What changed in this filing

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Item 1. Financial Statements

2026-05-14 compared with 2025-11-12 · 371 added, 349 removed, 316 unchanged (69% of the section changed)

Financial Statements

BIORESTORATIVE THERAPIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

BIORESTORATIVE

THERAPIES, INC.

CONSOLIDATED BALANCE SHEETS

Current Assets:

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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

1,543,158 shares designated, 0 and 1,398,158 shares issued and outstanding at March 31, 2026 and December 31, 2025,

Common stock, $ 0.0001 par value;

1 unchanged sentence

25,478,170 and 8,876,242

6,919,919 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

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BIORESTORATIVE THERAPIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF

For the Three Months Ended

For the Nine Months Ended

September 30,

Cost of goods sold

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( 4,807,534 )

( 11,821,832 )

( 8,865,052 )

Other (Expense) Income:

Interest income

Gain on exchange of warrants

Other Income (Expense):

Dividend and interest income, net

Change in fair value of warrant liabilities

Total Other Income

$ ( 3,038,277 )

$ ( 1,091,416 )

Total Other Income (Expense)

$ ( 2,154,405 )

4 unchanged sentences

BIORESTORATIVE THERAPIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Nine Months Ended September 30, 2025

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

For the Three Months Ended March 31, 2026

Series B Convertible

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$ ( 169,920,690 )

Exercise of stock options

Conversion of Series B Preferred Stock into common stock

( 1,398,158 )

Issuance and sale of common stock, net of issuance costs [1]

Exercise of pre-funded warrants [1]

Common stock issued in connection with abeyance shares

Reclassification of warrant liabilities to equity [2]

Stock-based compensation:

Restricted share units

Restricted share units, shares

( 2,154,405 )

3 unchanged sentences

$ ( 172,075,095 )

Issuance and sale of common stock, net of issuance costs [2]

Stock-based compensation:

( 2,656,263 )

Balance - June 30, 2025

$ 168,505,322

$ ( 163,674,777 )

Stock-based compensation:

( 3,038,277 )

Balance - September 30, 2025

$ 168,905,254

$ ( 166,713,054 )

For the Nine Months Ended September 30, 2024

For the Three Months Ended March 31, 2025

Series B Convertible

3 unchanged sentences

$ ( 155,678,715 )

Common stock issued in connection with warrant exchange [3]

Return and cancellation of shares in lieu of payroll tax withholding

Stock-based compensation:

Restricted share units

( 2,223,255 )

Balance - March 31, 2024

$ 163,411,257

$ ( 148,922,589 )

Exercise of stock options

Issuance and sale of common stock, net of issuance costs [3]

Common stock issued in connection with abeyance shares

2 unchanged sentences

( 5,339,799 )

Balance - June 30, 2024

$ 163,735,564

$ ( 152,951,151 )

$ 163,735,564

$ ( 152,951,151 )

Stock-based compensation:

( 1,091,416 )

Balance -September 30, 2024

$ 164,019,809

$ ( 154,042,567 )

Balance - March 31, 2025

$ 167,148,523

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See Note 4 - Stockholders’

Equity - ATM Sales for additional details.

Equity - Rodman Offering for additional details.

[2] On February 24,

2026, upon the conversion in full of the Company’s Series B Convertible Preferred Stock, the Company reassessed and concluded that

warrants previously classified as derivative liabilities met the criteria for equity classification under ASC 815-40.

The warrants were

remeasured to fair value on that date and reclassified from warrant liabilities to additional paid-in capital.

See Note 4 — Stockholders’

Equity for additional details.

[3] 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.

[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.

See Note 4 - Stockholders’

Equity - ATM Sales for additional details.

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

BIORESTORATIVE THERAPIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

BIORESTORATIVE

THERAPIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

Cash Flows From Operating Activities:

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Stock-based compensation

Non-cash lease expense

Gain on exchange of warrants

( 1,711,698 )

Change in fair value of warrant liabilities

( 1,220,121 )

Changes in operating assets and liabilities:

3 unchanged sentences

Accrued expenses and other current liabilities

Lease liability

Deferred revenue

Net Cash Used In Operating Activities

5 unchanged sentences

( 1,053,168 )

( 18,294,566 )

Purchases of equipment

Net Cash Provided By (Used In) Investing Activities

( 1,018,078 )

Net Cash Provided By Investing Activities

Cash Flows From Financing Activities:

Proceeds from issuance of common stock in at-the-market offering

Proceeds from issuance of common stock and pre-funded warrants in registered direct offering

Payment of issuance costs

Exercise of stock options

Proceeds from exchange and issuance of warrants, net

Deferred offering costs

Net Cash Provided By Financing Activities

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Non-cash investing and financing activities:

Return and cancellation of shares in lieu of payroll tax withholding

Conversion of Series B Convertible Preferred Stock into Common Stock

Issuance of common stock held in abeyance

Reclassification of deferred offering costs

Deferred offering costs included in accounts payable

Reclassification of deferred offering costs to equity

Issuance costs included in accounts payable

Issuance costs included in accrued expenses

Reclassification of warrant liabilities to equity

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

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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.

commercializing cell-based biologics, BRT has developed a biologics-based cosmetic products business through which it formulates, manufactures

and sells products designed for cosmetic and aesthetic uses.

The Company’s biocosmeceutical product offerings consist of two product

ExoCR, which is sold pursuant to a supply agreement with Cartessa Aesthetics, LLC, and BioX, which the Company commenced selling

commercially during the three months ended March 31, 2026 to multiple customers in the ordinary course of business.

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.

of Presentation

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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.

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”).

The December 31, 2025 consolidated balance sheet data were derived from audited financial statements but

do not include all disclosures required by U.S.

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 March 31, 2026 and for the three months then ended.

The results of operations for the three months ended

March 31, 2026 are not necessarily indicative of the operating results for the full year ending December 31, 2026 or any other period.

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, 2025 and for the year then ended, which were filed with the Securities and

Exchange Commission (“SEC”) on March 26, 2026 (the “Form 10-K”).

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.

For the three

months ended March 31, 2026, the Company had a net loss of $ 2.2 million, and negative cash flows from operations of $ 3.8 million, and

as of March 31, 2026, the Company had working capital of $ 2.2 million.

The Company anticipates that it will continue to incur net losses

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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.

During the three months ended March 31, 2026, the Company

sold 12,560,715 shares of its Common Stock, pre-funded warrants to purchase 1,725,000 shares of its common stock (which have been exercised

in full) and warrants for the purchase of 14,285,715 shares of its Common Stock in a public offering.

The Company received net proceeds

of approximately $ 4.4 million from the offering.

Company’s current funds will not be sufficient to enable the Company to fully complete its development activities or attain profitable

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do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Listing Requirements

March 26, 2026, the Company received a notice from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, because

the closing bid price for the Company’s shares of Common Stock was less than $ 1.00 per share for 30 consecutive business days,

the Company was no longer in compliance with the minimum bid price requirement for continued listing on Nasdaq under Nasdaq Listing Rule

accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided an initial compliance period of 180 calendar days, or

until September 22, 2026, to regain compliance with the minimum bid price requirement.

To regain compliance, the Company’s Common

Stock must have a minimum closing bid price of at least $ 1.00 per share for a minimum of ten consecutive business days during the 180

calendar day grace period.

If the Company does not regain compliance by September 22, 2026, the Company may be eligible for a second

180 calendar day grace period, subject to meeting the continued listing requirements (other than the minimum bid price) for the Nasdaq

Capital Market and providing written notice to Nasdaq of its intention to cure the deficiency, including by effecting a reverse stock

split, if necessary.

the Company does not regain compliance within the allotted compliance period(s), including any extensions that may be granted by

Nasdaq, Nasdaq will provide notice that the Company’s Common Stock will be subject to delisting, which the Company may appeal

to a Nasdaq Hearings Panel.

Delisting from the Nasdaq Capital Market may adversely affect the Company’s ability to raise

additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to

trade the Company’s securities and may negatively affect the value and liquidity of the Company’s Common Stock.

Company intends to monitor the closing bid price of its Common Stock and consider its available options to resolve the noncompliance

with the minimum bid price requirement, including effecting a reverse split of its Common Stock.

There can be no assurance that the

Company will be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with the other

Nasdaq listing criteria.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reclassifications

prior period statements of operations amounts have been reclassified to conform to the Company’s fiscal 2025 presentation.

reclassifications have no impact on the Company’s previously reported net loss.

prior period statement of operations amounts have been reclassified to conform to the Company’s fiscal 2025 presentation.

reclassifications consist of a change in the grouping of certain other income items on the condensed consolidated statements of

These reclassifications and adjustments were not material to any prior period and had no impact on the Company’s

previously reported net loss.

r evision to previously issued financial statements

connection with the preparation of the Company’s interim condensed consolidated financial statements for the three months

ended March 31, 2026, the Company noted certain stock -based compensation expense were

not allocated properly for the prior three months ended March 31, 2025.

As a result, the Company has voluntarily revised its

unaudited condensed consolidated statement of operations for the three months ended March 31, 2025 by reclassifying $ 932,573

of stock-based compensation expense from general and administrative expense to research and

development expense.

The Company appropriately allocated the stock-based compensation expense in its Annual Report on Form 10-K for

the year ended December 31, 2025 and for the interim periods ended June 30, 2025 and September 30, 2025.

The voluntary revision had

no effect on the Company’s financial position, results of operations, cash flows or loss per share .

and Cash Equivalents

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(“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

The Company had deposits in excess of FDIC coverage of $ 2,841,774

and $ 1,180,853 as of March 31, 2026 and December 31, 2025, respectively.

As of March 31, 2026, the Company has not experienced losses

on this account.

Held in Marketable Securities

of September 30, 2025 and December 31, 2024, investments held in marketable securities consists of U.S.

of March 31, 2026 and December 31, 2025, 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.

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 dividend and interest income, net in the accompanying unaudited condensed consolidated statements of

Treasury notes held in the trust account are short-term in nature and are carried at fair value.

As of March 31,

2026, the Company has not experienced any credit losses or other-than-temporary impairments on these investments

following tables summarize the Company’s investments held in marketable securities:

SCHEDULE OF INVESTMENTS HELD IN

MARKETABLE SECURITIES

As of March 31, 2026

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Treasury notes

Accrued interest

Investments held in marketable securities

As of December 31, 2025

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Treasury notes

Accrued interest

Investments held in marketable securities

and Revenue Concentrations

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.

of the Company’s royalty revenue is derived from one customer pursuant to a sublicense agreement.

The Company’s product sales

revenue is generated from two product lines, ExoCR and BioX.

ExoCR product sales are made to a single customer, and BioX product sales

are made to multiple customers in the ordinary course of business.

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

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.

Contract Costs

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.

As of March 31, 2026 and December 31, 2025,

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.

Offering Costs

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The Company had $ 0 and $ 49,808

$ 148,697 of deferred offering costs as of September 30, 2025 and December 31, 2024, respectively.

of deferred offering costs as of March 31, 2026 and December 31, 2025, respectively.

Financial Instruments

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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

As of March 31, 2026 and December

31, 2025, 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

The warrant liabilities are measured at fair value (see Note 5 – Fair Value Measurement for additional details).

Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts

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sales - Revenue is recognized at the point in time the customer obtains control of the goods and the Company satisfies its performance

The Company’s product sales are generated from two product lines:

ExoCR, sold to a single customer pursuant to

a bill-and-hold arrangement as described below, and BioX, sold to multiple customers with control transferring upon shipment.

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.

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:

Company recognizes bill-and-hold revenue from its sale of ExoCR 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:

reason for the bill-and-hold arrangement is substantive

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For the Three Months Ended

For the Nine Months Ended

September 30,

Product revenue

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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.

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:

For the three months ended March 31, 2026 and 2025, the Company

had 0 and 1,138,055 shares of Common Stock respectively, held in abeyance included in basic loss per share given that they were 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 and

convertible preferred stock have been excluded from the Company’s computation of diluted net loss per common share for the three

months ended March 31, 2026 and 2025.

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 Stock.

All outstanding shares of the Company’s Series B Convertible

Preferred Stock have been converted into Common Stock;

therefore, there were no shares of Convertible Preferred Stock presented as

being antidilutive for the three months ended March 31, 2026:

OF WEIGHTED AVERAGE DILUTIVE COMMON SHARES

For the Three and Nine Months Ended

September 30,

For the Three Months Ended

Stock options

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consolidated balance sheets as total assets.

Adopted Accounting Pronouncements

July 2025, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2025-05, “Measurement of Credit Losses for Accounts

Receivable and Contract Assets” (“ASU 2025-05”).

ASU 2025-05 amends ASC Subtopic 326-20 to provide a practical expedient

for all entities and an accounting policy election for all entities, other than public business entities, that elect the practical expedient

related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions

accounted for under ASC 606.

ASU 2025-05 is effective for all business entities for annual periods beginning after December 15, 2025,

with early adoption permitted.

The Company adopted ASU 2025-05 effective January 1, 2026.

There was no material impact to the Company’s

unaudited condensed consolidated financial statements as a result of adopting ASU 2025-05.

Issued Accounting Pronouncements

December 2023, the FASB issued ASU No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” (“ASU

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.

November 2024, the FASB issued ASU No.

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impact of this update on its consolidated financial statements and related disclosures.

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.

3 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

September 30 ,

Accrued bonuses

Accrued general and administrative expenses

Insurance financing arrangement

Accrued credit card payable

Accrued consulting fees

Other accrued expenses

Total accrued expenses and other current liabilities

2 unchanged sentences

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

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

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.

6 – Subsequent Events – for additional details regarding shares issued to Auctus subsequent to September 30, 2025.

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, 918,055

shares issuable to Auctus Fund, LLC (“Auctus”) were held in abeyance as of December 31, 2025, due to Auctus’

maximum beneficial ownership limitation (the “Abeyance Shares”).

On February 10, 2026, the Company issued 170,000

shares of Common Stock to Auctus in partial satisfaction of Abeyance Shares.

On February 13, 2026, the Company issued the remaining 748,055

shares of Common stock in full satisfaction of Abeyance Shares.

Following such issuances, there are no remaining Abeyance

consideration for the immediate exercise of the Existing Warrants for cash and the payment of $ 0.125 per share underlying the New Warrants,

1 unchanged sentence

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 New Warrants are exercisable until February 8, 2029

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

3 unchanged sentences

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.

to the Warrant Exercise and Issuance, the Existing Warrants were classified as derivative liabilities.

As part of the transaction, the Company filed a resale

registration statement with the SEC to register the resale of the shares of Common Stock underlying the New Warrants, which was declared

effective by the SEC on April 18, 2024.

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.

Note 5 – Fair Value of Financial Instruments for details regarding the valuation of warrants accounted for as derivative liabilities.

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 Existing Warrants and New Warrants, the Company did not

control the occurrence of events, such as a tender offer or exchange, that may have triggered cash settlement of the New Warrants

and not have resulted in a change of control of the Company.

As a result, the Existing Warrants and New Warrants did not meet the criteria for equity

February 24, 2026, in connection with the conversion of all outstanding shares of the Company’s Series B Preferred Stock (see “ Series

B Preferred Stock Conversion ” below), the Company reassessed the classification of the derivative liability classified Existing

Warrants and New Warrants under ASC 815-40.

Following the Series B Preferred Stock conversion, the Company’s voting equity capital

structure consists of a single class of Common Stock, such that a tender offer or exchange, that may trigger cash settlement of the Existing

Warrants or New Warrants, will now result in a change of control of the Company.

the Company concluded that, as of February 24, 2026, the conditions previously precluding equity classification were no longer present.

February 24, 2026, the Company remeasured the Existing Warrants and New Warrants to fair value, recognized a gain on change in fair value

of $ 1,220,121 within the unaudited condensed consolidated statements of operations for the three months ended March 31, 2026, and reclassified

the remaining aggregate fair value of $ 179,228 from warrant liabilities to additional paid-in capital.

Following the reclassification,

the Existing Warrants and New Warrants are classified as equity and no further fair value remeasurement will be performed.

— Fair Value Measurement for additional details.

Note 5 – Fair Value Measurement for details regarding the valuation of the Existing Warrants and New Warrants on the date of reclassification.

The Company estimated

the grant-date fair value of the Placement Agent Warrants to be $ 200,405

using the Black-Scholes option pricing model.

The following table shows the detail of the valuation assumptions used:

OF FAIR VALUE VALUATION ASSUMPTIONS

February 13, 2026

Risk free interest rate

Expected term (years)

Expected volatility

Expected dividends

summary of the Company’s warrant activity and related information follows:

1 unchanged sentence

Outstanding, January 1, 2026

Outstanding, September 30, 2025

Exercisable, September 30, 2025

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.

( 1,725,000 )

Outstanding, March 31, 2026

Exercisable, March 31, 2026

February 14, 2025, the Company granted options to purchase an aggregate 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

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

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.

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.

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.

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.

Company is recognizing the grant date fair value of the options on a straight-line basis over the vesting period.

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

OF STOCK OPTION GRANTED ASSUMPTIONS

For the Nine Months Ended

September 30,

For the Three Months Ended

Risk free interest rate

4.31 - 4.40 %

4.14 - 4.30 %

Expected term (years)

2 unchanged sentences

Expected dividends

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.

summary of the stock option activity during the nine months ended September 30, 2025 is

presented below:

were no stock options granted during the three months ended March 31, 2026.

Stock options granted during the three months ended March

31, 2025 had a weighted-average grant date fair value of $ 1.88 per share.

summary of the stock option activity during the three months ended March 31, 2026 is presented

OF STOCK OPTION ACTIVITY

Outstanding, January 1, 2026

Outstanding, September 30, 2025

Exercisable, September 30, 2025

Outstanding, March 31, 2026

Exercisable, March 31, 2026

Compensation Expense

following table presents information related to stock-based compensation expense:

SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE

SCHEDULE OF STOCK OPTION EXPENSE

For the Three Months Ended

For the Nine Months Ended

Unrecognized at

Weighted Average Remaining Amortization

September 30,

Weighted Average

Amortization Period

Research and development

1 unchanged sentence

Stock-based compensation expense

following table presents stock-based compensation by award type:

OF STOCK-BASED COMPENSATION EXPENSE BY AWARD TYPE

For the Three Months Ended

For the Nine Months Ended

September 30,

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 .

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.

February 2025, the Company sold 492,087

shares of its Common Stock under an at-the-market (the “ATM”) program with a weighted-average gross price of

approximately $ 2.20

per share and raised $ 1,083,915

of gross proceeds.

During the three months ended March 31, 2025, the total commissions and related legal and accounting fees

incurred from the ATM Offering were $ 33,608

and the Company received net proceeds of $ 1,050,307 .

During the three months ended March 31, 2025, the Company reclassified previously capitalized deferred offering costs of $ 148,697

to additional paid-in capital.

February 13, 2026, the Company completed a public offering through Rodman & Renshaw LLC (“Rodman”), as placement

agent (the “Rodman Offering”), of an aggregate of (a) 12,560,715 units

(the “Common Units”), consisting of (i) 12,560,715 shares

(the “Shares”) of Common Stock, and (ii) five 5 -year

warrants to purchase up to 12,560,715 shares

of Common Stock (the “Common Stock Warrants”), at an offering price of $ 0.35 per

Common Unit, and (b) 1,725,000 units

(the “Pre-Funded Units”), consisting of (i) pre-funded warrants to purchase up to 1,725,000 shares

of Common Stock at an exercise price of $ 0.0001 per

share (the “Pre-Funded Warrants”) and (ii) Common Stock 5 Warrants

to purchase up to 1,725,000 shares

of Common Stock at an offering price of $ 0.3499 per

Pre-Funded Unit.

Immediately upon the closing of the Rodman Offering, certain holders of Pre-Funded Warrants exercised their

Pre-Funded Warrants for the purchase of an aggregate of 1,325,000 shares

of Common Stock.

On March 13, 2026, the remaining individual holder exercised its Pre-Funded Warrant for the purchase of 400,000 shares

of Common Stock.

Common Stock Warrants (i.e., warrants for the purchase of an aggregate of 14,285,715

shares of Common Stock) have an exercise price of $ 0.35

per share, were immediately exercisable upon issuance and expire

five years after the date of issuance.

The Pre-Funded Warrants had an exercise price of $ 0.0001

per share and were exercised in full during the three months

ended March 31, 2026.

The gross proceeds of the Rodman Offering were approximately $ 5.0

million, before deducting placement agent fees and expenses

and offering expenses payable by the Company.

In connection with the Rodman Offering, the Company entered into a securities purchase

agreement (the “Securities Purchase Agreement”) with certain institutional investors.

Pursuant to the Securities Purchase

Agreement, the Company agreed not to issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares

of Common Stock or any securities convertible into or exercisable or exchangeable for shares of Common Stock or file any registration

statement or prospectus, or any amendment or supplement thereto for 90 days after the closing date of the Rodman Offering, subject to

certain exceptions.

In addition, the Company has agreed not to effect or enter into an agreement to effect any issuance of Common Stock

or any securities convertible into or exercisable or exchangeable for shares of Common Stock involving a variable rate transaction (as

defined in the Securities Purchase Agreement) until the nine-month anniversary of the closing date of the Rodman Offering, subject to

certain exceptions.

connection with the Rodman Offering, the Company entered into a placement agency agreement, dated February 11, 2026, with Rodman pursuant

to which the Company engaged Rodman as the exclusive placement agent in connection with the Rodman Offering.

The Company agreed to pay

Rodman a cash fee equal to 7% of the aggregate gross proceeds received in the Rodman Offering.

The Company also agreed to reimburse Rodman

for up to $ 100,000 for out-of-pocket expenses for legal fees and other expenses.

In addition, the Company agreed to issue to Rodman,

at the closing of the Rodman Offering, warrants, exercisable from the date of issuance until the five year anniversary of the commencement

of sales, to purchase up to 1,000,000 shares of Common Stock (which represents 7% of the aggregate number of shares of Common Stock,

inclusive of shares of Common Stock issuable upon the exercise of Pre-Funded Warrants, sold in the Rodman Offering), at a per share exercise

price of $ 0.4375 (which represents 125% of the public offering price per Common Unit) (the “Placement Agent Warrants”).

B Preferred Stock Conversion

February 24, 2026, Auctus converted its remaining 1,398,158 shares of Series B Preferred Stock into 1,398,158 shares of Common Stock.

Following this conversion, no shares of Series B Preferred Stock remain outstanding as of March 31, 2026.

Stock Repurchase Program

1 unchanged sentence

up to $ 2,000,000 of its outstanding Common Stock through June 16, 2026.

No repurchases have been made as of September 30, 2025.

No repurchases have been made as of March 31, 2026.

Stock Issuances

the three months ended September 30, 2025, there were no issuances of common stock by the Company.

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.

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 .

During the three months ended March 31, 2025, the Company issued 63,525 shares of Common Stock to Auctus Fund, LLC

in partial satisfaction of shares held by abeyance.

During the three months ended March 31, 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 .

the three months ended March 31, 2026, the Company issued 918,055 shares of Common Stock to Auctus in full satisfaction of shares held

addition, during the three months ended March 31, 2026, the Company issued:

(i) 12,560,715 shares of Common Stock, and 1,725,000 shares

of Common Stock upon the exercise of all outstanding Pre-Funded Warrants, in connection with the Rodman Offering (see “ Rodman

Offering” above);

and (ii) 1,398,158 shares of Common Stock upon the conversion of the remaining outstanding shares of Series

B Preferred Stock (see “ Series B Preferred Stock Conversion” above).

5 – FAIR VALUE MEASUREMENT

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

February 24, 2026, the Company estimated the aggregate fair value of the Existing Warrants and New Warrants to be $ 179,228 using the

Black-Scholes option price model (Level 3 inputs).

The change in fair value of $ 1,220,121 from January 1, 2026 through February 24, 2026

is included in gain on change in fair value of warrant liabilities in the unaudited condensed consolidated statements of operations for

the three months ended March 31, 2026.

On that date, the Existing Warrants and New Warrants were reclassified from warrant liabilities

to additional paid-in capital, and no warrant liability remains outstanding as of March 31, 2026.

The following table shows the detail

of the valuation assumptions used:

OF FAIR VALUE VALUATION ASSUMPTIONS

February 24, 2026

Risk free interest rate

2 unchanged sentences

Expected volatility

Expected dividends

OF FAIR VALUE MEASURED ON RECURRING BASIS

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:

For the Three Months Ended September 30,

Balance, July 1,

Change in fair value of warrant liability

109 % - 129 %

Balance, September 30,

Expected dividends

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:

For the Nine Months ended September 30,

basis during the three months ended March 31, 2026 and three months ended March 31, 2025:

OF FAIR VALUE MEASURED ON RECURRING BASIS

For the Three Months Ended March 31,

Balance, January 1,

Change in fair value of warrant liability

Balance, September 30,

( 1,220,121 )

Reclassification of warrant liability

Balance, March 31,

and liabilities measured at fair value on a recurring basis are as follows:

1 unchanged sentence

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)

Quoted prices in

identical liabilities

Significant other observable inputs

Significant unobservable inputs

Total Fair Value

Marketable securities as of September 30, 2025

Marketable securities as of March 31, 2026

Marketable securities as of December 31, 2025

Warrant liabilities as of September 30, 2025

Warrant liabilities as of March 31, 2026

Warrant liabilities as of December 31, 2025

6 – SUBSEQUENT EVENTS

Offering and Private Placement

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.

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 .

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

Stock Issuance

October 27, 2025, the Company issued 220,000 shares of common stock to Auctus Fund, LLC in partial satisfaction of shares held by abeyance.

April 2, 2026, the Company’s Board of Directors approved an increase in the number of authorized shares of Common Stock to 1,500,000,000 ,

subject to stockholder approval.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements