What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-08-11 compared with 2023-05-12 · 147 added, 95 removed, 126 unchanged (66% of the section changed)

61 unchanged sentences

research applications.

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.

of June 30, 2023, our accumulated deficit was $161,305,671.

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

have principally been operating expenses incurred in research and development, marketing and promotional activities in order to commercialize

our products and services, plus costs associated with meeting the requirements of being a public company.

We expect to continue to incur

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

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

We are currently pursuing our Disc/Spine Program with our initial investigational therapeutic product being called BRTX-100 .

In March 2022, a United States patent issued in our Disc/Spine Program .

We submitted an IND application to the FDA to obtain authorization

to commence a Phase 2 clinical trial investigating the use of BRTX-100 , our lead cell therapy candidate, in the treatment of chronic

lower back pain arising from degenerative disc disease.

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 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;

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.

In March 2022, a United States patent was issued in our Disc/Spine Program .

We submitted an IND application to the FDA to obtain

authorization to commence a Phase 2 clinical trial investigating the use of BRTX-100 , our lead cell therapy candidate, in the

treatment of chronic lower back pain arising from degenerative disc disease.

We have received such authorization from the FDA and have

commenced such clinical trial through the execution of a CRO agreement with Professional Research Consulting, Inc., d/b/a PRC Clinical (“PRC”),

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 received a license from the New

York State Department of Health to act as a tissue bank for mesenchymal stem cell processing.

In June 2023, we received a unanimous recommendation

from the Data Safety Monitoring Board (“DSMB”) to continue our Phase 2 clinical trial without any changes.

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.

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

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

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

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

2 unchanged sentences

prior to commercialization.

We do not intend to utilize this device in connection with our contemplated Phase 2 clinical trial with regard

to BRTX-100 .

We do not intend to utilize this device in connection with our Phase 2 clinical trial with regard 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 and

5 unchanged sentences

of Operations

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,

March 31, 2023

March 31, 2022

of the Three Months Ended June 30, 2023 to the Three Months Ended June 30, 2022

financial results for the three months ended June 30, 2023 are summarized as follows in comparison to the three months ended June 30,

the Three Months Ended,

Research and development

and administrative

operating expenses

from operations

(income) expense:

Interest (income) expense

Total other (income) expense

$ (2,980,552 )

$ (4,675,241 )

the three months ended June 30, 2023 and 2022, we generated $64,500 and $71,000, respectively, of royalty revenue in connection with

our sublicense agreement.

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.

Research and development

General and administrative

Total operating expenses

Loss from operations

Other (income) expense:

expenses are expensed as they are incurred.

For the three months ended June 30, 2023, research and development expenses decreased by

$107,333, or 10.0%, compared to the three months ended June 30, 2022.

The decrease was primarily the result of a difference in the timing

of payments made for PRC service expenses.

A milestone payment in the amount of $150,000 was paid on June 30, 2022 compared to the three

months ended June 30, 2023 in which no milestone payment was due.

expect that our research and development expenses will increase in subsequent fiscal periods.

and Administrative

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

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

For the three months ended

June 30, 2023, general and administrative expenses decreased by $1,411,344, or 38.9%, as compared to the three months ended June 30,

2022, primarily driven by a $1,618,481 decrease in stock-based compensation.

(income) expense

the three months ended June 30, 2023, interest income was $96,187 compared to interest expense of $46,613 for the three months ended

June 30, 2022.

The change was primarily due to our investments in marketable securities during the three months ended June 30, 2023,

which generated interest income.

During the three months ended June 30, 2022, we did not have any such investments and only incurred

interest expense.

the three months ended June 30, 2023, Other income, net primarily relates to gains from settlements of certain accrued expenses and realized

and unrealized gain on investments.

of the Six Months Ended June 30, 2023 to the Six Months Ended June 30, 2022

financial results for the six months ended June 30, 2023 are summarized as follows in comparison to the six months ended June 30, 2022:

the Six Months Ended,

Research and development

and administrative

operating expenses

from operations

(income) expense:

Interest (income) expense

Gain on PPP loan forgiveness

Other income, net

Total other income

1 unchanged sentence

$ (9,491,391 )

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.

the six months ended June 30, 2023 and 2022, we generated $95,800 and $87,100, respectively, of royalty revenue in connection with our

sublicense agreement.

and Development

5 unchanged sentences

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.

