BRTX 10-Q
BioRestorative Therapies, Inc. (BRTX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the Quarterly Period Ended
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Transition Period from _________ to _________
Commission
file number:
(Exact name of registrant as specified in its charter)
(State or other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of exchange on which registered | ||
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate
by checkmark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
As of November 11, 2025 there were shares of the registrant’s Common Stock outstanding.
BIORESTORATIVE THERAPIES, INC.
FORM 10-Q
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
TABLE OF CONTENTS
| 2 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
BIORESTORATIVE THERAPIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Investments held in marketable securities | ||||||||
| Accounts receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Deferred offering costs | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Warrant liabilities | ||||||||
| Total Current Liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock, $ par value; shares authorized; Series B Convertible Preferred Stock; shares designated, shares issued and outstanding at September 30, 2025 and December 31, 2024 | ||||||||
| Common stock, $ par value; shares authorized; and shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
BIORESTORATIVE THERAPIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Loss From Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (Expense) Income: | ||||||||||||||||
| Interest income | ||||||||||||||||
| Other income | ||||||||||||||||
| Gain on exchange of warrants | ||||||||||||||||
| Change in fair value of warrant liabilities | ( | ) | ||||||||||||||
| Total Other Income | ||||||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net Loss Per Share - Basic and Diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted Average Common Shares Outstanding - Basic and Diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
BIORESTORATIVE THERAPIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(unaudited)
| For the Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||
| Series B Convertible | Additional | |||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-In | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance - January 1, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Exercise of stock options | - | |||||||||||||||||||||||||||
| Issuance and sale of common stock, net of issuance costs [1] | - | |||||||||||||||||||||||||||
| Common stock issued in connection with abeyance shares | - | ( | ) | |||||||||||||||||||||||||
| Stock-based compensation: | ||||||||||||||||||||||||||||
| Options | - | - | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Issuance and sale of common stock, net of issuance costs [2] | - | |||||||||||||||||||||||||||
| Stock-based compensation: | ||||||||||||||||||||||||||||
| Options | - | - | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Stock-based compensation: | ||||||||||||||||||||||||||||
| Options | - | - | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - September 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| For the Nine Months Ended September 30, 2024 | ||||||||||||||||||||||||||||
| Series B Convertible | Additional | |||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-In | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance - January 1, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 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 | - | |||||||||||||||||||||||||||
| Options | - | - | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Common stock issued in connection with abeyance shares | - | ( | ) | |||||||||||||||||||||||||
| Stock-based compensation: | ||||||||||||||||||||||||||||
| Options | - | - | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Stock-based compensation: | ||||||||||||||||||||||||||||
| Options | - | - | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance -September 30, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| [1] |
| [2] |
| [3] |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
BIORESTORATIVE THERAPIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| For the Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Dividend and interest income | ( | ) | ( | ) | ||||
| Stock-based compensation | ||||||||
| Non-cash lease expense | ||||||||
| Gain on exchange of warrants | ( | ) | ||||||
| Change in fair value of warrant liabilities | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses and other current assets | ||||||||
| Accounts payable | ||||||||
| Accrued expenses and other current liabilities | ( | ) | ( | ) | ||||
| Lease liability | ( | ) | ||||||
| Net Cash Used In Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities: | ||||||||
| Sale of marketable securities | ||||||||
| Purchase of marketable securities | ( | ) | ( | ) | ||||
| Purchases of equipment | ( | ) | ( | ) | ||||
| Net Cash Provided By (Used In) Investing Activities | ( | ) | ||||||
| Cash Flows From Financing Activities: | ||||||||
| Proceeds from issuance of common stock in at-the-market 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 | ||||||||
| Net Increase In Cash and Cash Equivalents | ||||||||
| Cash and Cash Equivalents - Beginning of the Period | ||||||||
| Cash and Cash Equivalents - End of the Period | $ | $ | ||||||
| Supplemental Disclosures of Cash Flow Information: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Return and cancellation of shares in lieu of payroll tax withholding | $ | $ | ||||||
| Issuance of common stock held in abeyance | $ | $ | ||||||
| Reclassification of deferred offering costs | $ | $ | ||||||
| Deferred offering costs included in accounts payable | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
BIORESTORATIVE THERAPIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – BUSINESS ORGANIZATION, NATURE OF OPERATIONS, BASIS OF PRESENTATION AND LIQUIDITY
Corporate History
BioRestorative Therapies, Inc. has one wholly-owned subsidiary, Stem Pearls, LLC (“Stem Pearls”). BioRestorative Therapies, Inc. and its subsidiary are referred to collectively as “BRT” or the “Company”.
