What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-14 compared with 2025-11-12 · 121 added, 171 removed, 156 unchanged (65% of the section changed)

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ability to successfully engage in any new business lines that we pursue;

related to the restatement of our previously issued financial statements.

related to our failure to meet the continued listing requirements of Nasdaq which could result in a delisting of our Common

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

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research applications.

of September 30, 2025, our accumulated deficit was $166,713,054.

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

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

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

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

of March 31, 2026, our accumulated deficit was $172,075,095 We have historically only generated a modest amount of revenue, and our

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

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

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

develop therapeutic products and medical therapies using cell and tissue protocols, primarily involving adult stem cells.

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

We have received authorization from the FDA to commence

a Phase 2 clinical trial investigating the use of BRTX-100 in the treatment of chronic lower back pain arising from degenerative

disc disease.

We have commenced such clinical trial through the execution of a CRO agreement with Professional Research Consulting, Inc.,

d/b/a PRC Clinical, the execution of clinical trial site agreements, patient enrollment, the commencement of patient procedures, the

purchase of manufacturing equipment and the expansion of our laboratory to include capabilities for clinical production.

We have received

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

In June 2023, we

received a unanimous recommendation from the Data Safety Monitoring Board to continue our Phase 2 clinical trial without any changes.

We have obtained a worldwide (excluding Asia and Argentina) exclusive license to use technology for investigational adult stem cell treatment

of disc and spine conditions, including protruding and bulging lumbar discs.

The technology is an advanced stem cell injection procedure

that may offer relief from lower back pain, buttock and leg pain, and numbness and tingling in the leg and foot.

We are investigating

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

Pursuant to authorization received from the FDA, we are

conducting a Phase 2 clinical trial investigating the use of BRTX-100 in the treatment of chronic lower back pain arising from

degenerative disc disease.

We have received a license from the New York State Department of Health to act as a tissue bank for mesenchymal

stem cell processing.

In June 2023, we received a unanimous recommendation from the Data Safety Monitoring Board to continue our Phase

2 clinical trial without any changes.

We have obtained a worldwide (excluding Asia and Argentina) exclusive license to use technology

for investigational adult stem cell treatment of disc and spine conditions, including protruding and bulging lumbar discs.

The technology

is an advanced stem cell injection procedure that may offer relief from lower back pain, buttock and leg pain, and numbness and tingling

in the leg and foot.

We are investigating the expansion of the clinic application of BRTX-100 to other indications within the

are also developing our ThermoStem Program .

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regard to BRTX-100 .

addition, in continuation of our mission of developing and commercializing cell-based biologics, we are seeking to develop a biologics-based

cosmetic products business.

Pursuant to such business, we would formulate, manufacture and sell products designed for cosmetic and aesthetic

In April 2024, we announced that we entered into a five-year exclusive supply agreement with Cartessa Aesthetics, LLC (“Cartessa”),

a leading North American based aesthetic company, to supply to Cartessa our first commercial product.

derive revenue pursuant to a license agreement with a stem cell treatment company (the “SCTC”) entered into in January 2012,

addition, in continuation of our mission of developing and commercializing cell-based biologics, we have developed a biologics-based

cosmetic products business through which we formulate, manufacture and sell products designed for cosmetic and aesthetic uses.

Our biocosmeceutical

product offerings consist of two product lines:

ExoCR, which is sold pursuant to a supply agreement with Cartessa Aesthetics, LLC (“Cartessa”),

a North American aesthetic company, and BioX, which we commenced selling commercially during the three months ended March 31, 2026 to

multiple customers in the ordinary course of business.

derive royalty revenue pursuant to a license agreement with a stem cell treatment company (the “SCTC”) entered into in January

2012, as amended in November 2015 and November 2022.

Pursuant to the license agreement, the SCTC has granted to us an exclusive license to

Pursuant to the license agreement, the SCTC granted to us an exclusive license to

use certain intellectual property related to, among other things, stem cell disc procedures and we have granted to the SCTC a sublicense

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certain of the licensed intellectual property.

In consideration of the sublicense, the SCTC has agreed to pay us royalties on a per disc

procedure basis.

have also derived product revenue from our five-year exclusive supply agreement with Cartessa entered into in April 2024.

Stock Repurchase Program

June 16, 2025, our Board of Directors authorized a common stock repurchase program under which we may repurchase up to $2,000,000 of

our outstanding common stock through June 16, 2026.

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

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

disc procedure basis.

also derive product revenue from sales of our biocosmeceutical product offerings.

During the three months ended March 31, 2026, we derived

$11,870 of product revenue, all of which was generated from sales of our BioX product line.

We did not derive any revenue from our supply

agreement with Cartessa during the three months ended March 31, 2026.

We did not generate any product revenue during the three months

ended March 31, 2025.

of Operations

of the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024

financial results for the three months ended September 30, 2025 are summarized as follows in comparison to the three months ended September

of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025

financial results for the three months ended March 31, 2026 are summarized as follows in comparison to the three months ended March 31,

For the Three Months Ended

September 30,

Cost of goods sold

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Loss From Operations

Other Income:

Interest income

Other Income (Expense):

Dividend and interest income, net

Change in fair value of warrant liabilities

Total Other Income

Total Other Income (Expense)

$ (2,154,405 )

$ (5,339,799 )

the three months ended September 30, 2025 and 2024, we generated $11,800 and $2,900, respectively, of royalty revenue in connection with

our sublicense agreement with the SCTC.

The increase was primarily due to an increase in disc procedures.

the three months ended September 30, 2025 and 2024, we generated $0 and $230,700, respectively, of cosmetic product sales revenue in

connection with our exclusive supply agreement with Cartessa.

The decrease is primarily related to the timing of orders for this new

developing revenue stream.

the three months ended March 31, 2026, we generated total revenues of $23,170, comprised of $11,870 of product revenue and $11,300 of

royalty revenue, as compared to total revenues of $25,000, comprised entirely of royalty revenue, for the three months ended March 31,

Royalty revenue, which is derived from our sublicense agreement with the SCTC, decreased by $13,700, or 54.8%, to $11,300 from

$25,000, primarily due to a decrease in disc procedures performed by the SCTC.

Product revenue, which is derived from sales of our biocosmeceutical

product offerings, increased by $11,870 to $11,870 from $0, due to the commencement of commercial sales of our BioX product line during

the three months ended March 31, 2026.

and Development

and development expenses include cash and non-cash compensation of (a) our Vice President of Research and Development;

(b) our Scientific

Advisory Board members;

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

Research and development expenses are expensed as they are incurred.

For the three months ended September 30, 2025, research

and development expenses increased by $1,141,387 or 78.5%, as compared to the three months ended September 30, 2024.

The increase was

primarily the result of an increase in recruitment and other costs for our Phase 2 clinical trial of $850,037, an increase in lab supply

expense of $247,664 and an increase in stock-based compensation expense of $42,065 partially offset by a decrease in headcount costs

of $26,025 and a decrease in bonus expense of $17,625.

We expect that our research and development expenses will continue to increase

in subsequent fiscal periods.

and development expenses include cash compensation of (a) our Vice President of Research and Development;

(b) our Scientific Advisory

Board members;

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

Research and development expenses

are expensed as they are incurred.

For the three months ended March 31, 2026, research and development expenses decreased by $720,589

or 27.2%, as compared to the three months ended March 31, 2025.

The decrease is primarily attributed to a decrease in stock-based compensation

expense of $799,983, a decrease in general lab supplies expense of $83,447, and a decrease in bonus expense of $61,625, partially offset

by an increase in recruitment and other costs for our Phase 2 clinical trial of $230,824.

and Administrative

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For the three months ended

September 30, 2025, general and administrative expenses increased by $66,504, or 6.3%, as compared to the three months ended September

30, 2024, primarily driven by an increase in stock-based compensation expense of $73,623, an increase in payroll of $58,546, and an increase

in consulting expense of $16,655, partially offset by a decrease in professional fees of $79,744.

the three months ended September 30, 2025, interest income was $57,740 as compared to interest income of $158,547 for the three months

ended September 30, 2024.

The change was primarily due to a decrease in interest income from the investments held in marketable securities

due to a lower average balance of the marketable securities during the 2025 period as compared to the 2024 period.

the three months ended September 30, 2025, other income was $930, as compared to other income of $566 for the three months ended September

The change was primarily due to an increase in dividend income from investments held in marketable securities.

in Fair Value of Warrant Liabilities

the three months ended September 30, 2025, we recognized a gain on the change in fair value of warrant liabilities of $612,064, related

to the decrease in fair value of warrants that are accounted for as warrant liabilities.

For the three months ended September 30, 2024,

we recognized a gain on the change in fair value of warrant liabilities of $1,036,464, related to the decrease in fair value of warrants

that are accounted for as warrant liabilities.

of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024

financial results for the nine months ended September 30, 2025 are summarized as follows in comparison to the nine months ended September

For the Nine Months Ended

September 30,

Cost of goods sold

Operating Expenses:

Research and development

General and administrative

Total Operating Expenses

Loss From Operations

(11,821,832 )

Other (Expense) Income:

Interest income

Gain on exchange of warrants

Change in fair value of warrant liabilities

Total Other Income

$ (11,034,339 )

$ (7,343,233 )

the nine months ended September 30, 2025 and 2024, we generated $40,100 and $57,700, respectively, of royalty revenue in connection with

our sublicense agreement with the SCTC.

The decrease was primarily due to a decrease in disc procedures.

the nine months ended September 30, 2025 and 2024, we generated $300,000 in each period of cosmetic product sales revenue in connection

with our exclusive supply agreement with Cartessa.

and Development

and development expenses include cash and non-cash compensation of (a) our Vice President of Research and Development;

(b) our Scientific

Advisory Board members;

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

Research and development expenses are expensed as they are incurred.

For the nine months ended September 30, 2025, research

and development expenses increased by $2,462,738, or 49.2%, as compared to the nine months ended September 30, 2024.

The increase was

primarily the result of an increase in recruitment and other costs for our Phase 2 clinical trial of $2,010,122, an increase in lab supply

expense of $438,183, and an increase in headcount costs of $19,290, partially offset by a decrease in bonus expense of $86,372 and a

decrease in stock-based compensation expense of $5,976.

We expect that our research and development expenses will continue to increase

in subsequent fiscal periods.

and Administrative

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

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

For the nine months ended

September 30, 2025, general and administrative expenses increased by $478,967, or 11.4%, as compared to the nine months ended September

30, 2024, primarily driven by an increase in stock-based compensation expense of $246,803 related to the vesting of awards, an increase

in consulting expense of $127,621, and an increase in payroll of $91,274, partially offset by a decrease in professional fees of $20,748.

the nine months ended September 30, 2025, interest income was $231,621, as compared to interest income of $497,089 for the nine months

ended September 30, 2024.

The change was primarily due to a decrease in interest income from the investments held in marketable securities

due to a lower average balance of the marketable securities during the 2025 period as compared to the 2024 period.

the nine months ended September 30, 2025, other income was $3,336, as compared to other income of $150,498 for the nine months ended

September 30, 2024.

The change was primarily due to a one-time payment received in the 2024 period in connection with the development

of our biocosmeceuticals product line.

on Exchange of Warrants

the nine months ended September 30, 2024, we recognized a gain on exchange of $1,711,698 related to the issuance of warrants and common

stock in exchange for the cancellation of existing warrants.

There was no gain on exchange of warrants for the nine months ended September

March 31, 2026, general and administrative expenses decreased by $707,518, or 32.4%, as compared to the three months ended March 31,

The decrease is primarily attributed to a decrease in stock-based compensation expense of $918,928, partially offset by an increase

in professional fees of $141,428, an increase in headcount costs of $64,583 and an increase in consulting expense of $17,019.

and Interest Income, net

the three months ended March 31, 2026, dividend and interest income, net of interest expense decreased by $95,129, or 95%, to $5,479

as compared to interest income of $100,608 for the three months ended March 31, 2025.

The change was primarily due to a decrease in interest

income from the investments held in marketable securities due to a lower average balance of the marketable securities during 2026 as

compared to 2025.

the three months ended March 31, 2026, other income was $5,728, as compared to other income of $1,246 for the three months ended March

in Fair Value of Warrant Liabilities

the nine months ended September 30, 2025, we recognized a gain on the change in fair value of warrant liabilities of $552,536 related

to the decrease in fair value of warrants that are accounted for as warrant liabilities.

For the nine months ended September 30, 2024,

we recognized a loss on the change in fair value of warrant liabilities of $837,466 related to the increase in fair value of warrants

that are accounted for as warrant liabilities.

the three months ended March 31, 2026, we recognized a gain on the change in fair value of warrant liabilities of $1,220,121, primarily

reflecting the decrease in our stock price between January 1, 2026 and February 24, 2026, the date on which the warrants previously classified

as derivative liabilities were reclassified to equity.

For the three months ended March 31, 2025, we recognized a loss on the change

in fair value of warrant liabilities of $634,119 related to the increase in our stock price during that period.

and Capital Resources

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

September 30, 2025

March 31, 2026

December 31, 2025

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Investments held in marketable securities

Working capital

capital decreased by $6,124,034 primarily due to $8,373,790 of cash used to fund our operations and the $6,297,318 decrease in marketable

securities, offset by $6,496,796 of cash provided by investing activities and the $1,931,548 of cash provided by financing activities.

Working capital (deficiency)

capital increased by $2,771,100, from a working capital deficiency of $586,029 at December 31, 2025 to working capital of $2,185,071

at March 31, 2026.

The increase in working capital was driven primarily by a $1,399,349 reduction in current liabilities resulting from

the reclassification of warrant liabilities to equity in connection with the conversion of the Series B Convertible Preferred Stock,

a $674,597 decrease in accounts payable, and a net increase in current assets, of which cash and cash equivalents increased by $1,601,491

(partially offset by a $962,383 decrease in investments held in marketable securities).

The net increase in cash and cash equivalents

reflected $4,440,836 of cash provided by financing activities and $968,447 of cash provided by investing activities, partially offset

by $3,807,792 of cash used in operating activities.

of Additional Funds

the nine months ended September 30, 2025, we had a net loss of $11,034,339 and negative cash flows from operations of $8,373,790, and

as of September 30, 2025, we had working capital of $1,271,781.

We anticipate that we will continue to incur net losses and negative

cash flows from operations as we execute our development plans during 2025 and beyond, as well as other potential strategic and business

development initiatives.

Based on these conditions, we believe we may not have sufficient cash for at least twelve months after the issuance

date of the financial statements included in this Quarterly Report which raises substantial doubt about our ability to continue as a

going concern.

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

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

We anticipate that we will continue to incur net losses and negative cash

flows from operations as we execute our development plans during 2026 and beyond, as well as other potential strategic and business development

Based on these conditions, we believe we do not have sufficient cash for at least twelve months after the issuance date

of the financial statements included in this Quarterly Report which raises substantial doubt about our ability to continue as a going

operating needs include the planned costs to operate our business, including amounts required to fund our clinical trials, working capital

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agreements on unattractive terms.

the nine months ended September 30, 2025 and 2024, our sources and uses of cash were as follows:

Nine Months Ended Septemer 30,

Listing Compliance

March 26, 2026, we received a notification letter from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we are not

in compliance with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain

a minimum closing bid price of $1.00 per share.

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we have an initial compliance period of

180 calendar days, or until September 22, 2026, to regain compliance.

We intend to monitor the closing bid price of our Common Stock

and consider available options to resolve the noncompliance, including effecting a reverse stock split of our Common Stock.

be no assurance that we will regain compliance with the minimum bid price requirement or otherwise be in compliance with the Nasdaq listing

See Note 1 to the unaudited condensed consolidated financial statements for additional information.

the three months ended March 31, 2026 and 2025, our sources and uses of cash were as follows:

Three Months Ended March 31,

Net Cash Used In Operating Activities

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$ (2,778,786 )

Net Cash Provided By (Used In) Investing Activities

$ (1,018,078 )

Net Cash Provided By Investing Activities

Net Cash Provided By Financing Activities

Net Increase in Cash

cash used in operating activities was $8,373,790 for the nine months ended September 30, 2025, primarily due to cash used to fund the

net loss of $11,034,339, adjusted for net non-cash expenses of $2,246,501, and $414,048 of cash provided by changes in operating assets

and liabilities.

Net cash used in operating activities was $5,882,501 for the nine months ended

September 30, 2024 , primarily due to cash used to fund the net loss of $7,343,233, adjusted

for net non-cash expenses of $1,520,670, and $59,938 of cash used in changes in operating assets and liabilities.

cash provided by investing activities was $6,496,796 for the nine months ended September 30, 2025 primarily due to a sale of marketable

securities which provided $9,212,343 of cash, offset by a purchase of marketable securities which used $2,679,147 of cash and a purchase

of equipment which used $36,400 of cash.

Net cash used in investing activities was $1,018,078 for the nine months ended September 30,

2024 primarily due to a purchase of marketable securities which used $18,294,566 of cash and a purchase of equipment which used $93,755

of cash, offset by a sale of marketable securities which provided $17,370,243 of cash.

cash provided by financing activities was $1,931,548 for the nine months ended September 30, 2025 due to net proceeds of $1,938,445 received

in connection with the issuance of common stock for the 2024 ATM offering and $42,411 due to the exercise of stock options, partially

offset by deferred offering costs of $49,308, compared to $7,505,646 net cash provided by financing activities for the nine months ended

September 30, 2024 due to net proceeds of $7,528,027 received in connection with the exercise and issuance of warrants, partially offset

by deferred offering costs of $22,381.

cash used in operating activities was $3,807,792 for the three months ended March 31, 2026, primarily due to cash used to fund the net

loss of $2,154,405, adjustments to net non-cash expenses of $883,576, and $769,811 of cash used in changes in operating assets and liabilities.

Net cash used in operating activities was $2,778,786 for the

three months ended March 31, 2025 , primarily due to cash used to fund the net loss of $5,339,799

and $31,214 of cash used in changes in operating assets and liabilities, partially offset for adjustments to net non-cash expenses of

cash provided by investing activities was $968,447 for the three months ended March 31, 2026 primarily due to sales of marketable securities

which provided $1,043,367 of cash, partially offset by purchases of marketable securities which used $74,920 of cash.

Net cash provided

by investing activities was $2,366,967 for the three months ended March 31, 2025 primarily due to sales of marketable securities which

provided $3,456,535 of cash, partially offset by purchases of marketable securities which used $1,053,168 of cash and a purchase of equipment

which used $36,400 of cash.

cash provided by financing activities was $4,440,836 for the three months ended March 31, 2026 due to the issuance of Common Stock and

pre-funded warrants in the Rodman public offering which provided gross proceeds of $5,000,000 of cash, partially offset by the payment

of issuance costs which used $559,164 of cash.

Net cash provided by financing activities was $1,092,718 for the three months ended March

31, 2025 due to the issuance of Common Stock in an at-the-market offering which provided $1,083,915 of cash and the exercise of stock

options which provided $42,411 of cash, partially offset by the payment of issuance costs which used $33,608 of cash.

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis