What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-15 compared with 2022-05-16 · 136 added, 89 removed, 141 unchanged (61% of the section changed)

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These risks and factors include, by way of example and without limitation:

ability to obtain financing needed to complete our clinical trials and implement our business plan;

ability to successfully develop and commercialize BRTX-100, our lead product candidate for the treatment of chronic lumbar disc disease,

as well as our metabolic ThermoStem Program;

ability to obtain financing needed to complete our clinical trials and implement our business

ability to successfully develop and commercialize BRTX-100, our lead product candidate for

the treatment of chronic lumbar disc disease, as well as our metabolic ThermoStem Program;

possible lack of exclusive rights with regard to our licensed technology;

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ability to attract and retain world-class research and development talent;

ability to attract and retain key science, technology and management personnel and to expand our management team;

accuracy of estimates regarding expenses, future revenue, capital requirements, profitability, and needs for additional financing;

interruptions resulting from geo-political actions, including war and terrorism or disease outbreaks (such as the recent outbreak

of COVID-19);

ability to attract and retain key science, technology and management personnel and to expand

our management team;

accuracy of estimates regarding expenses, future revenue, capital requirements, profitability,

and needs for additional financing;

interruptions resulting from geo-political actions, including war and terrorism or disease

outbreaks (such as the recent outbreak of COVID-19);

ability to attract and retain customers;

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used in this Quarterly Report on Form 10-Q and unless otherwise indicated, the terms “Company,” “we,” “us”

and “our” refer to BioRestorative Therapies, Inc., a Delaware corporation (“BRT”), and its wholly-owned subsidiary,

Stem Pearls, LLC, a New York limited liability company (“Stem Pearls”).

Unless otherwise specified, all dollar amounts are

expressed in United States dollars.

and “our” refer to BioRestorative Therapies, Inc., a Delaware corporation, and its wholly-owned subsidiary, Stem Pearls,

LLC, a New York limited liability company.

Unless otherwise specified, all dollar amounts are expressed in United States dollars.

report includes references to our federally registered trademarks, BioRestorative Therapies and Dragonfly design , BRTX-100

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research applications.

of March 31, 2022, our accumulated deficit was $138,962,278.

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.

to continue to incur substantial costs for these activities over at least the next year.

of June 30, 2022, our accumulated deficit was $143.6 million.

We have historically only generated a modest amount of revenue, and our

losses have principally been operating expenses incurred in research and development, non-cash expenses such as stock-based compensation,

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.

develop therapeutic products and medical therapies using cell and tissue protocols, primarily involving adult (non-embryonic) stem cells.

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We have received such authorization from the FDA and have commenced such clinical

trial through the execution of a CRO agreement with PRC Clinical, the commencement of clinical trial site identification, the purchase

of manufacturing equipment and the expansion of our laboratory to include capabilities for clinical production.

We have obtained a license

to use technology for investigational adult stem cell treatment of disc and spine conditions, including protruding and bulging lumbar

The technology is an advanced stem cell injection procedure that may offer relief from lower back pain, buttock and leg pain,

and numbness and tingling in the leg and foot.

trial through the execution of a CRO agreement with PRC Clinical, the execution of clinical trial agreements, the enrollment of patients

in the clinical trials, the purchase of manufacturing equipment, the expansion of our laboratory to include capabilities for clinical

production and the certification of our clinical grade cell therapy manufacturing facility.

We have obtained a license to use technology

for investigational adult stem cell treatment of disc and spine conditions, including protruding and bulging lumbar discs.

The technology

is an advanced stem cell injection procedure that may offer relief from lower back pain, buttock and leg pain, and numbness and tingling

in the leg and foot.

We are also developing our ThermoStem Program .

This pre-clinical program involves

the use of brown adipose (fat) in connection with the cell-based treatment of type 2 diabetes and obesity as well as hypertension, other

metabolic disorders and cardiac deficiencies.