On December 23, 2022, the Company reincorporated from Delaware to Nevada by filing Articles of Incorporation with the state of Nevada. The reincorporation was structured as a statutory merger.
Business Operations
BRT develops therapeutic products and medical therapies using cell and tissue protocols, primarily involving adult stem cells. BRT’s website is at www.biorestorative.com. The information contained in the website or connected thereto is not intended to be incorporated by reference into this Quarterly Report. BRT is currently developing a Disc/Spine Program referred to as “brtxDISC”. Its lead cell therapy candidate, BRTX-100, is a product formulated from autologous (or a person’s own) cultured mesenchymal stem cells collected from the patient’s bone marrow. The product is intended to be used for the non-surgical treatment of painful lumbosacral disc disorders or as a complimentary therapeutic to a surgical procedure. BRT is also engaging in research efforts with respect to a platform technology utilizing brown adipose (fat) for therapeutic purposes to treat type 2 diabetes, obesity and other metabolic disorders and has labeled this initiative its ThermoStem Program. In addition, in continuation of BRT’s mission of developing and commercializing cell-based biologics, it is seeking to develop a biologics-based cosmetic products business. Pursuant to such business, BRT would formulate, manufacture and sell products designed for cosmetic and aesthetic uses. Further, BRT has licensed a patented curved needle device that is a needle system designed to deliver cells and/or other therapeutic products or material to the spine and discs or other potential sites.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) that are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of September 30, 2025 and for the three and nine months then ended. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the operating results for the full year ending December 31, 2025 or any other period. The December 31, 2024 consolidated balance sheet data were derived from audited financial statements but do not include all disclosures required by U.S. GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures of the Company as of December 31, 2024 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on March 28, 2025 (the “Form 10-K”).
| 7 |
Liquidity
The
accompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue as
a going concern, which contemplates realization of assets and satisfying liabilities in the normal course of business. For the nine months
ended September 30, 2025, the Company had a net loss of $
The
Company has previously funded, and plans to continue funding, these losses primarily through current cash on hand, investments in marketable
securities and additional infusions of cash from equity and debt financing. During the nine months ended September 30, 2025, the Company
sold shares of its common stock under its at-the-market offering agreement (the “2024 ATM”) with Rodman & Renshaw
LLC (“Rodman”) and raised approximately $
The Company’s current funds will not be sufficient to enable the Company to fully complete its development activities or attain profitable operations. If the Company is unable to obtain such needed additional financing on a timely basis, the Company may have to curtail its development, marketing and promotional activities, which would have a material adverse effect on the Company’s business, financial condition and results of operations, and ultimately the Company could be forced to discontinue its operations and liquidate.
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reclassifications
Certain prior period statements of operations amounts have been reclassified to conform to the Company’s fiscal 2025 presentation. These reclassifications have no impact on the Company’s previously reported net loss.
| 8 |
Cash and Cash Equivalents
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution.
The Company maintains deposits in its accounts that hold cash and cash equivalents in excess of the Federal Depository Insurance Corporation
(“FDIC”) coverage of $
Investments Held in Marketable Securities
As of September 30, 2025 and December 31, 2024, investments held in marketable securities consists of U.S. Treasury securities held in a trust account. The Company’s investments held in the trust account are presented on the unaudited condensed consolidated balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities are included in interest income in the accompanying unaudited condensed consolidated statements of operations.
Customer and Revenue Concentrations
All of the Company’s contract service revenue is derived from one customer. Additionally, all of the Company’s product sales revenue is derived from one customer.
Accounts Receivable
Accounts receivable are carried at their contractual amounts, less an estimate for credit losses. As of September 30, 2025 and December 31, 2024, no allowances for credit losses were determined to be necessary. Management estimates the allowance for credit losses based on existing economic conditions, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for credit losses only after all collection attempts have been exhausted.