For the six months ended June 30, 2023, research and development expenses increased by $628,575,

or 34.0%, compared to the six months ended June 30, 2022.

The increase was primarily driven by increased salaries and wages of $836,000,

increased lab site fees of $84,000, and increased consulting fees of 95,000, offset by a decrease in PRC service expenses of $532,000.

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

2 unchanged sentences

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.

For the six months ended

June 30, 2023, general and administrative expenses decreased by $1,406,647, compared to the six months ended June 30, 2022.

was primarily driven by a $1,655,195 decrease in stock-based compensation, offset by an increase in salaries and wages of $167,000.

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

1 unchanged sentence

(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.

the six months ended June 30, 2023, interest income was $114,403 compared to interest expense of $75,624 for the six months ended June

The change was primarily due to our investments in marketable securities during the six months ended June 30, 2023, which generated

interest income.

During the six months ended June 30, 2022, we did not have any such investments and only incurred interest expense.

the six months ended June 30, 2023, Other income, net primarily relates to gains from settlements of certain accrued expenses and realized

and unrealized gain on investments.

on PPP loan forgiveness

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.

the terms of the U.S.

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

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.

There was no grant income during the

six months ended June 30, 2023.

and Capital Resources

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

Cash, Cash Equivalents, and Investments

Equivalents, and Investments

Working Capital

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

capital decreased by $3,457,117 primarily due to the $3,479,065 of cash used to fund our operations.

of Additional Funds

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, 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.

upon our accumulated deficit of $161,305,671 as of June 30, 2023, along with our forecast for continued operating losses and our need

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

to continue our operations.

However, based on cash on hand as of June 30, 2023 and the recent offerings discussed below, we believe we

have 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

10 unchanged sentences

agreements on unattractive terms.

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

Three Months Ended March 31,

“At-the-Market”

April 2023, we entered into a Capital on Demand Sales Agreement with JonesTrading Institutional Services LLC (the “Sales Agent”)

under which we have the ability to issue and sell shares of our Common Stock, from time to time, through the Sales Agent, up to an aggregate

offering price of $4,200,000 in what is commonly referred to as an “at-the-market” (“ATM”) program.

three months ended June 30, 2023, we sold 93,551 shares of our Common Stock under the ATM program with the Sales Agent at a weighted-average

gross price of approximately $5.74 per share and raised approximately $536,600 of gross proceeds.

The total commissions and related legal

fees were approximately $125,000, and we received net proceeds of approximately $412,000.

As of June 30, 2023, we had remaining capacity

to sell up to an additional $3,663,407 of Common Stock under the ATM program.

Direct Offering

July 2023, we sold an aggregate of 685,033 shares of our Common Stock in a registered direct offering.

We received net proceeds of approximately

$1,831,000 from the offering.

the six months ended June 30, 2023 and 2022, our sources and uses of cash were as follows:

Months Ended June 30,

Net cash used in operating activities

2 unchanged sentences

Net cash provided by (used in) investing activities

Net cash used in financing activities

Net increase (decrease) in cash

Net cash provided by

financing activities

Net increase (decrease)

$ (3,093,003 )

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.

cash used in operating activities was $3,479,065 for the six months ended June 30, 2023, primarily due to cash used to fund the net loss

of $8,664,774, which was partially offset by non-cash expenses of $4,824,865 related primarily to stock-based compensation.

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

Net cash used in operating activities was $2,845,756

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

for the six months ended June 30, 2022, primarily due to cash used to fund the net loss of $9,491,391 and a non-cash gain of $250,000

on forgiveness of our PPP loan, which were partially offset by non-cash expenses of $6,480,055 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.

and $300,032 of cash provided by changes in the levels of operating assets and liabilities.

cash provided by investing activities increased by $3,421,680 for the six months ended June 30, 2023 compared to the six months ended

June 30, 2022, primarily due to a sale of marketable securities, which provided $3,263,504 of cash.

cash provided by financing activities increased by $411,701 for the six months ended June 30, 2023 compared to the six months ended June

30, 2022, due to the net proceeds from the ATM offerings of the Company’s Common Stock.

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

1 unchanged sentence

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

herein for the quarter ended June 30, 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.

2 unchanged sentences

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