Greetings. Welcome to the BioRestorative Therapies Second Quarter 2025 Results and Business Update Conference Call. Please note, this conference is being recorded. I will now turn the conference over to your host, Stephen Kilmer, Investor Relations. You may begin.

Thank you, Ali. 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 our expectations, see Part 1, Item 1A of our annual report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission. Listeners are cautioned not to place undue reliance on these forward-looking statements, which 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 is 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.

Thanks, Steve. Good afternoon, everyone, and welcome. On behalf of the management team and everyone at BioRestorative, I'd like to thank you for your interest in the company. And for those of you who are shareholders, we appreciate your support. As you can see from the press release, we executed very well across all areas of the business in the second quarter, a continuation really from Q1, and we have a lot of exciting things to look forward to as we move through the second half of the year. With that said, I'd like to ask Rob Kristal, our CFO, to provide a brief overview of 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. Second quarter 2025 revenues were $303,000 compared to $89,000 in the same period last year. This represents an increase of 240%, primarily resulting from our contract manufacturing agreement on BioCosmeceuticals. The company's second quarter 2025 loss from operations was $3.3 million compared to $2.5 million for the comparable period of 2024. The company's second quarter 2025 net loss was $2.7 million or $0.30 per share compared to a net loss of $4 million or $0.50 per share for the second quarter of 2024. The company ended the quarter in a strong financial position with cash, cash equivalents and marketable securities of $7.4 million and no outstanding debt. With that, I'll now turn the call over to Francisco.

Thanks, Rob. For the benefit of those who are new to the BioRestorative story, I would like to take a moment to summarize our developmental programs. Our lead clinical stage candidate BRTX-100, is a novel cell-based therapeutic engineered to target areas of the body that have little blood flow. The product is formulated from autologous or a person's own cultured mesenchymal stem cells collected from the patient's bone marrow. The safety and efficacy of BRTX-100 in treating chronic lumbar disc disease, or CLDD, is being evaluated in an ongoing Phase II prospective randomized, double-blinded and controlled study. A total of up to 99 eligible subjects will be enrolled at up to 16 clinical sites across the United States. Subjects included in the trial will be randomized 2:1 to receive either BRTX-100 or placebo. In a recent presentation that I gave a few weeks ago as part of the Clinical Innovations track at the International Society for Stem Cell Research or ISSCR 2025 Annual Meeting in Hong Kong, I reviewed very promising blinded data from the first 36 subjects enrolled in the Phase II trial. By the way, that number of subjects was up more than twofold since my previous presentation at ISCT back just in May. To help put the preliminary binding results in perspective, the FDA is requiring at least a greater than 30% improvement in function in the Oswestry Disability Index, or ODI, and a greater than 30% reduction in pain on the visual analog scale, or VAS, in determining whether the clinical trial will be allowed to proceed and ultimately gain BLA approval. Thus far, BRTX-100 is doing much better than that as I presented at ISSCR. Over 74% of the subjects showed greater than 50% improvement in function by 52 weeks. Over 72% of the subjects reported greater than 50% reduction in pain by 52 weeks. And combined, greater than 50% improvement in both ODI and VAS measures was achieved by a meaningful portion of subjects across all time points. From a safety perspective, again, no serious adverse events or dose-limiting toxicities were reported between 26 and 104 weeks at the target dose of 40 million cells. The data presented at ISSCR was meaningful and demonstrated a strong signal towards safety and efficacy and has helped us in connection with an increased enrollment rate. In fact, I am pleased to report that we are now more than halfway through enrollment of our 99 subject enrollment goal. In addition, again, based on the positive preliminary data, we intend to meet with the FDA in connection with a proposed Type B meeting in order to accelerate the regulatory pathway towards the BLA license of our BRTX-100 candidate. This is really exciting news, and we hope to be in a position to discuss further in the coming weeks. Moving to our core preclinical metabolic program, ThermoStem, we are developing cell-based therapy candidates to target obesity and metabolic disorders using brown fat or fat-derived stem cells to generate brown adipose tissue or BAT as well as exosomes secreted by the BAT cells. BAT is intended to mimic naturally occurring brown adipose depots that regulate metabolic homeostasis in humans and is involved in weight loss. While further work is needed to fully understand the mechanism of action of thermostat and 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 and negative cardiovascular effects. As awareness of the promise that our ThermoStem-based BAT 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 our future potential licensing partners. Accordingly, we have been methodically building a comprehensive portfolio of issued patents that cover the U.S. and international markets. And we are pleased to see our previously reported substantive discussions with an undisclosed commercial-stage regenerative medicine company with regard to a potential license agreement for our ThermoStem metabolic disease programs are continuing. While we cannot provide interim progress updates and will provide any assurances that we will come to a mutually acceptable agreement, we are committed to closing the loop on this as soon as practical.

Thanks, Francisco. As you can see from what Francisco and Rob just reviewed, we've had an exciting and productive second quarter. And while that progress continues, we're carefully managing our resources as we advance our two core clinical development programs, BRTX-100 and ThermoStem, while ramping our commercial opportunities on regenerative biologic secretome products. With respect to the latter, we're in advanced discussions with key partners and influencers to help accelerate the growth of this program and look forward to reporting more catalysts and news from it going forward. So to summarize, we're making great progress with our Phase II trial for BRTX-100 to treat cLDD. And while the data is still blinded, the initial trends continue to be very encouraging. We have a great safety profile and also highlighted by a greater than 50% improvement in pain and function in a significant portion of cLDD subjects. We intend to present more data from this trial with a larger patient population, and we are very optimistic that this data will be consistent with the previous trends. In addition, and as highlighted by Francisco, we are very optimistic about our regulatory pathway now that we have gotten very close to about 3/4 of the trial enrolled. So we look forward to having that upcoming meeting with the FDA. We continue to be in substantive discussions with regard to a potential license of the ThermoStem metabolic IP, and we are also in substantive discussions with partners on the commercial BioCosmeceutical platform to help expand our contract manufacturing business opportunities. And finally, we ended the second quarter in a very strong financial position with cash, cash equivalents and marketable securities of $7.4 million as of June 30, 2025. We will continue to efficiently manage our cash reserves while executing upon our strategic goals. With that, I thank you all for your attention. Given some of our introductory comments, we're happy to take any questions you may have.

At this time, we will be conducting a question-and-answer session. Your first question for today is from Jonathan Aschoff with ROTH Capital Partners.

Could you say anything about the timing for the start of the cCDP trial and the size of that trial?

No, we did not comment on the cervical trial. Our goal, we could effectively pursue a variety of different indications. As everyone knows, our cervical trial has been approved to initiate a Phase II. And we probably could get the same sort of status on a variety of other avascular zones being hips, knees and shoulders. And I think what we really want to focus on is our lumbar trial and getting that into a BLA. So we're really encouraged by the tremendous growth that we've seen in enrollment over the quarter. I'm very proud of the team and our service providers in assisting us in that process. And our goal right now is to drive that into a Phase III. And hopefully, we'll have some really good insight in terms of how the FDA is thinking about it given how much we've enrolled recently.

Okay. On the revenue side with Cosmeceutical driving it, do you think that versus the last couple of quarters that this is pretty much up and up from here? Or is it too lumpy to say that?

I think it's a little early. Up and up is a difficult comment to react to because it's somewhat of a growing business. I think what we'll see is a tremendous increase in visibility. As you know, we've hired Sandy Lipkins, who is an innovator and a pioneer within the space and he's been doing a lot of the groundwork, making sure that some of the meaningful consumers of these products are aware of us. And from a back-office perspective, we've been making sure that we're appropriately documented and qualified and validated in order to commercialize these programs at a rate that would be consistent with some of our expectations. So we think it's up and up from the standpoint of starting at a certain base. But I don't have a whole lot of guidance for you in terms of what we should expect quarterly going forward.

Okay. Lastly, should we expect the same trend in SG&A expenses this year as we did last year, with heavy spending in the first quarter and much lighter expenses in quarters two through four?

Yes, that would be appropriate.

I would add that as we approach 2026 and if our enrollment continues at its current pace, along with positive developments from the FDA regarding our regulatory pathway, we can anticipate a reduction in SG&A costs due to needing fewer patient enrollments in the first couple of quarters of 2026 as we prepare for a Phase III trial.

Okay. Lastly, the COGS looked really kind of low for $303,000 in that revenue. Is that what it's going to look like going forward? I kind of a lot higher COGS than that.

Yes. I believe our margin related to some of the secretome products is significant. This is a business we want to pursue not only because it's a large market and even a small penetration rate can generate substantial revenue, but also because it has a high margin.

And Jonathan, I would add to the COGS specifically that we improved some efficiencies a little bit in terms of making product and then the packaging costs as well. We improved some pricing there by shopping really some different vendors for particular things we need in the packaging.

Your next question is from Michael Okunewitch with Maxim.

Thank you so much for taking my question today. Congrats on all the great progress. So I guess just to kick things off, we have seen some vocal support from FDA leadership for stem cells. You have a controlled study in Phase 2. You previously mentioned the desire to bring this as a registrational. And now that Type B meeting is planned. So have there been any new recent interactions with FDA suggesting there may be further support for that expedited pathway?

I can tell you anecdotally, what we've heard, which would imply that there is a lot of wind at our backs with respect to an accelerated pathway. However, we have not learned directly through our conversations with the FDA that we have been designated other than just our Fast Track designation, anything more than what we've disclosed.

All right. And then with regards to Phase 2, the threshold with FDA is 30% on pain and function, but that's from baseline, correct? So what would you need to show versus placebo? Is that a comparison based on the proportion of responders, magnitude? Can you just give a bit more color on that?

Yes. It's based on a minimum of at least 30% improvement in both pain and function compared to baseline. That group is then compared to a control group that does not receive any type of intradiscal injection, serving as a sham. We analyze both groups to evaluate our responder rate.

And Michael, I would like to clarify that our primary focus is safety. As Francisco mentioned, we have not experienced any significant adverse events or dose-limiting toxicity. To quote our CRO, this has likely the best safety profile they have ever observed. The FDA requires a solid safety record before evaluating some of the secondary efficacy endpoints. Based on the data we have discussed and analyzed on a blinded basis, we believe this product is not only extremely safe, but we are also observing a strong signal regarding its effectiveness.

Yes. No, what we've seen so far is certainly encouraging. I'd like to actually just follow up on that. And do you have a sense of when we could start to see some unblinded data? Is there a potential for an unblinded interim? Are we going to have to wait for the full 99? Or is this something that will be better asked on the back end of that Type B meeting?

I think it's better asked on the back half because it will really help shape what the regulatory strategy will be. We may be in a position to through blinded data, get to the next stage and maybe even get to the next stage prematurely, which would be phenomenal news and would be a huge cost savings and put us in a position of really driving the Phase 3. And if that is the decision and if that is the nature of the conversation, and remember, the tides have turned at least from the administration's perspective on cell-based therapies. So we feel like this wind at our back could drive to that potential outcome. And if so, we wouldn't want to give up the alpha associated with an interim analysis.

Yes. No, that makes a lot of sense, and it's certainly an encouraging time. I'm going to be looking forward to hearing the results of that.

I'll tell you, for as long as we've been here, we've never been so encouraged about where we are as it relates to the enrollment, the results, the regulatory environment and some of these upcoming conversations as well as all cylinders kind of hitting on BioCosmeceuticals. So I think you're going to see a big change in our profile and what the opportunity set looks like going forward into the back half of the year.

We have reached the end of the question-and-answer session, and I will now turn the call over to Lance Alstodt for closing remarks.

Yes. Again, I appreciate everyone's attention to the company following us diligently. Great questions as usual from the analyst community. And thank you again to our investors for your continued interest and support. We look forward to talking to you all soon. Thank you.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.