What changed in this filing

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Item 1. Financial Statements

2023-05-12 compared with 2022-11-14 · 284 added, 506 removed, 195 unchanged (80% of the section changed)

1 unchanged sentence

BIORESTORATIVE

THERAPIES, INC., AND SUBSIDIARY

THERAPIES, INC.

AND SUBSIDIARY

Consolidated Balance Sheets

September 30,

Current Assets:

Cash and cash equivalents

Investments held in marketable securities

Accounts receivable

Prepaid expenses and other current assets

and cash equivalents

held in marketable securities

expenses and other current assets

Total Current Assets

Property and equipment, net

Right of use asset

Intangible assets, net

and equipment, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

Accrued expenses and other current liabilities

Lease liability, current portion

PPP loan payable, current portion

expenses and other current liabilities

liability, current portion

Total Current Liabilities

Lease liability, net of current portion

PPP loan payable, net of current portion

liability, net of current portion

Total Liabilities

Commitments (Note 7)

Stockholders’ Equity

Preferred stock, $ 0.01 par value;

Authorized, 20,000,000 shares;

Series A Convertible Preferred stock, $ 0.01

Preferred stock, $ 0.01 par

Authorized, 20,000,000 shares;

and 1,543,158

issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Series B Convertible Preferred stock, $ 0.01 par

1,543,158 authorized

shares, 1,543,158 and 0 issued

and outstanding at September 30, 2022 and December 31, 2021, respectively

Common stock, $ 0.0001 par value;

A Convertible Preferred stock, $ 0.01 par value;

1,543,158 designated shares, 0 and 0 issued and outstanding at March 31, 2023 and

December 31, 2022, respectively

B Convertible Preferred stock, $ 0.01 par value;

1,543,158 designated shares, 1,518,158 and 1,518,158 issued and outstanding at March

31, 2023 and December 31, 2022, respectively

Preferred stock, value

stock, $ 0.0001 par value;

Authorized, 75,000,000 shares;

3,646,450 and 3,520,391 issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Additional paid in capital

Accumulated deficit

3,767,615 and 3,677,775 issued and outstanding at March 31, 2023 and December

31, 2022, respectively

paid in capital

( 158,325,119 )

( 152,640,897 )

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

Total Stockholders’

Total Liabilities

and Stockholders’ Equity

accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

BIORESTORATIVE

THERAPIES, INC., AND SUBSIDIARY

THERAPIES, INC.

AND SUBSIDIARY

Consolidated STATEMENTS OF OPERATIONS

March 31, 2023

March 31, 2022

For the Three Months Ended,

For the Nine Months Ended

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

March 31, 2023

March 31, 2022

Operating expenses:

5 unchanged sentences

( 5,053,793 )

( 14,292,121 )

( 22,298,606 )

Other (income) expense:

Interest expense

Other income:

Interest (income) expense

Gain on PPP loan forgiveness

Other expense

Total other (income) expense

$ ( 4,655,825 )

$ ( 4,184,232 )

Other income, net

Total other income

$ ( 5,684,222 )

4 unchanged sentences

BIORESTORATIVE

THERAPIES, INC., AND SUBSIDIARY

Consolidated STATEMENTS of CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

Stockholders’

THERAPIES, INC.

AND SUBSIDIARY

Consolidated STATEMENTS of CHANGES IN STOCKHOLDERS’ EQUITY

Series A Convertible

Series B Convertible

Preferred Stock

Stockholders’

Balance at January 1, 2023

3 unchanged sentences

- restricted share units

- common stock

( 5,684,222 )

Balance as of March 31, 2022

( 138,962,278 )

Stock-based compensation:

- restricted share units

- common stock

( 4,675,241 )

Balance as of June 30, 2022

( 143,637,519 )

September 8, 2022, issuance of Series B Preferred stock in exchange for Series A Preferred stock

( 1,543,158 )

Stock-based compensation:

- restricted share units

- common stock

( 4,655,825 )

Balance as of September 30, 2022

Balance as of

March 31, 2023

$ 171,796,597

3 unchanged sentences

$ ( 134,146,128 )

Shares issued in exchange for notes payable and accrued interest

Shares issued in cashless exercise of warrants

Stock-based compensation:

- restricted share units

( 15,653,330 )

Balance as of March 31, 2021

( 105,496,163 )

( 2,694,382 )

Shares issued in exchange for notes payable and accrued interest

Shares issued in cashless exercise of warrants

Stock-based compensation:

- restricted share units

( 4,062,595 )

Balance as of June 30, 2021

( 109,558,758 )

( 3,808,941 )

Shares issued in cashless exercise of warrants

Shares issued in litigation settlement

Fair market value of beneficial conversion feature and warrants issued with convertible notes payable instruments

Stock-based compensation:

- restricted share units

( 4,184,232 )

- common stock

( 4,816,150 )

Balance as of September 30, 2021

( 4,816,150 )

Balance at March 31, 2022

$ 159,103,184

3 unchanged sentences

THERAPIES, INC.

AND SUBSIDIARY

Consolidated STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30, 2022

September 30, 2021

March 31, 2023

March 31, 2022

Three months ended

March 31, 2023

March 31, 2022

Cash flows from operating activities:

2 unchanged sentences

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of debt discount

Unrealized loss on marketable securities

Depreciation and amortization

Stock-based compensation - options

Stock-based compensation - common stock

Stock-based compensation - RSUs

Shares issued in settlement of litigation

Unrealized gain on marketable securities

Stock-based compensation

Gain on PPP loan forgiveness

10 unchanged sentences

Cash flows from investing activities:

Purchase of marketable securities

( 9,933,562 )

Sale of marketable securities

Purchases of equipment

Net cash used in investing activities

( 10,156,204 )

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Proceeds from PPP Loan

Net cash provided by financing activities

Net decrease in cash and cash equivalents

( 14,453,616 )

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalents

( 1,704,207 )

1 unchanged sentence

Cash and cash equivalents - end of period

Non-cash investing and financing activities:

Shares issued in exchange for notes payable and accrued interest

Bifurcated embedded conversion options and warrants recorded as derivative liability and debt discount

Accrued DIP expenses exchanged for convertible notes

accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

8 unchanged sentences

subsidiary are referred to collectively as “BRT” or the “Company”.

October 27, 2021, the Company effected a 1-for-4,000 reverse stock split of its common stock.

The Company has retroactively applied the

reverse stock split made effective on October 27, 2021 to share and per share amounts on the unaudited condensed consolidated financial

statements for the three and nine months ended September 30, 2021.

In connection with the reverse stock split, the Company’s authorized

number of shares of common stock was reduced from 300,000,000,000 to 75,000,000 .

The Company’s authorized number of shares of preferred

stock was not affected by the reverse stock split.

November 9, 2021, the Company completed a $ 23,000,000 underwritten public offering of units of securities pursuant to which an aggregate

of 2,300,000 shares of the Company’s common stock and warrants for the purchase of an aggregate of 2,645,000 shares of the Company’s

common stock were issued.

The Company intends to use the net proceeds from the offering as follows:

(i) undertaking of clinical trials

with respect to BRTX-100 and its related collection and delivery procedure;

(ii) pre-clinical research and development with respect to

the Company’s ThermoStem Program;

and (iii) for general corporate and working capital purposes.

In connection with the public offering,

the Company’s common stock was listed on the Nasdaq Capital Market.

of the Business

develops therapeutic products and medical therapies using cell and tissue protocols, primarily involving adult stem cells.

website is at www.biorestorative.com.

BRT is currently developing a Disc/Spine Program referred to as “brtxDISC”.

cell therapy candidate, BRTX-100 , is a product formulated from autologous (or a person’s own) cultured mesenchymal stem

cells collected from the patient’s bone marrow.

The product is intended to be used for the non-surgical treatment of painful lumbosacral

disc disorders or as a complimentary therapeutic to a surgical procedure.

BRT is also engaging in research efforts with respect to a

platform technology utilizing brown adipose (fat) for therapeutic purposes to treat type 2 diabetes, obesity and other metabolic disorders

and has labeled this initiative its ThermoStem Program.

Further, BRT has licensed a patented curved needle device that is a needle system

designed to deliver cells and/or other therapeutic products or material to the spine and discs or other potential sites.

accompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue as

a going concern, which contemplates realization of assets and satisfying liabilities in the normal course of business.

For the nine months

ended September 30, 2022, the Company had a net loss of $ 14.1

million (of which, $ 9.6

million was attributable to non-cash stock-based

compensation) and negative cash flows from operations of $ 4.3

The Company’s operating activities

consume the majority of its cash resources.

The Company anticipates that it will continue to incur net losses as it executes its development

plans for 2022 and beyond, as well as other potential strategic and business development initiatives.

In addition, the Company has had

and expects to have negative cash flows from operations, at least into the near future.

The Company has previously funded, and plans

to continue funding, these losses primarily through current cash on hand and additional infusions of cash from equity and debt financing.

Based on cash on

hand as of September 30, 2022, the Company believes it has sufficient cash to fund operations for the twelve months subsequent to the

December 29, 2022, the Company reincorporated from Delaware to Nevada.

The reincorporation was structured as a statutory merger of BioRestorative

Therapies, Inc., a Delaware corporation, with and into its wholly-owned subsidiary, BioRestorative Therapies, Inc., a Nevada corporation.

accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which

contemplates realization of assets and satisfying liabilities in the normal course of business.

For the three months ended March 31,

2023, the Company had a net loss of $ 5.7 million (of which, $ 3.3 million was attributable to non-cash stock-based compensation) and negative

cash flows from operations of $ 2.3 million.

The Company’s operating activities consume the majority of its cash resources.

Company anticipates that it will continue to incur net losses as it executes its development plans throughout 2023 and beyond, as well

as other potential strategic and business development initiatives.

In addition, the Company has had and expects to have negative cash

flows from operations, at least into the near future.

The Company has previously funded, and plans to continue funding, these losses

primarily through current cash on hand, investments in marketable securities and additional infusions of cash from equity and debt financing.

on cash on hand as of March 31, 2023, the Company believes it has sufficient cash to fund operations for the twelve months subsequent

to the filing date of this Form 10-Q.

funds noted above will not be sufficient to enable the Company to fully complete its development activities or attain profitable operations.

2 unchanged sentences

and results of operations, and ultimately the Company could be forced to discontinue its operations and liquidate.

accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally

accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and the

realization of assets and satisfaction of liabilities in the normal course of business.

The carrying amounts of assets and liabilities

presented in the unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement

The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary

should the Company be unable to continue as a going concern.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted

in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and the realization

of assets and satisfaction of liabilities in the normal course of business.

The carrying amounts of assets and liabilities presented

in the condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values.

The accompanying

condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue

as a going concern.

develops therapeutic products and medical therapies using cell and tissue protocols, primarily involving adult stem cells.

