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 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.

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, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, which was filed with the Securities and Exchange Commission (the “SEC”) on March 28, 2025.

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 (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:

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 for the fiscal year ended December 31, 2024, as filed with the SEC on March 28, 2025, 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 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.

Current wording

As of March 31, 2025, our accumulated deficit was $161,018,514. 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

We derived some of our revenue pursuant to a license agreement with a stem cell treatment company (the “SCTC”) entered into in January 2012, as amended in November 2015 and November 2022. Pursuant to the license agreement, the SCTC granted to us an exclusive license to use certain intellectual property related to, among other things, stem cell disc procedures and we have granted to the SCTC a sublicense to use, and the right to sublicense to third parties the right to use, in certain locations in the United States and the Cayman Islands, certain of the licensed intellectual property. In consideration of the sublicenses, the SCTC has agreed to pay us royalties on a per disc procedure basis.

Current wording

We derive revenue pursuant to a license agreement with a stem cell treatment company (the “SCTC”) entered into in January 2012, as amended in November 2015 and November 2022. Pursuant to the license agreement, the SCTC granted to us an exclusive license to use certain intellectual property related to, among other things, stem cell disc procedures and we have granted to the SCTC a sublicense to use, and the right to sublicense to third parties the right to use, in certain locations in the United States and the Cayman Islands, certain of the licensed intellectual property. In consideration of the sublicenses, the SCTC has agreed to pay us royalties on a per disc procedure basis.

Previous wording

We also derived our initial product revenue from our five-year exclusive supply agreement with Cartessa entered into in April 2024.

Current wording

We have also derived product revenue from our five-year exclusive supply agreement with Cartessa entered into in April 2024. We did not derive any such revenue during the three months ended March 31, 2025.

Previous 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.

Current wording

For the three months ended March 31, 2025 and 2024, we generated $25,000 and $35,000, 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

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.

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 March 31, 2025, research and development expenses increased by $656,196, or 62.0%, as compared to the three months ended March 31, 2024. The increase was primarily the result of an increase in lab supply expense of $577,631 and an increase in recruitment costs for our Phase 2 clinical trial of $68,978. 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 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.

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 March 31, 2025, general and administrative expenses increased by $29,177, or 0.9%, as compared to the three months ended March 31, 2024, primarily driven by an increase in professional fees of $52,598, partially offset by a decrease in stock-based compensation expense of $19,248 and a decrease in payroll of $3,681.

Previous 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.

Current wording

For the three months ended March 31, 2025, interest income was $99,966, as compared to interest income of $162,597 for the three months ended March 31, 2024. The change was primarily due to a decrease in interest income on the investments held in marketable securities.

Previous 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.

Current wording

For the three months ended March 31, 2025, other income was $1,888, as compared to other income of $149,021 for the three months ended March 31, 2024. The change was primarily due to a decrease in dividend income on investments held in marketable securities.

Previous 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.

Current wording

For the three months ended March 31, 2025 and 2024, we recognized a loss on the change in fair value of warrant liabilities of $634,119 and $137,319, respectively, related to the increase in fair value of warrants that are accounted for as warrant liabilities.

Previous 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.

Current wording

Working capital decreased by $2,222,574 primarily due to $2,778,786 of cash used to fund our operations and the $2,300,569 decrease in marketable securities, offset by $2,366,967 of cash provided by investing activities and the $1,092,718 of cash provided by financing activities.

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. 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.

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.

Previous wording

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

Current wording

During the three months ended March 31, 2025 and 2024, our sources and uses of cash were as follows:

Previous 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.

Current wording

Net cash used in operating activities was $2,778,786 for the three months ended March 31, 2025, primarily due to cash used to fund the net loss of $5,339,799, adjusted for net non-cash expenses of $2,592,227, and $31,214 of cash used in changes in operating assets and liabilities. Net cash used in operating activities was $2,317,780 for the three months ended March 31, 2024, primarily due to cash used to fund the net loss of $2,223,255, adjusted for net non-cash expenses of $381,174, and $475,699 of cash used in changes in operating assets and liabilities.

Previous 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.

Current wording

Net cash provided by investing activities was $2,366,967 for the three months ended March 31, 2025 primarily due to a sale of marketable securities which provided $3,456,535 of cash, offset by a purchase of marketable securities which used $1,053,168 of cash and a purchase of equipment which used $36,400 of cash. Net cash used in investing activities was $4,928,006 for the three months ended March 31, 2024 primarily due to a purchase of marketable securities which used $10,728,006 of cash, offset by a sale of marketable securities which provided $5,800,000 of cash.

Previous 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.

Current wording

Net cash provided by financing activities was $1,092,718 for the three months ended March 31, 2025 due to net proceeds of $1,050,307 received in connection with the issuance of common stock for the 2024 ATM offering and $42,411 due to the exercise of stock options, compared to $7,518,489 net cash provided by financing activities for the three months ended March 31, 2024.