BioRestorative Therapies(BRTX) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements The company's Q1 2025 financial statements show a $5.3 million net loss, decreased assets and equity, and negative operating cash flow Condensed Consolidated Balance Sheets Total assets decreased to $10.3 million and stockholders' equity declined to $6.1 million as of March 31, 2025, primarily due to reduced investments Condensed Consolidated Balance Sheet Highlights (unaudited) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,228,789 | $547,890 | | Investments held in marketable securities | $7,884,132 | $10,184,701 | | Total Assets | $10,326,821 | $12,279,799 | | Total Current Liabilities | $4,182,080 | $3,748,406 | | Warrant liabilities | $3,154,970 | $2,520,851 | | Total Liabilities | $4,182,080 | $3,748,406 | | Total Stockholders' Equity | $6,144,741 | $8,531,393 | Condensed Consolidated Statements of Operations Net loss significantly increased to $5.34 million in Q1 2025, driven by higher R&D expenses and a loss on warrant liabilities Statement of Operations Summary (unaudited) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Revenues | $25,000 | $35,000 | | Research and development | $1,714,327 | $1,058,131 | | General and administrative | $3,115,298 | $3,086,121 | | Loss From Operations | $(4,807,534) | $(4,109,252) | | Change in fair value of warrant liabilities | $(634,119) | $(137,319) | | Net Loss | $(5,339,799) | $(2,223,255) | | Net Loss Per Share | $(0.64) | $(0.33) | Condensed Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity decreased by $2.39 million in Q1 2025, primarily due to the net loss, partially offset by ATM stock sales and stock-based compensation - Total stockholders' equity decreased by $2.39 million during the first quarter of 2025[15] - Key activities impacting equity included a net loss of $5.34 million, stock-based compensation of $2.01 million, and net proceeds of $0.90 million from common stock issuance and sale[15] Condensed Consolidated Statements of Cash Flows Net cash used in operations was $2.8 million in Q1 2025, offset by investing and financing activities, resulting in a $0.68 million net cash increase Cash Flow Summary (unaudited) | Activity | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | $(2,778,786) | $(2,317,780) | | Net Cash Provided By (Used In) Investing Activities | $2,366,967 | $(4,928,006) | | Net Cash Provided By Financing Activities | $1,092,718 | $7,518,489 | | Net Increase In Cash and Cash Equivalents | $680,899 | $272,703 | Notes to Unaudited Condensed Consolidated Financial Statements Notes highlight substantial doubt about the company's going concern ability due to recurring losses, negative cash flows, and increased warrant liabilities - The company's financial condition, including a Q1 2025 net loss of $5.3 million and negative operating cash flow of $2.8 million, raises substantial doubt about its ability to continue as a going concern[26] - In February 2024, the company raised approximately $8.1 million in gross proceeds through a warrant exercise and issuance transaction at a reduced exercise price of $2.33 per share[49] - During Q1 2025, the company sold 492,087 shares under its ATM program, raising $1.08 million in gross proceeds[58] - The fair value of warrant liabilities was estimated at $3.15 million as of March 31, 2025, resulting in a recognized loss of $0.63 million for the quarter due to the change in fair value[61] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the $5.3 million net loss in Q1 2025, driven by increased R&D expenses, and acknowledges substantial doubt about the company's going concern ability Business Overview The company develops adult stem cell therapeutic products, including BRTX-100 in Phase 2 clinical trials, and is expanding into biologics-based cosmetic products - The company's lead product, BRTX-100, is in a Phase 2 clinical trial for treating chronic lower back pain from degenerative disc disease, with FDA authorization to proceed[73] - The ThermoStem Program is a pre-clinical initiative using brown adipose (fat) to treat type 2 diabetes, obesity, and other metabolic disorders, supported by multiple international patents[74] - The company is developing a biologics-based cosmetic business and entered a five-year exclusive supply agreement with Cartessa Aesthetics in April 2024[76] Results of Operations Q1 2025 net loss significantly increased by 140.2% to $5.34 million, primarily due to a 62.0% rise in R&D expenses and higher warrant liability losses Comparison of Operations for the Three Months Ended March 31 | Item | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $25,000 | $35,000 | (28.6%) | | Research and development | $1,714,327 | $1,058,131 | 62.0% | | General and administrative | $3,115,298 | $3,086,121 | 0.9% | | Loss From Operations | $(4,807,534) | $(4,109,252) | 17.0% | | Net Loss | $(5,339,799) | $(2,223,255) | 140.2% | - The 62.0% increase in R&D expenses was primarily driven by a $0.58 million increase in lab supply expense and a $0.07 million increase in recruitment costs for the Phase 2 clinical trial[82] Liquidity and Capital Resources The company's liquidity is strained with working capital decreasing to $5.2 million, and management expresses substantial doubt about its ability to continue as a going concern Liquidity Metrics | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,228,789 | $547,890 | | Investments held in marketable securities | $7,884,132 | $10,184,701 | | Working capital | $5,173,241 | $7,395,815 | - The company anticipates continued net losses and negative cash flows, believing it may not have sufficient cash for at least twelve months, raising substantial doubt about its ability to continue as a going concern[89] - Net cash used in operating activities was $2.8 million in Q1 2025, while net cash from financing activities was $1.1 million, primarily from an ATM offering and option exercises[92][93][95] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk[100] Controls and Procedures Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to continued material weaknesses in internal control over financial reporting - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025[103] - Material weaknesses in internal control over financial reporting continued to exist, including lack of adherence to formal policies, risk assessment, effective controls for reporting and disclosures, and accounting for warrants[105][108] - A remediation plan is being implemented, which includes oversight by the CFO, engagement of an external consulting firm, and documentation of key controls[105][108] PART II. OTHER INFORMATION Risk Factors Investors are advised to review the risk factors detailed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - Investors are advised to review the risk factors included in the company's Annual Report on Form 10-K for the year ended December 31, 2024[110] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the three months ended March 31, 2025 - There were no unregistered sales of equity securities during the first quarter of 2025[111] Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer - Exhibits filed with the report include CEO and CFO certifications (31.1, 31.2, 32.1) and XBRL data files[112] Signatures