BRT’s website is at www.biorestorative.com .

The information contained in our website is not intended to be incorporated

by reference into this Quarterly Report.

BRT is currently developing a Disc/Spine Program referred to as “brtxDISC”.

lead cell therapy candidate, BRTX-100 , is a product formulated from autologous (or a person’s own) cultured mesenchymal

stem cells collected from the patient’s bone marrow.

The product is intended to be used for the non-surgical treatment of

painful lumbosacral disc disorders or as a complimentary therapeutic to a surgical procedure.

BRT is investigating the expansion of

the clinic application of BRTX-100 to other indications within the body.

BRT is also engaging in research efforts with

respect to a platform technology utilizing brown adipose (fat) for therapeutic purposes to treat type 2 diabetes, obesity and other

metabolic disorders and has labeled this initiative its ThermoStem Program.

Further, BRT has licensed a patented curved needle

device that is a needle system designed to deliver cells and/or other therapeutic products or material to the spine and discs or

other potential sites.

2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING

of Presentation

accompanying unaudited condensed consolidated financial information as of and for the three and nine months ended September 30, 2022

and 2021 has been prepared in accordance with GAAP for interim financial information and with the instructions to Quarterly Report on

Form 10-Q and Article 10 of Regulation S-X.

In the opinion of management, such financial information includes all adjustments (consisting

only of normal recurring adjustments) considered necessary for a fair presentation of the Company’s financial position at such

dates and the operating results and cash flows for such periods.

Operating results for the three

and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the entire year or for

any other subsequent interim period.

information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant

to the rules of the U.S.

Securities and Exchange Commission (the “SEC”).

These unaudited condensed consolidated financial

statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements for the

year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2022.

Prior Period Reclassifications

prior period amounts have been reclassified for consistency with current period presentation.

These reclassifications had no effect on

the condensed consolidated statements of operations or cash flows.

accompanying condensed consolidated financial statements have been prepared in accordance with GAAP.

The summary of significant accounting

policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements.

condensed consolidated financial statements and accompanying notes are the representations of Company’s management, who is responsible

for their integrity and objectivity.

condensed consolidated financial statements of the Company included herein have been prepared, pursuant to the rules and regulations

of the Securities and Exchange Commission (the “SEC”).

Certain information and footnote disclosures normally included in

financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.

GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations.

Accordingly, these condensed

consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included

in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 27, 2023 (the

“Annual Report”).

The summary of significant accounting policies presented below is designed to assist in understanding the

Company’s consolidated financial statements.

Such consolidated financial statements and accompanying notes are the representations

of Company’s management, who is responsible for their integrity and objectivity.

Operating results for the three months ended March 31, 2023 are not necessarily

indicative of the results that may be expected for the entire year or for any other subsequent interim period.

of Consolidation

unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary.

All intercompany

accounts and transactions have been eliminated upon consolidation.

preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates

and assumptions that affect the reported amounts of assets, liabilities, equity-based transactions, revenue and expenses and disclosure

of contingent liabilities at the date of the unaudited condensed consolidated financial statements.

The Company bases its estimates and

assumptions on historical experience, known or expected trends and various other assumptions that it believes to be reasonable.

events and their effects cannot be determined with precision, actual results could differ from these estimates which may cause the Company’s

future results to be affected.

Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation

of the accompanying unaudited condensed consolidated financial statements.

Significant estimates include the carrying value of intangible

assets, deferred tax asset and valuation allowance, and assumptions used in the Black-Scholes option pricing model, such as expected

volatility, risk-free interest rate, and expected dividend rate.

Company derives all of its revenue pursuant to a license agreement between the Company and a stem cell treatment company (“SCTC”)

entered into in January 2012 and amended in November 2015.

Pursuant to the license agreement, the SCTC granted to the Company a license

to use certain intellectual property related to, among other things, stem cell disc procedures, and the Company has 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 the Company

royalties on a per disc procedure basis.

Company’s contracted transaction price is allocated to each distinct performance obligation and recognized as revenue when, or

as, the performance obligation is satisfied.

The Company’s contracts have a single performance obligation with a fixed determinable

contract value.

The Company’s performance obligation is satisfied upon the transfer of risk of loss to the customer.

have fixed pricing and there are currently no variable components included in the Company’s revenue.

The timing of the Company’s

revenue recognition may differ from the timing of receiving royalty payments.

A receivable is recorded when revenue is recognized prior

to receipt of a royalty payment and the Company has an unconditional right to the royalty payment.

Alternatively, when a royalty payment

precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied.

During the three months ended September 30, 2022 and 2021, the Company recognized $ 29,000 and $ 8,000 respectively, of revenue related

to the Company’s sublicenses.

During the nine months ended September 30, 2022 and 2021, the Company recognized $ 116,100 and $ 41,000 ,

respectively, of revenue related to the Company’s sublicenses.

Modifications

were no contract modifications during the three and nine months ended September 30, 2022.

Contract modifications are not routine in the

performance of the Company’s contracts.

Cash and Cash Equivalents

Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Cash and cash equivalents held at financial institutions may at times exceed insured amounts.

Company believes it mitigates such risk by investing in or through, as well as maintaining cash balances with, major financial institutions.

As of September 30, 2022, the Company had cash and cash equivalents totaling $ 16.5

condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary.

All intercompany accounts

and transactions have been eliminated upon consolidation.

preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions

that affect the reported amounts of assets, liabilities, equity-based transactions, revenue and expenses and disclosure of contingent

liabilities at the date of the condensed consolidated financial statements.

The Company bases its estimates and assumptions on historical

experience, known or expected trends and various other assumptions that it believes to be reasonable.

As future events and their effects

cannot be determined with precision, actual results could differ from these estimates which may cause the Company’s future results

to be affected.

Concentrations

instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution.

The Company maintains deposits in its cash account in excess of the Federal Depository Insurance Corporation coverage of $ 250,000 .

of March 31, 2023, the Company has not experienced losses on this account.

royalties related to the Company’s sublicense comprised all of the Company’s revenue during the three months ended March

31, 2023 and 2022.

of Significant Accounting Policies

Company’s significant accounting policies are described in Note 2, Summary of Significant Accounting Policies and Recent Accounting

Standards, in the Annual Report.

During the three months ended March 31, 2023, the Company did not make any changes to its significant

accounting policies, except as described below with respect to recent accounting pronouncements.

Value Measurements

26 unchanged sentences

methodologies that result in management’s best estimate of fair value.

following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of September

30, 2022, and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such

OF FAIR VALUE RECURRING BASIS

Fair value measurements at reporting date using:

for identical

Significant other

Cash equivalents as of September 30, 2022

Marketable securities as of September 30, 2022

Quoted prices in active markets for identical liabilities (Level 1)

Significant other observable inputs (Level 2)

Significant unobservable inputs (Level 3)

Marketable securities as of March 31, 2023

Marketable securities as of December 31, 2022

Value of Financial Instruments

carrying value of cash, accounts receivable, and accounts payable approximate

their fair values based on the short-term maturity of these instruments.

Loss per Common Share

loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

All vested outstanding options and warrants are considered potential common stock.

The dilutive effect, if any, of stock options, warrants,

and restricted stock units (“RSUs”) are calculated using the treasury stock method.

All outstanding convertible notes are

considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method.

the effect of common stock equivalents is anti-dilutive with respect to losses, options, warrants, RSUs and convertible notes have been

excluded from the Company’s computation of net loss per common share for the three and nine months ended September 30, 2022 and

following table summarizes the securities that were excluded from the diluted loss per share calculation:

loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year.

All outstanding options and warrants are considered potential common stock.

The dilutive effect, if any, of stock options and warrants

are calculated using the treasury stock method.

All outstanding convertible preferred stock is considered common stock at the beginning

of the period or at the time of issuance, if later, pursuant to the if-converted method.

Since the effect of common stock equivalents

is anti-dilutive with respect to losses, options, warrants, and convertible preferred stock have been excluded from the Company’s

computation of diluted net loss per common share for the three months ended March 31, 2023 and 2022.

following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these

potential shares was antidilutive due to the Company’s net loss position even though the exercise or conversion price could be

less than the average market price of the common shares:

SCHEDULE OF WEIGHTED AVERAGE DILUTIVE COMMON SHARES

Three Months Ended

September 30,

Unvested RSUs

Convertible notes – common stock (1)

Nine Months Ended

September 30,

Three months ended March 31,

Unvested RSUs

Convertible notes – common stock (1)

of September 30, 2021, all of the convertible notes had variable conversion prices and the shares issuable were estimated based on

the market conditions.

Pursuant to the note agreements, there were 12,876,004 shares of common stock reserved for future note conversions

as of September 30, 2021.

Company applies the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement

and recognition of compensation expense for all stock-based awards made to employees, including employee stock options, in the condensed

consolidated statements of operations.

stock options issued to employees and members of the board of directors for their services, the Company estimates the grant date fair

value of each option using the Black-Scholes option pricing model.

The use of the Black-Scholes option pricing model requires management

to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the

expected life of the option, risk-free interest rates and expected dividend yields of the common stock.

For awards subject to service-based

vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation expense equal to

the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting

Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised.

to Accounting Standards Update (“ASU”) 2018-07 Compensation – Stock Compensation (Topic 718):

Improvements to Nonemployee

Share-Based Payment Accounting, the Company accounts for stock options issued to non-employees for their services in accordance with

The Company uses valuation methods and assumptions to value the stock options that are consistent with the process for valuing

employee stock options noted above.

Company accounts for income taxes pursuant to the asset and liability method which requires the recognition of deferred income tax assets

and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax

bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are

expected to reverse.

Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment.

Company records valuation allowances against deferred tax assets when it is more likely than not that all or a portion of a deferred

tax asset will not be realized.

The Company routinely evaluates the realizability of deferred tax assets by assessing the likelihood

that deferred tax assets will be recovered based on all available positive and negative evidence, including scheduled reversals of deferred

tax liabilities, estimates of future taxable income, tax planning strategies and results of operations.

Estimating future taxable income

is inherently uncertain and requires judgment.

In projecting future taxable income, historical results are considered along with certain

assumptions related to future earnings.

As of September 30, 2022 and December 31, 2021, the Company had a full valuation allowance applied

against its deferred tax assets.

time to time the Company may recognize an income tax benefit, in its consolidated statements of operations, related to uncertain tax

positions taken.

For uncertain tax positions that are “more likely than not” to sustain an income tax audit, the Company

may record an allowance against certain deferred tax assets related to these positions.

The Company’s practice is to recognize

interest and penalties, if any, related to uncertain tax positions in income tax expense in the unaudited condensed consolidated statements

of operations.

and Development Expenses

and development expenses are expensed as incurred and recorded as a component of operating expenses in the Company’s condensed

consolidated statements of operations.