United States patents related to the ThermoStem Program were issued in September

2015, January 2019, March 2020, March 2021, and July 2021;

Australian patents related to the ThermoStem Program were issued in

April 2017, October 2019 and August 2021;

Japanese patents related to the ThermoStem Program were issued in December 2017 and

a notice of allowance also issued in January 2022 for a separate Japanese application in our ThermoStem Program and

is expected to issue in the near future;

Israeli patents related to our ThermoStem Program were issued in October 2019 and May

a notice of allowance also issued in September 2021 for a separate Israeli application in our ThermoStem Program and is

expected to issue in the near future;

and European patents related to the ThermoStem Program were issued in April 2020 and January

This pre-clinical program involves the use of brown adipose

(fat) in connection with the cell-based treatment of type 2 diabetes and obesity as well as hypertension, other metabolic disorders and

cardiac deficiencies.

United States patents related to the ThermoStem Program were issued in September 2015, January 2019, March

2020, March 2021, and July 2021;

Australian patents related to the ThermoStem Program were issued in April 2017, October 2019

and August 2021;

Japanese patents related to the ThermoStem Program were issued in December 2017, June 2021, and February 2022;

Israeli patents related to our ThermoStem Program were issued in October 2019, May 2020, and March 2022;

and European patents

related to the ThermoStem Program were issued in April 2020 and January 2021.

have licensed a patented curved needle device that is a needle system designed to deliver cells and/or other therapeutic products or

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of Operations

of the Three Months Ended March 31, 2022 to the Three Months Ended March 31, 2021

financial results for the three months ended March 31, 2022 are summarized as follows in comparison to the three months ended March 31,

of the Three Months Ended June 30, 2022 to the Three Months Ended June 30, 2021

financial results for the three months ended June 30, 2022 are summarized as follows in comparison to the three months ended June 30,

For The Three Months Ended

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Loss From Operations

Other Expense:

Interest expense

Total Other Expense

$ (4,675,241 )

$ (4,062,595 )

the three months ended June 30, 2022 and 2021, we generated $71,000 and $15,000, respectively, of royalty revenue in connection with

our sublicense agreement.

We do not expect that such increased level of revenues related to this agreement will continue in future periods.

and Promotion

and promotion expenses include advertising and promotion, marketing and seminars, meals, entertainment and travel expenses.

For the three

months ended June 30, 2022 and 2021, marketing and promotion expenses were insignificant.

Marketing and promotion expenses for the prior

year period included expenditures related to an advertising consulting agreement which was no longer in effect during 2022.

expenses consist of consulting fees and stock-based compensation to consultants.

For the three months ended June 30, 2022, consulting

expenses increased by $33,802, from $1,648 to $35,450, as compared to the three months ended June 30, 2021, primarily due to stock-based

compensation of $23,210 issued to consultants during the three months ended June 30, 2022.

and Development

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.

For the three months

ended June 30, 2022, research and development expenses increased by $914,326, or 568%, from $160,898 to $1,075,224, as compared to the

three months ended June 30, 2021, as we recommenced our research and development initiatives, including the engagement of PRC Clinical

to serve as our CRO in connection with our clinical trials, following the completion of our public offering of common stock and warrants

in November 2021.

expect that our higher level of research and development expenses will continue in subsequent fiscal periods.

and Administrative

and administrative expenses consist primarily of salaries, bonuses, payroll taxes, severance costs and stock-based compensation to employees

(excluding any cash or non-cash compensation of our Vice President of Research and Development and our laboratory staff), as well as

corporate expenses such as legal and professional fees, investor relations and occupancy-related expenses.

For the three months ended

June 30, 2022, general and administrative expenses increased by $0.2 million, or 6%, from $3.4 million to $3.6 million, as compared to

the three months ended June 30, 2021.

The increase is primarily due to an increase in stock-based compensation related to various consultants

and executives during three months ended June 30, 2022.

expect that our general and administrative expenses will increase as we expand our staff, develop our infrastructure, and incur additional

costs to support the growth of our business.

the three months ended June 30, 2022, interest expense decreased $460,719, or 91%, as compared to the three months ended June 30, 2021.

The decrease was due to the exchange of our outstanding interest-bearing convertible debt for common and preferred shares and warrants

in connection with our public offering in November 2021.

of the Six Months Ended June 30, 2022 to the Six Months Ended June 30, 2021

financial results for the six months ended June 30, 2022 are summarized as follows in comparison to the six months ended June 30, 2021:

For The Six Months Ended

Operating Expenses:

Marketing and promotion

Research and development

General and administrative

Total Operating Expenses

Loss From Operations

(18,609,919 )

Other (Income) Expense:

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Gain on PPP loan forgiveness

Amortization of debt discount

Total Other (Income) Expense

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$ (19,715,925 )

the three months ended March 31, 2022 and 2021, we generated $16,000 and $18,000, respectively, of royalty revenue in connection with

our sublicense agreement.

the six months ended June 30, 2022 and 2021, we generated $87,100 and $33,000, respectively, of royalty revenue in connection with our

sublicense agreement.

We do not expect that such increased level of revenues related to this agreement will continue in future periods.

and Promotion

and promotion expenses include advertising and promotion, marketing and seminars, meals, entertainment and travel expenses.

For the three

months ended March 31, 2022 and 2021, marketing and promotion expenses were insignificant.

months ended June 30, 2022 and 2021, marketing and promotion expenses were insignificant.

expect that marketing and promotion expenses will increase in the future as we increase our marketing activities following full commercialization

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expenses consist of consulting fees and stock-based compensation to consultants.

For the three months ended March 31, 2022, consulting

expenses increased by $77,862, from $8,389 to $86,071, as compared to the three months ended March 31, 2021, primarily due to stock-based

compensation of $72,818 issued to consultants during the three months ended March 31, 2022.

For the six months ended June 30, 2022, consulting expenses

increased by $111,484, from $10,037 to $121,521, as compared to the six months ended June 30, 2021, primarily due to stock-based compensation

of $96,030 issued to consultants who provided public relations services during the six months ended June 30, 2022.

and Development

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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, 2022, research and development expenses increased by

$610,083, or 369%, from $165,254 to $775,337, as compared to the three months ended March 31, 2021, as we recommenced

our research and development initiatives following the completion of our public offering of common stock and warrants in November 2021.

For the six months ended

June 30, 2022, research and development expenses increased by $1,524,409, or 467%, from $326,152 to $1,850,561, as compared to the six

months ended June 30, 2021, as we recommenced our research and development initiatives, including the engagement of PRC Clinical to serve

as our CRO in connection with our clinical trials, following the completion of our public offering of common stock and warrants in November

expect that our higher level of research and development expenses will continue in subsequent fiscal periods.

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corporate expenses such as legal and professional fees, investor relations and occupancy-related expenses.

For the three months ended

March 31, 2022, general and administrative expenses decreased by $10,688,497, or 72%, from $14,896,413 to $4,207,916, as compared to

the three months ended March 31, 2021.

For the six months ended June

30, 2022, general and administrative expenses decreased by $10.5 million, or 57%, from $18.3 million to $7.8 million, as compared to

the six months ended June 30, 2021.

The decrease is primarily due to a decrease of approximately $10.5 million in stock-based compensation

resulting from the effect of the issuances of 586,959 stock options and 293,479 RSUs during the three months ended March 31, 2021.

during the six months ended June 30, 2022 as compared to June 30, 2021, which related to grants issued to our executives.

expect that our general and administrative expenses will increase as we expand our staff, develop our infrastructure, and incur additional

costs to support the growth of our business.

the three months ended March 31, 2022, interest expense decreased $152,503, or 84%, as compared to the three months ended March 31, 2021.

the six months ended June 30, 2022, interest expense decreased $1,030,382, or 93%, as compared to the six months ended June 30, 2021.

The decrease was due to the exchange of our outstanding convertible debt for common and preferred shares and warrants in connection with

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Small Business Administration’s Paycheck Protection Program (“PPP”), our $250,000 PPP loan was

forgiven during the three months ended March 31, 2022.

of debt discount

of debt discount of $417,160 for the three months ended March 31, 2021 related to our convertible notes, which were exchanged for common

and preferred shares and warrants in connection with our public offering in November 2021, resulting in no comparable expense during

the three months ended March 31, 2022.

income of $16,654 during the three months ended March 31, 2022 consists of funding received under a $256,000 National Institutes of Health

forgiven during the six months ended June 30, 2022.

income of $16,654 during the six months ended June 30, 2022 consists of funding received under a $256,000 National Institutes of Health

Small Business Technology Transfer (STTR) Phase 1 grant, which we were awarded in September 2021.

