BioRestorative Therapies, Inc. 10-Q

Item 1. Financial Statements BIORESTORATIVE THERAPIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2025 2024 (unaudited) Assets Current Assets: Cash and cash equivalents $ 602,444 $ 547,890 Investments held in marketable securities 3,887,383 10,184,701 Accounts receivable 13,400 188,400 Prepaid expenses and other current assets 204,237 223,230 Total Current Assets 4,707,464 11,144,221 Deferred offering costs 69,066 148,697 Property and equipment, net 309,498 362,936 Intangible assets, net 556,634 623,945 Total Assets $ 5,642,662 $ 12,279,799 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable $ 859,898 $ 483,070 Accrued expenses and other current liabilities 607,470 744,485 Warrant liabilities 1,968,315 2,520,851 Total Current Liabilities 3,435,683 3,748,406 Commitments and contingencies - - Stockholders’ Equity: Preferred stock, $ 0.01 par value; 20,000,000 shares authorized; Series B Convertible Preferred Stock; 1,543,158 shares designated, 1,398,158 shares issued and outstanding at September 30, 2025 and December 31, 2024 13,982 13,982 Common stock, $ 0.0001 par value; 75,000,000 shares authorized; 7,978,117 and 6,919,919 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 797 692 Additional paid-in capital 168,905,254 164,195,434 Accumulated deficit ( 166,713,054 ) ( 155,678,715 ) Total Stockholders’ Equity 2,206,979 8,531,393 Total Liabilities and Stockholders’ Equity $ 5,642,662 $ 12,279,799 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 BIORESTORATIVE THERAPIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) 2025 2024 2025 2024 For the Three Months Ended For the Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Revenues $ 11,800 $ 233,600 $ 340,100 $ 357,700 Cost of goods sold 10,570 18,243 22,208 24,733 Gross profit 1,230 215,357 317,892 332,967 Operating Expenses: Research and development 2,594,750 1,453,363 7,467,532 5,004,794 General and administrative 1,115,491 1,048,987 4,672,192 4,193,225 Total Operating Expenses 3,710,241 2,502,350 12,139,724 9,198,019 Loss From Operations ( 3,709,011 ) ( 2,286,993 ) ( 11,821,832 ) ( 8,865,052 ) Other (Expense) Income: Interest income 57,740 158,547 231,621 497,089 Other income 930 566 3,336 150,498 Gain on exchange of warrants - - - 1,711,698 Change in fair value of warrant liabilities 612,064 1,036,464 552,536 ( 837,466 ) Total Other Income 670,734 1,195,577 787,493 1,521,819 Net Loss $ ( 3,038,277 ) $ ( 1,091,416 ) $ ( 11,034,339 ) $ ( 7,343,233 ) Net Loss Per Share - Basic and Diluted $ ( 0.33 ) $ ( 0.13 ) $ ( 1.26 ) $ ( 0.96 ) Weighted Average Common Shares Outstanding - Basic and Diluted 9,116,172 8,121,499 8,742,085 7,643,437 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 BIORESTORATIVE THERAPIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited) Shares Amount Shares Amount Capital Deficit Total For the Nine Months Ended September 30, 2025 Series B Convertible Additional Preferred Stock Common Stock Paid-In Accumulated Shares Amount Shares Amount Capital Deficit Total Balance - January 1, 2025 1,398,158 $ 13,982 6,919,919 $ 692 $ 164,195,434 $ ( 155,678,715 ) $ 8,531,393 Exercise of stock options - - 29,249 3 42,408 - 42,411 Issuance and sale of common stock, net of issuance costs [1] - - 492,087 49 901,561 - 901,610 Common stock issued in connection with abeyance shares - - 63,525 6 ( 6 ) - - Stock-based compensation: Restricted share units Restricted share units, shares Options - - - - 2,009,126 - 2,009,126 Net loss - - - - - ( 5,339,799 ) ( 5,339,799 ) Balance - March 31, 2025 1,398,158 $ 13,982 7,504,780 $ 750 $ 167,148,523 $ ( 161,018,514 ) $ 6,144,741 Issuance and sale of common stock, net of issuance costs [2] - - 473,337 47 888,091 - 888,138 Stock-based compensation: Options - - - - 468,708 - 468,708 Net loss - - - - - ( 2,656,263 ) ( 2,656,263 ) Balance - June 30, 2025 1,398,158 $ 13,982 7,978,117 $ 797 $ 168,505,322 $ ( 163,674,777 ) $ 4,845,324 Stock-based compensation: Options - - - - 399,932 - 399,932 Net loss - - - - - ( 3,038,277 ) ( 3,038,277 ) Balance - September 30, 2025 1,398,158 $ 13,982 7,978,117 $ 797 $ 168,905,254 $ ( 166,713,054 ) $ 2,206,979 For the Nine Months Ended September 30, 2024 Series B Convertible Additional Preferred Stock Common Stock Paid-In Accumulated Shares Amount Shares Amount Capital Deficit Total Balance - January 1, 2024 1,398,158 $ 13,982 4,706,917 $ 471 $ 156,689,256 $ ( 146,699,334 ) $ 10,004,375 Common stock issued in connection with warrant exchange [3] - - 2,000,000 200 4,742,043 4,742,243 Return and cancellation of shares in lieu of payroll tax withholding - - ( 34,825 ) ( 4 ) ( 48,406 ) - ( 48,410 ) Stock-based compensation: Restricted share units - - 97,827 10 985,028 - 985,038 Options - - - - 1,043,336 - 1,043,336 Net loss - - - - - ( 2,223,255 ) ( 2,223,255 ) Balance - March 31, 2024 1,398,158 $ 13,982 6,769,919 $ 677 $ 163,411,257 $ ( 148,922,589 ) $ 14,503,327 Common stock issued in connection with abeyance shares - - 150,000 15 ( 15 ) - Stock-based compensation: Options - - - - 324,322 - 324,322 Net loss - - - - - ( 4,028,562 ) ( 4,028,562 ) Balance - June 30, 2024 1,398,158 $ 13,982 6,919,919 $ 692 $ 163,735,564 $ ( 152,951,151 ) $ 10,799,087 Balance 1,398,158 $ 13,982 6,919,919 $ 692 $ 163,735,564 $ ( 152,951,151 ) $ 10,799,087 Stock-based compensation: Options - - - - 284,245 - 284,245 Net loss - - - - - ( 1,091,416 ) ( 1,091,416 ) Balance -September 30, 2024 1,398,158 $ 13,982 6,919,919 $ 692 $ 164,019,809 $ ( 154,042,567 ) $ 9,991,916 Balance 1,398,158 $ 13,982 6,919,919 $ 692 $ 164,019,809 $ ( 154,042,567 ) $ 9,991,916 [1] Represents the gross proceeds of $ 1,083,915 , less issuance costs of $ 182,305 , resulting in net proceeds of $ 901,610 . See Note 4 - Stockholders’ Equity - ATM Sales for additional details. [2] Represents the gross proceeds of $ 927,335 , less issuance costs of $ 39,197 , resulting in net proceeds of $ 888,138 . See Note 4 - Stockholders’ Equity - ATM Sales for additional details. [3] Represents the aggregate fair value of 3,351,580 shares of common stock, which includes 2,000,000 shares that were issued at the time of the warrant exchange and 1,351,580 shares that were held in abeyance at the time of the warrant exchange. See Note 4 - Stockholders’ Equity - Warrant Exercise and Issuance and Note 5 - Fair Value Measurement for additional details. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 BIORESTORATIVE THERAPIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) 2025 2024 For the Nine Months Ended September 30, 2025 2024 Cash Flows From Operating Activities: Net loss $ ( 11,034,339 ) $ ( 7,343,233 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 157,149 138,687 Dividend and interest income ( 235,878 ) ( 492,476 ) Stock-based compensation 2,877,766 2,636,941 Non-cash lease expense - 111,750 Gain on exchange of warrants - ( 1,711,698 ) Change in fair value of warrant liabilities ( 552,536 ) 837,466 Changes in operating assets and liabilities: Accounts receivable 175,000 ( 145,700 ) Prepaid expenses and other current assets 18,993 23,124 Accounts payable 357,070 211,990 Accrued expenses and other current liabilities ( 137,015 ) ( 29,449 ) Lease liability - ( 119,903 ) Net Cash Used In Operating Activities ( 8,373,790 ) ( 5,882,501 ) Cash Flows From Investing Activities: Sale of marketable securities 9,212,343 17,370,243 Purchase of marketable securities ( 2,679,147 ) ( 18,294,566 ) Purchases of equipment ( 36,400 ) ( 93,755 ) Net Cash Provided By (Used In) Investing Activities 6,496,796 ( 1,018,078 ) Cash Flows From Financing Activities: Proceeds from issuance of common stock in at-the-market offering 2,011,250 - Payment of issuance costs ( 72,805 ) - Exercise of stock options 42,411 - Proceeds from exchange and issuance of warrants, net - 7,528,027 Deferred offering costs ( 49,308 ) ( 22,381 ) Net Cash Provided By Financing Activities 1,931,548 7,505,646 Net Increase In Cash and Cash Equivalents 54,554 605,067 Cash and Cash Equivalents - Beginning of the Period 547,890 884,377 Cash and Cash Equivalents - End of the Period $ 602,444 $ 1,489,444 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ - $ - Income taxes $ - $ - Non-cash investing and financing activities: Return and cancellation of shares in lieu of payroll tax withholding $ - $ 48,410 Issuance of common stock held in abeyance $ 6 $ 15 Reclassification of deferred offering costs $ 148,697 $ - Deferred offering costs included in accounts payable $ 19,758 $ - The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 BIORESTORATIVE THERAPIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 – BUSINESS ORGANIZATION, NATURE OF OPERATIONS, BASIS OF PRESENTATION AND LIQUIDITY Corporate History BioRestorative Therapies, Inc. has one wholly-owned subsidiary, Stem Pearls, LLC (“Stem Pearls”). BioRestorative Therapies, Inc. and its subsidiary are referred to collectively as “BRT” or the “Company”. On December 23, 2022, the Company reincorporated from Delaware to Nevada by filing Articles of Incorporation with the state of Nevada. The reincorporation was structured as a statutory merger. Business Operations BRT 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 the website or connected thereto is not intended to be incorporated by reference into this Quarterly Report. BRT is currently developing a Disc/Spine Program referred to as “brtxDISC”. Its 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 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. In addition, in continuation of BRT’s mission of developing and commercializing cell-based biologics, it is seeking to develop a biologics-based cosmetic products business. Pursuant to such business, BRT would formulate, manufacture and sell products designed for cosmetic and aesthetic uses. 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. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) that are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of September 30, 2025 and for the three and nine months then ended. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the operating results for the full year ending December 31, 2025 or any other period. The December 31, 2024 consolidated balance sheet data were derived from audited financial statements but do not include all disclosures required by U.S. GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures of the Company as of December 31, 2024 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on March 28, 2025 (the “Form 10-K”). 7 Liquidity The 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, 2025, the Company had a net loss of $ 11.0 million, and negative cash flows from operations of $ 8.4 million, and as of September 30, 2025, the Company had working capital of $ 1.3 million. The Company anticipates that it will continue to incur net losses and negative cash flows from operations as it executes its development plans during 2025 and beyond, as well as other potential strategic and business development initiatives. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for at least twelve months after the issuance date of these financial statements. 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. During the nine months ended September 30, 2025, the Company sold 965,424 shares of its common stock under its at-the-market offering agreement (the “2024 ATM”) with Rodman & Renshaw LLC (“Rodman”) and raised approximately $ 2.0 million of gross proceeds. On October 8, 2025, the Company closed on the sale of an aggregate of 678,125 shares of its common stock for aggregate gross proceeds of approximately $ 1.1 million. Concurrently, the Company issued to the investors warrants to purchase an aggregate of 508,592 shares of its common stock at an exercise price of $ 2.75 per share. See Note 6 – Subsequent Events for additional details. The Company’s current funds will not be sufficient to enable the Company to fully complete its development activities or attain profitable operations. If the Company is unable to obtain such needed additional financing on a timely basis, the Company may have to curtail its development, marketing and promotional activities, which would have a material adverse effect on the Company’s business, financial condition and results of operations, and ultimately the Company could be forced to discontinue its operations and liquidate. The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. 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 values. 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. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reclassifications Certain prior period statements of operations amounts have been reclassified to conform to the Company’s fiscal 2025 presentation. These reclassifications have no impact on the Company’s previously reported net loss. 8 Cash and Cash Equivalents Financial 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 accounts that hold cash and cash equivalents in excess of the Federal Depository Insurance Corporation (“FDIC”) coverage of $ 250,000 per banking institution. The Company had deposits in excess of FDIC coverage of $ 290,180 and $ 252,801 as of September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025, the Company has not experienced losses on this account. Investments Held in Marketable Securities As of September 30, 2025 and December 31, 2024, investments held in marketable securities consists of U.S. Treasury securities held in a trust account. The Company’s investments held in the trust account are presented on the unaudited condensed consolidated balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities are included in interest income in the accompanying unaudited condensed consolidated statements of operations. Customer and Revenue Concentrations All of the Company’s contract service revenue is derived from one customer. Additionally, all of the Company’s product sales revenue is derived from one customer. Accounts Receivable Accounts receivable are carried at their contractual amounts, less an estimate for credit losses. As of September 30, 2025 and December 31, 2024, no allowances for credit losses were determined to be necessary. Management estimates the allowance for credit losses based on existing economic conditions, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for credit losses only after all collection attempts have been exhausted. Deferred Contract Costs The Company defers costs associated with fulfilling its contracts if those costs meet all of the following criteria: (i) the costs relate directly to a contract, (ii) the costs generate or enhance resources of the Company that will be used in satisfying performance obligations in the future, and (iii) the costs are expected to be recovered. Deferred contract costs are recognized as cost of revenues in the period when the related revenue is recognized. Deferred contract costs consist of consumables and labor costs and are included in prepaid and other current assets in the unaudited condensed consolidated balance sheets. The Company had $ 7,491 and $ 10,250 deferred contract costs as of September 30, 2025 and December 31, 2024, respectively. Deferred Offering Costs Deferred offering costs, which primarily consist of direct, incremental professional fees incurred in connection with a financing, are capitalized as non-current assets on the balance sheet. Upon consummation of a financing, the deferred offering costs would be offset against the offering proceeds. If the completion of a contemplated financing was no longer probable, the related deferred offering costs would be charged to general and administrative expense in the unaudited condensed consolidated financial statements. The Company had $ 69,066 and $ 148,697 of deferred offering costs as of September 30, 2025 and December 31, 2024, respectively. 9 Derivative Financial Instruments The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the unaudited condensed consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Fair Value of Financial Instruments Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured using inputs in one of the following three categories: Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment. Level 2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or market data other than quoted prices that are observable for the assets or liabilities. Level 3 measurements are based on unobservable data that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. The Company considers cash and cash equivalents, investments held in marketable securities, accounts receivable, accounts payable and warrant liabilities to meet the definition of financial instruments. As of September 30, 2025 and December 31, 2024, the carrying amount of cash and cash equivalents, investments held in marketable securities, accounts receivable, and accounts payable approximate their fair value due to the relatively short period of time between their origination and their expected realization or payment. The warrant liabilities are measured at fair value (see Note 5 – Fair Value Measurement for additional details). Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company recognizes revenue primarily from the following different types of contracts: ● Product sales - Revenue is recognized at the point in time the customer obtains control of the goods and the Company satisfies its performance obligation. ● Royalty revenue - Revenue is recognized as a usage-based royalty from customers’ usage of intellectual property pursuant to a license agreement at the point in time in which the underlying sale occurs. 10 The Company recognizes bill-and-hold revenue from its sale of cosmetic vials warehoused at a Company location for a specified period of time in accordance with directions received from the Company’s customer. Even though the vials are held at a Company location, a sale is recognized at the point in time when the customer obtains control of the product. Control is transferred to the customer in a bill-and-hold arrangement when: (i) customer acceptance specifications have been met, (ii) legal title has transferred, (iii) the customer has a present obligation to pay for the product and (iv) the risks and rewards of ownership have transferred to the customer. Additionally, all the following bill-and-hold criteria have to be met in order for control to be transferred to the customer: ● the reason for the bill-and-hold arrangement is substantive ● the customer has requested the product be warehoused ● the product has been identified as separately belonging to the customer ● the product is currently ready for physical transfer to the customer ● the Company does not have the ability to use the product or direct it to another customer. The following table summarizes the Company’s revenue recognized in its unaudited condensed consolidated statements of operations: SCHEDULE OF REVENUE RECOGNIZED 2025 2024 2025 2024 For the Three Months Ended For the Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Product revenue $ - $ 230,700 $ 300,000 $ 300,000 Royalty revenue 11,800 2,900 40,100 57,700 Revenue $ 11,800 $ 233,600 $ 340,100 $ 357,700 Net Loss Per Common Share Net 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. For the three and nine months ended September 30, 2025, the Company had 1,138,055 shares held in abeyance included in basic loss per share given that they are issuable for no additional consideration. For the three and nine months ended September 30, 2024, the Company had 1,201,580 shares held in abeyance included in basic loss per share given that they are issuable for no additional consideration (see Note 4 – Stockholders’ Equity for additional details). 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, restricted stock units (“RSUs”) and convertible preferred stock have been excluded from the Company’s computation of diluted net loss per common share for the three and nine months ended September 30, 2025 and 2024. 11 The 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 For the Three and Nine Months Ended September 30, 2025 2024 Stock options 5,262,973 3,401,608 Warrants 3,951,384 3,952,504 Convertible Preferred Stock 1,398,158 1,398,158 10,612,515 8,752,270 Segment Reporting Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The Company has one operating and reporting segment (BioRestorative Therapies, Inc.) which develops therapeutic products and medical therapies using cell and tissue protocols, primarily involving adult stem cells. The Company’s Chief Executive Officer serves as the CODM and reviews financial information presented on a consolidated basis to make operational decisions and evaluate financial performance. The CODM reviews profit and loss information on a consolidated basis, as presented in the statement of operations. Disaggregated expense data beyond what is included in the unaudited condensed consolidated statements of operations is not provided to the CODM. Since the Company’s operations consist of a single reporting segment, the segment assets are presented on the accompanying unaudited condensed consolidated balance sheets as total assets. Recently Issued Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” (“ASU 2023-09”). The amendments in ASU 2023-09 are designed to enhance the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments in ASU 2023-09 should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” (“ASU 2024-03”), which is intended to require more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the potential impact of this update on its consolidated financial statements and related disclosures. 12 Tax Law Change On July 4th, 2025, the President signed into law significant federal tax legislation, H.R.1 (the “Tax Reform Act of 2025”). The legislation includes numerous changes to U.S. corporate income tax law, including but not limited to: permanent 100% bonus depreciation for qualified property, immediate expensing of domestic research and experimental expenditures, modifications to the limitation on business interest expense, increased Section 179 expensing limits, changes to the international tax regime, and expanded limitations on the deductibility of executive compensation under IRC Section 162(m). Most provisions are effective for tax years beginning after December 31, 2024, with certain transition rules and exceptions. The Company does not expect the enactment of the Tax Reform Act of 2025 to have a material impact on its consolidated financial statements. NOTE 3 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES September 30 , December 31, 2025 2024 Accrued bonuses $ 538,875 $ 704,000 Accrued general and administrative expenses 68,595 40,485 Total accrued expenses and other current liabilities $ 607,470 $ 744,485 NOTE 4 - STOCKHOLDERS’ EQUITY Warrant Exercise and Issuance On February 6, 2024, the Company entered into agreements with certain holders of its existing warrants exercisable for an aggregate of 3,351,580 shares of its Common Stock (collectively, the “Existing Warrants”), to exercise their warrants at a reduced exercise price of $ 2.33 per share, in exchange for the issuance of new warrants (the “New Warrants”) as described below (the “Warrant Exercise and Issuance”). The aggregate gross proceeds from the exercise of the Existing Warrants and the payment of the New Warrants, as described below, was approximately $ 8.1 million, before deducting cash issuance costs in the amount of $ 595,364 . The reduction of the exercise price of the Existing Warrants and the issuance of the New Warrants was structured as an at-market transaction under Nasdaq rules. Of the 3,351,580 shares of Common Stock underlying the Existing Warrants, 1,201,580 shares issuable to Auctus Fund, LLC (“Auctus”) were held in abeyance as of December 31, 2024, due to Auctus’ maximum beneficial ownership limitation (the “Abeyance Shares”) . On March 20, 2025, the Company issued 63,525 of these shares, reducing the remaining Abeyance Shares to 1,138,055 . As of September 30, 2025, the Company had issued an aggregate of 2,213,525 shares of Common Stock. Such Abeyance Shares have been fully paid for and are issuable upon notice from Auctus to the Company. See Note 6 – Subsequent Events – for additional details regarding shares issued to Auctus subsequent to September 30, 2025. 13 In consideration for the immediate exercise of the Existing Warrants for cash and the payment of $ 0.125 per share underlying the New Warrants, the exercising holders received the New Warrants to purchase shares of Common Stock in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The New Warrants will be exercisable for a period of five years into an aggregate of 2,513,686 shares of Common Stock at an exercise price of $ 2.43 per share. The securities offered in the private placement have not been registered under the Securities Act or applicable state securities laws. Accordingly, the securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. As part of the transaction, the Company agreed to file a resale registration statement with the SEC to register the resale of the shares of Common Stock underlying the New Warrants issued in the private placement. Such resale registration statement was filed and was declared effective by the SEC on April 18, 2024. In connection with the transaction described above, the Company entered into a financial advisory services agreement, dated February 5, 2024, with Roth Capital Partners, LLC (“Roth”), pursuant to which the Company has paid Roth a cash fee of approximately $ 528,000 for its services, in addition to reimbursement for certain expense. During the nine months ended September 30, 2024, the Company incurred an aggregate of $ 595,364 of cash issuance costs related to the Warrant Exercise and Issuance. Prior to the Warrant Exercise and Issuance, the Existing Warrants were classified as derivative liabilities. Additionally, the Company analyzed the form of the New Warrants and determined that they should be classified as derivative liabilities in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity. Under the New Warrants, the Company does not control the occurrence of events, such as a tender offer or exchange, that may trigger cash settlement of the New Warrants and not result in a change of control of the Company. As a result, such New Warrants do not meet the criteria for equity treatment. Additionally, certain New Warrants contain adjustments to the settlement amount based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815-40 and, accordingly, such New Warrants are not considered indexed to the Company’s own stock and are not eligible for an exception from derivative accounting. See Note 5 – Fair Value Measurement for details regarding the valuation of warrants accounted for as derivative liabilities. Warrants See Note 5 – Fair Value of Financial Instruments for details regarding the valuation of warrants accounted for as derivative liabilities. A summary of the Company’s warrant activity and related information follows: SCHEDULE OF WARRANT ACTIVITY Weighted Weighted Average Average Remaining Number of Exercise Life Warrants Price In Years Outstanding, January 1, 2025 3,951,634 $ 5.22 Expired ( 250 ) 60.00 Outstanding, September 30, 2025 3,951,384 $ 5.21 2.55 Exercisable, September 30, 2025 3,951,384 $ 5.21 2.55 Stock Options On February 14, 2025, the Company granted options to purchase an aggregate of 2,152,908 shares of the Company’s common stock at an exercise price of $ 2.46 per share to employees, the Company’s board of directors and a member of the Company’s Scientific Advisory Board. The options had an aggregate grant date fair value of $ 4,044,250 and vest as follows: (i) options to purchase an aggregate 323,459 shares of common stock vest monthly over one year, and (ii) options to purchase an aggregate of 1,829,449 shares of common stock vest to the extent of 50% immediately with the remainder vesting quarterly over two years commencing one year from the date of grant. The Company is recognizing the grant date fair value of the options on a straight-line basis over the vesting period. 14 On June 5, 2025, the Company granted an option to purchase 25,000 shares of the Company’s common stock at an exercise price of $ 1.78 per share to an employee. The option had a grant date fair value of $ 34,250 and vests to the extent of 50% immediately with the remainder vesting quarterly over two years commencing one year from the date of grant. The Company is recognizing the grant date fair value of the option on a straight-line basis over the vesting period. On October 13, 2025, the Company granted an option to purchase 25,000 shares of the Company’s common stock at an exercise price of $ 1.62 per share to an employee. See Note 6 – Subsequent Events for additional details. In applying the Black-Scholes option pricing model to stock options granted, the Company used the following assumptions: SCHEDULE OF STOCK OPTION GRANTED ASSUMPTIONS For the Nine Months Ended September 30, 2025 2024 Risk free interest rate 4.03 - 4.40 % 4.14 - 4.30 % Expected term (years) 2.77 - 5.38 2.77 - 5.38 Expected volatility 98.14 - 99.22 % 101 - 102 % Expected dividends 0.00 % 0.00 % There were no stock options granted during the three months ended September 30, 2025 or 2024. Options granted during the nine months ended September 30, 2025 and 2024 had a weighted average grant date fair value per share of $ 1.87 and $ 1.11 per share, respectively. A summary of the stock option activity during the nine months ended September 30, 2025 is presented below: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Weighted Average Average Remaining Number of Exercise Life Intrinsic Options Price In Years Value Outstanding, January 1, 2025 3,263,467 $ 2.63 Granted 2,177,908 2.45 Exercised ( 29,249 ) 1.45 Forfeited ( 149,153 ) 2.23 Outstanding, September 30, 2025 5,262,973 $ 2.58 7.8 $ - Exercisable, September 30, 2025 3,805,964 $ 2.72 7.3 $ - 15 Stock-Based Compensation Expense The following table presents information related to stock-based compensation expense: SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE 2025 2024 2025 2024 2025 (Years) For the Three Months Ended For the Nine Months Ended Unrecognized at Weighted Average Remaining Amortization September 30, September 30, September 30, Period 2025 2024 2025 2024 2025 (Years) Research and development $ 175,398 $ 133,333 $ 1,308,322 $ 1,314,298 General and administrative $ 224,535 $ 150,912 $ 1,569,444 $ 1,322,643 Total $ 399,932 $ 284,245 $ 2,877,766 $ 2,636,941 $ 1,878,612 1.76 Stock-based compensation expense $ 399,932 $ 284,245 $ 2,877,766 $ 2,636,941 $ 1,878,612 $ 1.76 The following table presents stock-based compensation by award type: SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE BY AWARD TYPE 2025 2024 2025 2024 For the Three Months Ended For the Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Options $ 399,932 $ 284,245 $ 2,877,766 $ 1,651,903 RSUs - - - 985,038 Total $ 399,932 $ 284,245 $ 2,877,766 $ 2,636,941 ATM Sales During the three months ended September 30, 2025, there were no sales of common stock under the 2024 ATM. During the nine months ended September 30, 2025, the Company sold 965,424 shares of its common stock under the 2024 ATM, generating gross proceeds of $ 2,011,250 . For the nine months ended September 30, 2025, the total commissions and related legal and accounting fees incurred were $ 72,805 , resulting in net proceeds of $ 1,938,445 . During the nine months ended September 30, 2025, the Company reclassified previously capitalized deferred offering costs of $ 148,697 to additional paid-in capital. Common Stock Repurchase Program On June 16, 2025, the Company’s Board of Directors authorized a common stock repurchase program under which the Company may repurchase up to $ 2,000,000 of its outstanding common stock through June 16, 2026. No repurchases have been made as of September 30, 2025. Common Stock Issuances During the three months ended September 30, 2025, there were no issuances of common stock by the Company. During the nine months ended September 30, 2025, the Company issued 63,525 shares of common stock to Auctus Fund, LLC in partial satisfaction of shares held in abeyance. During the nine months ended September 30, 2025, the Company issued 29,249 shares of common stock related to the exercise of an option at an exercise price of $ 1.45 per share, which resulted in gross cash proceeds to the Company of $ 42,411 . 16 NOTE 5 – FAIR VALUE MEASUREMENT On September 30, 2025 and December 31, 2024, the Company estimated the aggregate fair value of warrants that are accounted for as warrant liabilities to be $ 1,968,315 and $ 2,520,851 , respectively, using the Black-Scholes option price model (Level 3 inputs). The Company recognized a gain on the change in fair value of these warrant liabilities of $ 612,064 and $ 552,536 for the three and nine months ended September 30, 2025, respectively. The Company recognized a gain (loss) on the change in fair value of these warrant liabilities of $ 1,036,464 and ($ 837,466 ) for the three and nine months ended September 30, 2024, respectively. The following table shows the detail of the valuation assumptions used as of September 30, 2025: SCHEDULE OF FAIR VALUE VALUATION ASSUMPTIONS September 30, 2025 Risk free interest rate 3.63 %- 3.68 % Expected term (years) 1.11 - 3.36 Expected volatility 71 % - 95 % Expected dividends 0.00 % SCHEDULE OF FAIR VALUE MEASURED ON RECURRING BASIS The following table sets forth a summary of the changes in the fair value of Level 3 liabilities that are measured at fair value on a recurring basis during the three months ended September 30, 2025 and three months ended September 30, 2024: 2025 2024 For the Three Months Ended September 30, 2025 2024 Balance, July 1, $ 2,580,379 $ 4,491,969 Change in fair value of warrant liability ( 612,064 ) ( 1,036,464 ) Balance, September 30, $ 1,968,315 $ 3,455,505 The following table sets forth a summary of the changes in the fair value of Level 3 liabilities that are measured at fair value on a recurring basis during the nine months ended September 30, 2025 and nine months ended September 30, 2024: 2025 2024 For the Nine Months ended September 30, 2025 2024 Balance, January 1, $ 2,520,851 $ 2,618,039 Change in fair value of warrant liability ( 552,536 ) 837,466 Balance, September 30, $ 1,968,315 $ 3,455,505 17 Assets and liabilities measured at fair value on a recurring basis are as follows: SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS Fair value measurements at reporting date using: Quoted prices in active markets for identical liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total Fair Value Assets: Marketable securities as of September 30, 2025 $ 3,887,383 $ - $ - $ 3,887,383 Marketable securities as of December 31, 2024 $ 10,184,701 $ - $ - $ 10,184,701 Liabilities: Warrant liabilities as of September 30, 2025 $ - $ - $ 1,968,315 $ 1,968,315 Warrant liabilities as of December 31, 2024 $ - $ - $ 2,520,851 $ 2,520,851 NOTE 6 – SUBSEQUENT EVENTS Registered Offering and Private Placement On October 6, 2025, the Company entered into subscription agreements (the “Subscription Agreements”) with several investors (the “Purchasers”) pursuant to which the Company agreed to sell and issue to the Purchasers an aggregate of 678,125 shares of the Company’s common stock in a registered direct offering at an offering price of $ 1.60 per share (the “Registered Offering”) for aggregate gross proceeds of approximately $ 1.1 million. Pursuant to the Subscription Agreements, in a concurrent private placement offering (the “Private Placement”), the Company agreed to issue to the Purchasers unregistered warrants to purchase up to an aggregate of 508,592 shares of the Company’s common stock at an exercise price of $ 2.75 per share. The Registered Offering and the Private Placement closed on October 8, 2025. In connection with the offering, the Company entered into an engagement letter, dated August 11, 2025, with Alere Financial Partners (a division of Cova Capital Partners, LLC) (the “Placement Agent”), pursuant to which the Company agreed to pay the Placement Agent a cash fee equal to 6% of the gross proceeds of the offering from investors introduced to the Company by the Placement Agent (the “Placement Agent Investors”) (4% for other investors). The Company has also agreed to reimburse the Placement Agent approximately $ 8,300 for out-of-pocket expenses for legal fees and other expenses. In addition, the Company agreed to issue to the Placement Agent, at the closing of the offering, a warrant exercisable commencing six months from the date of issuance until the five year anniversary of the date of issuance to purchase up to 6% of the number of Shares sold in the Registered Offering to Placement Agent Investors (4% for other investors), at a per share exercise price of $ 2.75 . Option Grants On October 13, 2025, the Company granted an option to purchase 25,000 shares of the Company’s common stock at an exercise price of $ 1.62 per share to an employee. The option vests as follows: (i) 50% immediately, and (ii) the remainder quarterly over two years commencing one year from the date of grant. The Company will recognize the grant date fair value of the option on a straight-line basis over vesting period. Common Stock Issuance On October 27, 2025, the Company issued 220,000 shares of common stock to Auctus Fund, LLC in partial satisfaction of shares held by abeyance. 18