Convertible preferred stock

Adopted Accounting Pronouncements

June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which requires entities to estimate all expected

credit losses for financial assets measured at amortized cost basis, including trade receivables, held at the reporting date based on

historical experience, current conditions, and reasonable and supportable forecasts.

The Company adopted this guidance on January 1, 2023.

The adoption of this accounting standard did not have a material impact on the Company’s condensed consolidated financial statements.

3 - INTANGIBLE ASSETS

1 unchanged sentence

Pursuant to the SCTC Agreement,

the Company obtained, among other things, a worldwide (excluding Asia and Argentina), exclusive, royalty-bearing license from the SCTC

to utilize or sublicense a certain method for culturing cells and a worldwide, exclusive, royalty-bearing license from the SCTC to utilize

or sublicense a certain medical device patent for the administration of specific cells and/or cell products to the disc and/or spine

(and other parts of the body).

Pursuant to the license agreement with the SCTC, certain performance milestones (or payouts in lieu of

performance milestones) had to be satisfied in order for the Company to maintain its exclusive rights with regard to the disc/spine technology

(subject to the SCTC’s compliance with its obligations under the SCTC Agreement).

The Company did not timely satisfy the third

of these performance milestones (which needed to be satisfied by February 2022).

Accordingly, such rights may currently be non-exclusive.

The Company and the SCTC are currently negotiating the terms of an agreement confirming the exclusive nature of the license.

can be given in this regard.

In February 2017, the Company received authorization from the Food and Drug Administration (the “FDA”)

to proceed with a Phase 2 clinical trial.

The Company has commenced such clinical trial.

In March 2022, a United States patent relating

to the Company’s BRTX-100 clinical program was issued.

The patent along with the license agreement gave rise to definite lived

intangible assets.

The below table details the activity related to those intangible assets from January 1, 2021 through September 30,

OF FINITE LIVED INTANGIBLE ASSETS

the Company obtained, among other things, a worldwide, exclusive, royalty-bearing license from the SCTC to utilize or sublicense a certain

medical device patent for the administration of specific cells and/or cell products to the disc and/or spine (and other parts of the

body) and a worldwide (excluding Asia and Argentina), exclusive, royalty-bearing license to utilize or sublicense a certain method for

culturing cells.

Pursuant to the license agreement with the SCTC, certain performance milestones (or payouts in lieu of performance milestones)

had to be satisfied in order for the Company to maintain its exclusive rights with regard to the disc/spine technology.

The Company did

not timely satisfy the third of these performance milestones (which needed to be satisfied by February 2022).

Accordingly, such rights

became non-exclusive.

However, in November 2022, the Company entered into an amended agreement under which it paid $ 175,000 and issued

51,370 warrants, with a fair value of $ 117,030 , in exchange for renewed exclusivity.

The consideration transferred to the SCTC in exchange

for exclusivity was capitalized to intangible assets on the Company’s consolidated balance sheet as of December 31, 2022.

February 2017, the Company received authorization from the Food and Drug Administration (the “FDA”) to proceed with a Phase

2 clinical trial.

In March 2022, the United States Patent and Trademark Office issued a patent relating to the Company’s BRTX-100

clinical program.

assets consist of the following:

SCHEDULE OF INTANGIBLE ASSETS

Patents and Trademarks

Accumulated Amortization

Balance as of January 1, 2023

1 unchanged sentence

Amortization expense

Balance as of December 31, 2021

Amortization expense

Balance as of September 30, 2022

Balance as of March 31, 2023

$ ( 816,204 )

Weighted average remaining amortization period as of September 30, 2022 (in years)

Weighted average remaining amortization period as of March 31, 2023

amortization of intangible assets consists of the following:

SCHEDULE OF FINITE LIVED INTANGIBLE ASSETS AMORTIZATION EXPENSES

SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSES

Patents and Trademarks

Accumulated Amortization

Balance as of January 1, 2023

Amortization expense

Balance as of December 31, 2021

Amortization expense

Balance as of September 30, 2022

Balance as of March 31, 2023

4 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

1 unchanged sentence

SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

September 30,

March 31, 2023

December 31, 2022

Accrued payroll

Accrued research and development expenses

Accrued general and administrative expenses

Total accrued expenses

5 – NOTES PAYABLE

summary of the notes payable activity during the nine months ended September 30, 2022 is presented below:

SCHEDULE OF NOTES PAYABLE ACTIVITY

January 1, 2022

September 30, 2022

March 14, 2021, under the U.S.

Small Business Administration’s Paycheck Protection Program (“PPP”), the Company entered

into a note payable with a financial institution for $ 250,000 at an interest rate of 1 % per annum and a maturity date of March 14, 2026 .

Pursuant to the note, principal and interest payments were deferred for ten months.

At that time the Company was able to apply for loan

At December 31, 2021, $ 250,000 was outstanding.

On January 5, 2022, the total amount of the PPP loan was forgiven .

6 – STOCKHOLDERS’ EQUITY (DEFICIT)

5 - STOCKHOLDERS’ EQUITY

A Preferred Stock

November 8, 2021, in connection with the Company’s public offering, the Company’s Board of Directors adopted a resolution

allowing for the authorization and issuance of 1,543,458 shares of the Company’s Preferred Stock, $ .01 par value per share,

designated as Series A Preferred Stock (“Series A”).

The Series A has a liquidation preference of $ 0.001 per share.

allowing for the designation and issuance of 1,543,158 shares of the Company’s Preferred Stock, $ .01 par value per share, designated

as Series A Preferred Stock (“Series A”).

The Series A had a liquidation preference of $ 0.001 per share.

On September 8,

2022, the Company issued 1,543,158 shares of Series B Preferred Stock (“Series B”) to Auctus Fund, LLC (“Auctus”)

5 unchanged sentences

B Preferred Stock

September 8, 2022, the Company issued 1,543,158 shares of Series B to Auctus in exchange for an equal

number of shares of the Company’s outstanding Series A.

The terms of the Series B are substantially identical to those of the Series

A, except that, among other things, the limitation on beneficial ownership of common stock of the Company upon a conversion of the Series

B into Common Stock, and the limitation on the number of votes attributable to the Series B, is 9.99% of the then outstanding Common Stock of the Company instead of 4.99% as provided for the Series A .

The Company shall, at all times, reserve from its authorized and

unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of the Series

The Series B is not subject to redemption by the Company or any Series B holder.

The exchange of Series A for Series B had no impact

on the Company’s financial statements as of September 30, 2022.

On October 25, 2022, Auctus converted

25,000 shares of Series B into 25,000 shares of Common Stock at a conversion rate of $ 10.00 per share.

The number of shares of Series

B remaining outstanding after this conversion is 1,518,158 .

September 8, 2022, the Company issued 1,543,158 shares of Series B to Auctus in exchange for an equal number of shares of the Company’s

outstanding Series A.

The terms of the Series B are substantially identical to those of the Series A, except that, among other things,

the limitation on beneficial ownership of common stock of the Company upon a conversion of the Series B into Common Stock, and the limitation

on the number of votes attributable to the Series B, is 9.99% of the then outstanding Common Stock of the Company instead of 4.99% as

provided for the Series A.

The Company shall, at all times, reserve from its authorized and unissued Common Stock a sufficient number

of shares to provide for the issuance of Common Stock upon the full conversion of the Series B.

The Series B is not subject to redemption

by the Company or any Series B holder.

B holders shall be entitled to receive, when and as declared by the Board of Directors, dividends on a pari passu basis with the holders

of the shares of Common Stock based upon the number of shares of Common Stock into which the Series B is then convertible.

B holders shall be entitled to vote on all matters presented to the stockholders of the Company for a vote at a meeting of

stockholders of the Company or a written consent in lieu of a meeting of stockholders of the Company, and shall be entitled to such

number of votes for each share of Series B entitled to vote at such meetings or pursuant to such consent, voting together with the

holders of shares of Common Stock and other shares of preferred stock who are entitled to vote, and not as a separate class, except

as required by law.

The number of votes to which the Series B holders shall be entitled to vote for each share of Series B shall

equal the number of shares of Common Stock into which such Series B is then convertible;

provided, however, that in no event shall a

Series B holder be entitled to vote more than 9.99 %

of the then outstanding shares of Common Stock.

Conversion - Each share of Series B shall be convertible, at any time and from time to time, at the option of the Series B holder,

into one share of Common Stock based upon a conversion price of $ 10.00

provided, however, that in no event shall a Series B holder be entitled to convert

any shares of Series B to the extent that such conversion would result in beneficial ownership by such Series B holder of more than 9.99 %

of the outstanding shares of common stock.

B holders shall be entitled to vote on all matters presented to the stockholders of the Company for a vote at a meeting of stockholders

of the Company or a written consent in lieu of a meeting of stockholders of the Company, and shall be entitled to such number of votes

for each share of Series B entitled to vote at such meetings or pursuant to such consent, voting together with the holders of shares

of Common Stock and other shares of preferred stock who are entitled to vote, and not as a separate class, except as required by law.

The number of votes to which the Series B holders shall be entitled to vote for each share of Series B shall equal the number of shares

of Common Stock into which such Series B is then convertible;

provided, however, that in no event shall a Series B holder be entitled

to vote more than 9.99 % of the then outstanding shares of Common Stock.

Conversion - Each share of Series B shall be convertible, at any time and from time to time, at the option of the Series B holder, into

one share of Common Stock ;

provided, however, that in no event shall a Series B holder be entitled to convert any shares of Series B

to the extent that such conversion would result in beneficial ownership by such Series B holder of more than 9.99 % of the outstanding

shares of common stock.

Conversion – From time to time, in the event of that an event occurs, including adjustment due to merger, consolidation, etc.,

5 unchanged sentences

notice shall have the effect of a notice of conversion with respect to the conversion of such number of shares of Series B as would increase

the Series B holder’s beneficial ownership of Common Stock to 9.99 % of the then publicly disclosed outstanding shares of Common Stock.

Stock Incentive Plan

March 18, 2021, the Company’s Board of Directors adopted the BioRestorative Therapies, Inc.

2021 Stock Incentive Plan (the “2021

Pursuant to the 2021 Plan, a total of 1,175,000 shares of Common Stock were initially authorized to be issued pursuant to the grant

of stock options, restricted stock units, restricted stock, stock appreciation rights and other incentive awards.

As of September 30,

2022, based on stock options and restricted stock units currently outstanding under the 2021 Plan, no shares remained available for future

grants under the 2021 Plan.

to 2021 Stock Incentive Plan

December 10, 2021, subject to stockholder approval, the Company’s Board of Directors approved amendments to the 2021 Plan to

increase the number of shares of Common Stock authorized to be issued from 1,175,000 to 2,500,000 and

to clarify certain provisions of the 2021 Plan as to the authority of the Board of Directors and the Compensation Committee to make

adjustments to, among other things, the exercise price of granted options.

Concurrently, subject to stockholder approval of the amendments to the 2021 Plan, the Company’s Compensation

Committee reduced the exercise price of the outstanding options under the 2021 Plan for the purchase of an aggregate of 838,549 shares

of the Company’s common stock from $ 13.50 per

share to $ 5.08 per

share (the closing price of the Company’s common stock on the day immediately preceding the Compensation Committee

determination), including the options held by the Company’s officers and directors as follows:

Lance Alstodt, the Company’s President, Chief Executive Officer and Chairman of the Board:

335,538 shares, (ii) Francisco

Silva, the Company’s Vice President of Research and Development and a director:

335,538 shares;

(iii) Robert Kristal, the

Company’s Chief Financial Officer:

10,490 shares;

(iv) Robert Paccasassi, the Company’s Vice President of Quality

Assurance and Regulatory Compliance:

8,277 shares;

(v) Nickolay Kukekov, one of the Company’s directors:

25,236 shares;

Williams, one of the Company’s directors:

10,490 shares;

and (vii) David Rosa, one of the Company’s

10,490 shares .

On November 3,

2022, the Company’s stockholders approved the amendments to the 2021 Plan.

As of September 30, 2022, options for the purchase of 864,609 shares of Common Stock had been granted pursuant

to the 2021 Plan.

In addition, as of such date, 318,356 restricted stock units (“RSUs”) had been granted pursuant to the 2021

Plan and no shares were reserved for future grants under the 2021 Plan (without giving effect to the amendment to the 2021 Plan increasing

the number of shares authorized to be issued under the 2021 Plan to 2,500,000 ).

As a result of the November 3, 2022 stockholder approval,

the exercise price of the outstanding options under the 2021 Plan was reduced to $ 5.08 per share.

The changes had no impact on the Company’s

financial statements at September 30, 2022.

the Series B holder’s beneficial ownership of Common Stock to 9.99 % of the then publicly disclosed outstanding shares of Common

October 25, 2022, Auctus converted 25,000 shares of Series B into 25,000 shares of Common Stock.

As of March 31, 2023, number of shares

of Series B remaining outstanding after giving effect to this conversion was 1,518,158 .

and Option Valuation

12 unchanged sentences

being valued.

Activity Summary

warrants were granted or issued during the nine months ended September 30, 2022 and 2021.

summary of the warrant activity during the nine months ended September 30, 2022, is presented below:

SCHEDULE OF WARRANT ACTIVITY

Outstanding, January 1, 2022

Outstanding, September 30, 2022

Exercisable, September 30, 2022

Company grants stock options to certain employees which are recognized as compensation expense on a straight-line basis over the vesting

term of the grants.

Vesting terms are generally two years, and grants expire between five and ten years.

the three months ended September 30, 2022 and 2021, the Company recognized compensation expense related to stock option grants of $ 1.9

million and $ 1.7 million, respectively.

For the nine months ended September 30, 2022 and 2021, the Company recognized compensation expense

related to stock option grants of approximately $ 6.0 million and $ 17.4 million, respectively.

Company granted options for the purchase of 25,000 shares of common stock during the nine months ended September 30, 2022, with a grant

date fair value of $ 4.88 per share.

As of September 30, 2022, the unamortized compensation expense related to these grants was $ 0.09

Company granted options for the purchase of 586,959 shares of common stock during the nine months ended September 30, 2021, with a grant

date fair value of $ 47.25 per share, after taking into effect the reverse stock split.

At September 30, 2022, the unamortized compensation

expense related to these grants was $ 3.2 million.

summary of the stock option activity during the nine months ended September 30, 2022 is presented below:

applying the Black-Scholes option pricing model to stock options granted, the Company used the following assumptions:

SCHEDULE OF STOCK OPTIONS GRANTED ASSUMPTIONS

For the Three Months Ended

Risk free interest rate

Expected term (years)

Expected volatility

Expected dividends

Company granted options for the purchase of 629,017 shares of common stock during the three months ended March 31, 2023.

The grant date

fair value of options issued during the three months ended March 31, 2023 was $ 1,745,000 .

The Company granted options for the purchase

of 25,000 shares of common stock during the three months ended March 31, 2022.

The grant date fair value of options issued during the

three months ended March 31, 2022 was $ 122,117 .

summary of the stock option activity during the three months ended March 31, 2023 is presented below:

OF STOCK OPTION ACTIVITY

Weighted Average

Exercise Price

Outstanding, January 1, 2023

Outstanding, September 30, 2022

Exercisable, September 30, 2022

to the 2021 Plan, the Company grants RSUs to employees, consultants and non-employee directors (“Eligible Individuals”).

The number, terms and conditions of the RSUs that are granted to Eligible Individuals are determined on an individual basis by the plan

administrator.

On the distribution date, the Company shall issue to the Eligible Individual one share of the Company’s common stock

for each vested and nonforfeitable RSU.

March 18, 2022, the Company granted an aggregate of 24,876 RSUs to its Chief Executive Officer, President and Chairman of the Board and

its Vice President, Research and Development with a fair value of $ 4.21 per share.

The RSUs vest in twelve equal monthly installments.

summary of the Company’s unvested RSUs as of September 30, 2022 is as follows:

Outstanding, March 31, 2023

Exercisable, March 31, 2023

to the 2021 Plan, the Company may grant restricted stock units (“RSUs”) to employees, consultants or non-employee directors

(“Eligible Individuals”).