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of Additional Funds

upon our accumulated deficit of $138,962,278 as of March 31, 2022, along with our forecast for continued operating losses and

our need for financing to fund our contemplated clinical trials, we will eventually require additional equity and/or debt financing to

continue our operations.

upon our accumulated deficit of $143,637,519 as of June 30, 2022, along with our forecast for continued operating losses and our need

for financing to fund our contemplated clinical trials, we will eventually require additional equity and/or debt financing to continue

our operations.

However, we believe we have sufficient liquidity to continue our operations for the next twelve months from the date

of this report.

operating needs include the planned costs to operate our business, including amounts required to fund our clinical trials, working capital

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agreements on unattractive terms.

the three months ended March 31, 2022 and 2021, our sources and uses of cash were as follows:

Three Months Ended March 31,

the six months ended June 30, 2022 and 2021, our sources and uses of cash were as follows:

Six Months Ended June 30,

Net cash used in operating activities

$ (2,845,756 )

$ (1,555,530 )

Net cash used in investing activities

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$ (3,093,003 )

cash used in operating activities was $1,594,634 for the three months ended March 31, 2022, primarily due to cash used to fund the net

loss of $4,816,150 and a non-cash gain of $250,000 on forgiveness of our PPP loan, which were partially offset by non-cash expenses

of $3,430,925 related primarily to stock-based compensation and $40,591 of cash provided by changes in the levels of operating

assets and liabilities, which was primarily due to increases in accounts payable and accrued expenses and other current liabilities,

partially offset by increases in accounts receivable and prepaid and other current assets and a decrease in the lease liability.

Net cash used in operating activities was $813,701 for the three months ended

March 31, 2021, primarily due to cash used to fund the net loss of $15,653,330, which was partially offset by non-cash expenses of $14,522,963

primarily related to stock-based compensation expense and amortization of debt discount and $316,666 of cash provided by changes in the

levels of operating assets and liabilities, primarily as a result of increases in accounts payable, accrued expenses and other current

liabilities and decreases in accounts receivable, prepaid expenses and other current assets.

cash used in investing activities consisted of $109,573 of equipment purchases during the three months ended March 31, 2022.

no cash flows from investing activities during the three months ended March 31, 2021.

were no cash flows from financing activities for the three months ended March 31, 2022.

Net cash provided by financing activities for

the three months ended March 31, 2021 consisted of $250,000 of net proceeds from a loan received under the U.S.

Small Business Administration’s

Paycheck Protection Program.

do not believe that inflation has had a material impact on our business, revenues or operating results during the periods presented.

$ (1,305,530 )

cash used in operating activities was $2,845,756 for the six months ended June 30, 2022, primarily due to cash used to fund the net loss

of $9,491,391, which was partially offset by non-cash expenses of $6,595,602 related primarily to stock-based compensation and $300,033

of cash provided by changes in operating assets and liabilities.

Net cash used in operating activities was $1,555,530 for the six months

ended June 30, 2021, primarily due to cash used to fund the net loss of $19,715,925 which was partially offset by non-cash expenses of

$17,849,822 related primarily to stock-based compensation and $310,573 of cash provided by changes in operating assets and liabilities.

cash used in investing activities consisted of $247,247 of equipment purchases during the six months ended June 30, 2022.

no cash flows from investing activities during the six months ended June 30, 2021.

were no cash flows from financing activities during the six months ended June 30, 2022.

provided by financing activities during the six months ended June 30, 2021 was $250,000, which related entirely to a loan received under

Small Business Administration’s Paycheck Protection Program.

Accounting Policies and Estimates

significant accounting policies are more fully described in the notes to our unaudited condensed consolidated financial statements included

herein for the quarter ended March 31, 2022, and in the notes to our audited consolidated financial statements included in our Annual

Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 30, 2022.

significant accounting policies are fully described in the notes to our unaudited condensed consolidated financial statements included

herein for the quarter ended June 30, 2022, and in the notes to our audited consolidated financial statements included in our Annual

Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 30, 2022 (“Annual Report”).

30, 2022, t here were no changes to our critical accounting policies and estimates as disclosed

in the Annual Report.

Sheet Arrangements

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Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company, we are not required to provide the information required by this Item.

are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and as such are not required to provide the information

under this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis