Good afternoon, and welcome to the BioRestorative Therapies Second Quarter 2024 Investor Call. At this time, all participants are in a listen-only mode and we will open for questions following the presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Stephen Kilmer, Investor Relations. Stephen, the floor is yours.

Thank you. Good afternoon, everyone. Let me start by pointing out that this conference call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are based on BioRestorative Therapies' current beliefs, assumptions and expectations, and such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. No forward-looking statement can be guaranteed. For details on factors, among others, that could affect expectations, see Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission. Listeners are cautioned not to place undue reliance on these forward-looking statements. We speak only as of the date of this conference call. BioRestorative undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, other than as required by law. On the call today representing the company are Lance Alstodt, BioRestorative's Chairman and Chief Executive Officer; Francisco Silva, our Vice President of Research and Development; and Robert Kristal, the company's Chief Financial Officer. With that said, I'll now turn the call over to Lance.

Thank you, Steve, and good afternoon, everyone. Welcome to our second quarter quarterly conference call. On behalf of the management team and everyone at BioRestorative, I'd like to thank you for your interest in our company. And for those of you who are shareholders, we appreciate your support. We've had a very interesting and very productive first half of 2024. We're energized by the many potential value-enhancing inflection points that we see ahead. As you can see from the financial results we announced today, we're very pleased with our quarterly and first half success. The team has executed well on all of our programs, and with the commencement of our commercial platform and the execution of the Cartessa contract, we are also starting to make progress on a path to sustainable profitability. With that said, I'd like to turn the call over to Rob who's going to provide a brief overview on our second quarter financial results.

Thanks, Lance. Good afternoon, everyone. To streamline the presentation of the financial results, all the numbers I will refer to have been rounded so they are approximate. While it hasn't been fully reflected in our financial results, we did begin to derive some initial product revenue from our exclusive supply agreement with Cartessa in the second quarter. As a reminder, the goal of the agreement is to combine our deep cell-based biologics experience and formulation and clinical manufacturing expertise with Cartessa's extensive professional aesthetics market reach and marketing and distribution capabilities. As part of the exclusive five-year agreement, we have agreed to supply significant pre-set minimum quantities of finished vials of our current cell-based biologic commercial product to Cartessa annually as a private label under Cartessa's Chronos ExoCR mark. This product is formulated and manufactured by using our cGMP ISO-7 certified clean room and is comprised of a cell-based secretome containing billions of exosomes, proteins and growth factors. While the absolute number is still relatively small at this stage, our initial supply of product to Cartessa contributed to a 154% sequential growth in total revenues, growing from $35,000 in Q1 2024 to $89,000 in Q2 2024. Moving forward, we expect revenues to continue to grow materially both on an absolute and a percentage basis as we supply at least the minimum quantities of finished vials of the product under the agreement. For the three-month period ended June 30, 2024, BioRestorative had a loss from operations of $2.5 million, a 19% year-over-year improvement from the $3.1 million loss for the comparable period of 2023, and a 39% improvement sequentially from the $4.1 million loss in the first quarter of 2024. Cash used in operating activities in Q2 2024 was $1.9 million, and the company ended the second quarter in a strong financial position with cash, cash equivalents and marketable securities of $14.7 million and no outstanding debt. We expect that this cash level, combined with meaningful revenues we expect from our commercial BioCosmeceutical business, should make us significantly less reliant than most of our clinical-stage life sciences company peers on the capital markets going forward. With that, I'll turn the call over to Francisco for a review and update of our development programs.

Thanks, Rob. For the benefit of those who are new to BioRestorative's story, I would like to start by taking a moment to briefly describe our clinical BRTX-100 and our preclinical ThermoStem pipeline programs. Our lead cell therapy candidate, BRTX-100, is a novel cell-based therapeutic engineered to target areas of the body that have little or low blood flow. The product is formulated using autologous or your own cultured mesenchymal stem cells collected from the patient's bone marrow. We intend that the product will be used for the non-surgical treatment of painful lumbosacral disc disorders or as a complementary therapeutic to a surgical procedure. The safety and efficacy of BRTX-100 in treating chronic lumbar disc disease, or CLDD, is being evaluated in our ongoing Phase II prospective randomized double-blinded control study. A total of up to 99 subjects are currently being enrolled at 16 clinical sites in the United States. Subjects included in the treatment will be randomized 2-to-1 to either receive BRTX or sham. In our core preclinical metabolic program, ThermoStem, we are developing a cell-based therapy candidate to target obesity and metabolic disorders using brown adipose or fat-derived stem cells, which we call BADSCs, to generate brown adipose tissue as well as exosomes secreted by the BADSC. BAT is intended to mimic naturally occurring brown adipose depots that are found in the body that can regulate metabolic homeostasis in humans and is involved in weight loss. Previously published peer-reviewed preclinical data from a study conducted in collaboration with the University of Utah School of Medicine demonstrated that functional brown adipose-derived stem cells formatted using our Patter10 ThermoStem platform produced significant reductions in weight consistent with losses achieved by GLP-1 pharmaceuticals. The blood glucose levels and diet-induced obesity model in mice, it is important to note that although further work is needed to fully understand the mechanism of action of ThermoStem, its impact on weight loss, we have not seen nor do we expect the same negative secondary effects of GLP-1 pharmaceuticals, such as loss of muscle mass or negative cardiovascular effects. We have achieved significant milestones in both of these core developmental programs over the past few weeks and months. With respect to BRTX-100, in April, the FDA cleared an important amendment to our Phase 2 study protocol, which removes the saline injection in the control arm of the study and replaces it with the sham injection. With the protocol change, control patients now have a needle placed in close proximity to the target disc, but the disc is not pierced, nor does it receive a saline injection. We believe this brings additional safety to our subject participants. In addition, it is well established that saline can rehydrate the disc and create a change in the disc microenvironment. This change, although transient, may result in short-term pain relief, so the protocol amendment helps preclude the possibility of transient clinical outcomes in the control group, which could potentially impact end-of-study readouts in trials like this. We believe, with the FDA clearance of this important amendment, highlights our positive relationships with the agency. We remain confident that we will be fully enrolled in the Phase 2 study by the end of 2024 and look forward to providing additional preliminary data updates as we progress. Shifting now to our Pattern and ThermoStem platform, we were pleased to announce mid-quarter the development of a novel exosome-based biologic program targeting obesity. Exosomes are small intracellular vesicles secreted by various cells, including stem cells. They are understood to play an important role as mediators for intracellular communication and have been found to play a role in adipose fat metabolism by transporting cargo such as non-coding RNAs and proteins and other factors that may impact weight loss. This new therapeutic candidate has the potential to serve as an adjuvant as well to existing weight loss drugs and programs, potentially allowing for lower dosing as well as the prevention or minimization of possible muscle mass loss and negative cardiovascular effects. Importantly, as awareness of the promise of our ThermoStem-based BADSC holds for the treatment of obesity and related metabolic disorders continues to grow, it is important that this potentially game-changing opportunity is well protected, both for us and any current and or future potential licensing partners. We believe that a broad intellectual property portfolio can also be leveraged across drugs that are currently approved or marketed for weight loss, potentially opening up the door for future big pharma partnership opportunities for the company. To that end, we have methodically built a comprehensive portfolio of issued patents that cover both U.S. and international markets, and we are pleased to see that we are already formidable IP estate expanding in the second quarter via our notice of allowance for the fifth Japanese patent covering technology. Also in the second quarter, our positive preclinical data and strong intellectual property portfolio began to bear fruit as we entered into substantive discussions with an undisclosed commercial stage regenerative medicine company with regard to a potential license agreement for a ThermoStem metabolic disease program. Those discussions are continuing, and while we cannot provide interim progress updates nor provide any assurances that we will come to a mutually acceptable agreement, we are committed to closing the loop on this as soon as practicable. To summarize, we are making good progress with our Phase 2 clinical trial using BRTX-100 to treat chronic lumbar disc disease. We have added a new therapeutic candidate targeting the BADSC ThermoStem program. We are involved in substantial discussions for a potential out-licensing agreement for the ThermoStem Metabolic Disease Program, and we have begun to commercialize our technology with Cartessa in the BioCosmaceutical markets. Now I will turn over the call back over to Lance.

Thank you, Francisco. As you can all see from what the team just reviewed, we've had a great and productive first half of 2024. I'm very energized by many of the upcoming value-enhancing inflection points that we see ahead. Our second quarter financial results also demonstrate that we're starting to make progress on a path to sustainable profitability. As we move forward, we'll drive that by continuing to focus squarely on carefully managing our resources as we advance our two core clinical development programs, while leveraging the significant cash flow we anticipate coming soon from our transformative BioCosmeceuticals agreement with Cartessa. So to summarize, the FDA has recently cleared an important amendment to the protocol on the ongoing Phase 2, replacing saline injection with a sham injection in the control arm. This is great for us, and it's great for patients in the trial. Patient recruitment in the study is going very well through the hiring of Galen and we expect a complete enrollment before the end of 2024. We intend to present more data from this trial like we did before on a blinded basis, but with a larger patient population. And we are very optimistic that this data will be consistent with previous trends. Based on our very strong data from our preclinical animal study in obesity, we've enhanced our preclinical metabolic program with a novel exosome-based therapeutic candidate targeting obesity. We're continuing to proactively expand the already formidable ThermoStem intellectual property estate to help ensure long-term market exclusivity and the continued discussions from a strategic licensing perspective. Our promising preclinical work and strong IP estate have resulted in entering into some of these discussions for the ThermoStem metabolic disease program and substantive licensing discussions that are ongoing. Our strategic agreement with Cartessa, an established aesthetics market leader, serves to validate our BioCosmeceuticals platform and represents a transformative step towards our building a strong commercial engine capable of supporting profitable growth while also helping fund the continued advancement of BRTX-100 and ThermoStem. We intend to add a family of patents protecting our BioCosmeceuticals platform and expand the existing relationship with additional product lines before the end of 2024. Finally, we ended the second quarter in a very strong financial position with cash and cash equivalents marketable securities of $14.7 million as of June 30, 2024. That combined with our steady, steadily improving financial performance provides us with an additional flexibility financially and puts us on the pathway to profitability. Thank you. And with that concluding our introductory remarks, we're happy to take any questions you may have.

Thank you very much. We will now be conducting our question-and-answer session. Thank you. Your first question is coming from Jonathan Aschoff of ROTH MKM. Jonathan, your line is live.

Thank you. Good afternoon, guys. I was wondering given what sounds like apparent BRTX 100 data confidence, are you saying that you are already seeing blinded data have a 2 to 1 split of activity kind of like the 3 to 1 split you reported on in February?

The first four patients, as you know, had a 3 to 1 randomization. The remaining patients after those four are randomized 2 to 1, so the data would be cut that way. And even with that, we are starting to see again we're blinded or at least I am. So what we see is improvement and reduction of pain and increase in function off of baseline with some of the patients. And then other patients, we're seeing a fairly consistent flat trend relative to baseline. Based on how many patients we're talking about in the randomization, I think there's a very clear signal as there was with the first four patients. So I think it's very consistent.

So that's affirmative to seeing a 2 to 1 trend with more patients, given the new randomization. That's definitely encouraging. Can you help us understand anything about the magnitude of minimum Cartessa purchase quantities or is that not something we can go into?

Well, I think I might have given some indication in the past that what we're talking about is a low, multi-million-dollar revenue contract over the course of 12 months. And that would represent the first year. Obviously, this is a five-year exclusive agreement. So while we are not giving guidance on quarterlies until we feel comfortable with the ebbs and flows and tactical dynamics of how each invoice is booked and paid for, we have clear sight as to what that number will look like over the course of 12 months.

And the 81,000 represents how many days of the second quarter that you could have still delivered them product?

We'll have to calculate that, but the contract was late April, so you can figure it out. Without being able to spell out the agreement for you, if you're going to do it based on days, you're not going to come up with the right math. There's a series of milestones and other provisions within the agreement that sets off the first couple of payments. I see what you're doing, but it's not a linear equation.

Right. That should clearly go up. Can I ask you, when is the 10-Q coming out and do you expect any delay like last quarter?

No, I believe it will take some time. If it hasn't been filed yet, it will be filed at some point before 5:30 tonight.

Thank you, guys. I'm assuming that there's really nothing else you can say about a potential BADSC deal, so I guess that's the end of my questions. Thanks.

Okay. Thank you, Jonathan.

Thank you very much. Your next question is coming from Michael Okunewitch of The Maxim Group. Michael, your line is live.

Hi, everyone. Thank you for taking my question. I want to congratulate Francisco on becoming the Section Editor for the Journal of Translational Medicine. That's fantastic.

Thank you, Michael.

So, I guess just in relation to the ThermoStem partnering, would you be looking to launch the study and proceed as though you weren't going into a partnership? Just based on the timelines for the DMS filing, would you be looking to move into a first-in-human regardless of whether or not you have a signed partnership deal?

Yes, I think from the point of view of the DMF, the DMF is strategic in that it allows for the third parties to reference our preclinical data, our CMC section on manufacturing and cell identity. I do believe that with that, our partners could potentially leverage first-in-man studies relatively quickly whether it happens here in the U.S. or ex-U.S.

All right. Thank you. And then you have said that you're looking to provide some preliminary data. I think in here you do say before year-end 24. So, I would just like to get an idea of what sort of duration after treatment we could be seeing just given the timeframe and trial start. What would be the longest we would be able to look at these patients for?

Right. So we've submitted a few abstracts for a few conferences that we expect to get feedback and we did begin presenting some of this later-term data that is a follow-up from last year or earlier this year. We're talking about disclosing again, in a blinded fashion, it would be the 52-week mark on some of these subjects. So, it's one of the key components where in the trial, we're talking about our first primary efficacy endpoint, which is our 52-week mark. So, that's the type of data we're looking to deliver.

And then one last one for me just with regards to the protocol amendment. I know that was cleared in April. So, have there been any patients that have been dosed or randomized into that placebo group prior to it changing to a sham and then is that something you're going to have to stratify in the data?

Yes. There was a handful of patients that were previously part of the original protocol. We've worked it with stats and we're still within the proper powering numbers that we need to make sure that we can hit our efficacy endpoints considering the change with the group. So, yes, we feel pretty good with the data that should be coming shortly.

All right. Well, thank you very much. I'm looking forward to it and congrats on all the progress. Thank you.

Thank you.

Thank you.

Thanks very much. Your next question is coming from Elemer Piros of Rodman and Renshaw. Elemer, your line is live.

Yes, good afternoon. Lance, by the way the 10-Q is out. It's on Edgar for the last 10 or 15 minutes.

Okay. Thank you, Elemer. There you have it, Jonathan.

You're welcome. So, I wanted to ask just a little housekeeping question from Rob on the G&A expense for this quarter, which was probably very, very low and I'm sure that it's an anomaly. Would you please help us to look at the second half of G&A expenses and where would they sort of average on a quarterly basis?

Well, Q1 is usually a little higher, Elemer, so you can kind of take what you have now and divide it by two, but you have to skew up Q1 a little bit. It's non-cash; essentially, that is the real difference.

Okay, because I'm looking at…

And there may be some timing. There could be some timing issues in there as well.

So, it's more like in the $2 million on a quarterly basis that you would feel comfortable with in that sort of ballpark?

Yes, but there's other things there. As the trial enrolls, you would see a trend higher.

I'm talking about G&A only, Rob.

Right. There could be expenses related to G&A though, as well. There's vendors. There's considerations.

Okay, cool. Thank you. And, Francisco, if I heard you correctly, the DMF itself may be a rate-limiting step to conclude or a key element to a potential agreement on thermostat. Is that what you were alluding to?

No, I don't think it's a rate-limiting step, but I think it's a key element to facilitate the out-licensing opportunities with the program. A lot of groups that are interested in cell-based technologies, they don't want to do a lot of the early work in terms of the CMC section that comes along with it. And DMF is a living document that's consistently being updated that will allow for a lot of the third parties to begin to reference. So, right now, it's heavily built on manufacturing, cell identity, and showing the safety from an allogeneic point of view in vitro. And as we develop it into the clinical programs, which we're aggressively pursuing, that DMF will begin to incorporate a lot of the clinical data, which is our key goal with the program. So, I don't want to say it's rate-limiting but it's a very important component to the program that we're launching. It's really a strategic vehicle for us to facilitate out-licensing and to develop these programs with strong therapeutics.

And if I could also just add to that, just to be clear that it's not – if you're thinking it's dependent on us doing a strategic licensing deal that we've alluded to, it's not necessarily connected in the sense that it must come first before we have an announceable event.

And it will come soon enough. I mean, you project it to be submitted during the next month and a half or so?

The DMF? Correct.

Yes.

Yes. We intend to do that soon.

Okay. And, you sound very confident that you could achieve the 99-patient enrollment mark by the end of the year. Have you seen an acceleration since you amended the protocol, or is that just an independent factor of that?

A combination of factors. One of them, I think, can be attributed to the change in protocol, but we've hired Galen, which is an organization that is on the marketing and recruiting side of it, something that we didn't have early on. And they've been able to refer a tremendous amount of patients. So, we're very pleased with that activity, and the numbers are projected to be kind of where we've outlined from a timing perspective. Now, look, the real world, things can move. They can slip. But where we are right now, we feel pretty good about where this new activity has been coming from.

Okay. And, Lance, I don't mean to put words in your mouth, but I've heard you and Francisco alluding to potentially multiple ThermoStem transactions or agreements. Are you thinking about indication-specific or geographic-specific potential deals? Multiple, potentially?

Possibly multiple deals. I don't want to lean too heavy on those words. Obviously, we have had a number of conversations with multiple potentially interested parties for different indications. I think, as you know, obesity is one of the things we think would drive and suit the technology very well. Metabolic syndrome can be defined and splintered into a number of other indications as well. So, I guess we'll leave it at that for now.

Thank you very much.

Thank you very much. Your next question is coming from Todd Morrison, who's a private investor. Todd, your line is live.

Hi, guys. Congratulations on the quarter. Just one question. Excited to see that the Cartessa agreement is finally generating revenues. Do you see the opportunity to possibly expand your commercial agreement with Cartessa or to possibly pursue other agreements in the biocosmetic space?

That's a great question. Thank you, Todd. I'm excited to talk about that because we have ExoCR, which is a serum that's used topically on the face, and there we have an exclusive five-year agreement with Cartessa here in the U.S. There are some Ex-U.S. opportunities that we can pursue with ExoCR. So, from a channel and distribution perspective, we will initiate and have had some preliminary conversations with distribution and sales and marketing outside of the U.S. where we're permitted to. But more importantly, we have, using the basis of this technology to go into other applications, we've developed and formulated some family of products that we will most likely be rolling out in the fall of this year, this upcoming fall, and we will give Cartessa the opportunity to review it and to hopefully agree to what we're proposing. However, if for whatever reason that's not something that would work in their favor, we're happy to market that with the assistance of others. But it seems very logical that this would fit into their family of products using their distribution, sales, and marketing capabilities as well as some of their key relationships. So, my guess is we would have a larger revenue attributed to this commercial operation in BioCosmeceutical as this year goes on, not just from the existing contract but a future contract related to the new products in development.

That's terrific. Well, thank you very much.

Thank you, Todd. Appreciate it.

Thank you very much. Well, we appear to have reached the end of our question-and-answer session. I will now hand back over to Lance for closing remarks.

I would just say thank you very much to all of our investors, our shareholders, our analysts that cover our stock and spend time learning about our company and continuing to support us. And we look forward to speaking to you all soon. Have a great rest of your week.

Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.

Thank you, Jenny.