The number, terms and conditions of the RSUs that are granted to Eligible Individuals are determined

on an individual basis by the 2021 Plan administrator.

On the distribution date, the Company shall issue to the Eligible Individual one

unrestricted, fully transferable share of the Company’s common stock (or the fair market value of one such share in cash) for each

vested and nonforfeitable RSU.

summary of our unvested RSUs as of March 31, 2023 is as follows:

OF UNVESTED RESTRICTED STOCK UNITS

Outstanding, January 1, 2022

Outstanding, September 30, 2022

There were 2,074 restricted stock

units vested in October 2022.

the three months ended September 30, 2022 and 2021, the Company recognized compensation expense related to RSUs of $ 1.2 million and $ 1.2

million, respectively.

For the nine months ended September 30, 2022 and 2021, the Company recognized compensation expense related to

RSUs of $ 3.6 million and $ 2.5 million, respectively.

the three months ended September 30, 2022 and 2021, the Company recognized compensation expense of $ 3.1 million and $ 2.9 million, respectively.

For the nine months ended September 30, 2022 and 2021, the Company recognized compensation expense of $ 9.6 million and $ 19.9 million,

respectively.

Company’s unrecognized compensation expense was $ 10.8 million as of September 30, 2022.

7 - COMMITMENTS

Services Agreement

December 20, 2021, the Company entered into a Master Clinical Services Agreement (the “Clinical Services Agreement”) with

Professional Research Consulting, Inc.

(“PRC”) pursuant to which PRC will provide trial management services related to the

Company’s Phase 2 clinical trials.

The Clinical Services Agreement has a 46 -month term with an estimated budgeted cost of $ 5,844,380 .

Upon execution of the Clinical Services Agreement, the Company made an upfront payment of $ 328,152 which was recorded as a prepaid expense

on the condensed consolidated balance sheet at December 31, 2021, and is being expensed over the life of the Clinical Services Agreement

as the services are rendered.

During the three and nine months ended September 30, 2022, the Company incurred $ 0.6 million and $ 1.7 million,

respectively, of research and development expense related to this agreement and had a balance in prepaid expense of approximately $ 0.3

million as of September 30, 2022 associated with the Clinical Services Agreement.

Number of Shares

Outstanding, December 31, 2022

Outstanding, March 31, 2023

following table presents information related to stock compensation expense:

SCHEDULE OF STOCK OPTION EXPENSE

For the three months ended

Unrecognized at March 31,

Weighted Average Remaining Amortization Period

Research and development

General and administrative

following table presents stock compensation by award type:

OF STOCK COMPENSATION BY AWARD TYPE

For the three months ended March 31,

Shares issued for services

Company is a party to a lease for 6,800 square feet of space located in Melville, New York (the “Melville Lease”) with respect

to its corporate and laboratory operations.

The Melville Lease is scheduled to expire in December 2024 and provides for an annual base

rental during the term, which commenced as of January 1, 2020, ranging between $ 153,748 and $ 173,060 .

The remaining term of this lease

is approximately 2.25 years as of September 30, 2022 .

calculating the present value of lease liabilities for operating leases, the Company discounted the lease payments using its estimated

incremental borrowing rate at the inception of the term.

The weighted average incremental borrowing rate applied to the Melville Lease

The Melville Lease was scheduled to expire in March 2020 (subject to extension at the option

of the Company for a period of five years) and provided for an annual base rental during the initial term ranging between $ 132,600 and

In June 2019, the Company exercised its option to extend the Melville Lease and entered into a lease amendment with the lessor

whereby the five-year extension term commenced on January 1, 2020 with annual base rent ranging between $ 153,748 and $ 173,060 .

measuring lease liabilities for leases that were classified as operating leases, the Company discounted lease payments using its estimated

incremental borrowing rate at August 1, 2019.

The weighted average incremental borrowing rate applied was 12 % .

following table presents net lease cost and other supplemental lease information:

OF NET LEASE COST AND OTHER SUPPLEMENTAL LEASE INFORMATION

Ended September

Ended September 30,

Three months ended March 31,

Operating lease cost (cost resulting from lease payments)

5 unchanged sentences

Non-current liabilities - operating lease liabilities

minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases as of September 30, 2022:

minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases as of March 31, 2023:

OF FUTURE MINIMUM PAYMENTS UNDER NON-CANCELABLE LEASES FOR OPERATING LEASES

Operating Leases

Remainder of 2022

Total future minimum lease payments

2 unchanged sentences

7 – SUBSEQUENT EVENTS

On November 3, 2022, BioRestorative Therapies, Inc.

held its Annual Meeting of Stockholders.

At the Annual Meeting,

the Company’s stockholders:

(i) elected the nominees as the Class II directors, (ii) approved amendments to the Company’s

2021 Stock Incentive Plan, (iii) authorized the reincorporation of the Company from the State of Delaware to the State of Nevada, (iv)

approved, on a non-binding advisory basis, the compensation of the Company’s executive officers, (v) recommended, on a non-binding

advisory basis, that future advisory votes be held every three years with regard to the approval of the Company’s executive compensation,

and (vi) ratified the selection of Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year

ending December 31, 2022.

April 4, 2023, Auctus converted 120,000 shares of Series B into 120,000 shares of Common Stock.

The number of shares of Series B remaining

outstanding after this conversion is 1,398,158 .

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 1. Financial Statements