Deferred Contract Costs
The
Company defers costs associated with fulfilling its contracts if those costs meet all of the following criteria: (i) the costs relate
directly to a contract, (ii) the costs generate or enhance resources of the Company that will be used in satisfying performance obligations
in the future, and (iii) the costs are expected to be recovered. Deferred contract costs are recognized as cost of revenues in the period
when the related revenue is recognized. Deferred contract costs consist of consumables and labor costs and are included in prepaid and
other current assets in the unaudited condensed consolidated balance sheets. The Company had $
Deferred Offering Costs
Deferred
offering costs, which primarily consist of direct, incremental professional fees incurred in connection with a financing, are capitalized
as non-current assets on the balance sheet. Upon consummation of a financing, the deferred offering costs would be offset against the
offering proceeds. If the completion of a contemplated financing was no longer probable, the related deferred offering costs would be
charged to general and administrative expense in the unaudited condensed consolidated financial statements. The Company had $
| 9 |
Derivative Financial Instruments
The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the unaudited condensed consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Fair Value of Financial Instruments
Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured using inputs in one of the following three categories:
Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.
Level 2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or market data other than quoted prices that are observable for the assets or liabilities.
Level 3 measurements are based on unobservable data that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.
The Company considers cash and cash equivalents, investments held in marketable securities, accounts receivable, accounts payable and warrant liabilities to meet the definition of financial instruments. As of September 30, 2025 and December 31, 2024, the carrying amount of cash and cash equivalents, investments held in marketable securities, accounts receivable, and accounts payable approximate their fair value due to the relatively short period of time between their origination and their expected realization or payment. The warrant liabilities are measured at fair value (see Note 5 – Fair Value Measurement for additional details).
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company recognizes revenue primarily from the following different types of contracts:
| ● | Product sales - Revenue is recognized at the point in time the customer obtains control of the goods and the Company satisfies its performance obligation. |
| ● | Royalty revenue - Revenue is recognized as a usage-based royalty from customers’ usage of intellectual property pursuant to a license agreement at the point in time in which the underlying sale occurs. |
| 10 |
The Company recognizes bill-and-hold revenue from its sale of cosmetic vials warehoused at a Company location for a specified period of time in accordance with directions received from the Company’s customer. Even though the vials are held at a Company location, a sale is recognized at the point in time when the customer obtains control of the product. Control is transferred to the customer in a bill-and-hold arrangement when: (i) customer acceptance specifications have been met, (ii) legal title has transferred, (iii) the customer has a present obligation to pay for the product and (iv) the risks and rewards of ownership have transferred to the customer. Additionally, all the following bill-and-hold criteria have to be met in order for control to be transferred to the customer:
| ● | the reason for the bill-and-hold arrangement is substantive | |
| ● | the customer has requested the product be warehoused | |
| ● | the product has been identified as separately belonging to the customer | |
| ● | the product is currently ready for physical transfer to the customer | |
| ● | the Company does not have the ability to use the product or direct it to another customer. |
The following table summarizes the Company’s revenue recognized in its unaudited condensed consolidated statements of operations:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Product revenue | $ | $ | $ | $ | ||||||||||||
| Royalty revenue | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. All outstanding options and warrants are considered potential common stock. For the three and nine months ended September 30, 2025, the Company had 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 shares held in abeyance included in basic loss per share given that they are issuable for no additional consideration (see Note 4 – Stockholders’ Equity for additional details). The dilutive effect, if any, of stock options and warrants are calculated using the treasury stock method. All outstanding convertible preferred stock is considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, options, warrants, restricted stock units (“RSUs”) and convertible preferred stock have been excluded from the Company’s computation of diluted net loss per common share for the three and nine months ended September 30, 2025 and 2024.
| 11 |
| For the Three and Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Stock options | ||||||||
| Warrants | ||||||||
| Convertible Preferred Stock | ||||||||
Segment Reporting
Operating
segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief
operating decision-maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance.
The Company has
Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” (“ASU 2023-09”). The amendments in ASU 2023-09 are designed to enhance the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments in ASU 2023-09 should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” (“ASU 2024-03”), which is intended to require more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the potential impact of this update on its consolidated financial statements and related disclosures.
| 12 |
Tax Law Change
On July 4th, 2025, the President signed into law significant federal tax legislation, H.R.1 (the “Tax Reform Act of 2025”). The legislation includes numerous changes to U.S. corporate income tax law, including but not limited to: permanent 100% bonus depreciation for qualified property, immediate expensing of domestic research and experimental expenditures, modifications to the limitation on business interest expense, increased Section 179 expensing limits, changes to the international tax regime, and expanded limitations on the deductibility of executive compensation under IRC Section 162(m). Most provisions are effective for tax years beginning after December 31, 2024, with certain transition rules and exceptions. The Company does not expect the enactment of the Tax Reform Act of 2025 to have a material impact on its consolidated financial statements.
