What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-11-13 compared with 2023-08-11 · 166 added, 131 removed, 142 unchanged (68% of the section changed)

20 unchanged sentences

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

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

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

as well as our metabolic ThermoStem Program;

ability to protect our proprietary rights;

ability to achieve and sustain profitability of the existing lines of business;

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

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

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

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

of COVID-19);

ability to attract and retain customers;

ability to navigate through the increasingly complex therapeutic regulatory environment.

our ability to obtain financing

needed to complete our clinical trials and implement our business plan;

our ability to successfully

develop and commercialize BRTX-100, our lead product candidate for the treatment of chronic lumbar disc disease, as well as our metabolic

ThermoStem Program;

our ability to protect

our proprietary rights;

our ability to achieve

and sustain profitability of the existing lines of business;

our ability to attract

and retain world-class research and development talent;

our ability to attract

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

the accuracy of estimates

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

business interruptions

resulting from geo-political actions, including war and terrorism or disease outbreaks (such as the recent outbreak of COVID-19);

our ability to attract

and retain customers;

our ability to navigate

through the increasingly complex therapeutic regulatory environment.

we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels

27 unchanged sentences

research applications.

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.

of September 30, 2023, our accumulated deficit was $164,231,163.

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

our losses have principally been operating expenses incurred in research and development, marketing and promotional activities in order

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

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

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

5 unchanged sentences

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.

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 worldwide (excluding Asia and Argentina) exclusive 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

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

materials to the spine and discs or other potential sites.

We anticipate that FDA approval or clearance will be necessary for this device

prior to commercialization.

We do not intend to utilize this device in connection with our Phase 2 clinical trial with regard to BRTX-100 .

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, July 2021, and June 2023;

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,

February 2022 and June 2023;

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

and European patents related to the ThermoStem Program were issued in April 2020, January 2021, and July

have obtained a license for a patented curved needle device that is a needle system designed to deliver cells and/or other

therapeutic products or materials to the spine and discs or other potential sites.

We anticipate that FDA approval or clearance will

be necessary for this device prior to commercialization.

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

trial with regard to BRTX-100 .

September 2023, we announced that we had entered into a supply agreement with a supplier of biologic-based cosmetics pursuant to which

we will manufacture tissue-based biologics for use in the production of cosmetic and aesthetic applications.

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 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

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

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

For the Three Months Ended,

September 30, 2023

September 30, 2022

Operating expenses:

from operations

(income) expense:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other (income) expense:

Interest (income) expense

Grant income, net

Other income, net

Total other (income) expense

1 unchanged sentence

$ (4,655,825 )

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.

the three months ended September 30, 2023 and 2022, we generated $30,700 and $29,000, 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 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.

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

by $114,346, or 11.6%, compared to the three months ended September 30, 2022.

The decrease was primarily the result of a decrease in

contract research fees of $228,683 and a decrease in other fees of $117,138 that were the result of start-up and execution expenses incurred

during the three months ended September 30, 2022 that did not occur in the same period of 2023, offset by an increase in salaries

and wages of $214,021 due to salary increases.

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

3 unchanged sentences

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,

September 30, 2023, general and administrative expenses decreased by $1,389,211, or 38.1%, as compared to the three months ended September

30, 2022, primarily driven by a $1,580,822 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,

the three months ended September 30, 2023, interest income was $61,667 compared to interest expense of $28,841 for the three months ended

September 30, 2022.

The change was primarily due to our investments in marketable securities during the three months ended September

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

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

only incurred interest expense.

income of $83,333 during the three months ended September 30, 2023 consists of funding received under a National Institutes of

Health Small Business Technology Transfer (STTR) Phase 1 grant, offset by related expenses.

There was no grant income received

during the three months ended September 30, 2022.

the three months ended September 30, 2023, Other income, net primarily relates to an Employee Retention Tax Credit (“ERTC”),

gains from settlements of certain accrued expenses and realized and unrealized gain on investments.

of the Nine Months Ended September 30, 2023 to the Nine Months Ended September 30, 2022

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

For the Nine Months Ended,

September 30, 2023

September 30, 2022

Operating expenses:

from operations

(income) expense:

Research and development

General and administrative

Total operating expenses

Loss from operations

(12,000,092 )

(14,292,121 )

Other (income) expense:

Interest (income) expense

Gain on PPP loan forgiveness

Other (income) expense, net

Total other income

1 unchanged sentence

$ (14,147,216 )

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.

the nine months ended September 30, 2023 and 2022, we generated $126,500 and $116,100, respectively, of royalty revenue in connection

with our sublicense agreement.

and Development

5 unchanged sentences

expenses are expensed as they are incurred.

For the 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.

For the nine months ended September 30, 2023, research and development expenses increased

by $514,229 or 18.1%, compared to the nine months ended September 30, 2022.

The increase was primarily driven by increased salaries and

wages of $1,050,221 due to salary increases and bonuses, increased lab site fees of $104,000, and increased consulting fees of $93,000,

offset by a decrease in PRC service expenses of $733,000 as the result of non-recurring start-up and execution expenses

incurred during the nine months ended September 30, 2022.

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 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.

For the nine months ended

September 30, 2023, general and administrative expenses decreased by $2,795,858, or 24.2%, compared to the nine months ended

September 30, 2022.

The decrease was primarily driven by a $3,236,017 decrease in stock-based compensation, offset by an increase in

salaries and wages of $235,000 due to salary increases and bonuses paid during the nine months ended September 30, 2023.

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 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.

the nine months ended September 30, 2023, interest income was $176,070 compared to interest expense of $104,465 for the nine months ended

September 30, 2022.

The change was primarily due to our investments in marketable securities during the nine months ended September 30,

2023, which generated interest income.

During the nine months ended September 30, 2022, we did not have any such investments and only

incurred interest expense.

the nine months ended September 30, 2023, Other income, net primarily relates to the ERTC refundable tax credit, gains from settlements

of certain accrued expenses and realized and unrealized gain on investments.

on PPP loan forgiveness

1 unchanged sentence

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.

forgiven during the nine months ended September 30, 2022.

income of $83,333 during the nine months ended September 30, 2023 consists of funding received under a National Institutes of Health Small Business Technology Transfer (STTR) Phase 1 grant, offset by related expenses.

Grant 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.

and Capital Resources

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

Equivalents, and Investments

September 30,

Cash, Cash Equivalents, and Investments

Working Capital

1 unchanged sentence

of Additional Funds

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

upon our accumulated deficit of $164,231,163 as of September 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.

However, based on cash on hand and investments as of September 30, 2023, 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

11 unchanged sentences

“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.

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

Agent”) under which we currently 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 approximately $5,486,000 in what is commonly referred to as an

“at-the-market” (“ATM”) program.

During the nine months ended September 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 September 30, 2023, we had remaining capacity to sell up

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

October 2023, we sold an additional 39,276 shares of our Common Stock at an average price of $2.17 per share and raised approximately

$86,000 in gross proceeds under the ATM program.

Direct Offering

2 unchanged sentences

$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,

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

Nine Months Ended September 30,

Net cash used in operating activities

2 unchanged sentences

Net cash provided by (used in) investing activities

Net cash provided by

financing activities

Net increase (decrease)

(10,156,204 )

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 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 $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.

Net cash provided by financing activities

Net increase (decrease) in cash

$ (14,453,616 )

cash used in operating activities was $4,656,785 for the nine months ended September 30, 2023, primarily due to cash used to fund the

net loss of $11,590,266, which was partially offset by non-cash expenses of $6,547,216 related primarily to stock-based compensation.

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

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 and a non-cash gain of $250,000 on forgiveness of our PPP loan ,

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.

cash provided by investing activities increased by $13,307,581 for the nine months ended September 30, 2023 compared to the nine months

ended September 30, 2022, primarily due to the initial purchase of investments held in marketable securities of $9,933,562

made in the prior year, compared to sales of marketable securities of $3,690,238 in the current year.

cash provided by financing activities increased by $2,265,700 for the nine months ended September 30, 2023 compared to the nine months

ended September 30, 2022, due to the net proceeds from the ATM and registered direct 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 June 30, 2023, and in the notes to our audited consolidated financial statements included in our Annual

herein for the quarter ended September 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