What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-12 compared with 2022-11-14 · 126 added, 171 removed, 95 unchanged (76% of the section changed)

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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

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 “Management’s Discussion and Analysis of Financial Condition and Results of Operations

– Factors That May Affect Future Results and Financial Condition” in our Annual Report on Form 10-K for the fiscal year ended

December 31, 2021, as filed with the U.S.

Securities and Exchange Commission (the “SEC”) on March 30, 2022, any of which

may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially

Forward-looking statements are projections in respect of future events or our future financial

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, 2022, as filed with the U.S.

Securities and Exchange Commission (the “SEC”) on March 27, 2023, 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.

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as well as our metabolic ThermoStem Program;

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

ability to protect our proprietary rights;

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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, 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.

and “our” refer to BioRestorative Therapies, Inc., a Nevada 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.

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

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This report may also include references to trademarks, trade names and service marks that are the property of

other organizations.

Solely for convenience, trademarks and trade names referred to in this report appear without the ®, SM

or ™ symbols, and copyrighted content appears without the use of the symbol ©, but the absence of use of these symbols

does not reflect upon the validity or enforceability of the intellectual property owned by us or third parties.

This report may also include

references to trademarks, trade names and service marks that are the property of other organizations.

Solely for convenience, trademarks

and trade names referred to in this report appear without the ®, SM or ™ symbols, and copyrighted content appears

without the use of the symbol ©, but the absence of use of these symbols does not reflect upon the validity or enforceability of

the intellectual property owned by us or third parties.

offices are located in Melville, New York where we have established a laboratory facility in order to increase our capabilities for the

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research applications.

of September 30, 2022, our accumulated deficit was $148.3 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.

of March 31, 2023, our accumulated deficit was $158,325,119.

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.

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 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.

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

the commencement of patient procedures, 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 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 investigating the expansion

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

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, 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.

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;

a notice of allowance was issued in February

2023 by the United States Patent Office for a patent application related to our ThermoStem Program;

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;

a notice of allowance was issued in May 2023 by the Japanese Patent

Office for a patent application related to our ThermoStem Program ;

Israeli patents related to our ThermoStem Program were

issued in October 2019;

May 2020 and March 2022;

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

and January 2021;

and a notice of allowance was issued in February 2023 by the European Patent Office for a patent application related

to our ThermoStem Program.

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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to BRTX-100 .

derived all of our revenue pursuant to a license agreement with the SCTC entered into in January 2012, as amended in November 2015.

to the license agreement, the SCTC granted to us a 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.

derived all of our revenue pursuant to a license agreement with 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

In consideration of the sublicenses, the SCTC has agreed to pay us royalties on a per disc procedure basis.

of Operations

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

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

For The Three Months Ended

September 30,

Operating Expenses:

Research and development

General and administrative

Total Operating Expenses

Loss From Operations

Other Expense:

Interest expense

Total Other Expense

$ (4,655,825 )

$ (4,184,232 )

the three months ended September 30, 2022 and 2021, we generated $29,000 and $8,000, 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 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 September 30, 2022, research and development expenses increased by $751,760, or 317%, from $237,410 to $989,170, as compared to

the three months ended September 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.

of the Three Months Ended March 31, 2023 to the Three Months Ended March 31, 2022

financial results for the three months ended March 31, 2023 are summarized as follows in comparison to the three months ended March 31,

For the Three Months Ended,

September 30, 2022, general and administrative expenses increased by approximately $0.2 million, or 5%, from approximately $3.5 million

to approximately $3.7 million, as compared to the three months ended September 30, 2021.

The increase is primarily due to an increase

in stock-based compensation related to various consultants and executives during the three months ended September 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 September 30, 2022, interest expense decreased $466,704, or 94%, as compared to the three months ended September

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 Nine Months Ended September 30, 2022 to the Nine Months Ended September 30, 2021

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

For The Nine Months Ended

September 30,

March 31, 2023

March 31, 2022

Operating expenses:

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Loss from operations

(14,292,121 )

(22,298,606 )

Other (income) expense:

Interest expense

Interest (income) expense

Gain on PPP loan forgiveness

Other expense

Total Other (Income) Expense

Other income, net

Total other income

$ (5,684,222 )

$ (4,816,150 )

the nine months ended September 30, 2022 and 2021, we generated $116,100 and $41,000, 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

the three months ended March 31, 2023 and 2022, we generated $31,300 and $16,000, respectively, of royalty revenue in connection with

our sublicense agreement.

and Development

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and (c) laboratory staff and costs related to our brown fat and disc/spine initiatives.

For the nine months ended

September 30, 2022, research and development expenses increased by $2,276,169, or 404%, from $563,562 to $2,839,731, as compared to the

nine months ended September 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.

Research and development

expenses are expensed as they are incurred.

For the three months ended March 31, 2023, research and development expenses increased by

$735,908, or 94.9%, compared to the three months ended March 31, 2022.

The increase was primarily driven by increased salaries and wages

of $621,673 and increased lab site fees of $70,866.

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 nine months ended

September 30, 2022, general and administrative expenses decreased by approximately $10.2 million, or 47%, from approximately $21.8 million

to approximately $11.6 million, as compared to the nine months ended September 30, 2021.

The decrease is primarily due to a decrease

of approximately $10.5 million in stock-based compensation during the nine months ended September 30, 2022 as compared to September 30,

2021, which related to grants issued to our executives.

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, 2023, general and administrative expenses remained relatively flat, compared to the three months ended March 31, 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 nine months ended September 30, 2022, interest expense decreased $1,497,086, or 93%, as compared to the nine months ended September

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

with our public offering in November 2021.

(income) expense

the three months ended March 31, 2023, interest income was $18,216 compared to interest expense of $29,011 for the three months ended

March 31, 2022.

The change was primarily due to the Company having investments in marketable securities during the three months ended

March 31, 2023, which generated interest income.

During the three months ended March 31, 2022, the Company did not have any such investments

and only incurred interest expense.

on PPP loan forgiveness

the terms of the U.S.

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

forgiven during the nine months ended September 30, 2022.

income of $16,654 during the nine months ended September 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.

the three months ended March 31, 2022, our outstanding PPP loan balance was forgiven in full, which was recorded as a gain in the condensed

consolidated statement of operations.

There were no gains recorded for PPP loan forgiveness for the three months ended March 31, 2023.

Company did not earn any grant income during the three months ended March 31, 2023.

During the three months ended March 31, 2022, the

Company earned $16,654 of grant income, primarily consisting 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.

the three months ended March 31, 2023, Other income, net primarily relates to gains from settlements of certain accrued expenses and

unrealized gain on investments.

and Capital Resources

measure our liquidity in a number of ways, including the following:

September 30,

Cash and cash equivalents

Investments held in marketable securities

Cash, Cash Equivalents, and Investments

Working Capital

Notes Payable (Gross)

capital decreased by $2.4 million primarily due to the $2.3 million of cash used to fund our operations.

of Additional Funds

upon our accumulated deficit of $148,293,344 as of September 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

upon our accumulated deficit of $158,325,119 as of March 31, 2023, 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.

However, based 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.

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 nine months ended September 30, 2022 and 2021, our sources and uses of cash were as follows:

Nine Months Ended September 30,

the three months ended March 31, 2023 and 2022, our sources and uses of cash were as follows:

Three Months Ended March 31,

Net cash used in operating activities

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$ (1,594,634 )

Net cash used in investing activities

(10,156,204 )

Net cash provided by financing activities

Net decrease in cash

$ (14,453,616 )

Net cash provided by (used in) investing activities

Net cash used in financing activities

Net increase (decrease) in cash

$ (1,704,207 )

cash used in operating activities was $4,297,412 for the nine months ended September 30, 2022, primarily due to cash used to fund the

net loss of $14,147,216, which was partially offset by non-cash expenses of $9,554,582 related primarily to stock-based compensation

and $349,543 of cash provided by changes in operating assets and liabilities.

Net cash used in operating activities was $2,184,894 for

the nine months ended September 30, 2021, primarily due to cash used to fund the net loss of $23,900,157 which was partially offset by

non-cash expenses of $19,929,696 related primarily to stock-based compensation and $541,424 of cash provided by changes in operating

assets and liabilities.

cash used in investing activities consisted of $10,156,204 of equipment and marketable securities purchases during the nine months

ended September 30, 2022.

There were no cash flows from investing activities during the nine months ended September 30,

were no cash flows from financing activities during the nine months ended September 30, 2022.

cash provided by financing activities during the nine months ended September 30, 2021 was $250,000, which related entirely to a loan

received under the U.S.

Small Business Administration’s Paycheck Protection Program.

cash used in operating activities was $2,348,740 for the three months ended March 31, 2023, primarily due to cash used to fund the net

loss of $5,684,222, which was partially offset by non-cash expenses of $3,374,146 related primarily to stock-based compensation.

flows were also impacted by routine fluctuations in our operating assets and liabilities.

Net 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.

cash provided by investing activities increased by $2,618,205 for the three months ended March 31, 2023 compared to the three months

ended March 31, 2022, primarily due to a sale of marketable securities, which provided $2,568,654 of cash.

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

Accounting Policies and Estimates

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

herein for the quarter ended September 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”).

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

disclosed in the Annual Report.

Sheet Arrangements

have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,

changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that

is material to stockholders.

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, 2023, 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, 2022, as filed with the SEC on March 27, 2023.

Quantitative and Qualitative Disclosures about Market Risk

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.

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