, primarily driven by a decrease in stock-based compensation expense of $1,161,346 related to vesting of awards, partially offset by an increase in professional fees of approximately $111,711 primarily related to the recent restatement of our historical financial statements.

Current wording

General and administrative expenses consist primarily of salaries, bonuses, payroll taxes and stock-based compensation to employees, as well as corporate expenses such as legal and professional fees, investor relations and occupancy-related expenses. For the three months ended September 30, 2024, general and administrative expenses decreased by $1,142,999, or 49%, as compared to the three months ended September 30, 2023, primarily driven by a decrease in stock-based compensation expense of $1,209,459 related to the vesting of awards, partially offset by an increase in cash compensation to employees of $40,075 and an increase in professional fees of $11,836 primarily related to the recent restatement of our historical financial statements.

Previous wording

For the three months ended June 30, 2024, interest income was $175,945, compared to interest income of $96,187 for the three months ended June 30, 2023. The change was primarily due to interest and dividend income on the investments held in marketable securities.

Current wording

For the three months ended September 30, 2024, interest income was $158,547, as compared to interest income of $61,667 for the three months ended September 30, 2023. The change was primarily due to interest and dividend income on the investments held in marketable securities.

Previous wording

For the three months ended June 30, 2024 and 2023, we recognized a loss on the change in fair value of derivative liabilities of $1,736,611 and $2,728,847, respectively, related to the increase in fair value of warrants that are accounted for as derivative liabilities.

Current wording

For the three months ended September 30, 2024 and 2023, we recognized a gain on the change in fair value of warrant liabilities of $1,036,464 and $7,693,753, respectively, related to the decrease in fair value of warrants that are accounted for as warrant liabilities.

Previous wording

Comparison of the Six Months Ended June 30, 2024 to the Six Months Ended June 30, 2023

Current wording

Comparison of the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023

Previous wording

Our financial results for the six months ended June 30, 2024 are summarized as follows in comparison to the six months ended June 30, 2023:

Current wording

Our financial results for the nine months ended September 30, 2024 are summarized as follows in comparison to the nine months ended September 30, 2023:

Previous wording

For the six months ended June 30, 2024 and 2023, we generated $54,800 and $95,800, respectively, of royalty revenue in connection with our sublicense agreement with the SCTC primarily due to a decrease in disc procedures which we expect will increase in future periods.

Current wording

For the nine months ended September 30, 2024 and 2023, we generated $57,700 and $126,500, respectively, of royalty revenue in connection with our sublicense agreement with the SCTC. The decrease was primarily due to a decrease in disc procedures.

Previous wording

For the six months ended June 30, 2024 and 2023, we generated $69,300 and $0, respectively, of cosmetic product sales revenue in connection with our exclusive supply agreement with Cartessa. We expect that our product sales revenue will increase in future periods as we execute on our contract with Cartessa.

Current wording

For the nine months ended September 30, 2024 and 2023, we generated $300,000 and $0, respectively, of cosmetic product sales revenue in connection with our exclusive supply agreement with Cartessa.

Previous wording

Research and development expenses include cash and non-cash compensation of (a) our Vice President of Research and Development; (b) our Scientific Advisory Board members; and (c) laboratory staff and costs related to our brown fat and disc/spine initiatives. Research and development expenses are expensed as they are incurred. For the six months ended June 30, 2024, research and development expenses increased by $215,677, or 10%, compared to the six months ended June 30, 2023. The increase was primarily the result of increased lab supply expense of $285,883 and increased payroll expense of $145,380, all partially offset by a decrease in bonus expense of $210,878. We expect that our research and development expenses will continue to increase in subsequent fiscal periods.

Current wording

Research and development expenses include cash compensation of (a) our Vice President of Research and Development; (b) our Scientific Advisory Board members; and (c) laboratory staff and costs related to our brown fat and disc/spine initiatives. Research and development expenses are expensed as they are incurred. For the nine months ended September 30, 2024, research and development expenses increased by $746,035, or 25%, as compared to the nine months ended September 30, 2023. The increase was primarily the result of increased lab supply expense of $532,268 and increased payroll expense of $271,388, all partially offset by a decrease in bonus expense of $196,878. We expect that our research and development expenses will continue to increase in subsequent fiscal periods.

Previous wording

General and administrative expenses consist primarily of salaries, bonuses, payroll taxes and stock-based compensation to employees, as well as corporate expenses such as legal and professional fees, investor relations and occupancy-related expenses. For the six months ended June 30, 2024, general and administrative expenses decreased by $2,511,457, or 37%, as compared to the six months ended June 30, 2023, primarily driven by a decrease in stock-based compensation expense of $2,511,470 related to the vesting of awards and a decrease in payroll expense of $210,981 all partially offset by an increase in professional fees of $176,339 primarily related to the recent restatement of our historical financial statements.

Current wording

General and administrative expenses consist primarily of salaries, bonuses, payroll taxes and stock-based compensation to employees, as well as corporate expenses such as legal and professional fees, investor relations and occupancy-related expenses. For the nine months ended September 30, 2024, general and administrative expenses decreased by $3,674,608, or 40%, as compared to the nine months ended September 30, 2023, primarily driven by a decrease in stock-based compensation expense of $3,681,621 related to the vesting of awards and a decrease in payroll expense of $170,434 all partially offset by an increase in professional fees of $179,273 primarily related to the recent restatement of our historical financial statements.

Previous wording

For the six months ended June 30, 2024, interest income was $338,542, compared to interest income of $114,403 for the six months ended June 30, 2023. The change was primarily due to interest and dividend income on the investments held in marketable securities.

Current wording

For the nine months ended September 30, 2024, interest income was $497,089, as compared to interest income of $176,070 for the nine months ended September 30, 2023. The change was primarily due to interest and dividend income on the investments held in marketable securities.

Previous wording

For the six months ended June 30, 2024 and 2023, other (income) expense was primarily related to gains from settlements of certain accrued expenses and realized and unrealized gain on investments.

Current wording

For the nine months ended September 30, 2024 and 2023, other income primarily related to gains from settlements of certain accrued expenses and realized and unrealized gain on investments.

Previous wording

For the six months ended June 30, 2024, we recognized a gain on exchange of $1,711,698 related to the issuance of warrants and common stock in exchange for the cancellation of existing warrants.

Current wording

For the nine months ended September 30, 2024, we recognized a gain on exchange of $1,711,698 related to the issuance of warrants and common stock in exchange for the cancellation of existing warrants.

Previous wording

Working capital increased by $900,754 primarily due to the $7,505,646 of cash provided by financing activities which was partially offset by $4,182,945 of cash used to fund our operations and $1,954,831 of cash used to fund our investments.

Current wording

Working capital increased by $144,223 primarily due to the $7,505,646 of cash provided by financing activities which was partially offset by $5,882,501 of cash used to fund our operations and $1,018,078 of cash used to fund our investments.

Previous wording

Based upon our accumulated deficit of $152,951,151 as of June 30, 2024, along with our forecast for continued operating losses and our need for financing to fund our current and contemplated clinical trials, we will eventually require additional equity and/or debt financing to continue our operations. However, based on cash and cash equivalents and investments on hand, we believe we have sufficient cash to fund operations for at least 12 months after the issuance date of these financial statements.

Current wording

Based upon our accumulated deficit of $154,042,567 as of September 30, 2024, along with our forecast for continued operating losses and our need for financing to fund our current and contemplated clinical trials, we will eventually require additional equity and/or debt financing to continue our operations. However, based on cash and cash equivalents and investments on hand, we believe we have sufficient cash to fund operations for at least 12 months after the issuance date of these financial statements.

Previous wording

We may be unable to raise sufficient additional capital when we need it or raise capital on favorable terms. Future financing may require us to pledge certain assets and enter into covenants that could restrict certain business activities or our ability to incur further indebtedness and may contain other terms that are not favorable to our stockholders or us. If we are unable to obtain adequate funds on reasonable terms, we may be required to significantly curtail or discontinue operations or obtain funds by entering into financing agreements on unattractive terms.

Current wording

We may be unable to raise sufficient additional capital when we need it or raise capital on favorable terms. Future financing may require us to pledge certain assets and enter into covenants that could restrict certain business activities or our ability to incur further indebtedness and may contain other terms that are not favorable to our stockholders or us. If we are unable to obtain adequate funds on reasonable terms, we may be required to significantly curtail or discontinue operations or obtain funds by entering into financing agreements on unattractive terms. On November 6, 2024, we entered into an at-the-market offering agreement pursuant to which we have an ability to issue and sell shares of our common stock up to an aggregate offering price of $3,614,170.

Previous wording

During the six months ended June 30, 2024 and 2023, our sources and uses of cash were as follows:

Current wording

During the nine months ended September 30, 2024 and 2023, our sources and uses of cash were as follows:

Previous wording

Net cash used in operating activities was $4,182,945 for the six months ended June 30, 2024, primarily due to cash used to fund the net loss of $6,251,817, adjusted for net non-cash expenses of $2,351,582, and $282,710 of cash used in changes in operating assets and liabilities. Net cash used in operating activities was $3,662,831 for the six months ended June 30, 2023, primarily due to cash used to fund the net loss of $12,881,971, adjusted for non-cash expenses of $9,014,104, and $205,036 of cash provided by changes in operating assets and liabilities.

Current wording

Net cash used in operating activities was $5,882,501 for the nine months ended September 30, 2024, primarily due to cash used to fund the net loss of $7,343,233, adjusted for net non-cash expenses of $1,520,670, and $59,938 of cash used in changes in operating assets and liabilities. Net cash used in operating activities was $4,842,249 for the nine months ended September 30, 2023, primarily due to cash used to fund the net loss of $8,113,710, adjusted for non-cash expenses of $2,885,196, and $386,265 of cash provided by changes in operating assets and liabilities.

Previous wording

Net cash used in investing activities was $1,954,831 for the six months ended June 30, 2024 primarily due to a purchase of marketable securities which used $12,784,535 of cash and a sale of marketable securities which provided $10,865,000 of cash. Net cash provided by investing activities was $3,358,199 for the six months ended June 30, 2023 primarily due to a sale of marketable securities which provided $10,982,932 of cash and a purchase of marketable securities which used $7,535,662 of cash.

Current wording

Net cash used in investing activities was $1,018,078 for the nine months ended September 30, 2024 primarily due to a purchase of marketable securities which used $18,294,566 of cash and a sale of marketable securities which provided $17,370,243 of cash. Net cash provided by investing activities was $3,336,841 for the nine months ended September 30, 2023 primarily due to a sale of marketable securities which provided $18,089,372 of cash and a purchase of marketable securities which used $14,651,512 of cash.

Previous wording

Net cash provided by financing activities was $7,505,646 for the six months ended June 30, 2024 due to net proceeds received in connection with the exercise and issuance of warrants, compared to $411,701 net cash provided by financing activities for the six months ended June 30, 2023 due to the net proceeds from the at-the-market offering of our Common Stock.

Current wording

Net cash provided by financing activities was $7,505,646 for the nine months ended September 30, 2024 due to net proceeds received in connection with the exercise and issuance of warrants, compared to $2,265,700 net cash provided by financing activities for the nine months ended September 30, 2023 due to the net proceeds from the at-the-market offering of our common stock.