NOTE 3 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of:
| September 30 , | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accrued bonuses | $ | $ | ||||||
| Accrued general and administrative expenses | ||||||||
| Total accrued expenses and other current liabilities | $ | $ | ||||||
NOTE 4 - STOCKHOLDERS’ EQUITY
Warrant Exercise and Issuance
On
February 6, 2024, the Company entered into agreements with certain holders of its existing warrants exercisable for an aggregate of
| 13 |
In
consideration for the immediate exercise of the Existing Warrants for cash and the payment of $
Prior to the Warrant Exercise and Issuance, the Existing Warrants were classified as derivative liabilities. Additionally, the Company analyzed the form of the New Warrants and determined that they should be classified as derivative liabilities in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity. Under the New Warrants, the Company does not control the occurrence of events, such as a tender offer or exchange, that may trigger cash settlement of the New Warrants and not result in a change of control of the Company. As a result, such New Warrants do not meet the criteria for equity treatment. Additionally, certain New Warrants contain adjustments to the settlement amount based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815-40 and, accordingly, such New Warrants are not considered indexed to the Company’s own stock and are not eligible for an exception from derivative accounting. See Note 5 – Fair Value Measurement for details regarding the valuation of warrants accounted for as derivative liabilities.
Warrants
See Note 5 – Fair Value of Financial Instruments for details regarding the valuation of warrants accounted for as derivative liabilities.
A summary of the Company’s warrant activity and related information follows:
| Weighted | ||||||||||||
| Weighted | Average | |||||||||||
| Average | Remaining | |||||||||||
| Number of | Exercise | Life | ||||||||||
| Warrants | Price | In Years | ||||||||||
| Outstanding, January 1, 2025 | $ | |||||||||||
| Expired | ( | ) | ||||||||||
| Outstanding, September 30, 2025 | $ | |||||||||||
| Exercisable, September 30, 2025 | $ | |||||||||||
Stock Options
On February 14, 2025, the Company granted options to purchase an aggregate of shares of the Company’s common stock at an exercise price of $ per share to employees, the Company’s board of directors and a member of the Company’s Scientific Advisory Board. The options had an aggregate grant date fair value of $ and The Company is recognizing the grant date fair value of the options on a straight-line basis over the vesting period.
| 14 |
On June 5, 2025, the Company granted an option to purchase shares of the Company’s common stock at an exercise price of $ per share to an employee. The option had a grant date fair value of $ and The Company is recognizing the grant date fair value of the option on a straight-line basis over the vesting period.
On October 13, 2025, the Company granted an option to purchase shares of the Company’s common stock at an exercise price of $ per share to an employee. See Note 6 – Subsequent Events for additional details.
| For the Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Risk free interest rate | - % | - % | ||||||
| Expected term (years) | - | - | ||||||
| Expected volatility | - % | - % | ||||||
| Expected dividends | ||||||||
There were 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 $ and $ per share, respectively.
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | |||||||||||||||
| Number of | Exercise | Life | Intrinsic | |||||||||||||
| Options | Price | In Years | Value | |||||||||||||
| Outstanding, January 1, 2025 | $ | |||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Forfeited | ( | ) | ||||||||||||||
| Outstanding, September 30, 2025 | $ | $ | ||||||||||||||
| Exercisable, September 30, 2025 | $ | $ | ||||||||||||||
| 15 |
Stock-Based Compensation Expense
| For the Three Months Ended | For the Nine Months Ended | Unrecognized at | Weighted Average Remaining Amortization | |||||||||||||||||||||
| September 30, | September 30, | September 30, | Period | |||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | (Years) | |||||||||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Options | $ | $ | $ | $ | ||||||||||||
| RSUs | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
ATM Sales
During
the three months ended September 30, 2025, there were sales of common stock under the 2024 ATM. During the nine months ended September
30, 2025, the Company sold shares of its common stock under the 2024 ATM, generating gross proceeds of $
Common Stock Repurchase Program
On
June 16, 2025, the Company’s Board of Directors authorized a common stock repurchase program under which the Company may repurchase
up to $
Common Stock Issuances
During the three months ended September 30, 2025, there were issuances of common stock by the Company.
During the nine months ended September 30, 2025, the Company issued shares of common stock to Auctus Fund, LLC in partial satisfaction of shares held in abeyance.
During
the nine months ended September 30, 2025, the Company issued shares of common stock related to the exercise of an option at an
exercise price of $ per share, which resulted in gross cash proceeds to the Company of $
| 16 |
NOTE 5 – FAIR VALUE MEASUREMENT
On
September 30, 2025 and December 31, 2024, the Company estimated the aggregate fair value of warrants that are accounted for as warrant
liabilities to be $
| September 30, 2025 | ||||
| Risk free interest rate | ||||
| Expected term (years) | ||||
| Expected volatility | ||||
| Expected dividends | ||||
The following table sets forth a summary of the changes in the fair value of Level 3 liabilities that are measured at fair value on a recurring basis during the three months ended September 30, 2025 and three months ended September 30, 2024:
| For the Three Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Balance, July 1, | $ | $ | ||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||
| Balance, September 30, | $ | $ | ||||||
The following table sets forth a summary of the changes in the fair value of Level 3 liabilities that are measured at fair value on a recurring basis during the nine months ended September 30, 2025 and nine months ended September 30, 2024:
| For the Nine Months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Balance, January 1, | $ | $ | ||||||
| Change in fair value of warrant liability | ( | ) | ||||||
| Balance, September 30, | $ | $ | ||||||
| 17 |
Assets and liabilities measured at fair value on a recurring basis are as follows:
| Fair value measurements at reporting date using: | ||||||||||||||||
| Quoted prices in active markets for identical liabilities (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total Fair Value | |||||||||||||
| Assets: | ||||||||||||||||
| Marketable securities as of September 30, 2025 | $ | $ | $ | $ | ||||||||||||
| Marketable securities as of December 31, 2024 | $ | $ | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||||
| Warrant liabilities as of September 30, 2025 | $ | $ | $ | $ | ||||||||||||
| Warrant liabilities as of December 31, 2024 | $ | $ | $ | $ | ||||||||||||
NOTE 6 – SUBSEQUENT EVENTS
Registered Offering and Private Placement
On
October 6, 2025, the Company entered into subscription agreements (the “Subscription Agreements”) with several investors
(the “Purchasers”) pursuant to which the Company agreed to sell and issue to the Purchasers an aggregate of shares
of the Company’s common stock in a registered direct offering at an offering price of $ per share (the “Registered Offering”)
for aggregate gross proceeds of approximately $
Option Grants
On
October 13, 2025, the Company granted an option to purchase shares of the Company’s common stock at an exercise price of
$ per share to an employee. The option The Company will recognize the grant date fair value of the option on a straight-line basis over vesting
period.
Common Stock Issuance
On October 27, 2025, the Company issued shares of common stock to Auctus Fund, LLC in partial satisfaction of shares held by abeyance.
| 18 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated interim financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, which was filed with the Securities and Exchange Commission (the “SEC”) on March 28, 2025.
Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes a number of forward-looking statements that reflect management’s current views with respect to future events and financial performance. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements include statements regarding the intent, belief or current expectations of us and members of our management team, as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on March 28, 2025, any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in our forward-looking statements. These risks and factors include, by way of example and without limitation:
| ● | our ability to obtain financing needed to complete our clinical trials and implement our business plan; |
| ● | our ability to successfully develop and commercialize BRTX-100, our lead product candidate for the treatment of chronic lumbar disc disease, as well as our metabolic ThermoStem Program and commercial biocosmeceuticals platform; |
| ● | our ability to protect our proprietary rights; |
| ● | our ability to achieve and sustain profitability of the existing lines of business; |
| ● | our ability to attract and retain world-class research and development talent; |
| ● | our ability to attract and retain key science, technology and management personnel and to expand our management team; |
| ● | the accuracy of estimates regarding expenses, future revenue, capital requirements, profitability, and needs for additional financing; |
| ● | business interruptions resulting from geo-political actions, including war and terrorism or disease outbreaks; |
| ● | our ability to attract and retain customers; |
| ● | our ability to navigate through the increasingly complex therapeutic regulatory environment; |
| ● | our ability to successfully engage in any new business lines that we pursue; and |
| ● | risks related to the restatement of our previously issued financial statements. |
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
| 19 |
Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the SEC. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time, except as required by law. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions.
As used in this Quarterly Report on Form 10-Q and unless otherwise indicated, the terms “Company,” “we,” “us” and “our” refer to BioRestorative Therapies, Inc., a Nevada corporation (“BRT”), and its wholly-owned subsidiary, Stem Pearls, LLC, a New York limited liability company (“Stem Pearls”). Unless otherwise specified, all dollar amounts are expressed in United States dollars.
Intellectual Property
This report includes references to our federally registered trademarks, BioRestorative Therapies and Dragonfly design, BRTX-100, ThermoStem, and BRTX. The Dragonfly logo is also registered with the U.S. Copyright Office. This report may also include references to trademarks, trade names and service marks that are the property of other organizations. Solely for convenience, trademarks and trade names referred to in this report appear without the ®, SM or ™ symbols, and copyrighted content appears without the use of the symbol ©, but the absence of use of these symbols does not reflect upon the validity or enforceability of the intellectual property owned by us or third parties.
Corporate History
Our offices are located in Melville, New York where we have established a laboratory facility in order to increase our capabilities for the further development of possible cellular-based treatments, products and protocols, stem cell-related intellectual property and translational research applications.
As 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. We expect to continue to incur substantial costs for these activities over at least the next year.
Business Overview
We develop therapeutic products and medical therapies using cell and tissue protocols, primarily involving adult stem cells.
We are currently pursuing our Disc/Spine Program with our initial investigational therapeutic product being called BRTX-100. 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.
| 20 |
We are also developing our ThermoStem Program. This pre-clinical program involves the use of brown adipose (fat) in connection with the cell-based treatment of type 2 diabetes and obesity as well as hypertension, other metabolic disorders and cardiac deficiencies. United States patents related to the ThermoStem Program were issued in September 2015, January 2019, March 2020, March 2021, July 2021, June 2023 and December 2023; Australian patents related to the ThermoStem Program were issued in April 2017, October 2019, and August 2021; Japanese patents related to the ThermoStem Program were issued in December 2017, June 2021, February 2022, June 2023, July 2024 and September 2025; Israeli patents related to our ThermoStem Program were issued in October 2019, May 2020, March 2022, and March 2025; European patents related to the ThermoStem Program were issued in April 2020, January 2021, July 2023, and March 2025.
We have obtained a license for a patented curved needle device that is a needle system designed to deliver cells and/or other therapeutic products or materials to the spine and discs or other potential sites. We anticipate that FDA approval or clearance will be necessary for this device prior to commercialization. We do not intend to utilize this device in connection with our Phase 2 clinical trial with regard to BRTX-100.
In 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 uses. 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.
Revenue
We derive 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 use certain intellectual property related to, among other things, stem cell disc procedures and we have granted to the SCTC a sublicense to use, and the right to sublicense to third parties the right to use, in certain locations in the United States and the Cayman Islands, 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.
We have also derived product revenue from our five-year exclusive supply agreement with Cartessa entered into in April 2024.
| 21 |
Common Stock Repurchase Program
On 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.
Results of Operations
Comparison of the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024
Our financial results for the three months ended September 30, 2025 are summarized as follows in comparison to the three months ended September 30, 2024:
| For the Three Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | 11,800 | $ | 233,600 | ||||
| Cost of goods sold | 10,570 | 18,243 | ||||||
| Gross profit | 1,230 | 215,357 | ||||||
| Operating Expenses: | ||||||||
| Research and development | 2,594,750 | 1,453,363 | ||||||
| General and administrative | 1,115,491 | 1,048,987 | ||||||
| Total Operating Expenses | 3,710,241 | 2,502,350 | ||||||
| Loss From Operations | (3,709,011 | ) | (2,286,993 | ) | ||||
| Other Income: | ||||||||
| Interest income | 57,740 | 158,547 | ||||||
| Other income | 930 | 566 | ||||||
| Change in fair value of warrant liabilities | 612,064 | 1,036,464 | ||||||
| Total Other Income | 670,734 | 1,195,577 | ||||||
| Net Loss | $ | (3,038,277 | ) | $ | (1,091,416 | ) | ||
Revenues
For 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.
For 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.
| 22 |
Research and Development
Research 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 program. 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.
General and Administrative
General 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 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.
Interest Income
For 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.
Other Income
For the three months ended September 30, 2025, other income was $930, as compared to other income of $566 for the three months ended September 30, 2024. The change was primarily due to an increase in dividend income from investments held in marketable securities.
Change in Fair Value of Warrant Liabilities
For 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.
| 23 |
Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024
Our financial results for the nine months ended September 30, 2025 are summarized as follows in comparison to the nine months ended September 30, 2024:
| For the Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | 340,100 | $ | 357,700 | ||||
| Cost of goods sold | 22,208 | 24,733 | ||||||
| Gross profit | 317,892 | 332,967 | ||||||
| Operating Expenses: | ||||||||
| Research and development | 7,467,532 | 5,004,794 | ||||||
| General and administrative | 4,672,192 | 4,193,225 | ||||||
| Total Operating Expenses | 12,139,724 | 9,198,019 | ||||||
| Loss From Operations | (11,821,832 | ) | (8,865,052 | ) | ||||
| Other (Expense) Income: | ||||||||
| Interest income | 231,621 | 497,089 | ||||||
| Other income | 3,336 | 150,498 | ||||||
| Gain on exchange of warrants | - | 1,711,698 | ||||||
| Change in fair value of warrant liabilities | 552,536 | (837,466 | ) | |||||
| Total Other Income | 787,493 | 1,521,819 | ||||||
| Net Loss | $ | (11,034,339 | ) | $ | (7,343,233 | ) | ||
Revenues
For 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.
For 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.
Research and Development
Research 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 program. 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.
| 24 |
General and Administrative
General 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.
Interest Income
For 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.
Other Income
For 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.
Gain on Exchange of Warrants
For 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 30, 2025.
Change in Fair Value of Warrant Liabilities
For 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.
| 25 |
Liquidity and Capital Resources
Liquidity
We measure our liquidity in a number of ways, including the following:
| September 30, 2025 | December 31, 2024 | |||||||
| Cash and cash equivalents | $ | 602,444 | $ | 547,890 | ||||
| Investments held in marketable securities | $ | 3,887,383 | $ | 10,184,701 | ||||
| Working capital | $ | 1,271,781 | $ | 7,395,815 | ||||
Working 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.
Availability of Additional Funds
For 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.
Our operating needs include the planned costs to operate our business, including amounts required to fund our clinical trials, working capital and capital expenditures. Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings.
We may be unable to raise sufficient additional capital when we need it or raise capital on favorable terms. Future financing may require us to pledge certain assets and enter into covenants that could restrict certain business activities or our ability to incur further indebtedness and may contain other terms that are not favorable to our stockholders or us. If we are unable to obtain adequate funds on reasonable terms, we may be required to significantly curtail or discontinue operations or obtain funds by entering into financing agreements on unattractive terms.
Cash Flows
During the nine months ended September 30, 2025 and 2024, our sources and uses of cash were as follows:
| Nine Months Ended Septemer 30, | ||||||||
| 2025 | 2024 | |||||||
| Net Cash Used In Operating Activities | $ | (8,373,790 | ) | $ | (5,882,501 | ) | ||
| Net Cash Provided By (Used In) Investing Activities | $ | 6,496,796 | $ | (1,018,078 | ) | |||
| Net Cash Provided By Financing Activities | $ | 1,931,548 | $ | 7,505,646 | ||||
| Net Increase in Cash | $ | 54,554 | $ | 605,067 | ||||
| 26 |
Operating Activities
Net 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.
Investing Activities
Net 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.
Financing Activities
Net 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.
Effects of Inflation
We do not believe that inflation had a material impact on our business, revenues or operating results during the periods presented.
Critical Accounting Policies and Estimates
We prepare our unaudited condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our unaudited condensed consolidated financial statements that require estimation but are not deemed critical, as defined above.
For a detailed discussion of our significant accounting policies and related judgments, see Note 2 of the Notes to Unaudited Condensed Consolidated Financial Statements in “Item 1. Financial Statements” of this report.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable. As a smaller reporting company, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we are required to perform an evaluation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Exchange Act, as of September 30, 2025.
Management has completed such evaluation and has concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is appropriate to allow timely decisions regarding required disclosures. As a result of the material weaknesses in internal controls over financial reporting described below, we concluded that our disclosure controls and procedures as of September 30, 2025 were not effective.
Material Weaknesses in Internal Control over Financial Reporting
A material weakness, as defined in the standards established by Sarbanes-Oxley, is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. The following material weaknesses in our internal control over financial reporting were present as of December 31, 2024 and continued to exist as of September 30, 2025:
| ● | Lack of adherence to formal policies and procedures; |
| ● | Lack of risk assessment procedures on internal controls to detect financial reporting risks in a timely manner; |
| ● | Lack of design and implementation of effective controls to achieve complete and accurate financial reporting and disclosures, including documented controls over the preparation and review of journal entries, account reconciliations and income taxes; and |
| ● | Lack of design and implementation of effective controls over the accounting for warrants issued in connection with equity financings. |
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Management’s Plan to Remediate the Material Weaknesses
Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions include:
| ● | Management personnel, including our Chief Financial Officer, are overseeing the financial reporting process and implementation of enhanced controls and governance; |
| ● | Engagement of external financial consulting firm with expertise in accounting for significant and complex non-routine transactions to continue to enhance financial reporting, financial operations and internal controls; and |
| ● | Documentation of key procedures and controls using a risk-based approach. |
Management is committed to maintaining a strong internal controls environment and implementing measures designed to help ensure that control deficiencies contributing to the material weaknesses are remediated as soon as possible. We have documented key procedures and controls using a risk-based approach and have, therefore, made progress toward remediation. We continue to implement our remediation plan, which includes continued engagement of an external financial consulting firm to enhance financial reporting and operations as well as design and implementation of controls. We will consider the material weaknesses remediated after the applicable controls operate for a sufficient period of time, and management has concluded, through testing, that the controls are operating effectively.
Management will continue to monitor and evaluate the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
Changes in Internal Control Over Financial Reporting
Other than described above, there have been no changes in our internal control over financial reporting that occurred during our third quarter of 2025 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1A. Risk Factors
An investment in our common stock involves a number of very significant risks. You should carefully consider the risk factors included in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 28, 2025, and the other information contained in that report and in this quarterly report in evaluating the Company and its business before purchasing shares of our common stock. Our business, operating results and financial condition could be adversely affected due to any of those risks.
Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds
During the three months ended September 30, 2025, we did not have any unregistered sales of equity securities.
Item 6. Exhibits
| Exhibit | Incorporated by Reference | |||||||
|
Number |
Exhibit Description | Form | Exhibit | Filing Date | ||||
| 3.1 | Amended and Restated Articles of Incorporation | 8-K | 3.3 | 1/5/2023 | ||||
| 3.2 | Certificate of Designations of Preferred Stock (Series B) | 8-K | 3.4 | 1/5/2023 | ||||
| 3.3 | Bylaws | 8-K | 3.5 | 1/5/2023 | ||||
| 31.1* | Certification of Principal Executive Officer | |||||||
| 31.2* | Certification of Principal Financial Officer | |||||||
| 32.1** | Section 1350 Certification of Principal Executive Officer and Principal Financial Officer | |||||||
| 101.INS | Inline XBRL Instance Document | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | Cover Page Interactive Date File (embedded within the Inline XBRL document) | |||||||
| * | Filed herewith. |
| ** | In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BIORESTORATIVE THERAPIES, INC. | ||
| By: | /s/ Lance Alstodt | |
| Lance Alstodt | ||
| Chief Executive Officer, President, and Chairman of the Board | ||
| (Principal Executive Officer) | ||
| Date: | November 12, 2025 | |
| By: | /s/ Robert E. Kristal | |
| Robert E. Kristal | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) | ||
| Date: | November 12, 2025 | |
| 31 |
Exhibit 31.1
SECTION 302 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, Lance Alstodt, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of BioRestorative Therapies, Inc. |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| /s/ Lance Alstodt | |
| Date: November 12, 2025 | Lance Alstodt |
| Principal Executive Officer |
Exhibit 31.2
SECTION 302 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
I, Robert Kristal, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of BioRestorative Therapies, Inc. |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| /s/ Robert Kristal | |
| Date: November 12, 2025 | Robert Kristal |
| Principal Financial Officer |
Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
AND PRINCIPAL FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. § 1350, the undersigned officers of BioRestorative Therapies, Inc. (the “Company”) hereby certify that the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2025 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Lance Alstodt | |
| Date: November 12, 2025 | Lance Alstodt |
| Principal Executive Officer | |
| /s/ Robert Kristal | |
| Robert Kristal | |
| Principal Financial Officer |
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.